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HomeMy WebLinkAboutPR 14987 INDUSTRIAL DISTRICT AGMT W/BASF/TOTAL PETROCHEMICALS~ interoffice D R EM M To: Mayor, City Council, and City Manager From: Mark~Sokolow, City Attorney ~'~~ . . Date:, December 12, 2008 ~ ~:: - ISubject: P. R. No. 14987; . Special Council Meeting Decmber 15, 2008 Regular Council Meeting December 16, 2008 Attached is P. R. No. 14987 authorizing the City Manager to execute an Industrial District Agreement with BASF Corporation and TOTAL Petrochemicals USA, Inc. We received the latest draft at 6:32 .m. on Friday, December 12, 2008 and we are still reviewing it: p MTS:ts ~ , . ~ Attachment cc: Director of Finance ~ , . , z.pr149B7_memo P. R. No. 14987 12/12/08 ts RESOLUTION N0. A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE AN INDUSTRIAL DISTRICT AGREEMENT WITH BASF CORPORATION AND TOTAL PETROCHEMICALS USA, INC. . ~ WHEREAS, ~he City Council of the City of Port Arthur deems it ___ ___.____ ~ . ;/ in the best interests of the citizens of Port Arthur to enter into ~--~.. an "In Lieu of Tax" Agreement with BASF CORPOR.ATION .AND TOTAL -` ~~ PETROCHEMICALS USA, INC. ~ ~ NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR: Section 1. That the facts and opinions in the preamble are true and correct. Section 2. That the City Council hereby authorizes the City Manager to execute an "In Lieu of Tax" Agreement with BASF 4 Corporations and TOTAL Petrochemicals USA,~ Inc., in substantially the same form as attached hereto as Exhibit "A". . Section 3. That BASF Corporation and TOTAL Petrochemicals : ,USA, Inc. shall sign and return the Agreement by December 23, 2008, or this Resolution is null and void and the property described herein is annexed, effective December 31, 2008 at 11:59 p.m., as further delineated in P. 0. No. 5925. Section 4. That a co of the caption of this Resolution be pY ,~, s read upon the Minutes of the City Council. p , z.pr14987 . ` READ, ADOPTED AND APPROVED on this day of , ~ A.D., 2008, at~a Meeting o~f the City C~ouncil of the City ~of Port Arthur, by the fo~llowing~vote: AYES: ~ ~ ~~ , ~ Mayor Councilmembers ~ NOES: . MAYOR ATTEST: TERRI HANKS, ACTING CITY SECRETAR.Y ~ APPR4VED AS TO FORM: See City Attorney Memo CITY ATTORNEY ~ ~ APPROVED FOR ADMINISTRATION: ,~ , , , . z.pr14987 r . ~ ~ ~~ ~~ wii . STATE OF TEXAS ~ ~ ~ . § ~ COUNTY OF JEFFERSON § INDUSTRIAL DISTRICT AGREEMENT WITH BASF CORPORATION AND TOTAL PETROCHEMICALS USA, INC. ~2009 to 2013~ . .~~ . - ~,~ .~~~. , , WHEREAS, in 1998 , the City of Port Arthur (hereinaf ter , referred to as the "City"), and BASF Corporation and Fina Oil & Chemical Companies (now known as TOTAL PETROCHEMICALS USA, INC .) (hereinaf ter collectively ref erred to as the "Companies"), entered into an Industrial District Agreement for the chemical plant.for the payment of $720,000 per year , ~~ from 2001 to 2004 and the payment of $900,000 per year from 2005 to 2008; and, WHEREAS, the Industrial District Agreement was approved by Resolution No. 98-291 and expires December 31, ` 2008; and, WHEREAS, the assessed value on this facility has grown over the years to the JC~.D assessed value of at least $1,101,094,000; and ~ WHEREAS, the City Council is concerned as to the unemployment rate of Port Arthur residents; and, WHEREAS, the Ci.ty Council is interested in maximizing job opportunities and ~contracting opportunities for Port ~ z.ida BASF.FSNA.2009-2013.12.5 1 70452947.2/10707537 ' ) Arthur residents and Port Arthur businesses and ~ ^ contractors, and the~ City Council is intere.sted in working with industry and Lamar State College-Port Arthur to obtain sound information on current ~hiring and procurement efforts, includin results, and working with industry to g 4~ try to increase employment opportunities for Port Arthur residents and rocurement for Port Arthur businesses; and . p WHEREAS, the ~ City Council also believes improved 0 ortunities for minority and women-owned businesses is pp important; and, ~ WHEREAS, the Companies' hiring and procurement ex erience~ and efforts to increase Port Arthur resident p hirin and Port Arthur procurement opportunities will be g considered b the Cit .Council in future in-lieu of tax Y Y ~ contractual agreements; and WHEREAS, the Companies own the land described in Attachment "A"; and WHEREAS the City and the Companies desire to enter , , into an Industrial DistriCt Agreement with respect to the land described in Attachment "A" that is within the extraterritorial jurisdiction of the City; and WHEREAS, the City and the Companies agree that there has been full and adequate `consideration for ~this Agreement; and ~ 2 z.ida BASF.FINA.2009-2013.12.5 70452947.2/10707537 ~ ~ ~. ~ WHEREAS, this Agreement is authorized under Sections 42.044 and 212.172 Local Government Code, Vernon's Texas Code Annotated and Article l, Section 5 of the City's Charter, and the parties agree ~hat the following terms are reasonable, appropriate, and not ~unduly restrictive of business activities; and ~ ~~ ~ - ~ ~, . ; , WHEREAS, all parties find tha~ this Agreement, as delineated ~erein, is beneficial to each party. NOW, THEREF4RE, in consideration of the promises and , the mutual agreements of the parti;es contained herein, the City and the Companies agree with each other as follows: Section 1. Payments by the Companies. (a) For each~of the tax years 2009 through 2013, the Companies shall pay to the City the amou~.ts delineated in this Section 1 so long as this Industrial District ~ Agreement is in full force and effect and all of the land ~ ~ described in Attachment "A" is not annexed by the City. ; For purposes of this Agreement, the term "tax year" means ~ the calendar year, i.e., January 1 through December 31. (b) The Companies shall pay to the City of Port ` Arthur $5,000,000 on January 1, 2009. In addition, on ; October 15th of each of the tax years 2009 through,2013, and ~sub'ect to the provisions of Section 1(c), the Companies J shall pay to the City of Port Arthur an amount ~equal to ` z.ida BASF.FINA.2009-2013.12.5 ~ 3 70452947.2/10707537 ~ seventy-five percent (75%) of the amount of property taxes , that the Companies would have paid to the City with respect to the taxable value (as def ine.d ir~ Section 5 below) of the . land, improvements, units, equipment, inventory and all other property located on the land, as descr~bed in f Attachment "A", as if they had beer~ located wit~in th.e , , . , . . ~ , Corporate limits of the City of Port Arthur. Each of such annual payments will be reduced by 200 of the ~anuary l, 2009 payment (i. e. ,$5, 000, 000 x 20 0=$'l, 000, 0~00) . SuCh annual paymer~ts will be further reduced by a credit for interest on the January l, 2009 payment, calculated as~ ., . desCribed below, at 6o per year. Therefore, such annual payments will be as follows: ~ Date Companies' payments to City January 1, 2009 $5,000,000 October 15, 2009 75~ of taxes as if the property was within the City less $1,237,500 Octobe~r 15, 2010 ~ 75~ of taxes as if the property was within the City less $1,240,000 ; Octo~er 15, 2011 75~ ~of taxes as if the property was within the City less $1,180,000 October 15, 2012 75~ of taxes as if the - property was within the City less $1,124,000,~ October 15 , 2013 75~ of taxes as if the , property was within the City less $1,060,000 4 z.ida BASF.FINA.2009-2013.12.5 70452947.2/10707537 ti (c) Notwithstand~ing anything contained herein to the contrary, with respect to each ~of the tax years 2010 , through 2013,: (i) if the taxable value of the taxable portion of the land, improvements, units, equipment, inventory and ~~ ' all other ro ert located on such land, as described in p p Y ~ . Attachment "A", for such tax year exceeds such taxable value for the immedia~ely preceding tax year b~r more than , - ten percent (10%), then for purposes of calculating the a~ount of the payment for such tax year.under Se~tion 1(b~,. such taxable value for such taxable year shall be an amount equal to 1100 of such taxable value for the immediately preceding tax year; and ~11}-lf the taxable value of the taxable portion of the land, improvements, units, equipment, inventory and all other ro erty located on such land, as described in p p tachment "A~` for_ such tax ear is less thar~ such. taxable At , Y value for the immediately preceding tax year by more than , ten ercent (l00), then for purposes of Calculating the p amount of the a ent for suCh tax year under Section 1(b7, p Ym such taxable value for such tax year shall be an amount ~ , ~ value for the immediately equal to 900 of such ~axable ~ preceding ta.x year . z.ida BASF.FINA.2009-2013.12.5 5 ?0452947.2j10707537 \ If, for examp~e, such taxable value for the tax year 2010 . ~ is 150 less than such taxable value for the tax year 2009, the amount of the payment for 2010 under Section l~b) is equal to~ the product of the City's tax rate for 2010 ~ multiplied by 75o multiplied by 900 of such taxable value for the tax year 2009~, less $l, 240, 000 . If , for ..example, ., . . . . . ' such taxable.value for the tax year 2010 is 15o more than such taxable value for the tax year 2009, the amount of the payment for 2010 under Section 1(b) is equal to the product of the City's ta~ rate for 2010 multiplied by 750 ~ multiplied by ll00 of such taxable value for the tax year -, 2009, less $1,240,000. ~~ (d) The City shall not refund or Credit any "In Lieu of Tax" payments previously paid by the Companies prior to the date of the execution of this Agreement, either directly or indirectly, to the City. Except as delineated in this Section 1 and in Section 15, once an "In Lieu of Tax" payment is paid to the City, the City shall not refund or credit any of said payment. s Section 2. Certain Emer encies. If requested orall or in writing by the Companies, the City's Fire Y De artment may, in its sole discretion, provide back-up p J Fire Suppression Support as determined by the City's Fire Chief and the Cit 's Police Department may, in its sole , Y. . ~~ z.ida BASF.FINA.2009-2013.12.5 6 70452947.2/10747537 l iscretion assist in providing an evacuation route and d , traffic control in the case of a fire or a chemical release at the Companies' facilities located in the City's , extraterritorial jurisdiction, at no cost or expense to the Companies. ~Nevertheless; the Companies s~all abide by and -, ~ : l~ take such recautions as" to prevent (1) fires, sha p ~ ~ . ~ ~ .~ .~~ ~~.'.~ , . ~ ex losions and chemical releases and (2} the imprudent p dischar e of storm water that contribute to flooding on g adjacent property. The Companies shall also put in place , ' an evaCUation lan for the, Companies' facilities located on p , - the land described on Attachment "A" that is consistent with industry standards and/or as is required by applicable fede~al and state laws and the health and safety~laws of ~ he Cit of which the Companies has been notified by the ti ~ ~ ,. it . The Com an~es shall employ or provide sufficient C y p . ~ . ' fire su ression response, as well as primary primary pp ~ res onse for the control and abatement of ghemical p The Com anies shall~ provide the City's Fire releases. p ' f and Police Chief with Emergency Response Plans for CY~le an lants, refineries, chemical operations or other Y P hazardous operations that take place on the land, as scribed _ in Attachment "A" . If there is a f ire and the de ' ' uested to rovide initial and primary (as Clty is req p , ed to back-u ) fire su pression services or if a clean oppos p p , 7 z.ida BASF.FINA.2009-2013.12.5 70452947.2/10707537 ' ired of the Cit , the Companies will pay to the . up ls requ y Cit the costs and expenses incurred by the City and any of Y . its de artments or 'of any of its affiliated providers, p ~~ i.e. ambulance companies that are called to the scene. , Section 3. If re uested orally or in writing by q ~ , , the ~ompanies, the City's Fire Department shall provide . ~ ~ - Fire Su ress.ion Support as determined by the back up pp '~s Fire Chief, and the City's Police Department shall C1ty ' ' 'din an evacuation route and traffic control assist ln provi g in the case of a fire or a chemical release at the Com anies' facilities located in the City's p rritorial 'urisdiction. Nevertheless, the Companies extrate ~ shall abide by and shall take such precautions as to ent 1 f ires, ex losions and chemical releases and ( 2) prev ~ ) p the im rudent discharge of storm water that contribute to p floodin on ad'acent property. The Companies shall also g ~ rovide an evacuation as is expected in the industry, and p . as is re uired by applicable federal and state laws, and q lth and safet laws of the City. The Companies t~e hea Y , or rovide suf f icient primary f ire suppression shall employ p . onse as well as control and abate chemical releases. resp , The Com anies shall provide ,the City's Fire Chief and p , ' hief with Emer enc Response Plans for any plants, PoliCe C g Y ' 'es chemical o erations or other hazardous re f inerl , ~ / 8 , z.ida BASF.FINA.2009-;2013.12.5 7045~'2947.2/10707537 o erations that take place on the land, described in p Attachment "A". If there is a fire and the City is requested to provide initial and primary fire suppression , services or if a clean up is required, the Companies will to the Cit the costs and expenses incurred by the City paY y and any of its~departments ~or of any of its affiliated . , , . , . J- ~ ~oviders i.e. ambulance companies that are called to the p ~ , scene. Section 3. Certain Notifications. The Companies, shall immediately notify the central dispatch office which serves the City's Fire Chief, Police Chiet, and the City's Emergency Management Coo.rdinator of all inCidents involving fires, serious injuries, deaths, chemical releases and flooding that create a health and safety hazard to the community or that exceed permissible exposure limits under ,. applicable state and federal law. Section 4. Annexation for Health, Safety and Welfare Reasons. It is specifically stipulated that nothin in this Agreement will in any manner limit o~r g . , restrict the au~hority of the City to annex all or part of said lands and facilities during the period of the t if the Cit should determine that such annexation Agreemen y is reasonabi neCessary to promote and protect the general Y health safety, and welfare of the persons residing within , ~ ~ g z.ida BASF.FINA.2009-2Q13.12.5 , 70452947.2/10707537 ~~ or adjacent to the City, provided however, that the City agrees that such annexation f.or the ~land described in Attachment "A" prior to flctober l, 2013 will not be made for revenue purposes only. ~ Section 5. Annexation Due to Legislative Action. \ _ - ~ ^~ Notwithstanding the p.rovisions of Section 4, ,the, parti~e~ , ~ ~; a ree and consent that the City may °annex the land g . described in Attachment "A" if legisl~ation is enacted which limits or restricts the authority of the City to annex all or part~of said land and improvements. In the event of annexation under thi~s Section 5 or the preceding Sect~ion 4, (i~ the Companies will not be required to make further payments under this Agreement for any calendar year commencing after annexation with respect to the property so annexed, but shall nevertheless be obligated to make full a ents for the year during which such annexation becomes p Y~ effective if the annexation becomes effective after January lst of said year, and _( ii ) the Companies shall not be re uired to pay ad valorem taxes to the City for the same q period of time they have already paid an "in lieu of tax" a ent with respect to the property described in p Ym Attachment ."A" to this Agreement. If for any reason the Cit is revented from annexing such property and if the Y p parties cannot reach an agreement on a new payment schedule z.ida BASF.FINA.2009-2013.12.5 10 70452947.2/10707537 . '~ , , ^ , or~on a new "in lieu of tax" agreement, the Companies .1 a rees that, for so long as it or its assignees and g s~ccessors or affiliates own such property, it will ` continue to pay to the City the "in lieu of tax" payments delineated in Section 1 until December 31, 2013, and will thereaf ter continue to annually pay the City an "in .lieu of ,. . , ~~tax" a ent amount e ual to seventy- f ive percent ( 75 0)~ of p Y~ q the amount of ro ert taxes that the Companies would have p. p Y , aid to the City with respect to the taxable portion of the p land, improvements, units, equipment, inventory and all other roperty located on such land, as described in p Attachment "A", as if they had been located within the corporate limits of the~City of~Port Arthur. Payments will ~ ~ ~ be due on OCtober 15th of each year. In the event the City is revented from annexing such property described in p . c Attachment "A" in the circumstances described in the first Ce of this Section 5, then pursuant to Sections senten 044 and 212.172, Local Governrnent Code, the Companies 42. a rees and consents that the City has the option, in the ~ C~it 's sole discretion, to extend this Agreement and that Y ~ the Com anies will continue to annually pay the City "in p lieu of tax" ayments at the seventy, f ive ( 75 0) rate, as p ' ed in the immediatel preceding sentence, for describ Y successive periods ~not to exceed 15 years each, for a total , ~ 11 z.ida BASF.FINA.2009-2013,12.5 70452947.2/3.0707537 / ~ duration not to exceed 45 years, or the maximum period allowed by law, whichever is longer. As used in this Agreement, "taxable value" means the taxable value as determined by the ~efferson County Appraisal District in , appraisal rolls after the completion of all litigation and ~ a eals ,( if an ), of the taxable portio~ S of the land, pp Y , , ~ , ~. im rovements units, e uip~ent, inventory and all other p ~ q roperty located ~n such land, as described in Attachment p ~~A~~, excluding the value of exempt pollution control devices and any other exempt property, owned or leased by the Com anies and located within the extra-territorial p . jurisdiction of the City, as described in Attachment "A". Such "taxable value" also includes the taxable value on olls of an ro ert that is located in a foreign such r y p p Y zone or in an other type of federal, state, or local trade Y zone. Section 6. Future Actions. The parties agree that the Cit has the sole discretion, af ter October 1, 2 013 , to ~ Y x the ro ert described in Attachment "A" or to enter anne p p Y ~. inta ne otiations with the Companies regarding an agreement g ernin the a ent b the Companies of additional "in conc g ~ Ym Y , lieu of tax" payments for future years : f Section 7. ~ Lessees and Other Owners. The present , owners and lessees of the land, improvements, units, . 12 z.ida BASF.FINA.2009-2013.12.5 . 7045294'l . 2/10707537 e ui ment, inventory., and al~ other property located on the q p land, as described in Attachrnent. "A", are described in Attachment "B". The City reserves the right to annex that tract or parcel with the minimum required adjacent area, as . ~ per Chapter 43 Local Government Code, if the owners or the , . lessees do not pay an- "in - lieu of tax" payment for , its interest in the land, improvements, units, equipment, invento~y, and all other property l~cated on the land, as . , . described in Attachment "A". Nothing contained herein shall be construed to prohibit or prevent the Companies ~ . from paying the other owners' or lessees' "in lieu of tax" payment to prevent annexation by the City. If the City ~ annexes a tract or tracts, such annexed tract or tracts shall be deleted from the description of the land set forth ~ ~ . on Attachment "A" for all purposes of this Agreement, and , ~ the Com anies' total "in lieu of tax" payments under this p Agreemen~t will be reduced accordingl~. Section 8. Assi nment; 8indin Effect. If the Companies desires to assign this Agreement to .any person, ~ the Com anies shail rovide written notice of such p p assi nment to the City and shall receive the written g consent of the City Council,. by a duly adopted Resolution, which written consent will not be unreasonably withheld, , dela ed or conditioned. The Companies shall provide a Y ~ z,ida BASF.FINA.2009-2013:12.5 13 70452947.2/10707537 description of the assignee and such other information as is reasonably requested to~indicate that the assignee will operate the fac~ility as a reasonably prudent operator, act J as a good corporate citizen, and will fully abide by the ~ terms of this Agreement. If the assignment is approved by the City Council, the Companies shall be relieved of its obli ations under this Agreement to the extent that the g y assignee expressly assumes such obligations. Subject. to the fore oing, this Agreement shall inure, to the benefit of g and be binding upon the parties hereto and their respective , successors and assigns. , Section-9. Equitable Relief. It is agreed by the arties to this Agreement that the Companies and the City ~ ~ave the ri ht to seek equitable~relief, including specific , g ; performance of this Agreement. Section 10. Ins ections~. The Corn~anies shall allow - a reasonable number of authorized employees and/or representatives of the~City who have been designated and ~ approved by the City Manager, City Council, or Mayor to ~ave access to the land described in Attachment "A" during the term of this Agreement to inspect the plants thereon ~ ~ and an im rovements thereto~ to determine Compliance with Y p the terms and conditions of this Agreement. Al1 such ins ections will be made at mutually agreeable times and p z.ida BASF.FINA.2009-2013.12.5 ~ ~ 14 7045294'7 . 2/10707537 l will~only be conducted in such manner as to not interfere with the Com anies' safety standards and security standards p and rules. All such inspections will be made with one or ; more representatives of the Companies and in accordance with the Companies' safety standards. The Companies may ~ ~ uire an erson conducting such~ an inspection to execute req . ~ p ~ , . ~~ . identialit a reement before entering the Companies' a conf y g facilities. ~ ~ Section 11. Port Arthur Industrial Grou . The Com anies shall; subject to the Companies' annual p ement a roval, articipate in the Port Arthur manag pp p Industrial Grou during the life of this Agreement in order p ~~~ ~ ~ ~ to im rove employment opportunities for Port Arthur p residents. The Companies further agrees to encourage its contractors and subcontractors to establish and fund their renticeshi internship, education and/or mentoring own app p, and ro'ects for the training` of Port Arthur programs p ~ ' nts for re ular full-time jobs in the Port Arthur reside g area. , Section 12. Port Arthur Local Business Ente rise Pro~• i a} The City recognizes that proactive steps~must be t to hel ensure that Port Arthur local business taken p ~ enter rises thrive and continue to benefit our Community p • 15 z.ida BASF.FINA.2049-2013.12.5 70452947.2/10707537 C ~ economically and socially. The goals of the Port Arthur Local Business Enterprise Program are to create a program that promotes spending by companies that have industrial district agreements with qualified Port Arthur ~local business enterprises as well as to increase the diversity of Port Arthur- businesse~s~ with .which ~such companies procure , , .. , goods and services so that the pool of such businesses is representative of the business c~mmunity at large. (b) As , used in this Section 12: , . ~1~ "LBE" means a Port Arthur buslness ~including, but not limited to, a Port Arthur minority and/or women owned business enterprise ("MWBE"), a Port Arthur historically underutilized business ("HUB"), and a ~ Port Arthur disadvantaged business enterprise ~"DBE"17 that , , ; has been certified as an LBE under the procedures and criteria specified in Section 12,,~d), but such term shall not include any Port Arthur business that has ceased to be ~ so certif ied. (ii) "Commercially Useful Functi on" means the erformance of the following p functions by a business : (A) bein directl res onsible g Y p ; for providing the materials, equipment, supplies or services as required by the contract solicitation,~ ~B) erforming , p work that is normal for its business services, and (C) carrying out its obligations by 1 z.ida BASF.FINA.2009-20i3.12.5 16 70452947.2/10707537 / ^ actually performing, managing, or supervising the work involved. A business is not performing a"Commercially Useful Function" when its role is limited to that of an extra participant in a transaction, contract, or profit through which funds are passed in order to obtain the ~appearance of LBE participat..ion; e. g: ,- a_ sham transac~ion. ~.. . ~ . ( iii ) "good faith ef forts" means commercially reasonable efforts to further qualified LBE par.ticipation 1 or otherwise satisfy the requirements contained in this Section l2 which, by their scope, intensity, and ~ ; appropriateness to the, objective, can reasonably be expected to fulfill the program requirements. ~c) The Port Arthur Local Business Enterprise Program shall include, but is not limited to, good faith~ efforts with respect to utilization of qualified LBE's as follows: ~i) arranging solicitations, times for ~ presentation of bids, quantities, specifications, and y deliver schedules in ways that facilitate qualification of Y LBE articipation, except where it is not commercially p 0 ~ reasonable to do so without material added expense or substantial inconvenience, or where there would be a ~ material sacrifice in operational or construction eff iciency; z.ida BASF.FINA.2009-2013.12.5 17 70452947.2/10707537 (ii7 carrying out information and communication ro rams on contracting procedures and specific contract p g 0 ortunities (e.g., faci;litating the inclusion of pp ' ~ qualified LBE's on the Companies' bidder list7; and (iii7 helping support: ~ ~ an ~educational program to inform ~qualif ied LBE' s of opportunities and the ~ Companies' requirements; and ~ ~ ~ • ~publica~tion of a local business directory. ~iv) paying at least the prevailing wage, as , - reasonably .set by the City, in acCOrdance with Chapter 2258, Texas Government Code, V.T.C.A., after the City has rovided reasonable advance notice to the Cornpanies of the p meetin at which suCh prevailing wage is reasonably set and g afforded the Com anies an opportunity to be heard by the p f City Council on such matter at such meeting. ° (d) Through appropriately promulgated procedures, the City, using an independent source (Lama'r State College of t Arthur or otY~er mutually agreeable party), shall Por certif as an LBE any business that meets all of the Y following criteria: • The business is financially and operationally independent from, and operates at arm's length to, any other business. z.ida BASF.FINA.2009-2013.12.5 18 70452947.2/10707537 ~ ~ ~ • The business has been in operation for at least ~ six months within the City. `~ • The business is a for-profit enterprise. ~ ~ , ~ • The business performs a Commercially Useful ~ ~ Function. ~ • The business maintains its. prir~cipal place of business~ at a fixed, established. commercial ~ address ~and not a temporary or movable:~. of fice, . a ost offiee box, o~ telephone answering p service or a temporary short-term lease) that ~~ is within the boundaries of the City and that ~ provides all of the serviCes for which LBE certification is sought, other than work required to be perf~,ormed at a job site. Suppliers are required to maintain their principal place of business within the boundaries of the City. ~ • The business can be expected to satisfy . ualifications specified by the Companies, q including, but not limited to, financial viability, an adequate safety record, employees , that can pass b`ackground and drug testing checks, and the business's ability to comply with a licable local, state and federal pp regulations and licensing requirements. (e) The Companies will notify ~in writing or by e- , mail) the following of job openings: • City of Port Arthur • The Port Arthur News • Texas Work Force Commission J • Lamar State College of Port Arthur • Port Arthur ISD • Sabine Pass ISD ~ • Digital Work F~orce • Any of the following who have provided , `~, written notice to the City stating that it wants to` receive notification of ~ such job openings and identifying its , mailing and~e-mail addresses, and the ~, z.ida BASF.FINA.2009-2013.1~2.5 19 70452947.2/10707537 - ~ City has provided the Companies with a ~ Ecopy of such written notification: Port Arthur labor unions '~ Associations representin~, historically ~ underutilized segments of the population in Port Arthur The Companies will also request that its ~ , Contractors and subcontractors~cons~der~.notifyi~ng - - the above entities of their respective job ~ openings. (f) The Companies will make good faith efforts: • to have their large prime contractors obtain qualified LBE bids on contracts subject to , this Agreement; ~, • to arrange subcontracts by size and type of work to improve the opportunities for LBE's to participate, in~luding reasonably dividing projects into smaller parts, except where it is not Comrnercially reasonable to do so without material added expense or substantial inconvenience, or where there would be a material sacrifice in operational or construction efficiency; ~ • to hire qualified citizens of Port Arthur f or regular, f ul 1~- t ime j obs ; and • to request its ~rime contractors to consider soliciting through the local office of the Texas Workforce Commission and general media ~ to hire qualified Port Arthur residents for jobs and taking such other measures as delineated in this Agreement. ( f), ( i} The Companies and the City agree to set a hree-member rievance board (the "Grievance Board") up t g z.ida BASF.FINA.2009-2013.12.5 ' 20 70452947.2/10707537 ~ made up of one ,member appointed by the City, one member appointed by the Companies, and one member who will be the head of the Grievance Board and will be from Lamar State College of Port Arthur or be' another person mutually acceptable to the City and the Companies. The head of the GrievanCe Board will have the tie breaking vote if needed. , ,~ ~ . - ~ , , . The head of the Grievance Board will serve as facilitator. and will receive a reasonable st~.pend for his or her time, to be paid equally by the Cit~ and by the Companies. . (ii) A written grievance can be made to the ' Grievance Board by a Port Arthur business who claims that it sought to be employed by the Companies and was not given , a due opportunity under standards set forth in the terms of this Agreement. (iii) If a written grievance is made, the Companies shall make a written response within fourteen (14} days thereof. The Grievance Board will meet to review the grievance' and the Companies' response within thirty ( 3 0) days of the date of the grievance . . (iv) If an LBE or other business, or lts designee, files two or more unfounded complaints of business discrimination, the LBE or business, and/, or its F designee, will be in violation of the City's LBE program z.ida BASF.FINA.2009-2013.12.5 21 70452947.2/10707537 ~ and the Grievance Board can recommend to the parties that , the LBE or business be removed from the LBE. (v) The Grievance Board will take such action as necessary or advisable to preserve the confidentiality of grievances and the responses, deliberations and ~ proceedings with respect thereto. The Grievance Board will ~, . make written reports to the Companies and to the City as to ~ - _ , their findings, and the Companies and the Cit~r shall ~ , ~ thereafter meet to discuss, if necessary, what, if any, corrective action should be taken. ( g) ( i) During the tax years 2 0 o y tnrougn ~ u 1.~ , tne Companies agrees to submit on a semi-annual basis a~report providing ~ the information specif ied in Section 12 (g) ( ii ), - (iii), and (iv) with respect to the hiring of qualified ~ Port Arthur residents by the Companies and its major~prime contractors and the retention of LBE' s by the~ Companies, and by its~major prime contractors, as the same relate to the property described in Attachment "A". (ii} With respect to the hiring of qualif~ied Port Arthur residents by the Companies, such report shall . , set forth the following information: • Total number of new hires by zip code • Total number of new hires z.ida BASF.FINA.2009=2013.12.5 , 22 70452947.2/10707537 ~• Total number of applicants disqualified by reason of not meeting the Companies' min~imum hiring standards (for example, disqualified by reason of drug screening, background check, etc.) J • Total number of applicants extended an offer • Total number of applicants completing the ~ interview process . ; . : , " .. ~ • . , , Total number of applicants invited to ~~ ~ interview ~, • Total number of applicants with satisfactory scores on in-house assessments . • Total number of applicants invited to take ~ in-house assessments ~ • Total~nurnber of applicants meeting minimum qualif i.cati,ons for the specif ic positions ( educatior~/experience ) • Total number of applications received for ar~nounced positions (iii) With respect to the hiring of qualified Port Arthur residents by ~ the Companies' major prime contraCtors, such report shall set forth the following information : • Number of new hires by zip code • Total number of new hires • Total number of applicants extended an offer ~ • Such other information listed in Section 12tg}(ii) above as is reasonably available ~ from the major prime ContraCtors z.ida BASF.FINA.2009-2013.12.5 ~ 23 70452947.2/10707537 (iv) With respect to the hiring of LBE's, such report shall set forth.the following information: • Number of LBE's that are included on the Companies' and on its major prime contractor's bidders lists • Numb e r o f providing _ Companies • Total dol LBE' s LBE's that were invited to bid on services and goods for the and for its major prime contractor 1ar amount of Contracts awarded.to , ~ ~ , ~, • Number of contracts awarded to LBE's , (v) The information provided by the Companies to the Cit~ in any such report shall be and remain conf idential . , (h~ The City and the Companies agree, in conjunction with other companies that have entered into industrial ~ dist~rict agreements with the City, to set up an advisory board to implement the programs goals and objectives for the LBE program. The advisory board will me~et as needed and will be facilitated by an outside source (Lamar State College of Port Arthur or other mutually agreeable party). ., The facilitator will be paid a stipend which shall be prorated equally among the parties to the industrial , district agreements. ~ ~ Section 13. Compliance Monitor. The City reserves , . , the right to hire or contract for a monitor to inspeCt the z.ida BASF.FINA.2009-2013.12.5 70452947.2/10707537 ~ 24 ~ Companies' records and hiring practices in accordance w~ith ~ ~ this Agreement so as to verify whether the Companies has ~tCOmplied and will continue to comply with this Agreement. Al1 inspections will be made at mutually~ agreeable times l and will only be conducted in such manner as to not , ~ \ ~ . - unreasonably lnterfere with the~ Cor~panles safety and ; , . security standards ,and rules. All inspections will be.made ~ with one or mo`re representatives of the Companies present, and any information provided by the-Companies to any such monitor shall be and remain confidential; p~rovided, however, that such monitor may make reports to the City provided that any data reported is provided in the aggregate and does not identif~ any individual or include any information which would tend to make th~e identity of any individual ascer~ainabl,e. The Companies may require any such monitor to execute a confidentiality agreement , bef ore making any records or other inf ormation avai lable to such monitor. Section 14. Undocumented Workers. The Companies certifies t~at they will not knowingly employ an "undocumented worker" which means an individual who, at the time of employment, is not (i) lawfully admitted for ~ permanent residence to the United States, (ii) a temporary ~ ~ , resident lawfully permitted to be employed in the United z.ida_BASF.FTNA.2,009-2013.12.5 25 70452947.2/10707537 ~~ States, or (iii) authorized under law to be employed in that manner in the United States. The Companies acknowledges that it has reviewed Chapter 2264, Texas Government Code, and hereby affirmatively agrees to repay the amount of any incentive with interest at the rate of ten ercent (100) er. annum, not later than the 120th day p p . ,~ , , af ter the date the City notif ies the Companies of a , ~ violation. The Companies acknowledges the City may bring a ~ civil action to recover any amounts owed under „ this ~ Chapter, and further acknowledges that the City may recover court costs and reasonable attorney's fees incurred in bringing an action under Section 2264.101, Texas Government Code. Upon learning that any "undocumented worker" is , improperly retained by one of its contractors or subcontractors at its facility on the land described on .. Attachment "A", the Companies will promptly report ,same to the City. Section 15. Property Tax Information; Credits and Refunds. With respect to the land, improvements, units, t 9 e ui ment, inventory and all other property located on such q p land, as de~cribed in ~Attachment "A", for the tax years ~ 2009 through 2013, the Companies will, to the extent such property has not been ~annexed by the City, provide the . Dir. ector of Finance of the City with copies of : z.ida BASF.FINA.2009-2013,12.5 . 26 70452947.2/10707537 ~ • e.ach notice of appraised value received by the Companies from the Jefferson County Appraisal District with respect to such property; ~ any notice of protest file~d by the Companies with the Jefferson County Appraisal Review Board ("ARB") with respect to such property; • any informal settlement or final ARB order ~. . determining protes~ with respect to such .~ property; ~ ~ • any pleadings filed by the Companies as a petition for review of an order determining protest of the ARB with respect to such property; and • any settlement, final judgment or other final disposition on appeal or otherwise of any suchJlawsuit. Pending final determination of any tax protest filed by CPC with the Jef ferson County Appraisal Review Board, or a eal thereof, CPC shall pay to City, on October 15~h of pp each year, the amount calculated based upon the value of , the property reflected on the most recently adopted , appraisal roll prepared by or for Jefferson County Appraisal District and as ~urther delineated in Section 1 of this Agreement. If the final determination of a protest or an appeal reduces the value of the property after CPC has tendered a ent to the City hereun,der, CPC' s liability p Y~ hereunder shall be recaiculated based on the final determination of value, and the City shall, after the f inal determination of such protest or appeal, either credit z.ida BASF.FINA.2009-2013.12.5 27 70452947.2/10707537 . toward future "In Lieu of Tax" agreements or refund to CPC the difference between the amount actually paid hereunder and the amount for which the CPC ~is ~determined to be , ~ liable, without interest. Under no circumstances shall r there be a refund or a credit of more than ten (l00) of any 9 - , . . "In Lleu of Tax" payment made. _ . ., , . . Section 16. Electrical Usage. The Companies will . , . , . provide the City with information as to the e3.ectrical consumption from EntMergy or from any ~other electric utilities, transmission and distribution utilitv, municipally owned utility, electric cooperative, or from any other source, as well as all metering locations that service the area described in Attachment "A". The information provided by the Companies to the City regarding such electrical consumption and metering locations shall be~ held conf idential by the~ City . ~ Section 1?. Notice of Default. Notwithstanding anything herein to the contrary contained, in the event of any breach by the Companies of any of the terms or ~ conditions of this Agreement, the City shall give the Companies not less than five (5~ business days' written notice, specifying the nature of the alleged default, and manner in which the alleged default may be satisfaCtorily ~, cured. Thereafter, the Companies will be afforded ~ a z.ida BASF.FINA.2009-2013.12.5 70452947.2/10707537 , Zs \i ~ • reasonable time (but in no event less than 60 days) within which to cure the alleged d~efault. Nevertheless, time is of the essence on the payment schedule for the "in lieu of tax" payments on October 15th of each year as well as the payment of $5,000,000 on January 1, 2009. If the Companies -do not pay the "in lieu of tax" payment on October 15th of each year and do not pay $5,000,000 on January 1~, 2009, the City can immediately c~mmence annexation proceedings and sue for all damages provided for herein. In the case of such a suit, and to encourage timely payments, th~e City can , seek 100a of all monies that the City would have received ~ from the Companies if it been within the corporate limits, . . which include 100 0 of all taxes, bui~.ding permits, sales or use taxes, and all franchise fees on electrical usage, interest and penalty thereon, attorney's fees, and court costs. Section 18. Entire Agreement. This Agreement constitutes the entire agreement of the parties with res ect to~the sub'eCt matter hereof and supersedes any and p J all prior understandings or oral or written agreements between the parties respecting such subject matter, except as otherwise provided in the instruments referenced herein. This Agreement may be amended only by written instrument signed by all of the parties hereto. z.ida BASF.FINA.2009-2013.12.5 29 ' 70452947.2/10707537 .. Section 19. Severability. If any term or provision in this Agreement, or the application thereof to any person or circumstance, shall to any extent be held to be invalid or unenforceable by a court of competent j urisdiction, such invalidity or unenforceability shall not affect any other ~ provision of this Agreement or the application thereof, ~which can be given effect without the invalid or , unenforceable provision or application, and the parties agree that the provisions of this Agreement are and shall be severab.le. Payment of the "in lieu of tax" payment is an essential part of this Agreement. Section 20. Remedies Curnulative. Except as other- ; . . wise expressly provided herein, all rights, privileges, and remedies afforded the parties by this Agreement shall be~ , deemed cumulative and not ~exclusive, and the exercise of , any or more of such remedies shall not be deemed to be a waiver of any other right, remedy, or privilege provided . ' , ~ for herein or avallable at law or in equity. Section 21. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas. This,Agreement is to be performed in Jefferson County, Texas. Section 22. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an ,: , z.ida BASF.FINA.2009-2013.12.5 30 70452947.2/10707537 original, and all of which taken ~ogether, shall constitute but one and the same instrument. ~ Section 23. Authority. By acceptance of this ~Agreement and/or benefits conferred hereunder, the , Companies represents and warrants that its undersigned . agents have complete and unrestricted authority to enter , , . ~. . ' into this Agreement and to obligate and bind the Companies to all of the terms, covenants and conditions contained herein. ~ ~ Section 24. Notice. Any notice provided for in this contract shall be given in writing to ~he parties hereto by certified mail, return receipt requested, addressed as follows: TO CITY: TO COMPANIES: City Manager BASF CORPORATION CITY OF PORT ARTHUR ~ 444 4th St . Port Arthur, TX 77640 . TOTAL PETROCHEMICALS USA; INC. WITH A COPY TO: ~City Attorney CITY ~F PORT ARTHUR ~ ~ ~ . 444 4th St . ~ ' Port Arthur, TX 77640 409} 983-8126 - , 409) 983=8124 , ~f z.ida BASF.FINA.2009-2013.12.5 31 70452947.2/10707537 . ~ Section 25. Term of Agreement. This Agreement is effective the lst day of January, 2009, and shall expire on the 31st day of December, 2013, unless extended by the City of Port Arthur, as delineated in Section 5. Section 26. Companies Obligations. Notwithstanding , anything contained herein° ta the contrary, the Companies shall in no event be obligated hereunder (i) to amend or othe~rwise change, or attempt to amend or otherwise change, ; , ~ ~~ any agreemen~ to which the Companies is a party as of the ~ date hereof, or ~ii) ~to hire or retain any person, or to ~ award any contract for materials, supplies, equipment or services to any vendor, supplier, professional, contractor or subcontractor, unless, in the Companies' sole , discretion, ~A) such person is qualified, is willing to perform the work, and satisfies all of the Companies' normal standards for employment, and (B) such vendor, supplier, professional, contractor or subcontractor is. ~~ , ~ ,. , , ' ~ , qualif led, f lnancially sound, has . an adequate saf ety record, is willi.ng to perform the work, or provide the materials or services, in the time required and in a competitive manner, and is the lowest qualified responsive bidder who meets all the applicable bid specifications. z.ida_BASF.FINA.2009-2013.12.5 32 70452947.2/i0707537 ~ S I GNED AND AGi~EED t o on t he day o f , , 2008. BASF CORPOR.ATION BY: , ~ ACKNOWLEDGMENT STATE OF TEXAS ~ ~ ~ COUNTY OF JEFFERSON ~ ~ BEFORE ME, the undersigned Notary Public, on this day personally appeared , ~ known to -~e to be the person whose name is ascribed to the ~ ' foregoing instru~ent, and acknowl~edged to me that he , ~ executed the same as the act and deed of BASF CORPORATION for the purposes and considerations therein expressed, and the capacities therein stated. GIVEN UNDER MY HAND AND SEAL. OF OFFICE, THIS THE day of , A.D. , 2008. NOTARY PUBLIC, STATE OF TEXAS z.ida~remcor_2009.11.4 . 33 SIGNED Ar?D AGREED to on the - day of , 2008. TOTAL PETROCHEMICALS USA, INC. BY: ACKNOWLEDGMENT STATE OF TEXAS ~ ~ ~ COUNTY OF JEFFERSON ~ ~ BEFORE ME, the undersigned Notary Public,~ on this, day ~ personally appeared , known to me~to be the person ~whose name is ascribed to the foregoing instrument, and acknowledged to me that he executed the same as the act and deed of TOTAL PETROCHEMICALS USA, INC. for the purposes ~ and considerations therein expressed, and the capacities therein stated. ~ GIVEN UNDER MY HAND AND SEAL OF OFFICE, THIS THE day of , A.D., 2008. NOTARY PUBLIC, STATE OF TEXAS z.ida BASF.FINA.2009-2013.12.5 34 70452947,2/10707537 . SIGNED~ AND AGREED to on the day of 2008. CITY OF PORT ARTHUR, TEXAS BY: Stephen Fitzgibbons _ City Manager ' ACKNOWLEDGMENT - STATE OF TEXAS ~ ~ . ~ COUNTY OF JEFFERSON ~ BEFORE ME, the undersigned Notary Public; on this day ~ personally appeared Stephen Fitzgibbons, City Manager of the City of Port Arthur, known to me to be the person whose name is ascribed to the foregoing instrument, and , ,acknowledged to me that he executed the same as the act and deed of the City of Port Arthur, for the pu~poses and considerations ~herein expressed, and the capacities r . therein stated. ~ GIVEN UNDER MY HAND AND SEAL OF OFFICE, THIS THE day of , A.D. , 2008. NOTAR.Y PUBLIC, STATE OF TEXAS z.ida BASF.FINA.2009-2013.12.5 35. 70452947.2/10707537 ~~ ~. LIST OF ATTACHMENTS • "A" Area of land •"B" Description of owners of property z.ida BASF.FINA.2009-2013.12.5 36 70452947.2/10707537 ATTACHMENT "B" BASF Corporation and TOTAL PETROCHEMICALS USA, INC., as well as BASF FINA Petrochemicals Limited Partnership, own all the land and improvements as delineated in Attachment "A" ~ , ~ z.ida BASF.FINA.2009-2013,12.5 37 , 70452947,2/10707537 .