HomeMy WebLinkAboutPR 18105: IDA BETWEEN CITY OF PA AND THE PREMCOR REFINING GROUP, INC. P. R. NO. 18105
12/12/13 gt
RESOLUTION NO.
A RESOLUTION AUTHORIZING THE EXECUTION OF THE
FIRST AMENDMENT TO THE INDUSTRIAL DISTRICT
AGREEMENT BETWEEN THE CITY OF PORT ARTHUR AND THE
PREMCOR REFINING GROUP, INC.
WHEREAS, on December 16, 2008, the City Council adopted
Resolution 08 -494 authorizing an Industrial District Agreement
with The Premcor Refining Group, Inc., which will expire on
December 31, 2013; and
WHEREAS, on May 24, 2005, the City Council adopted
Resolution 05 -164 authorizing an Industrial District Agreement
with The Premcor Refining Group, Inc., and Port Arthur Coker
Company, L.P.'s Port Arthur Refinery Feed Rate Expansion Project
and Decoker Expansion, which will expire on December 31, 2014;
and
WHEREAS, the expiring agreement adopted pursuant to
Resolution 08 -494, covers all of the land owned by The Premcor
Refining Group, Inc., its affiliates and subsidiaries located in
the in the City of Port Arthur's extraterritorial jurisdiction;
and
WHEREAS, the company agreed to pay amounts equal to sixty -
five percent of the amount of property taxes that the Company
would have paid to the City with respect to the taxable value of
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the land, improvements, units, equipment, inventory and all
other property located on the land, described in Attachments A
and B of the agreement, as if they had been located within the
corporate limits of the City of Port Arthur; and
WHEREAS, due to the fact that the agreement which covers
the expansion projects (Resolution 05 -164), will not expire
until December 31, 2014, it is deemed in the best interest of
the City to negotiate these agreements and address all issues
with regard to the land owned by The Premcor Refining Group,
Inc., its affiliates and subsidiaries located in the in the City
of Port Arthur's extraterritorial jurisdiction at the same time;
and
WHEREAS, it would be more administratively expeditious for
both the City and The Premcor Refining Group, Inc., to negotiate
one new contract for all of the property, for the period
beginning January 1, 2015; and
WHEREAS, in order to accomplish this desire, the parties
will execute the First Amendment, which will extend the
industrial district agreement contract for the Premcor Agreement
(Resolution 08 -494) for one year; to an expiration date of
December 31, 2014.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF PORT ARTHUR:
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Section 1. That the facts and opinions in the preamble
are true and correct.
Section 2. That City Council hereby authorizes the
execution of a first amendment to the industrial district
agreement with The Premcor Refining Group, Inc., in
substantially the same form as Exhibit "A" attached hereto.
Section 3. That this first amendment will also cover
the taxable value of the land, improvements, units, equipment,
inventory and all other property located on the land which is
being leased by Air Products and Praxair.
Section 4. That a copy of the caption of this
Resolution shall be spread upon the Minutes of the City Council.
READ, ADOPTED, AND APPROVED, this day of
2013 AD, at a Regular Meeting of the City Council of the City of
Port Arthur, Texas by the following vote: AYES:
Mayor:
Councilmembers: ;
NOES:
Mayor
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ATTEST:
City Secretary
APPROVED AS TO FORM:
1 14 1
City Attorney
APPROVED FOR ADMINISTRATION:
City Manager
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Exhibit "A"
Will be presented at or
before the Council Meeting
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: J
STATE OF TEXAS §
§
COUNTY OF JEFFERSON 5
FIRST AMENDMENT TO
INDUSTRIAL DISTRICT AGREEMENT
WITH
THE PREMCOR REFINING GROUP, INC.
The First Amendment to Industrial District Agreement with
The Premcor Refining Group Inc., (also referred to as "Premcor ")
is made and entered into by and among the City of Port Arthur,
Texas (the "City ") and Premcor. The City and Premcor are each
hereinafter sometimes referred to individually as a "Party" and
collectively as the "Parties."
Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings ascribed to such terms
in the Agreement (as hereinafter defined), unless otherwise
stated.
RECITALS
WHEREAS, the City and Premcor are parties to that certain
Industrial District Agreement entered into effective as of
January 1, 2009 (the "Agreement "), which expires on December 31,
2013; and
WHEREAS, the Parties desire to amend the Agreement to (a)
extend the term of the Agreement for 1 (one) additional year,
and as a result of such extension, the Agreement will expire on
December 31, 2014, and (b) specify the amount of the "in lieu of
tax" payment to be made by Premcor, its affiliates, and lessees
to the City for the year 2014.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the
mutual undertakings contained herein, the Parties hereby amend
the Agreement as follows:
1. Section 1 of the Agreement is hereby amended to read in
its entirety as follows:
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Section 1- Payments by the Company
(a) Refinery and HOUP: As to the 1998 Industrial District Agreement
( with Clark Refining and Marketing, Inc. for the refinery with existing
improvements that was approved per Resolution 98 -288 and the 1998
Industrial District Agreement with Clark Refining and Marketing, Inc.
for Heavy Oil Upgrade Project that was approved per Resolution 98 -289,
these agreements will expire on December 31, 2008. As part of the new
Industrial District Agreement, the Company shall pay to the City of
Port Arthur $6,000,000 on January 1, 2009. In addition, on October
15 of each year, the company will pay amounts equal to sixty -five
percent (65 %) of the amount of property taxes that the Company would
have paid to the City with respect to the taxable value of the land,
improvements, units, equipment, inventory and all other property
located on the land, described in Attachment "A" and "B ", as if they
had been located within the corporate limits of the City of Port
Arthur. The "taxable value" also includes the assessed value of any
property that is located in a foreign trade zone or any other type of
federal, state or local zone. Each of such annual payments will be
reduced by 20% of the January 1, 2009 payment ($1,200,000). Such
• annual payments will be further reduced by a credit for interest on
the January 1, 2009 payment, calculated as described below, at 6% per
year. Therefore, the payments will be as follows:
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Date Company payments to City
(Refinery and HOUP)
January 1, 2009 $6,000,000
October 15, 2009 65% of taxes as if the property was
within the City less $1,485,000
October 15, 2010 65% of taxes as if the property was
within the City leas $1,488,000
October 15, 2011 65% of taxes as if the property was
within the City less $1,416,000
October 15, 2012 65% of taxes as if the property was
within the City less $1,344,000
October 15, 2013 65% of taxes as if the property was
within the City less $1,272,000
October 15, 2014 65% of taxes as if the property was
within the City
With regard to the payment due for October 15, 2014, there will be no
pre- payment credit, as the all terms related to the January 1, 2009
payment have been satisfied.
(b) Notwithstanding anything contained herein to the contrary as it
pertains to the refinery and HOUP payments in subsection (a) above,
with respect to each of the tax years 2010 through 2014,;
(i) if the taxable value of the taxable portion of the land,
improvements, units, equipment, inventory and all other property
located on such land, as described in Attachments "A" and "B ", for
such tax year exceeds such taxable value for the immediately preceding
tax year by more than ten percent (10 %), then for purposes of
calculating the amount of the payment for such tax year under Section
1(a), such taxable value for such taxable year shall be an amount
equal to 110% of such taxable value for the immediately preceding tax
year; and
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(ii) if the taxable value of the taxable portion of the land,
improvements, units, equipment, inventory and all other property
located on such land, as described in Attachments "A" and "B ", for
such tax year is less than such taxable value for the immediately
preceding tax year by more than ten percent (10 %), then for purposes
of calculating the amount of the payment for such tax year under
Section 1(a), 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 1(b) is equal to the product of the
City's tax rate for 2010 multiplied by 65% multiplied by 900 of such
taxable value for the tax year 2009 less $ 1,488,000. If, for
example, such taxable value for the tax year 2010 is 15% more than
such taxable value for the tax year 2009, the amount of the payment
for 2010 under Section 1(b) is equal to the product of the City's tax
rate for 2010 multiplied by 65% multiplied by 110% of such taxable
value for the tax year 2009 less $1,488,000. With regard to the
payment due for October 15, 2014, there will be no pre - payment credit,
as the all terms related to the January 1, 2009 payment have been
satisfied.
(c) Chevron Ethylene Plant As to the 2003 Industrial District
Agreement with Chevron Phillips for the ethylene plant with existing
improvements as approved by Resolution No. 03 -355, this agreement
expires on December 31, 2008 and this area will be annexed unless the
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City in its sole discretion enters into a new Industrial District
Agreement with Chevron Phillips.
(d) Hydrotreater As to the 2003 Industrial District Agreement with
The Premcor Refining Group Inc. for the Premcor (Hydrotreater)
Refinery Expansion (50,000 BPSD gasoline hydro processing unit) which
was approved by Resolution 03 -297, said agreement expires on December
31, 2010 and the Company shall continue to make payments thereon in
accordance with the terms of that agreement. Nevertheless, from
January 1, 2011 to December 31, 2014, the Company shall pay to the
City of Port Arthur—amounts equal to sixty -five percent (65 %) of the
amount of taxes that the Company would have paid to the City with
respect to the taxable value of the land, improvements, units,
equipment, inventory and all other property located on the land,
described in Attachment "C ", as if they had been located within the
corporate limits of the City of Port Arthur. The "In Lieu of Tax"
payments shall be paid by October 15 of each year, as follows:
Date Company payment to City
( Hydrotreater)
October 15, 2009 The Company pays based on the 75%
and with the Jefferson County Tax
Abatement percentages as further
delineated in the agreement as
approved by Resolution No. 03 -297
October 15, 2010 The Company pays based on the 75%
and with the Jefferson County Tax
Abatement percentages as further
delineated in the agreement as
approved by Resolution No. 03 -297
October 15, 2011 65% of taxes as if the property was
within the City
October 15, 2012 65% of taxes as if the property was
within the City
October 15, 2013 65% of taxes as if the property was
_within the City
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October 15, 2014 65% of taxes as if the property was
within the City
(e) Decoker As to 2005 Industrial District Agreement with the
Premcor Refinery Group and with the Port Arthur Coker Company, L.P. for
the Refinery's Feed Rate Expansion Project and Decoker Expansion
approved by Resolution No. 05 -164, said agreement expires on December
31, 2014 and the Company shall continue to make payments thereon in
accordance with the terms of that agreement.
(f) Tier II Diesel As to the 2005 Industrial District Agreement with
the Premcor Refinery Group for the Tier II Diesel Project as approved by
Resolution No. 05 -165, said agreement expires on December 31, 2009 and
the Company shall continue to make payments thereon in accordance with
the terms of that agreement. Nevertheless, from January 1, 2010 to
December 31, 2014, the Company shall pay to the City of Port Arthur
amounts equal to sixty -five percent (65%) of the amount of taxes that
the Company would have paid to the City with respect to the taxable
value of the land, improvements, units, equipment, inventory and all
other property located on the land, described in Attachment "D ", as if
they had been located within the corporate limits of the City of Port
Arthur. The "In Lieu of Tax" payment shall be paid by October 15`' of
each year as follows:
Date Company payment to City
(TIER II Diesel)
October 15, 2009 The Company pays based on the 75%
and with the Jefferson County Tax
Abatement percentages as further
delineated in the agreement as
approved by Resolution No. 05 -165
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October 15, 2010 65% of taxes as if the property was
within the City
October 15, 2011 65% of taxes as if the property was
within the City
October 15, 2012 65% of taxes as if the property was
within the City
October 15, 2013 65% of taxes as if the property was
within the City
October 15, 2014 65% of taxes as if the property was
within the City
(g) The Company shall also pay to the City of Port Arthur amounts
equal to sixty -five (65) percent of the amount of taxes as if the
property of Trans - Global (Coke Handling Facility as referenced in
Resolution No. 01 -03) is a part of their property for the years 2009
to 2014 and is within the City of Port Arthur. (See Exhibit "E" to
Resolution 08 -494)
(h) The Company shall also pay to the City of Port Arthur amounts
equal to sixty -five (65) percent of the amount of taxes as if the
property of Air Products and Chemicals (Hydrogen Plant and affiliated
units as referenced in Resolution No. 99 -174) is a part of their
property for the years 2009 to 2014 and is within the City of Port
Arthur. (See Exhibit "F" to Resolution 08 -494)
(i) The Company shall also pay to the City of Port Arthur amounts
equal to sixty -five (65) percent of the amount of taxes as if the
property of Port Arthur Coker Company and Air Products and Chemicals
(portions of HOUP that was assigned per Resolution No. 99 -174) is a
part of their property for the years 2009 to 2014 and is within the
City of Port Arthur. (See Exhibit "G" to Resolution 08 -494).
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(j) Air Products and Chemicals shall continue to pay to the City of
Port Arthur seventy -five (75) percent as denoted in their agreement
approved by Resolution No. 05 -22 (Second Hydrogen Plant in Premcor
facility) for the years 2006 to 2010 and thereafter the Company
(Premcor Refining Group Inc.) shall also pay to the City of Port
Arthur amounts equal to sixty -five (65) percent of the amount of taxes
as if the property of Air Products and Chemicals (Hydrogen Plant and
affiliated units as referenced in Resolution No. 05 -22) is a part of
their property for the years 2011 to 2014 and is within the City of
Port Arthur. (See Exhibit "H" to Resolution 08 -494).
(k) Praxair, Inc., operates a hydrogen plant on a tract owned by
Premcor Refining Group, Inc. Praxair has entered into a separate
Industrial District Agreement with the City of Port Arthur and will be
responsible for its "in lieu of tax" payment.
(1) Economic Incentive Program In case the property described in
Exhibits "A" and "B" are annexed prior to December 31, 2014, 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, 2014.
(m) Fluctuations in Value In the portions of the company's property
wherein the Company is paying either sixty -five (65) percent or
seventy -five (75) percent of the amount of taxes that the Company
would have paid to the City, and starting with a basis of Tax Year
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2009 if there are changes in tax value, there shall be a cap of plus
or minus 10 '3/4 of the Company's value from the previous years as more
fully delineated in subsection (b) above.
(n) 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
delineated in Sections 1 and Section 15, once an "In Lieu of Tax"
payment is paid to the City, the City shall not refund or credit any
of said payment.
2. All Sections of the Agreement are hereby amended to
replace the date "October 1, 2013" with the date {'
"October 1, 2014" wherever the date "October 1, 2013"
appears in the Agreement set forth in Resolution 08-
494.
3. All Sections of the Agreement are hereby amended to
replace the date "October 15, 2013" with the date
"October 15, 2014" wherever the date "October 15,
2013" appears in the Agreement set forth in Resolution
08 -494.
4. All Sections of the Agreement are hereby amended to
replace the date "December 31, 2013" with the date
"December 31, 2014" wherever the date "December 31,
2013" appears in the Agreement set forth in Resolution
08 -494.
5. Section 25 of the Agreement is hereby amended to read
in its entirety as follows:
"Section 25. This Agreement is effective the 1 day of
January, 2009, and shall expire on the 31st day of
December, 2014, unless extended by the City, as
delineated in Section 6. As to the decoker facility,
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that agreement expires on December 31, 2014 unless
extended by the City of Port Arthur as delineated in
Section 5 of the decoker agreement as approved by
Resolution No. 05- 164."
6. This Amendment may be executed in counterparts, each of
which shall be deemed an original, and all of which
taken together shall constitute one document. A copy of
this Amendment that is signed and delivered by telecopy
or other facsimile transmission shall be considered an
original, executed document.
7. This Amendment shall be governed by and shall be
construed in accordance with the laws of the State of
Texas, excluding any conflict -of -laws rule or principle
that might refer the governance of the construction of
this Amendment to the law of another jurisdiction.
8. All terms, conditions and provisions of the Agreement
that are not specifically addressed by this Amendment
shall be unaffected by this Amendment and shall remain
in full force and effect until the Agreements to which
this Amendment pertains expire on December 31, 2014.
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IN WITNESS WHEREOF, each of the Parties has executed this
Amendment on the date indicated above its signature line below.
SIGNED AND AGREED TO on the day of
2013.
ATTEST: CITY OF PORT ARTHUR, TEXAS
By:
Sherri Bellard Floyd T. Johnson,
City Secretary City Manager
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p: rd C b e r
SIGN ND ED A AGREED TO on the 'day of '
2013.
THE PR �f COR REFINING GROUP, INC.
0 By: •
A
Y'
Y
Name: 4C - I �i f j ) r nO
Title: D '1� -<-- [ O r Off } / ay .
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