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HomeMy WebLinkAboutResolution No. 2003-30 RESOLUTION NO. R2003-30 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FRIENDSWOOD, TEXAS, AUTHORIZING THE MAYOR TO EXECUTE AND THE CITY SECRETARY TO ATTEST A TAX ABATEMENT AGREEMENT BY AND BETWEEN THE CITY AND EASTHAVEN, - INCORPORATED. * * �x � * BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FRIENDSWOOD, TEXAS: Section l. That the Mayor and City Secretary be, and they are hereby, authorized and directed to execute and attest, respectively, a Tax Abatement Agreement by and between the City and Easthaven, Incorporated. A copy of such Tax Abatement Agreement is attached hereto as Exhibit "A" and made a part hereof for all purposes. PASSED, APPROVED, and RESOLVED this 7th day of July, 2003. � C � . Kimball W. Brizendine Mayor ATTEST: � Deloris McKenzie, TR C City Secretary TAX ABATEMENT AGREEMENT THE STATE OF TEXAS § § KNOW ALL MEN BY THESE PRESENTS: COUNTY OF GALVESTON § THIS TAX ABATEMENT AGREEMENT ("Agreement") is made and entered into by and between the CITY OF FRIENDSWOOD, TEXAS, a home-rule municipal corporation located in Galveston and Harris Counties, Texas ("City"), and EASTHAVEN, INCORPORATED, a Texas corporation ("Owner"), owner of a 2.1025-acre tract of land, more or less (the "Property"), located in City of Friendswood Reinvestment Zone No. 2, and owner of the tangible personal property to be placed within facilities to be constructed thereon. 1. Authorization. This Agreement is authorized by the Property Redevelopment and Tax Abatement Act, Chapter 312, TE�s Tax CoDE, as it exists on the effective date hereof, and the City of Friendswood Guidelines and Criteria for Granting Tax Abatement in a Reinvestment Zone ("Guidelines for Tax Abatement"), as adopted by the City Council of City on July 16, 2001. The City Council has determined that the request for tax abatement presented by Owner conforms to the criteria established in the Guidelines for Tax Abatement. 2. Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below: a. "Certified Appraised Value" shall mean the appraised value(s) of the Property and the Improvements as certified by the Galveston County Central Appraisal District. b. "Reinvestment Zone No. 2" shall mean that certain area qualifying for tax abatement pursuant to the Guidelines for Tax Abatement, and City of Friendswood Ordinance No. 2003-09, a copy of which is attached hereto as E�ibit"A"and incorporated herein for all purposes. c. "Improvements" shall mean the buildings (or portions thereo fl and other improvements to be used for business or manufacturing purposes, which are erected or expanded by Owner on the Property (as contemplated by Section 6 herein) after the effective date of this Agreement. d. "Tangible Personal Property" shall mean tangible personal property classified as such under state law. e. "Property" shall mean the 2.1025-acre tract of land described in Exhibit`B," attached hereto and incorparated herein for all purposes, and all improvements currently located thereon, which tract of land is located within Reinvestment Zone No. 2. f. "City Council" shall mean the governing body of the City of Friendswood, Texas. 3. Administration of Agreement. This Agreement shall be administered by the City Manager of the City. 4. Term. This Agreement shall be effective as of the date of execution hereof and shall continue through July 6, 2010, unless terminated earlier, as provided elsewhere herein. Notwithstanding the foregoing, Owner's obligations upon default to pay City any taxes abated under this Agreement, and penalty and interest thereon as herein provided, shall not terminate until the abated taxes, plus penalty and interest, are paid. 5. Tax Abatement. Subject to limitations imposed by law, and conditioned on the representations outlined in Section 6 herein below, there shall be granted and allowed hereunder to Owner a property tax abatement at a rate of 100% in years 2004-2006, 80% in 2007, 60% in 2008, 40% in 2009, and 20% in 2010, on Improvements constructed or expanded hereunder on the Property; provided, however, if the Certified Appraised Value of the Property is less than the Certified Appraised Value for 2003, for any year during the term of this Agreement, such abatement shall not apply to the Improvements to the extent of the difference between the Certified Appraised Value of the Property for such year and the Certified Appraised Value for 2003. The property t� abatement granted and allowed hereunder shall extend only to all real properiy ad valorem taxes assessable on the Improvements, as constructed or expanded. 6. Representations. Owner makes the following representations, which representations were and are the inducement for City's entering into of this Agreement: a. (1) Owner owns the Property; (2) Owner will have a taxable interest with respect to Improvements and Tangible Personal Property on the Property; (3) all Improvements placed on the Property will be completed in a workmanlike manner and will be completed in accordance with applicable rules, regulations and ordinances of the City of Friendswood in effect at the time such Improvements are erected; (4) the Certified Appraised Value of the Improvements, the Properiy, and Tangible Personal Property, from January 1, 2005 through January 1, 2010, will be not less than $800,000.00; (5) Owner will commence construction of Improvements on or before December 31, 2003, and Owner will complete construction of Improvements on or before December, 2004, which Improvements will have - 2 - a Certified Appraised Value of not less than $500,000.00; (6) Owner will employ, within eighteen (18) months following the date of execution of this Agreement, not less than 16 full-time employees on the Property and will maintain this employment level on the Property during the remainder of the term of this Agreement; (7) Owner has, as of the effective date of this Agreement, the financial resources to implement the above respective representations; (8) Owner will not represent, verbally or in written form, that its facility as contemplated hereby is located elsewhere than in the City of Friendswood, Galveston County, Texas; (9) Owner will request its contractors to execute a separated construction contract for materials and labor to maximize, to the extent reasonably possible, without increasing project costs, sales taxes payable to the City of Friendswood for construction materials and labor used for the construction of the Improvements and will m�imize, to the extent reasonably possible, without increasing project costs, sales tax payable to the City of Friendswood for new furnishings and equipment to be placed on the Property, it being the intention of the parties hereto that City sales t� for sales of material and labor for the Improvements and sales of furnishings and equipment to be placed on the Properly sha11 be collected for the benefit of the City; and (10) Owner will comply with all applicable provisions of the Code of Ordinances of the City of Friendswood, Texas. b. City represents that (1) Reinvestment Zone No. 2 has been created in accardance with Chapter 312 of the TE�ws Tax CoDE and the City of Friendswood Guidelines and Criteria for Granting Ta�c Abatement in a Reinvestment Zone, as both exist on the effective date of this Agreement; (2) the Property is within such Zone; and (3) the Property is located within the corporate limits of City. c. Owner and City represent that no member of the City Council or the City Planning and Zoning Commission owns or leases the Property or Improvements. d. Access to and Inspection of Property by Municipal Employees. Owner shall allow City's employees and/or designated representatives of City access to the Improvements for the purpose of inspecting any Improvements erected to ensure that such Improvements are completed and maintained in accordance with the terms of this Agreement and to ensure that all terms and conditions of this Agreement are being met. All such inspections shall be made only after giving Owner twenty-four (24) hours advance notice and shall be conducted in such a manner as to not unreasonably interfere with the construction andlor operation of the Improvements. All such inspections shall be made with one (1) or more representatives of Owner and in accordance with all applicable safety standards. Upon completion of construction, the designated representative of City shall annually evaluate - 3 - each facility receiving abatement to ensure compliance with the Agreement, and a formal report shall be made to the City Council. e. On September 1 st of each year that this Agreement is in effect, Owner shall certify to City, and to the governing body of each taxing unit, that Owner is in compliance with each applicable term of this Agreement. Such certification shall include, but not be limited to, a brief descriptive summary regarding the nature of compliance with each representation contained in Section 6(a) of this Agreement that requires Owner to use its best efforts. 7. Default. a. City may declare a default hereunder if(1) Owner fails, refuses, or neglects to comply with any of the terms, conditions, or representations of this Agreement and fails to cure during the cure period; or (2) allows ad valorem taxes owed to City to become delinquent and fails either to cure during the cure period or to timely and properly follow the legal procedures for their protest or contest. b. If City declares a default of this Agreement, this Agreement shall terminate (after notice and opportunity to cure as provided for herein), and City, in such event, shall be entitled to recapture any and all property t�es, which have been abated as a result of this Agreement. City shall notify Owner of any default in writing in the manner prescribed herein. The notice shall specify the basis for the declaration of default, and Owner shall have thirty (30) days from the date of such notice to cure any default; provided, however, where fulfillment of any obligation requires more than thiriy (30) days, performance shall be commenced within thirty (30) days after the receipt of notice, and such performance shall be diligently continued until the default is cured. If the default cannot be cured, or if Owner fails to cure within the period herein specified, Owner shall be liable for and will pay to City within thirty (30) days following the termination of this Agreement (1) the amount of all property t�es abated under this Agreement, (2) interest on the abated amount at the rate provided for in the Texas Tax Code for delinquent taxes, and (3) penalties on the amount abated in the year of default at the rate provided for in the Texas Tax Code for delinquent taYes. c. Notwithstanding any other provision contained herein to the contrary, in the event of termination of this Agreement due to default, City shall be entitled to recapture only property ta�ces which have been abated on Improvements, plus applicable penalty and interest thereon as otherwise provided herein. 8. Changes in Tax Laws. The tax abatement provided in this Agreement is conditioned upon and subject to any changes in the state tax laws during the term of this Agreement. -4 - 9. Compliance with State and Local Regulations. Nothing in this Agreement shall be construed to alter or affect the obligations of Owner to comply with any ordinance, rule, or regulation of City or laws of the State of Texas. 10. Assignment of Agreement. This Agreement may be assigned, with the approval by resolution of City, subject to the financial capacity of the assignee, and provided that all conditions and obligations in this Agreement are guaranteed by the execution of a new agreement with City. No assignment shall be approved if (a) City has declared a default hereunder that has not been cured, or (b) the assignee is delinquent in the payment of ad valorem taxes owed to City. Approval shall not be unreasonably withheld. 11. Conditions Precedent. This Agreement and the abatement granted herein is conditioned entirely upon (a) the approval of the City Council by the affirmative vote of a majority of the members present at a regularly scheduled meeting of the City Council, (b) Owner's commencement of construction of the Improvements on the Properiy on or before December 31, 2003. In the event Owner fails to commence construction of the Improvements as herein provided, this Agreement shall automatically terminate as of the applicable date of such noncompliance as set forth above. 12. Notice. All notices shall be in writing. If mailed, any notice or communication shall be deemed to be received three (3) days after the date of deposit in the United States mail, first-class, postage prepaid. Unless otherwise provided in this Agreement, all notices shall be delivered to the following addresses: If to Owner: Baywood Holdings Ltd. Co. 8723 Easthaven Houston, Texas 77005 Attn: Archie Ameigh, President To City: City of Friendswood 910 South Friendswood Drive Friendswood, Texas 77546 Attn: City Manager Any party may designate a different address by giving the other parties at least ten (10) days written notice in the manner prescribed above. 13. Entire Agreement. This Agreement contains the entire and integrated tax abatement agreement between the parties and supersedes all other negotiations and agreements, whether written ar oral. - 5 - IN TESTIMONY OF WHICH, THIS AGREEMENT has been executed by the parties as of the 7th day of July, 2003. ATTEST: EASTHAVEN, INCORPORATED ("Owner") By: By: Name: Name: Archie Ameigh Title: Title: President ATTEST: CITY OF FRIENDSWOOD, TEXAS �"Ci�,") By: By: Name: Deloris McKenzie, TRMC Name: Kimball W. Brizendine Title: City Secretary Title: Mayar - 6 - 13. Entire Agreement. This Agreement contains the entire and integrated tax abatement agreement between the parties and supersedes all other negotiations and agreements, whether written or oral. IN TESTIMONY OF WHICH, THIS AGREEMENT has been executed by the parties as of the 7th day of July, 2003. ATTEST: EASTHAVEN, INCORPORATED ("Owner") By: By: Name: Name: Archie Ameigh Title: Title: President ATTEST: CITY OF FRIENDSWOOD, TEXAS �«Ci�„) c � � By: By: ~ � .� � Name: Deloris McKenzie, 'I RMC Name: Kimball W. Brizendine T�tIP• C`itv .CP�r,rPtarv T�tIP• Macrr�r • � � . �., - 6 -