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Home My WebLink AboutPR 15470: PORT ARTHUR HOLDINGS III, LTD.interoffice MEMORANDUM To: Mayor, City Council, anal City Manager From r. Mark T . Sokolow, City Attorney ~,„~j S ~J'w~,-~' Dater. September 4, 2009 SubjE~ct: P. R. No. 15470; Council Meeting September 8, 201)9 Attached is P. R. No. 15470 a.s it pertains to an Amendment No. 2 to the Sales Tax Refund Agreement with Port Arthur Holdings III, Ltd. for a retail center development. MTS:gt Attachment Copy to: Lee Bentley SDI REALTY Ken Delery SDI REALTY z.pr15470 memo P. R. No. 15470 09/04/09 gt RESOLIITION NO. A RESOLIITION AIITHORIZING THE CITY MANAGER TO EXECIITE AN AMENDMENT NO. 2 TO THE SALES TAX REFIIND AGREEMENT WITH PORT ARTHIIR HOLDINGS III, LTD FOR A RETAIL CENTER DEVELOPMENT WHEREAS, per Resolution No. 07-010, the City and Port Arthur Holdings III, Ltd. entered into a. Sales Tax Refund Agreement; and WHEREAS, per Resolution No. 0~7-219, the City agreed to :provide an incentive for the remediation of the property located at 8857 Highway 69; and WHEREAS, per Resolution No. 07-440, an Amendment No. 1 to the Sale: Tax Refund Agreement for Retail Center Development was approved, granting Port Arthur Holdings an extension until March 1, 2008 to remediate the property at 8857 Highway 69 to TCEQ standards and by building additional access and parking areas on the property; and WHEREAS, per Resolution No. 09-052, an extension was approved to July 15, 2009 due to the remE~diation process of the property located at 8857 Highway 69 beings more extensive than originally proposed by having to over excav<~te the property, which not only caused time delays, but budget over runs as well; and WHEREAS, the City Council deems it in the best interests of the ~~ublic to enter into an Amendment No. 2 to the Sales Tax Refund Agreement in substantially the :game form as attached hex-eto as z.pr159,70 Exhik~it "A. NOW THEREFORE, B8 IT RESOLVED BY THE CITY COIINCIL OF THE CITY OF PORT ARTHIIR: Section 1. That the facts and opinions in the pre<~mble are true and correct . Section 2. That the City Manager is herein authorized to execute Amendment No. 2 to the Sales Tax Refund Agreement :in substantially the same form as denoted in Exhibit "A". Section 3. That a copy of the caption of this Resolution be s~>read upon the Minutes of the City Council. READ, ADOPTED AND APPROVED on this day of A.D., 2009, at a Meeting of the City Council of the City of Port Arthur, by the following vote: AYES: Mayor. Counc;ilmembers ---_ , NOE~> MAYOR ATTEST: TERR7: HANKS, CITY SECRETARY z.pr15470 APPROVED AS TO FORM: ~~ ~~ CITY ATTORNEY APPROVED FOR ADMINISTRATION: CITY MANAGER z.pr15970 AMENDMENT NO. 2 TO SALES TA% REFUND AGREEMENT FOR RETAIL CENTER DEVELOPMENT BETWEEN THE CITY OF PORT ARTHIIR AND PORT ARTHIIR HOLDINGS III, LTD. WHEREAS, pursuant to Resolution No. 07-010, the City of Port Arthur and the Port Arthur Holdings III, Ltd. entered into a Sa]_es Tax Refund Agreement in January 2007; and WHEREAS, pursuant to Resolution No.07-440, the City oiE Port Arthur and the Port Arthur Holdings III, Ltd. entered into an Amendment No. 1 to the Sales Tax Refund Agreement WHEREAS, Circuit City occupied a portion of the lease space at tree retail center and their space is now unoccupied due to the k~ankruptcy of Circuit City; and WHEREAS, Port Arthur Holdings III, LTD is seeking to attract Best Buy to relocate at the retail center WHEREAS, Port Arthur Holdings III, LTD has not receivesd a refund of any sales tax at the Retail Center due to its tenants not f~roviding sufficient information as to the sales tax that they have collected and remitted to the Texas Comptroller of Public Accounts; and WHEREAS, the City of Port Arthur and the Port Arthur Holdings III desire to amend the existing agreement as to provide an incentive as to attract Best Buy who will also provide information as to the sales tax that they will collect and z-emit to the Texas Comptroller of Public Accounts; and NOW THEREFORE, it is herein agreed to between the Cite of Port Arthur and Port Arthur Holdings III, Ltd. as follows:) 1. That Article 2 of the Sales Tax Refund Agreement is amended as follows: z.Port Arthur Holdings III, Ltd._refund agreement amendment2 "Arti.cle 2. Grant and Refund Schedule and Term 2.01. As an incentive for the construction of the retail center in the Zone and the retention of Best Buy at the center, the City agrees to refund to Port Arthur Holdings 7CII, Ltd., a portion (which portion is set forth below) of the :ales tax F>roceeds from retail sales at this retail center, (the "Sales Tax Refund"). The parties acknowledge the provisions of existing state law (i.e., Chapters 151 and 321, Texas Tax Code), whereby retail sales at the stores to be located in the retail center are subject to a total tax of 8.25 (the "Total Tax"). The 'T'otal Taxes that will be collected by Port Arthur Holdings III, Ltd., or by the occupants of the retail center on each applicable retail sale, reported and paid to the Texas Comptroller of Public Accounts, are as follows: • To the State of Texas 6.25~k; • To the City 1.00 (the "City Portion"); • To Jefferson County 0.508; and • To the City of Port Arthur EIDC 0.50. Only the City Portion of the Total Tax shall be subject to this Agreement. The Sales Tax Refund in each year will equal: (i) 50~ of the City Portion (14) collected with respect to retail sales at the stores to bes located at the retail center described in Exhibit "A" (Tract I, 1.3156 acre), Exhibit "B" (Tract II, 3.5920 acres), and Exhibit "C" (Tract III, 4.8047 acres), for the first year to the tenth year, up to a maximum of $180,000 per year. The refund for the first to the tenth year shal7L be proportionately reduced if Port Arthur Holdings III, Ltd. does not build an 80,000 square foot retail center as amount of square feet divided by 80,000. (ii) The total refund shall not exceed $1,800,000. 2.02. The period of the Sales Tax Refund (the "Refund Periad") will commence on June 1, 2010, the Commencement D<~te, and will expire on May 31, 2020, unless sooner terminated .Ln accordance with the terms and conditions herein set forth in this agreement. 2.03. This Agreement shall terminate on the earlier to occur- of, (i) the expiration of the Refund Period, and (ii) the z.Port Arthur Holdings III, Ltd._refund agreement amendment2 date that the sum of the Sales Tax Refund paid to Port Arthur Holdings III, Ltd., equals $1,800,000. 2.04 The City will pay to Port Arthur Holdings III, Ltd t:hereof during the Refund Period either, (a) within thirty (30) days after receipt of the City Portion from the Texas Compt;roller of Public Accounts, as well as after receipt from Port Arthur Holdings, III, Ltd and the retail occupants of information as to the sales tax paid (including reports made to Comptroller of Public Accounts or (b) at the City's option (but only after written notice to Port Arthur Holdings III, Ltd.) in montrily installments based upon the reasonably estimated Sales Tax Refund for the applicable calendar year. The refund will only be applicable for sales taxes that are collected from June 1, 2(110 until May 31, 2020. 2.05 Notwithstanding anything to the contrary contained herein, the substantial completion of the retail center including the build out as to accommodate Best Buy with a certificate of compliance by the City shall be a condition precedent to the obligations of the City under this Agreement" 2. That the City of Port Arthur will make such refunds only from the City portion of sales tax that is collected with respect to the retail center as located in the Tracts in Exhik>its "A", "B" and "C" with such further limitations as denoted in the Sales Tax Refund Agreement approved by Resolution No. 07-010. 3. That this Amendment No. 2 is herein contingent on the entry of a lease between Port Arthur Holdings III, LTD and Best Buy f:or Best Buy to relocate into the Retail Center by JunE~ 1, 2010 with Best Buy providing the City information as to the' sale~~ tax that it collects and remits to the Texas Comptroller of Public Accounts. SIGNED AND AGREED TO on this the day of 2009. CITY OF PORT ARTHIIR, (the "City") BY: Name: Stephen Fitzgibbons Title: City Manager z.POrt Arthur Holdings III, Ltd._refund agreement amendment2 SIGNED AND AGREED TO on this the day of 2009. PORT ARTHIIR HOLDINGS III, LTD. BY: Name: Title: President z.Port Arthur Holdings III, Ltd._refund agreement amendment2