HomeMy WebLinkAboutPR 13050: LAGRONE SERV. LTDinteroffice
MEMORANDUM
TO: Mayor, City Council & City Manager
From: Mark T. Sokolow, City Attorney ~ ~
Subject: P. R. No. 13050 Council Meeting March 29, 2005
Date: March 24, 2005
Attached is P. R. No. 13050 as it pertains to a Sales Tax
Refund Agreement with LaGrone Services, LTD. The agreement
extends the time for LSI to buy the land to June 1, 2005,
provides for the possibility of a hotel, and postpones the
construction date to October 1, 2005. It readjusts the rebate
period so that it commences on December 1, 2006 and ends on
November 30, 2016.
MTS:ts
Attachment
cc: VIA FACSIMILE (281) 444-2350
Kerry LaGrone
LSI
z.pr13050.2memo
P. R. No. 13050
03/24/05 ts
RESOLUTION NO.
A RESOLUTION AS IT PERTAINS. TO A S~LES TAX
REFUND A~REE~ENT WITH LA,ROME SERVICES, LTD
~HEREAS, pursuant to Resolution Mo. 04-426, the City
Council established a Neighborhood Empowerment Zone; and
WHEREAS, the City Manager was authorized to enter into a
sales tax refund agreement with LaGrone Services, LTD pursuant
to Resolution No 04-427; and
WHEREAS, LaGrone Services, LTD has requested modifications
thereto as to allow an extension to June 1, 2005 for LaGrone
Services, Ltd. to purchase the land and to include the possible
construction of a hotel; and
WHEREAS, the City Council deems it in the best interest of
the citizens to enter into a sales tax refund agreement with
LaGrone Services, LTD as denoted in Exhibit "A".
NOW THEREFOKE, BE IT RESOLVED BY THE CITY COUNCIL OF TEE
CITY OF PORT ARTHUR, TEXAS:
Section 1. That the facts and opinions in the preamble
are true and correct.
Section 2. That the City Manager is authorized to
execute a Sales Tax Refund Agreement with LaGrone Services, LTD
in substantially the same form as delineated in the attached
Exhibit "A".
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Section 3. That a copy of the caption of this
Resolution shall be spread upon the Minutes of the City Council.
READ, ADOPTED AND APPROVED on this __ day of
, A.D., 2005, at a Regular Meeting of the City
Council of the City of Port Arthur, Texas, by the following
vote:
AYES: Mayor ,
Councilmembers ;
;
NOES:
OSCAR ORTIZ, MAYOR
ATTEST:
EVANGELINE GREEN, CITY SECRETARY
APPROVED AS TO FORM:
CITY ATTORNEY
APPROVED FOR ADMINISTRATION:
STEVE FITZGIBBONS, CITY MANAGER
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EXHIBIT "A"
FOR RETAIL FACILITY REDEVELOPMENT AND EXPANSION
BETWEEN
THE CITY OF PORT ARTHUR AND LAGRONE SERVICES, LTD.
This Sales Tax Refund Agreement (this "Agreement") is entered
into as of April 1, 2005 (the "Effective Data") by and between the
City of Port Arthur (the "City"), a Texas municipal corporation of the
County of Jefferson and State of Texas, and LaGrone Services, LTD.
Article 1. General Provisions
1.01. This Agreement is authorized and governed by (i) Chapter
378 (Neighborhood Empowerment Zone) of the Texas Local Government
Code, Sections 378.001 through 378.004, (ii) Chapter 380
(Miscellaneous Provisions Relating to Municipal Planning and
Development) of the Texas Local Government Code, Sections 380.001
through 380.003, and (iii) the City's Resolution enacted on March 29,
2005.
1.02. LaGrone Services, LTD., is negotiating a contract to
purchase certain land (the "Property") in the City of Port Arthur,
Jefferson County, Texas described on Exhibit A attached hereto and
made a part hereof. The Property is situated within the City as a
Neighborhood Empowerment Zone pursuant to Resolution enacted on
December 14, 2004. LaGrone Services, LTD., proposes to construct a
retail center and possibly a hotel of approximately 266,000 square
feet in Phase I, and 120,000 square feet in Phase II as delineated in
projections provided to the City by LaGrone Services, LTD., on the
Property, which retail center and hotel the City has found will
contribute to an increase in economic development in the Zone.
1.03. The Property is not part of an improvement project financed
with tax increment bonds.
1.04. The Property is not owned or leased by any member of the
Port Arthur City Council or any member of the City Planning and Zoning
Commission.
Article 2. Grant and Refund Schedule and Term
2.01. As partial consideration for the construction of the retail
center and hotel in the Zone, the City agrees to refund to LaGrone
Services, LTD., a portion (which portion is set forth below) of the
sales tax proceeds from retail sales at this retail center and hotel,
(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
and at the hotel are subject to a total tax of 8.25% (the "Total
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Tax") . The Total Taxes will be collected by LaGrone Services, LTD.,
or by the occupants of the retail center and hotel on each applicable
retail sale, reported and paid to the Texas Comptroller of Public
Accounts, and thereafter disbursed as follows:
· To the State of Texas 6.25%;
· To the City 1.00% (the "City Portion");
· To Jefferson County 0.50%; and
· To the City of Port
Arthur EDC 0.50%.
Only the City Portion of the Total Tax shall be subject to this
Agreement. The Sales Tax Refund in each calendar year (i.e., January
1 through December 31) will equal:
(i) 100% of the City Portion (1¢) collected with
respect to retail sales at the stores to be
located at the retail center described in Exhibit
"A" and at a hotel for the first year, up to a maximum
of $300,000.
(ii) 50% of the City Portion collected with respect to
retail sales at the stores to be located at the retail
center described in Exhibit "A" and at a hotel for the
second year to the tenth year, up to a maximum of
$300,000 per year.
(iii) The total refund shall not exceed $3,000,000.
(iv) The refund shall be proportionately reduced if LaGrone
Services, LTD., does not build a 200,000 square foot
retail center and a hotel, as amount of square feet
divided by 200,000.
2.02. The period of the Sales Tax Refund (the "Refund Period")
will commence on December 1, 2006, the Commencement Date and will
expire on November 30, 2016, unless sooner terminated in 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 date that the sum
of the Sales Tax Refund paid to LaGrone Services, LTD., equals
$3,000,000.
2.04. The City will pay to LaGrone Services, LTD., thereof during
the Refund Period either (a) within thirty (30) days after receipt of
the City Portion from the Texas Comptroller of Public Accounts or (b)
at the City's option (but only after written notice to LaGrone
Services, LTD.,) in monthly installments based upon the reasonably
estimated Sales Tax Refund for the applicable calendar year.
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2.05. Notwithstanding anything to the contrary contained herein,
the substantial completion of the retail center with a certificate of
compliance by the City shall be a condition precedent to the
obligations of the City under this Agreement.
Article 3. Additional Incentives Provided by
the City of Port Arthur
As partial consideration for the construction of the retail
center and a hotel in the Zone and the creation of jobs and other
economic benefits to the Zone anticipated in connection with the
operation of the retail center and a hotel, the City agrees to
expedite the process for all hearings, reviews, inspections, and
contacts with City staff in order to ensure the timely completion of
the construction process, and to consider any other reasonable
requests made by LaGrone Services, LTD., in order to assist it in
constructing the retail center and of the hotel. The City will either
pay or waive all building permit fees and tap fees to be charged to
LaGrone Services, LTD., for the retail center and hotel.
Nevertheless, LaGrone Services, LTD., is responsible to pay for all
construction costs, which includes, but is not limited to, the cost to
tap into the City's water and sewer system and to pay for all meters
and related equipment.
Article 4. Effect of Sale and Assignment
4.01. LaGrone Services, Ltd. shall have the right, without the
City's consent, to transfer or assign this Agreement to an Affiliate
(as such term is hereinafter defined} of LaGrone Service, Ltd. or any
other business that will occupy the retail store or own the hotel for
the purpose of operating a retail business, provided that LaGrone
Services, Ltd. shall notify the City in writing of such transfer or
assignment within ten (10) after the effective date thereof. For
purposes of this Agreement, the term ~Affiliate" shall mean:
(1} A parent corporation of LaGrone Services, Ltd;
(2) Any wholly subsidiary of LaGrone Services, Ltd. or LaGrone
Services, Ltd.'s parent corporation;
{3) Any business entity succeeding to substantially all of
LaGrone Services, Ltd.'s assets as a result of a
consolidation or merger; or
(4) Any business entity to which all or substantially all of
LaGrone Services, Ltd.'s assets as to this property have
been sold.
4.02. The Transfer or assignment of this Agreement to an entity
which does not satisfy the requirements of Section 4.01 above shall
require the City's consent as evidenced by a Resolution of the City
Council after receipt by the City of LaGrone Services, Ltd.'s written
notification of such proposed transfer at least ten (10) days before
the effective date thereof, provided that the City's consent shall not
unreasonably be withheld, conditioned, or delayed, but shall be
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conditioned upon the express assumption, pursuant to an Assignment of
and Assumption of Obligations Under Sales Tax Refund Agreement in
substantially the form attached hereto as Exhibit ~B", by such
transferee/assignee of all of LaGrone Services, Ltd.'s obligations set
forth in this Agreement.
4.03.Any attempted transfer or assignment of this Agreement in
violation of the terms set forth in this Article 4 shall be void ab
initio, and shall entitle the City to terminate this Agreement by
written notice to LaGrone Services, Ltd., whereupon the parties hereto
shall be relieved of all duties hereunder except that LaGrone
Services, Ltd. shall be entitled to its share of the Sales Tax Refund
accrued prior to the date of such termination; provided, however, that
such termination shall not be effective if, within ten days after its
receipt of the City's termination notice, LaGrone Services, Ltd. shall
notify the City that LaGrone Services, Ltd. has rescinded such
attempted transfer or assignment.
4.04. Effective as of the effective date of a transfer or
assignment pursuant to Section 4.01 or 4.02 above, LaGrone Sezvices,
Ltd. will be released of any further duties or obligations under this
Agreement.
Artlcle 5. Independent Contractor/Indemnity
5.01. In executing this Agreement and in performing their
respective obligations hereunder, the City and LaGrone Services, Ltd.
are acting independently and not in any form of partnership or joint
venture. The City assumes no responsibilities or liabilities to any
third parties in connection with this Agreement.
Article 6. Docu~ent&tlon
6.01. The parties agree that the dollar amount of retail sales
tax eligible for the Sales Tax Refund will be calculated based upon
sales and sales tax information furnished by the Office of the
Comptroller of the State of Texas or any successor agency charged with
collecting such information and preparing such reports (the
"Comptroller's Office".) Each calendar year (or month, if the City
elects to pay the Sales Tax Refund in monthly installments) during the
applicable Refund Period, LaGrone Services, Ltd. will authorize the
Comptroller's Office to furnish to the City a report of LaGrone
Services, Ltd. or of the occupants of the retail center and hotel
collections and payments of sales tax for the retail center and hotel
during such calendar year (or month, as applicable.) The retail
center occupants and the hotel will also provide to LaGrone Services,
Ltd. or his assignee, a copy of their sales tax reports, who will
thereafter forward it to the City.
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Artlcle 7. Not~ce
7.01. All notices required or permitted by this Agreement will be
delivered either (a) by certified mail, postage prepaid, effective
five days after mailing, or (b) by hand delivery or by a nationally
recognized overnight courier, in either case effective upon delivery,
in all cases addressed as follows (or to such other address as a party
may specify to the other party by notice delivered in accordance with
the terms hereof):
TO LA~RONE SERVICES, LTD.= LaGrone Services, Ltd.
ATTN: Kerry LaGrone
13810 Champion Forest Drive
Suite 145
Houston, TX 77069
TO THE CITYz City of Port Arthur
ATTN: City Manager
444 4th Street
P. O. Box 1089
Port Arthur, TX 77641
Article 8. Miscellaneous
8.01. This Agreement was approved by the City Council of the City
at its meeting on March 29, 2005.
8.02. If any section, subsection, paragraph, sentence, phrase, or
word of this Agreement is held invalid for any reason, the balance of
this Agreement will remain in effect and will be read as if the
parties intended at all times not to include the invalid section,
subsection, paragraph, sentence, phrase, or word.
8.03. This Agreement will be construed under the laws of the
State of Texas.
8.04. This Agreement may be executed by the parties in multiple
counterparts, all of which counterparts when taken together
constituting one Agreement.
Article 9. Termination Clauses
9.01. This Agreement can be terminated by the City of Port
Arthur if LaGrone Services, Ltd. does not own the property described
in Exhibit ~A" by June 1, 2005.
9.02. This Agreement can be terminated by the City of Port
Arthur if LaGrone Services, Ltd. does not coF~ence construction by
October 1, 2005.
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9.03. If the events delineated in Sections 9.01 or 9.02 occur,
the City of Port Arthur shall give LaGrone Services, Ltd. ten (10)
days written notice thereof.
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SIGNATURE PAgE TO BALES TAX ~EF~RD A~REEMENT
FOR RETAIL CENTER DEVELOPMENT
BETWEEN
THE CITY OF PORT ARTHUR AND LA~RONE SERVICES, LTD.
EXECUTED by the parties hereto to be effective as of the date
first set forth above.
CITY OF PORT ARTHUR, a Texas municipal
corporation (the ~City")
Name:
Title:
LA~RONE SERVICES, LTD.
Name:
Title:
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EXHIBIT "A"
TO THE AGREEMENT
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EXHIBIT "B"
TO THE A(~REEMENT
(SEE ATTACHED ASSIGNMENT}
z. lsi_refund agreement 2 9
EXHIBIT
ASSIGNMENT OF AND ASSUMPTION OF OBLIGATIONS
UNDER SALES TAX REFUND A~REEMENT
THIS ASSIGNMENT OF AND ASSUMPTION OF OBLIGATIONS ~RDER SALES TAX
REFUND A~REEMENT (hereinafter called this ~Assi~nment") made the __
day of , 2005 between LaGrone Services, Ltd., a
corporation duly organized and existing under the laws of the State of
Texas, with its principal place of business at
(hereinafter called ~Assignor") and
, a corporation duly organized and
existing under the laws of the State of Texas, with its principal
place of business at {hereinafter
called ~Assi~nee"), and the City of Port Arthur, a municipal
corporation of the County of Jefferson and State of Texas, with its
principal place of business at 444 4th Street, Port Arthur, Texas 77641
(hereinafter called the ~City".)
WiTNESSETH~
WHEREAS, the City and Assignor entered into a Sales Tax Refund
Agreement (hereinafter called the ~Agreement") dated
, 2005, a copy of which is attached hereto as
Exhibit ~1", whereby Assignor became entitled to certain rights and
privileges and subject to certain duties and obligations, all as more
particularly described in the Agreement; and
WHEREAS, the City is willing to consent to such an assignment on
the terms set forth herein.
NOW, THEREFORE, in consideration of the sum of Ten Dollars
($10.00) and No/100, and other good and valuable consideration
exchanged among the parties hereto, the receipt and sufficiency of all
which is hereby acknowledged and confessed, it is agreed:
1. Assignor by these presents does sell, grant, assign, and
convey unto Assignee all of Assignor's right, title, and interest in
and to the Agreement, and Assignor fully authorizes and empowers
Assignee to exercise all rights as Assignor under the terms of said
Agreement, and in the same manner as Assignor might or could do
thereunder.
2. Assignee hereby expressly assumes all of the terms
covenants, and conditions of the Agreement, and expressly agrees to be
bound thereby and assumes full performance thereunder.
3. Nothing herein contained shall in any way operate to modify
or abrogate any requirements in the Agreement respecting any further
or future assignment of the Agreement, or the rights or obligations
thereunder, in whole or in part.
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4. The parties hereto do hereby expressly ratify and reaffix~n
the Agreement, and the terms, covenants, and conditions therein
contained.
5. Expressly subject to the terms herein contained, the City
does hereby consent to the within assignment of the Agreement. It is
further agreed and understood between all parties to this Assignment,
that upon the assumption of the obligations contained in the Agreement
by Assignee, Assignor shall be relieved of all rights, privileges,
duties, and obligations thereunder.
IN WITNESS THEREOF, the parties hereto have executed this
Assignment as of the day and year first above written, and the City
further manifests its approval of this Assignment by a Resolution.
SIGNED on the __ day of , 200_.
CITY OF PORT ARTHUR
Stephen Fitzgibbons, City Manager
SIGNED on the __ day of , 200_.
LAGRONE SERVICES, INC.
Kerry LaGrone, President
SIGNED on the __ day of , 200_.
ASSIGNEE
BY:
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MESSAGE CONFIRMATION
83/24×2005 12:34
ID=409 983 8124
DATE S,R-TIIIE DISTAHT STATION ID i%~DE PAGES RESULT
03/24 03' 24" 2815802004 CALL lNG 16 OK OE~E~O
03-'24/2005 12:30 409 983 8124 · 12814442350 N0.383 BO1
intero££ice
MEMORANDUM
To: Mayor, City Council & City Manager
From: Mark T. Sokolow, City Attorney ~ ~
Subject: P. R. No. 13050 Cou/Tcil Meeting March 29, 2005
Date: March 24, 2005
Attached is P. R. No. 13050 as it pertains to a Sales Tax
Refund Agreement with LaGrone Services, LTD. The agreement
extends the time for LSI to buy the land to June 1, 2005,
provides for the possibility of a hotel, and postpones the
construction daze to October 1, 2005. It readjusts the rebate
period so that it commences on December 1, 2006 and ends on
November 30, 2016.
MTS:tS
Attachment
cc: VIA ~AC~. 444-2350
Kerry LaGrone