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HomeMy WebLinkAboutPR 14999 INDUSTRIAL DISTRICT AGMT. W/BASF CORPORATIONinterof f ice M EM RAND ~ To: Mayor, City Council, and City Manager From: Mark Sokolow, City Attorney ~~`~ Date: December 12, 2008 , Subject: P. R. No. 14999; Council Meeting December 16, 2008 ~ Attached is P. R. No. 14999 auth~rizing the City Manager to execute an Industrial District Agreement with BASF Coxporation for the Old Sandoz F'ac~ility. We received the latest draf t~ af ter 7: 00 p.m. on Frida~r, December 12, 2008~ and we are still reviewing it. MTS:ts Attachment ~ cc: Director of Finance z.pr14999_memo P. R. No. 14999 12/12/08 ts i RESOLUTION N0. ~ A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE AN I1~DUSTRIAL DISTRICT AGREEMENT WITH BASF CORPOR.ATION FOR-THE OLD SANDOZ FACILITY WHEREAS, the City Council of the City of Port Arthur deems it in the best interests of the citizens of ~ort - Arthur~ t~ ~enter~ into ~,, _-.~ ., an "In Lieu of Tax" Agreement with BASF Corporation for the Old ~ Sandoz~facility. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PORT AR3'HUR : 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 i Corporation for the Old Sandoz Facility, in substantially the same , form as attaChed hereto as Exhibit "A". ~ Section 3. That BASF Corporation for the Old Sandoz , Facility 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. O. No. 5925. Section 4. That a copy of the caption of this Resolution be spread upon the Minutes of the City Council. , READ, ADOPTED AN~ APPROVED on this day of , z.pr14999 A.D., 2008, at a Meeting of the City CounCil of the City of Port Arthur, by the following vote: AYES: ~ Mayor ~ Councilmembers ~ ~ ~ ~ ~ NOES: MAYOR ATTEST: TERRI HANKS, ACTING CITY SECRETARY ~ . . APPROVED AS TO FORM: See City Attorney Memo CITY ATTaRNEY ~ , APPROVED FOR ADMINISTRATION: CITY MANAGER - __ _ iN . . ' ' '• I ~' . z.pr14999 " ~, , , l ~ ~ STATE OF TEXAS ~ _ ~ COUNTY OF JEFFERSON ~ INDUSTRIAL DISTRICT AGREEMENT WITH BASF CORPORATION (2009 to 2013~ . WHEREAS, in September 2007, the City of Port Arthur ( hereinaf ter ref erred to ~as the "City" ) and BASF Corporation (herei.naf ter ref erred to as the "Company" ) entered into an Industrial District Agreement for the BASF plant that produces chemicals for agricultural usage, providing f or the payment to, the City of Port Arthur of 8 0 0 , of the amour~t of taxes that the Company would have paid to the City as if it had been~located wit~in the corporate limits of ~ the City; and, WHEREAS, the Industrial District Agreement was approved by Resolution No. 07-439 and expires December 31, 2008; and, WHEREAS, the assessed value on this facility has grown over the years to the JCAD assessed value of at least $85,259,710; and ~ WHEREAS, the City Council is Concerned as to the unemployment rate of ~Port Arthur residents; and, . ; .^ i ^ z.ida BASF(OLDSANDOZ).2009-2013.12.5 1 70462808.2/10707537 WHEREAS', the~City Council is interested in maximizing , job opportunities and contracting opportunities for Port Arthur residents and Port Arthur businesses and contractors, and the City Council is interested in working with industry and Lamar State College-Port Arthur to obtain so,und information on current hiring and procurement efforts, including results, and working with industry to , ~ ., try to increase employment opportunitles for Port Arthur , residents and procurement for Port Arthur businesses; and WHEREAS, the City Council also believes improved opportunities for ~ninority and women-owned businesses is important; and WHEREAS, the Company's hiring and procurement experience and efforts to increase Port~Arthur resident hiring and Port Arthur procurement oppor~unities will be considered by the City Council in future in-lieu of tax Contractual agreements; and WHEREAS, the Company owns the land described in Attachment "A"; and WHEREAS, the City ~and the Company 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 z.ida BASF(OLDSANDOZ).2009-2013.12.5 2 70462808.2/10707537 / WHEREAS, the City and the Company agree that there has been full and adequate consideration for this Agreement; ~ , and WHEREAS, this Agreement is authorized under Sections 42.044 and 212.172 Local Governrnent Code, Vernon'~s Texas ~ Code Annotated and Article 1, Section 5 of the City's ~ . ~ . - , , . ~- ,: . ~ ~ Charter, and the parties agree that the following terms are reasonable, appropriate, and not unduly restrictive of business activities; and WHEREAS, all parties find that this Agreement, as ~ delineated herein; is beneficial to each party. NOW, THEREFORE, in consideration of the promises and ` the mutual agreements of the parties contained herein, the . City and the Company agree with each other as follows: Section 1. Pa ents b the Com an . ( a) Far each of ~ the tax years 2 0 0 9 through 2 013 , the ~ Company shall pay to the City the amounts delineated in . this Section 1 so long as this Industrial District A reement is in full force and effect and all of the land g 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 Company shall pay to the City of Port Arthur $500,000 on January 1, 2009. In addition, on October 15th ~ . .. ^ :~ ~ ~ z.ida BASF(OLDSANDOZ).2009-2013.12.5 3 70462808.2/10707537 of each of the tax years 2009 through 2013, and subject to the provisions of Section l(c}, the Company shall pay to the ~City of Port Arthur an amount equal to seventy-five , percent ~(7507 of the amount of property taxes that the , Company would have paid to the City with respect to the taxable value (as def ined ir~ Section 5~ below) of the land, improvements, units, equipment, inventory and all other property located on the land, as described in Attachment , "A", and pertaining to the refinery as if they had been located within thVe corporate limits of the ~ity of Port Arthur. Each of such annual payments will be reduced by 20 a of the January l, 2009 payment ( i. e. ,$500, 000 x 20 0= $10 0, 0 0 0). Such annual pa~rments wi 11 be f urther reduced b~ , , , a credit for ~interest on the January ~l, 2009 payment, ~ calculated as described below, at 6o per year. Therefore, , such annual payments w~ill be as follows: ~Date ~ Company payments to City ~January~~ 1, 2009 ~ $500,000 October 15, 2009 ~ ~ 75~ of taxes as ~if the ~ ~~ ~ property was within the City ~ less $123,750 ~ October 15, 2010 ~ ~ 75~ ~ of taxes as if the property was with~in the City less $124,000 October 15, 2011 ?5~ o~f taxes as if the ~ -~~ ~~ property Was with~in the C~ity ~ ~ ~~ less ~$1~18, 000 October 15, 2012 ~~~ 75~ of taxes as ~~if the ~ ~~~ property was within the City . .-. ^ ~.~~1 z.ida BASF(OLDSANDOZ).2009-2013.12.5 ' 4 70462808.2/10707537 ~ less $11~2,000 October 15, 2013 ~ 75~ of taxes as if the property was within the City less $106,000 (c) Notwithstanding anything contained herein to the ~ contrary, with respect to each of the tax years 2010 , . ~~~~ough 2013,: ~i) if the taxable value of the taxable portion , of the land, improvements, units,requipment, invento~y and all other propert~r located ~n such land, as described in Attachment "A" , and pertaining to the ref inery for such tax year exceeds such taxable value for the immediately , preceding tax~year by more than ten percent (l00}, then for purposes of calculating the amount of the payment for such tax year under Section 1(b}, such taxable value for such taxable year sha11. be an amount equal to 110% of such ~ taxable value for the immediately preceding tax year; and (ii) if the taxable value of the taxable portion of the land, improvemen,ts, units, equipment, inventory and ~ all other property located on such land, as described in Attachment "A" , and pertaining to the ref inery f or such tax ~ t year is less than such taxable value for the immediately preceding tax year by more than ten percent (l00), then for urposes of calculating the amount of the payment for such p .. ^ z.ida BASF(OLDSANDOZ).2009-2013.12.5 5 70462808.2/10707537 tax year under Section l~b), such taxable value for such tax year shall be an amount equal to 90% of such taxable value for the immediately preceding tax year. If, for example; 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 ltb) is • ~ ! • ~ i equal to the product of the City's tax rate for 2010 , multiplied by 75o multiplied by 90% of such taxable value for the tax year 2009, less $124,000. If, for example, ;..- such taxable value for the tax year 2010 is.l5o more than such taxable value for the tax ~rear 2009, the amount of the . , payment for 2010 under Section 1(b) is equal to the product , of the City's tax rate for 2010 multiplied by 750 multiplied by 1100 of such taxable value for the tax year , 2009, less $124,000. ~ (d) The City shall not refund or credit any "In Lieu of Tax" payments previously paid by the Company prior to the date of the execution of this Agreement, either directly or indirectly, to the City. Except as delineatea in this Section 1 and in Sect,ion 15, once an "In Lieu of ~ Tax" payment is paid to the City, the City shall not refund or credit any of said payment. ~ Section 2. Certain Emer encies. If requested orally or in writing by the Company, the City's Fire z.ida BASF(OLDSANDOZ).2009-2013.12.5 ~ 6 70462808.2/10707537 Department may, in its .sole discretion, provide back-up Fire Suppression Support as determined by the City's Fire Chief, and the City's Police Department may, in its sole discretion, assist in providing an evacuation route and traffic control in the case of a fire or a chemiCal release at the Company's facilities located in the City's = ~.. extraterritorial jux~isdiction, at no cost or expense to the : Company. Nevertheless, the Company shall abide by and shall take ,such precautions as to prevent (1) fires, explosions and chemical releases and ~2} the imprudent discharge of storm water that contribute to flooding on adjacent.property. The Company shall also put in place an evacuation plan for the Company's facilities located on the land described on Attachment "A" that is consistent with industry standards and/or as is required by applicable federal and state laws and the health and safety laws of the Cit of which the Company has been notified by the~ Y City. The Company~ shall employ or provide sufficient ~ primary fire suppression response,~ as well as primary res onse p for the control and abatement of chemical releases. The Company~shall provide the City's Fire Chief and Police Chief with Emergency Respons~e Plans for any . , lants, refineries, chemical operations or other hazardous p operations that take place on the land, as described in z.ida BASF(OLDSANDOZ).2009-2013.12~.5 , 7 70462808.2/10707537 Attachment "A". If there is a fire and the City is requested to provide initial and primary (as opposed to back-up) fire suppression services or if a clean up is required of the City, the Company will pay to the City the costs and expenses incurred by the City and any of its , , departrnents or of. ~ny of its affiliated providers, i.e., ambulance companies that are called to the scene. Section 3. Certain Notifications. The Company shall immediately not~ify the central dispatch office whiCh ~ serves the City's Fire Chief, Police Chief, and the City's Emergency Management Coordinator 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 nothing in this Agreement will in any manner limit or restrict the authority of the~City to annex all or part of said lands and facilities during the period of the A reement if the Ci.ty should determine that such annexation g is reasonably necessary to promote and protect the general health, safety, and welfare of the persons residing w~ithin or adjacent to the City, provided however, that the City . z.ida BASF(~LDSANDOZ).2009-2013.12.5 8 70462808.2/10707537 1 agrees that such annexation for the land described in Attachment "A" prior to October l, 2013 will not be made ~ for revenue purposes on1y. Section 5. Welfare Reasons . nothing in this restrict the aut] said lands and Agreement if the Annexation for Health, Safety and It is specifically stipulated that Agreement will in any manner limit or zority of the City to annex all or part of facilities during the period of the , City should determine tha~ such annexation is reasonably necessary to promote and protect the general ~ health, safety, , and welfare of the persons residing w~.thin , or adjacent to the City, provided however, that the City ' agrees that such annexation for the land described in ~ . Attachment "A" prior to October 1, 2013 will not be made for revenue purposes only. Section 5. Annexation Due to Legislative Action. Notwithstanding the provisions of Section 4, the parties agree and consent that the City may annex the land described in Attachment "A" if legislation 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 this Section 5 or the preceding Section 4, ( i) the Company v~i~ll not be required to make further , payments under this Agreement for any calendar year . ~ -- _ -^ ; z.ida BASF(OLDSANDOZ).2009-2013.12.5 9 70462808.2/10707537 . comrnencing after annexation with respect to the property so annexed, but shall nevertheless be obligated to make full payments for the year during which such annexation becomes ~ ~ ef f ective if the annexation becames ef f ective af ter January ~ lst of said year, and ( ii ) the Company shall not be required ,_ to pay ad valorem taxes to the Ci~ty for the same period of ~-~~. ' y. t time they have already paid' an `~"in lieu of tax" payment with respect to the property described in Attachment "A" ta this Agreement. If for any reason the City is prevented from annexing such property and if the parties cannot reach an agreement on a new payment schedule or on a new "in lieu of tax" agreement, the Company agrees that, for so lon g as it or its assignees and successors 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 thereafter continue to annually pay the City an "in lieu of tax" payment amount equal to seventy- five percent (750) of the amount of property taxes that the Company would have paid to the City with respect to t.he taxable portion of the land, improvements, units, equipment, inventory and all other property located on such land, as described in Attachment "A", as if they had been located within the corporate limits of the City of Port Arthur. Payrnents will be due on October 15th of each year. z.ida BASF(OLDSANDOZ).2009-2013.12.5 10 70462808.2/10707537 ~~ ~~._'-~ ; ^ In the event the City is prevented from annexing such property described in Attachment "A" in the circumstances described in t~e first sentence of this Section 5, then pursuant to Sectio~s 42.044 and 212.172, Local ,Government Code, the Company agrees and consents that the~City has the option, in the City's sole discretion, to extend this Agreement and that the Company will Continue to annually ~ pay the City "in lieu of~ tax" payments at the seventy-five ; (750) rate, as described in the immediately preceding sentence, for successive periods not to exceed 15 years each, for a total 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 Je~ferson County Appraisal District in appraisal rolls after the completion of all , litigation and appeals (if any), of the taxable portion of the land, ~improuements, units, equipment, inventory and all other property located on such land, as described in Attachment "A", excluding the value of exempt pollution ~ control devices and any other exempt property, owned or~ leased by the Company and located within the extra- territorial jurisdiction of the City, as described in Attachment "A". Such "taxable value" also includes the taxable value on such rolls of any property. that is located -~_ -1 - _. - ~ . a z.ida BASF(OLDSANDOZ).2009-2013.12.5 11 70462808.2/10707537 in a foreign trade zone or in any other type of federal, state, or local zone. , Section 6. ~ Future Actions. The parties agree that the City has the sole discretion, af ter October T, 2013 , to , annex the property described in Attachment "A" or to enter into negotiations ~aith the Company regarding an agreement :-_.. concerning the payment by the Company of additional "in _._~..~ lieu of tax" payments for future ~rears . Section 7. Lessees and Other Owners. The present owners and lessees of the land, improvements, units, equipment, inventor~r, and all other property located on the land, as described in Attachment "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, eq~ipment, inventor , and all other property located on the land, as Y , described in Attachment "A". Nothing contained herein shall be construed to prohibit or prevent the Company from a ing the other owners' or lessees' "in lieu o:f tax" pY ; a ent to revent annexation by the City. If the City p Ym p , annexes a tract or tracts, such annexed tract or traCts , ' shall be ~ deleted f rom the description of the land set forth z.ida BASF(OLDSANDOZ).2009-2013.12.5 ~ 12 70462808.2/10707537 on Attachment "A" for all purposes of this Agreement, and the Company's total "in~lieu of tax" payments under this Agreement will be reduced accordingly. . Section 8. Assignment, Binding Effect. If the - _ , Company desires to ~ssign this Agreement to any person, the Com an shall rovide.written notice of such assignment to . p Y p_ the Cit and shall receive the written consent of the City Y . Council, by a duly adopted Resolution, whi.ch written consent wil-1 not be unreasonably withheld, delayed or Conditioned. The Company shall provide~ a description of the assi nee and such other information as is reasonably g re uested to indicate that the assignee will operate the q facilit as a reasonably p~udent operator, act as a good Y cor orat~e citizen, and will fully abide by the terms of p this A reement. If the assignment is approved by the City 9 . Council, the Company shall be relieved of its obligations under this A reement to t~e extent that the assignee g expressly assumes such obligations. Subject to the , ~ foregoing, this Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns. Section 9: E itable Relief. ~It is agreed by the ~ arties to this A reement that,the Company and the City p g 1 ~ z.ida BASF(OLD5ANDOZ).2009-2013.12.5 5 13 70462808,2/10707537 . - f ~ have the right to seek equitable relief, including specific performance of this Agreement . ~ Section 10. Inspections. The Company 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 have access to the land described in Attachment "A" during , the term of this Agreement to inspect the plants thereon ' and any improvements thereto to determine compliance with ~ the terms and conditions of this Agreement. All such inspections will be made at mutually agreeable times and ; will only be conducted in such manner as to not interfere , with the Company's safety standards and security standards and rules. Al1 such inspections will be made with one or more representatives of the Company and in accordance with the Company's safety standards. The Company may require ~ any person conducting such an inspection to execute a confidentiality agreement before entering the Company's facilities. Section 11. Port Arthur Industrial Group. The Company shall, subject to the Company's annual management approval, participate in the Port Arthur Industrial Group during the life of this Agreement in order to improve , employment opportunities for Port Arthur residents. The r; _ ~. ~: ~ z.ida BASF(OLDSANDOZ).2009-2013.12.5 14 70462808.2/10707537 i . Company further agrees to encourage its contractors and subcontractors to establish and fund their own apprenticeship, internship, education and/or mentoring programs and projects for the training of Port Arthur residents for regular full-time jobs in the Port Arthur area. ,~. ._ _.~~ , , , Section 12. Port-Arthur Local Business Enterprise Proc~. _ . , - (a) The City recogn.izes that proactive steps must be taken to help ensure that Port Arthur local busine~ss enterprises thrive and continue to benefit our community 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 businesses with which such companies procure goods and services so that the pool of such businesses is representative of the business community at large. (b) As used in this Section 12: (i) "LBE" means a Port Arthur business ~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 z.ida BASF(OLDSANDOZ).2009-2013.12.5 15 70462808.2/10707537 ' • Port Arthur disadvantaged business enterprise ("DBE"}) that has been certified as an LBE under the procedures and , criteria ~pecified in Section 12~d), but such term shall not include any Port Arthur business that has ceased to be ~ f so certif ied . ~ ~ii} "Commercially Useful Function" means the -~ performance of the following functions by a business : (A) ~~ ~- being directly re~sponsible for providing the materials, equipment, supplies or seruices as required by the contract solicitation, (B) performing work that is normal for its business services, and (C) carrying out its obligations by 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 participation, e.g.,.a sham transaction. .~ iii 7. "good f aith ef f orts" means commercially reasonable efforts to further qualified LBE participation or otherwise satisfy the requirements contained in this ' Section 12 which, by their scope, intensity, and appropriateness to the objective, can reasonably be expected to fulfill the program requirements. z.ida BASF(OLDSANDOZ).2009-2013.12.5 1~ 704628~08.2/10707537 (c) The Port Arthur Local Business Enterprise Program shall include, but is not lirnited to, good faith ef~orts with respect to utilization of qualified LBE's as follows: , (i) arranging solicitations, times for ~ presentation of bids, quantities, specifications, and delivery schedules in ways that facilitate qualif ication of ~_-~~ _ LBE ~articipation, except where it is not commercially ..~, reasonable to do so without material added expense or substantial inconvenience, or where there would be a material sacrifice in operational or construction efficiency; ~ ~ ~ ~ ~ (~ii) carrying ou~t information and communication ~ programs~ o~n contract~ing procedures and specific contract opportunities (e.g., fac~~ilitating the inclusion of qualified LBE's on the Company's bidder l~ist); and (ii~i) helping support: ~ ~ ~ ~~ ~• an educational program to inform qualified LBE's of opportuni~ties and the ~ Company's requirements; and ~ ~~• publication 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 provided reasonable advance notice to the Company of the \ z.ida BASF(OLDSANDOZ).2009-2013.12.5 • 17 70462808.2/10707537 meeting at which such prevailing wage is reasonably set and , af f orded the~ Company an opportunity to be heard by the City Council on such matter at such meeting. (d) Through appropriately promulgated procedures, the City, ~using an independent source (Lamar State College of Port Arthur or other mutually agreeable part~r), shall certify ~ as an LBE any business that meets all of the~ following criteria: • The business is financially and operationally independent from, and operates at arm's length to, any other business. • The business has been in operation for ~at least six mo~ths within the City. • The business is a for-profit enterprise. . ~ . . • The business performs a Commercially Useful Function.~~ • The business maintains its principal p1aCe of business a~t a fixed, established commercial address ~and not a temporary or movable office, a post off ice box, or telephone answering 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 performed 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 qualif~ications specif ied by the Company, - including, but not limited to, financial ~. viability, an adequate safety record, employees that can pass background and drug testing z.ida BASF(OLDSANDOZ).2009-2013.12.5 18 70462808.2/10707537 ~ ~checks, and the business-'s ability to comply with applicable local, state and ~ federal regulations and licensing requirements. (e) The Company will notify ~in writing or by e-mail) ~ the following of job openings: ,• City of Port Arthur ~ • The Port Arthur News • Texas Wo.rk.Force Commission . • Lamar State College of Port Arthur ~ • Port Arthur ISD . • Sabine Pass ISD • Digital Work Force ' • 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 ~ City has provided the Company with a copy of~'such written notification: Port Arthur labor unions Associations representing historiCally underutilized segments of the population in Port Arthur The Company will also request that its , contractors and subcontractors consider notifying , the above entities of their respective job openings. (f) The Company will make good faith efforts: y 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 z.ida BASF(OLDSP,NDOZ).2009-2013.12.5 , 19 70462808.2/10707537 to participate, including reasonably ~ dividing projects into smaller parts, except where it is not commercially 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, ful l- time j obs ; and • to.request its prime 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 del'ineated in this Agreement. (f) ~i7 The Company and the City agree to set up a three-member grievance board (the "GrievanCe Board") ' made up of one member appointed by the City, one member appointed by the Compan~r, 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 Company. 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 stipend for his or her time, to be paid equally by the~City and by the Company. ~ii) A~vritten grievance can be made to the , Grievance Board by a Port Arthur business who claims that - it sought to be employed by the Company and was not given a z.ida BASF(OLDSANDOZ).2009-2013.12.5 20 70462808.2/10707537 due o~portunity under' standards set forth in the terms of. this Agreement. ~ ~ ( iii ) If a written grievance is made, the Company shall make a written response within fourteen (14) days ~ thereof. The Grievance Board will meet to review the - grievance and the Company's response within thirty ~30) :,_ days of the date of the grievance. ~ _ - (iv) If an LBE or other business, or its designee, files two or more unfounded complaints of , business discrimination, the LBE or business, and/ or its ~ ; designee, will be in violation of the City's LBE program and the Grievance ~oard can recommend to the parties that the LBE or business be removed from the LBE. {v7 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 t~e Company and to the City as to their findings, and the Company and the City shall thereafter meet to discuss, if necessary, what, if any, corrective action should be taken. ~g) (i7 During the tax years 2009 through 2013, the Company agrees to submit on a semi-annual basis a report providing the information specified in Section 12 ~g) (ii) , z.ida BASF(OLDSANDOZ).2009-2013.12.5 21 70462808.2/10707537 ~iii), and (iv) with respect to the hiring of qualified Port Arthur residents by the Company and its major prime contractors and the retention of LBE's by the Company and by its major prime contractors, as the same relate to the . property described in Attachment "A". ~ (ii) With respect to the hiring of qualified Port Arthur residents by the Company, such report shall set forth the following information: ~• Total number of new hires by zip code • Total number of new hires • Total number of applicants disqualified by reason of not meeting the Company's minimum hiring standards ~for example, disqualified by reason of drug screening, background ,~ , check, etc. ) ~ ~ • 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 number of applicants meeting minimum ~ qualifications for the specifiC positions (education/experience) • Total number of applications received for , announced positions . z.ida BASF(OLDSANDOZ).2009-2013.12.5 22 70462808.2/10707537 ' ~ ~ . (iii) With respect to the hiring of qualified Port ~rthur residents by the Company's major prime contractors, such report shall set forth t~he following , information: ~ Number of new hires by zip code ~ • Total number of new hires ~ Total number of applicants extended an offer . • Such bther information listed in Section 12 (g) ( ii ) above as is reasonably available from the major prime contractors ~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 Company's and on its major prime contractor's bidders lists • Number of LBE's that were invited to bid on prova.ding services and goods for the Company and for its major prime cont`ractor • Total dollar amount of contracts awarded to LBE' s ~~ • Number of contracts award.ed to LBE' s (v~ The information provided by the Company to the C~ty in any such report shall be and remain ~ confidential. (h) The City and the Company agree, in conjunction with other~ companies that have entered into industrial district agreements with the City, to set up an advisory z.ida BASF(OLDSANDOZ).2009-2013.12.5 23 70462808.2/10707537 board to implement the programs goals and objectives for the LBE program. The advisory board will meet 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 k district agreements. . Section 13. Compliance Monitor. The City reserves the right to hire or contract for a monitor to inspect the Company's records and hiring practices in accordance with this Agreement so as to verify whether the Company has complied and will continue to comply with this Agreement. All inspections will be made at ,mutually agreeable~ times and wi~.l on~y be conducted in such manner as to not unreasonably interfer~ with the Company's safety and ~ security standards and rules. All inspections will be made with one~ or more representatives of the Company present, and any information provided by the Company to any such monitor shall be and remain confidential; provided, ~ however, that such monitor may make reports to the City provided that any data reported is provided in the aggregate and does not identify any individual or include any information which would tend to make the identity of any individual ascertainable. The Company may require any, ~ ~ ~~ ~z.ida BA5F(OLDSANDOZ).2009-2013.12.5 , 24 74462808.2/10707537 such monitor to execute a confidentiali,ty agreement before ` making any re~ords or other information available to such monitor. Section 14. Undocumented Workers. ~he Company certifies that they will not knowingly employ an "undocurnented 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 States, or (iii) authorized under law to be employed in that manner in the United States. The Company acknowledges f that it has reviewed Chapter 2264, Texas Government Code, , and hereby affirmatively agrees to repay the amoun~t of any incentive with interest at the rate of ten percent ~100) , er annum, not later than the 120th day after the date the ~ City notifies the Company of a violation. The Company acknowledges the City may bring a civil action to reCOVer any amounts owed under this Chapter, and fu`rther 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 ~ z.ida BASF(OLDSANDOZ).2009-2013.12.5 ; 25 70462808.2/10707537 i faCili~y on the land described on Attachment "A", the ~ , Company will promptly report same to the City. . Section 15. Property Tax Information; Credits and Refunds. With respect to the land, improvements, units, equipment, inventory and all other prope~ty located on such land, as described in Attachment "A", for the tax years . ~.. 2009 through 2013, the Company will, to the extent such ~.. ~ property has not been annexed by the City, provide the ~ Director of Finance of the City with copies of: • each notice of appraised value received by the Company from the Jefferson County Appraisal District with respect to such . property; , • any ~otice of protest filed by the Company with the Jefferson County Appraisal Review Board ("ARB") with respect to such property; • any informal sett~ement or final ARB order determining protest with respect to such property; • any pleadings filed by the Company 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 such lawsuit. Pending final determination of any tax protest filed by the Company with the Jefferson County Appraisal Review Board, or appeal thereof,, the Company shall pay to City, on , October 15th of each year, the amount calculated based upon t z.ida BASF(OLDSANDOZ).2009-2013.12.5 2~ 70462808.2/10707537 the value of the property reflected on the most recently adopted ~ppraisal roll prepared by or for Jefferson County. Appraisal District and as ~further deline*ated in Section 1 of this Agreement. If the final determination of a protest or an appea,l reduces the value of the property after the , . . Company has tendered payment to the City; hereunder, the ~ Company's liability hereunder shall be recalculated based on the final determination of value, and the City shall, after the final determination of such protest or appeal, either credit toward future "In Lieu of Tax" agreements or ~ 2~ refund to the Company the difference be~ween the amount actually paid hereunder~ and the amount for which the Company is determined to be liable, without interest. Under no circumstances shall there be a refund or a credit ~ of more than ten (10 0) of any ~"In Lieu of Tax" payment made. Section 16. Electrical Usage. The Compariy will provide the City with information as to the electrical consumption from Entergy or from any other electric utilities, transmission and distribution utility, , 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 Company to the City regarding z.ida BASF(OLDSANDOZ).2009-2013.12.5 70462808.2/10707537 ~ . such electrical consumption and~metering locations shall be held confidential by the City. 1 Section 17. Notice of Default. Notwithstanding anything herein to the contrary contained, in the event of any breach by the Company of any of the terms or conditions of this Agreement, the City shall give the Company not less . _~ ; . ~ .4, than f ive ( 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 Company will be~ afforded a reasonable time (but in no event less than 60 days) within which to cure the alleged default. Nevertheless, time is ~of the essence on the payment schedule for the "in lieu of tax" payments on ~ . , October 15th of each year . If the Company does not pay the "in lieu of taX" payment on October 15th of each year, the ~ City can immediately commence annexation proceedings and , . sue for all damages provided for herein. In~the case of such a suit, and to encourage timely payments, the City can ' seek 1000 of all monies that the City would have received from the Company if it been within the corporate limits, which include 1000 of all taxes, building permits, sales or use taxes, and all franchise fees on electrical usage, interest and penalty thereon, attorney's fees, and court costs. , z.ida BASF(OLDSANDOZ).2009-2013.12.5 28 ~ 70462808.2/10707537 , ~ Section 18. Entire Agreement. This' Agreement constitutes the entire agreement of the parties with respect to the subj ect matter hereof and supersedes any and all prior understandings or oral or written agreements between the parties respecting such subject matter, except as otherwi.se provided in the instruments referenced herein. ~ This Agreement may be amended only by written instrument signed ~y all of the parties hereto. , ~ , 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 jurisdiction, 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 prov~sion or application, and the parties agree% that the provisions of this Agreement are and shall be severable. Payment of the "in lieu of tax" payment is an essential part of this Agreement. Section 20. Remedies Cumulative. 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 no~ be deemed to be a z.ida BASF(OLDSANDOZ).2009-2013.12.5 ~ , 29 70462808.2/10707537 waiver of any other right, remedy, or privilege provided for herein or available 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 coun~terparts, each of which shall be deemed~ an original, and all of which taken together, shall constitute ~ a but one and the same instrument. Section 23. Authority. By acceptance of this Agreement and/or benefits conferred hereunder, the Company , represents and warrants that its undersigned agents have complete ~and unrestricted authority to enter into this • Agreement and to obligate and bind the Company to all of the terms, covenants and cond~.tions contained herein. Section 24. Notice. Any notice provided fo~r in this Agreement shall be given in writing to the parties hereto by certified mail, return receipt requested, addressed as follows: ~ TO CITY: TO-BASF CORPORATION: City Manager ~ CITY OF PORT ARTHUR 444 4th St . Port Arthur, TX 77640 4 ' z.ida BASF(OLDSANDOZ).2009-2013.12.5 ' 3fl - 70462808.2/10707537 ~ WITH A COPY T0: : ', WITH A COPY T0: City Attorney CITY OF PORT ARTHUR 444 4th St. ~ Port Arthur, TX 77640 (409) 983-8126 (409} 983-8124 ~ ' 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 deli~nea~ted in Section 5. , Section 26. Company Obligations. Notwithstanding ~ . anything contained ,herein to the contrary, the Company shall in no event be obligated hereunder (i) to amend or otherwise change, or attempt to amend or otherwise change, any agreement to which the Company 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 Company's sole discretion, " (A) such person is qualified, is willing to perform the work, and satisfies all of the Company's normal standards ~ for emp3.oyment, and (B) such vendor, ~ supplier, ' professional, contractor or subcontractor is qualified, ~ financially sound, has an adequate safety record, is i a 31 3 z.ida BASF(OLDSANDOZ).2009-2013.12.5 70462808.2/10707537 \ willing 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. i ~ . , , , :~ ;f ~ ~ ~ ~ , ~ z.ida BASF(OLDSANDOZ).2009-2013.12.5 32 70462808.2/10707537 SIGNED AND AGREED to on the day of , 2008. BASF CORPOR.ATION BY : ~~ ACKNOWLEDGMENT STATE OF TEXAS ' ~ ~ COUNTY OF JEFFERSON ~ I ~ 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 instrument, and acknowledged to me that he executed the same as the act and deed of ~ ~ { ' BASF CORPOR.ATION, for the purpases and considerations ~ ~, ; Y, therein expressed, and the capacities therein stated. ~ ~ ~ ~ GIVEN UNDER NiY HAND AND SEAL OF OFFICE, THIS THE ~ ~ , day of , A.D., 2008. ~ y ~ ~ NOTARY PUBLIC, STATE OF TEXAS z.ida~remcor_2009.1i.4 33 ~ ~70462808.2/10707537 ; ~ .. S I GNED AND AGREED t o on t he day o f , 2008, CITY OF PORT ARTHUR, TEXAS BY: ~ ~Stephen Fitzgibbons ~ ~ ' City Manager , - ~ ACKNOWLEDGMENT STATE OF TEXAS ~ 1 ~ ~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 purposes and considerations therein expre,ssed, 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(OLDSANDOZ).2009-2013.12.5 34 ~ 70462808.2/10707537 ~ ~ ~ LIST OF ATTACHMENTS • "A" Area of land . •"B" Description of owners of property . , ~^ 35 z.ida BASF(OLDSANDOZ).2009-2013.12.5 70462808.2/10707537 ~ ATTACHMENT "B" BASF CORPORATION OWNS ALL THE PROPERTY AS DESCRIBED IN ATTACHMENT "A" ~ ~ ~ . ~ ~ z.ida BASF(OLDSANDOZ).2009-2013.12.5 36 • 70462808.2/10707537