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HomeMy WebLinkAboutPR 14381:BASF INDUSTRIAL AGMTinteroffice MEMORANDUM To: From: Date: Subject: Mayor, City Council, and City Manager Valecia R. Tizeno, First Assistant City Attorney September 21, 2007 P. R. No. 14381; Council Meeting September 25, 2006 Attached is P. R. No. 14381 approving a new Industrial District Agreement with BASF Corporation for 2008. BASF will provide information estimating that their 2008 values at the Council Meeting, which will be attached as Exhibit "E" to the agreement. The agreement provides that the payment will be 80% of the taxes as if they had been located in the City. We should have Exhibit "E" to the agreement by Tuesday. VRT:gt Attachment cc: Director of Finance Mr. Mark Garner BASF CORPORATION z. pr14381.memo P. R. No. 14381 09/21/07 gt RESOLUTION NO. A RESOLUTION APPROVING AN INDUSTRIAL DISTRICT AGREEMENT WITH BASF CORPORATION WHEREAS, the City and BASF Corporation entered into an Industrial District Agreement per Resolution No. 06-365 for the year 2007; and, WHEREAS, the City and BASF Corporation desire to enter into a new agreement; and, WHEREAS, BASF Corporation will be paying the City 80% of the taxes as if they had been located in the City. WHEREAS, NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR, TEXAS: That the facts and opinions in the preamble are Section 1. true and correct. Section 2. That the City Manager is herein authorized to execute a new Agreement with BASF Corporation on behalf of the City in substantially the same form as set forth in Exhibit "A" attached hereto for the year of 2008. Section 3. That a copy of the caption of this Resolution be spread upon the Minutes of the City Council. READ, ADOPTED AND APPROVED on this day of the City of z.pr14381 , A.D., 2007, at a Meeting of the City Council of Port Arthur, Texas, by the following vote: AYES: Councilmembers , ; NOES: ATTEST: MAYOR CITY SECRETARY APPROVED AS TO FOBM: APPROVED FOR ADMINISTRATION: CITY MANAGER z.pr14381 EXHIBIT "A" STATE OF TEXAS COUNTY OF JEFFERSON § INDUSTRIAL DISTRICT AGP~EMENT WITH BASF CORPORATION WHEREAS, the City of Port Arthur and BASF Corporation entered into an Industrial District Agreement on or about September 18, 2006, that was approved by Resolution No. 06-365; and WHEREA.~, this Industrial District Agreement will December 31, 2007; and WHEREA~, BASF Corporation hereinafter denoted as expire on the "Company" is the owner of the property described in Exhibits "A" and "B"; and WHEREAS, the Company is a business that presently produces the products described in Exhibit "C" at its Port Arthur facility; and WHEP~AS, the Company presently has the land, improvements, inventory, equipment and units described in Exhibit "D" with the value described in Exhibit "E"; and WHEREAS, the Company plans to make a capital expansion in the timetables and values as described in Exhibit "F"; and WHEREA~, the City of Port Arthur and the Company wish to address the following: described in Exhibits z.basf ida 2008 (1) health and safety issues on the land "A" and "B" and at any existing plant or at any plant City's review thereof, revenue source that is that may be built thereon and procedures for the (2) needs of the City to have a stable not materially affected by appraisal litigation, the City, residents, Agreement; (3) the need to define backup services provided by (4) employment opportunities for Port Arthur minorities, and companies, and (5) the terms and of a new WHEREAS, the City of Port Arthur ("City") and the Company desire to enter into a new Industrial District Agreement with respect to property described on Exhibits "A" and "B" that is within the extraterritorial jurisdiction of the City; and WHEREAS, the City and the Company agree that there has been full and adequate consideration for the new Industrial District Agreement with the Company; and WHEREAS, this new Agreement is authorized under Sections 42.044 and 212.172 Local Government Code, Vernon's Texas Code Annotated, and that the parties agree that the following terms are reasonable, appropriate, and not unduly restrictive of business activities; and WHEREAS, all parties find that this new Agreement as delineated herein is beneficial to each party; and NOW, THEREFORE, in consideration of the promises and the mutual agreement of the parties contained herein, the City of z.basf ida 2008 2 Port Arthur and BASF Corporation follows: Section 1. agree with each other as Payments by BASF Corporation. (a) For the year 2008, BASF Corporation shall pay to the City the amounts delineated in this Section so long as this Industrial District Agreement is in full force and effect and all of the property described in Exhibits "A" and "B" is not annexed by the City. (b) The Company shall pay to the City of Port Arthur amounts equal to eighty percent (80%) of the amount of taxes that the Company would have paid to the City with respect to the property (land, improvements, units, equipment, inventory, and all other property located thereon) described in Exhibits "A" if it had been located within the corporate limits of The "in lieu of tax" payment shall be paid by October and "B" as the City. 15, 2008. (c) The City shall previously paid by the Company, the City. (d) not refund or credit any monies either directly or indirectly to BASF Corporation shall also pay any sums due and owing on its September 2006 "in lieu of tax" agreement. Section 2. If requested orally or in writing by the Company, the City's Fire Department shall provide backup fire z.basf ida 2008 3 suppression support, and the City's Police Department shall assist in providing an evacuation route and traffic control in the case of a fire or a chemical release at the Company plant located in the City's extraterritorial jurisdiction. Nevertheless, the Company shall be primarily liable for taking such precautions as is expected in the industry and as is required by federal, state and local law, including the standard codes as delineated and referenced in the Fire Code as published each year by the International Code Council to prevent (1) fire, explosions and chemical releases and to provide an evacuation, and (2) the imprudent discharge of storm water that contributes to flooding on adjacent property. The Company shall employ or provide sufficient fire suppression personnel and equipment to provide an initial and primary fire suppression response, as well as to control and abate chemical releases. The Company shall provide the City's Fire Chief and Police Chief with Emergency Response Plans for any plants, operations or other hazardous operations land described in Exhibits "A" and "B". the City is requested to provide initial refineries, chemical that take place on the If there is a fire and and primary fire suppression services or if a cleanup is required under the 2000 International Fire Code, the Company will pay to the City the costs and expenses incurred by the City and any of its departments. z.basf ida 2008 4 Section 3. The Company shall promptly notify 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 OSHA permissible exposure limits. Section 4. It in this Agreement will is specifically stipulated that nothing 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 Agreement if the City should determine that such annexation is reasonably necessary to promote and protect the general health, safety and welfare of the persons residing within or adjacent to the City, provided however, October 1, 2008 Notwithstanding, that the City agrees that such annexation prior to will not be made for revenue purposes only. the parties agree and consent that the City can annex if a bill is adopted by the State legislature which materially limits or restricts the authority of the City to annex all or part of said land and facilities. In the event of such annexation, the Company will not be required to make further payments under this Agreement for any calendar year commencing after such annexation with respect to property so z.basf ida 2008 5 annexed, but shall nevertheless be obligated to make full payments for the year during which such annexation becomes effective if the annexation becomes effective after January 1st of said year. The Company shall not be required to pay ad valorem taxes to the City for the same period of time that they have already paid an ~'in lieu of tax" payment, with respect to the property described in Exhibits "A" and "B" to this Agreement. In case the property described in Exhibits "A" and "B" is annexed prior to December 31, 2008, the City will remit to the Company any taxes paid to the City in excess of the "in lieu of tax" payments as described in Section 1 as an Economic Incentive Program as allowed under Chapter 380 Local Government Code. This partial remission of taxes (Economic Incentive Program) will only be applicable until December 31, 2008. If the annexation laws are changed so that the City can no longer annex the property of the Company, the Company agrees that it will continue to annually pay to the City the "in lieu of tax" payments delineated in Section 1 until December 31, 2008 and it will thereafter continue to pay the City an "in lieu of tax" payment of 80% of its appraised value times the City's tax rate for so long as it or its assignees and successors owns the property as described in the attached Exhibits "A" and "B". Payments will be due on October 15th of each year. If the z.basf ida 2008 6 annexation laws are changed so that the City can no longer annex the property of the Company, that the City has the option, extend this contract and that the Company agrees and consents at the City's sole discretion, to the Company will continue to be obligated to pay the City "in lieu of tax" payments not to exceed 15 years each, for a total duration not to exceed 45 years. The appraised value of the Company's plant is the value as denoted by the Jefferson County Appraisal District and includes all of the land, buildings, goods, equipment, inventory, and other property that is or will be located in or on the property described in the attached Exhibits "A" and "B". This also includes the appraised value of any property that is zone or in any other type of federal, located in a free trade state or local zone. Section 5. The parties agree that the City has the sole discretion after October 1, 2008 to annex the property in Exhibits "A" and "B" or to enter into negotiations on the payment by the Company of additional "in lieu of tax" payments. Section 6. The present owners of the tract are described in Exhibit "G". If the Company only owns or possesses a partial interest in any of the parcels or tracts described in Exhibits "A" and "B" to this Agreement, the City reserves the right to annex that tract or parcel if the other owners do not z.basf ida 2008 7 pay an Kin lieu of tax" payment for their interest in the property. If the City annexes a tract or tracts, the total "in lieu of tax" payment will be reduced by the same percentage as the appraised value of the tracts under the contract are reduced. Section 7. The City will not commence annexation proceedings prior to October 1, 2008 for the Company's property as delineated in Exhibits "A" and "B" to this Agreement under Chapter 43 of the Local Government Code, or file litigation in District Court to abate or prevent a nuisance or seek a civil penalty under Sections 54.016, 54.017, and 217.042 Local Government Code for ~'health, safety and welfare concerns" until written notice of the concerns have been delivered to the Company, and they have had an opportunity to respond and to address the City Council in open session. Section 8. If there is a dispute as to whether there is a health, safety and welfare concern for an event that occurs prior to October 1, 2008, the matter can, at the request of either party, be submitted to arbitration before an arbitrator selected from a panel supplied by the American Arbitration Association ("AAA"). The arbitration shall be governed by the rules of the AAA and shall take place in Jefferson County or at such other locations as the parties agree to. The request for z. bas f_ida_2 0 0 8 8 arbitration must be demanded in writing no later than ten (10) days following the City Council meeting at which the Company had the opportunity to address the City Council, in accordance with Section 7, or the right to arbitration shall be waived unless the parties agree otherwise. The costs of the arbitration shall be shared equally between the two {2) parties. The arbitration process shall be completed within forty-five (45) days from the date the arbitrator is selected, and if it is not so completed, either party may proceed with annexation or litigation as they so desire. Section 9. When hiring, the Company shall continue to seek qualified applicants by advertising in the official newspaper of the City as to give Port Arthur residents a fair opportunity to apply for employment with the Company for work on the plants that are located or to be located on the land described in Exhibits "A" and "B". The Company shall use its best efforts to hire Port Arthur residents for both the construction work and for permanent jobs. The Company shall also continue to give Port Arthur companies a fair opportunity to sell goods and services to the Company. For major new capital expansions as measured by industrial standards, the Company shall also include advertising for construction and permanent jobs in the local market, including radio stations in Port Arthur, and shall also include recruitment through the z.basf ida 2008 9 Texas Work Force Commission in Port Arthur, Lamar College-Port Arthur, PAISD, the Black Pastor's Association and the Ministerial Alliance, the Port Arthur NAACP, and local labor unions. For major new capital expansions, the Company shall also meet every other month or at other intervals mutually agreed on with City officials to monitor progress on hiring and hiring efforts and to try to make adjustments in the recruitment process, if needed. The Company will also have a local hiring facility in Port Arthur or in Port Arthur's extraterritorial jurisdiction for both the retention/selection of new employees and contractors. Ail employees, as well as contract and construction workers, will be paid at least the prevailing wage as set by the City in accordance with Chapter 2258 Government Code. The Company shall also be receptive and responsive to SBE/MWBE projects and programs of the City. Section 10. The Company shall have the right to assign, transfer, or convey all, or any part of its rights, title and interest in this Agreement to any of its subsidiaries or controlled affiliates (control being more than a 50% ownership interest). The Company shall remain financial responsible for its subsidiaries and for its affiliates. The Company shall have the right to assign, transfer or convey all, or any part of its rights, title and interest in this Agreement to any person other than one of its subsidiaries or the Company controlled z.basf_ida_2008 ]0 affiliates in connection with any transfer or conveyance of title to all or any part of the properties subject to this Agreement at any time during the term of this Agreement, provided however, that the Company shall provide written notice of suoh assignment and shall receive the written consent of the City Council, by a duly adopted Resolution, which will not be unreasonably withheld. If the Company desires to make an assignment to any person other than one of its subsidiaries, or the Company controlled affiliates, it shall make a written request to the City Council, attaching (1) a description of the new company, (2) a financial statement of the new company, (3) the proposed contract between the companies, and (4) the portion or portions of the plant with respect to which the rights and obligations are to be assigned. The Company shall be relieved of its obligations under this Agreement to the extent that an approved assignee expressly assumes the Company's obligations. Subject to the preceding, this Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns. Section 11. The City encourages capital expansion on the land described in Exhibits "A" and "B" and the City agrees to act in good faith to negotiate reasonable incentive programs with the Company as such new projects are contemplated. This includes major new capital expansions that are not delineated in Exhibit "F", since all parties agree that reasonable incentive programs should be offered and that the Company expects to pay, and should pay, reasonable "in lieu of tax" payments on new capital projects. Major new capital expansion shall also include any project for which the Company seeks tax abatement from any taxing entity. Section 12. It is agreed by the parties to this Agreement that the Company and the City have the right to seek including specific performance of this equitable relief, Agreement. Section 13. The Company shall allow authorized employees and/or representatives of the City, including a monitor, who have been designated and approved by the City Council, Mayor, or the City Manager, to have access to the Company's land and/or plants during the term of this Agreement to inspect the plants and any improvements thereto to determine compliance with the terms and conditions of the Agreement. Ail inspections will be made at mutually agreeable times and will only be conducted in such manner as to not unreasonably interfere with the construction and/or operation of the Company. will be made with one or more representatives in accordance with the Company safety standards and security z.basf_ida_2008 12 Ail inspections of the Company and standards and rules. Ail inspections shall be made only on 48 hours' notice, except in case of an emergency. Section 14. The Company shall certify the commencement and completion date of the contemplated improvements described in Exhibit "F" herein. or make available for written statements to Additionally, the Company shall furnish inspection the following information or the City at least every six (6) months during the construction period of major capital improvements: (1) Statement by Company describing the status of construction of the contemplated improvements, percentage of construction completed, construction schedule and Company's estimate of taxable value of constructed improvements on the date of the statement; and (2) Statement by the Company of the numbers of Port Arthur residents, minorities, and companies hired and the amount of Port Arthur goods and services purchased; and (3) Any information, documents or records of any kind reasonably necessary for the City's evaluation of the Company's compliance with the terms and conditions of this Agreement and the City's guidelines, provided that the Company shall not be required to furnish any information, documents, or records which a reasonable, z.basf ida_2008 13 prudent Company under the same or similar circumstances would consider to be harmful business The Company's to its operations. statements described above shall be verified by the Company's project manager or other appropriate representative. Section 15. The Company agrees to annually furnish information necessary for the City to evaluate the Company's compliance with the terms and conditions of this Agreement. The Company further agrees that on or before March 1st of each year of this Agreement, the Company shall provide the City an annual report/statement of compliance with this Agreement. Section 16. The Company has indicated that no new construction jobs will be utilized in building the improvements for the new project, as described in Exhibit "F" and no new permanent jobs will be created at the plant once the new project is completed. The City reserves the right to hire or contract for a monitor as to review the Company's records and hiring practices as to verify whether the Company has complied and will continue to comply with this Agreement as to any construction improvements. Section 17. By acceptance of this Agreement and/or benefits conferred hereunder, the Company represents and z.basf_ida_2008 warrants that its undersigned agent has complete and unrestricted authority to enter into obligate and bind the Company to all and conditions contained herein. Section 18. Notice of Default. this Agreement and to of the terms, covenants, 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 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 Company will be afforded a reasonable time within which to cure the alleged default. Nevertheless, time is of the essence on the payment schedule for the "in lieu of tax" payments. Section 19. Entire Agreement. This Agreement constitutes the entire Agreement of the parties with respect to the subject matter here, and supercedes any and all prior understandings or oral or written Agreements between the parties respecting such subject matter, except as otherwise provided in the instruments referenced herein. amended only by written instrument hereto. This Agreement may be signed by all of the parties z.basf ida 2008 Section 20. Severability. If any term or provision in this Agreement or the application thereof to any person or circumstances 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 provision or application, and the parties agree that the provisions of this Agreement are and shall be severable. Payment of the "in lieu of tax" payments is an essential part of this Agreement. Section 21. Remedies Cumulative. Except as otherwise 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 one or more of such remedies shall not be deemed to be a waiver of any other right, remedy or privilege provided for herein or available at law or in equity. Section 22. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the This Agreement is to be performed in Jefferson State of Texas. County, Texas. Section 23. Any notice provided for in this contract shall be given in writing to the parties hereto by certified z. bas f_ida_2008 16 mail, return receipt requested, or by other delivery means addressed as follows: TO CITY: City Manager City of Port Arthur 444 4tn Street Port Arthur, TX 77640 TO BASF CORPOBATION: Site Manager BASF CORPOP~%TION 14385 West Port Arthur road Beaumont, TX 77705 with a copy to: City of Port Arthur City Attorney 444 4th Street Port Arthur, TX 7741 or shall designate by at least ten party. Section 24. January 2008, and such other address in each case as the party to be notified (10) days notice to the other This Agreement is effective the 1st day of shall expire on the 31st day of December 2008, unless extended by the City of Port Arthur. Section 25. The Company has the option to terminate this Agreement and request that the property described in Exhibits "A" and "B" be annexed by the City. This Agreement will not terminate until the annexation is completed and the "in lieu of tax" payment will continue to be paid during the year of annexation. Furthermore, the City will proceed in a timely manner with the annexation. z. bas f_ida_2008 17 SIGNED AND AGREED to 2007. on this the day of , BASF CORPORATION 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 described to the foregoing instrument, and acknowledged 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 __ , A.D., 2007. day of NOTARY PUBLIC, STATE OF TEXAS z.basf ida 2008 SIGNED AND AGREED to on this the day of , 2007. CITY OF PORT ARTHUR, TEXAS BY: ACKNOWLEDGMENT STATE OF TEXAS § COUNTY OF JEFFERSON § BEFORE ME, the undersigned Notary Public, on this day personally appeared Stephen Fitzgibbons, City Manager, known to me to be the person whose name is described 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 expressed, and the capacities therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE, THIS THE __ day of , A.D., 2007. NOTARY PUBLIC, STATE OF TEXAS z.basf ida 2008 EXHIBIT ~A" Attached herein are the legal descriptions of the tracts owned by BASF Corporation , which are the subject of this Agreement. z. bas f_ida_2008 20 ~'~,'t~':~.':~' .." ...''....',.'~',~ ......." · ~, '~' · · · . · ' : ' · -..J .. ' ...:~ ': .',:t:...M ..~.(~¢.,~ "t:'/ ' -.~. r~.,.~,~ ~u.~ or a .port,on o~ propert~-o:f~",, ..s Tr,c,:t....~41.3~.~.cres ou['ofinorth par~ of } ';:'~' ":-: ": ' "':'?'~ "~' ~"::?:' :~ ~. ..~' · r{.': ~39/ ~' :~ !. , ..',: : · ,. .. .. : . u : .'. , · . A-, .(.S~:,h j. ae~e.rt.); 'Tract 2 199 59 acres out ~¢; ' ;' ~ ""? .': .... ' '.' ' :' ,,ame .,urvev.u.. · .:'..' )'~ :..' ,ketch) along .the property line shown as 527°30'36"[ tha¢ is t.tast of and run- '. .'.'. i,,g po,.c. . d/stance 9ff 830 flee[ to a poin[ thence due south a -dis~ance.o~'6SO.30 fea~ "'"':~:~ 2~' ' ' '-:'i.'.:.7 '"' a point, th~n due west a:cHstance of 1,170 feat to a poin~ .~hence due south ':" · distance o7 ],000.fee¢ t~ a point, thence'jdue ~ast'a. . . ' o~s ~ance' ' ' 'or'~l.04"' rea~' ' ' ' . ' '"" . . .' . - ' . ..' . . · .2...~}:: ..~'.' a po'~at ~'heace 520e05~0,[ a d' "~ . '~.'"' '- ' ~70:~0' ;:c::::;":.::-.'' :,' : : 4'.;'~ :, , ~.= ....... ~,~ - P p cy the, ce .... :........ : ~. ~. :~ , . .. .... . Ba~.ng.a tract of:land'ou'~'~" ,;~,,'.:'~..~ , "'. -.'..,.- ' ..._. '. .- · .:.:..:Z..:.'."'. · .'-.' '..'6".;. -.'.. :,¢'.~.'.;:'~; ~s' ?~Le;~.S~'~eY ~bs~ra~ ~y lOXag. ' · ' :.;.. ~-': ..... P. '.3 ' ' '% ........ ~ ~ q -~' ,. ...~-.. ,. ..~.2.¥..,.~ .... d. r: ..... ~. ,. · : ~ '.. ~. ..- . , ..-.- ~. ...... ~.:.~,.,,,.~ .... . .... ,. . . .. ..} .... . ~..-:..> .... · .... '. "' ' "':'~'" ,'.,"'N"'".'..':' " ' · ~ '..~';:, '"'~"%'"'? ".' ' ' . · ' .....:.[ ..- .-... '.. · . . . .~ ,~'; ,." . . The map hereto. showing the EXHIBIT ~B" location of the tracts is attached z.basf ida 2008 21 '. ":.. .': "'i'll''I'..' '." . '0 EXHIBIT ~C" The plant owned by BASF Corporation produces chemicals for agricultural usage. z. bas f_ida_2008 22 EXHIBIT ~D" BASF Corporation is a chemical company with units, storage facilities and pipelines to produce, store and transport chemicals for agricultural use. z. bas ~_ida_2008 23 EXHIBIT ~E" A memorandum from BASF will be presented at the Council Meeting, delineating their estimate improvements, equipment, inventory, units, property) located on Exhibits "A" and "B", lieu of tax" payment to be made by BASF to the City of Arthur. of the 2008 values (land, and all other and the expected "in Port z.basf_ida 2008 24 EXHIBIT ~F" NO planned capital expansion z. bas f_ida_2008 25 EXHIBIT ~G" BASF Corporation owns the property described in Exhibits "A" and "B". z.basf ida 2008 26