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Ord. 1299 2006-09-25ORDINANCE NO. 1299 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS, FINDING THAT THE CITY HAS ESTABLISHED GUIDELINES AND CRITERIA FOR GRANTING TAX ABATEMENT PURSUANT TO RESOLUTION NO. R2006-121; DESIGNATING AND DESCRIBING A REINVESTMENT ZONE (TO BE KNOWN AS REINVESTMENT ZONE #15), IN ACCORDANCE WITH THE PROPERTY REDEVELOPMENT AND TAX ABATEMENT ACT; FINDING THAT THE IMPROVEMENTS SOUGHT ARE FEASIBLE AND PRACTICAL AND WOULD BE A BENEFIT TO THE LAND TO BE INCLUDED IN THE ZONE AND THE MUNICIPALITY AFTER THE EXPIRATION OF THE TAX ABATEMENT AGREEMENT; AUTHORIZING THE CITY MANAGER TO SIGN TAX ABATEMENT AGREEMENTS WHEN APPROVED BY THE CITY COUNCIL; HAVING A SAVINGS CLAUSE AND A SEVERABILITY CLAUSE; AND AN EFFECTIVE DATE. WHEREAS, Chapter 312 of the Texas Tax Code (the "Property Redevelopment and Tax Abatement Act") provides for the designation of a Reinvestment Zone or area; and WHEREAS, the City Council has, pursuant to Resolution No. R2006-121, established Guidelines and Criteria for Granting Tax Abatement; and WHEREAS, a certain area of the City of Pearland meets the criteria and guidelines heretofore established by the City Council required for designation as a Reinvestment Zone; and WHEREAS, the City Council, on September 1 1, 2006, held a public hearing on the designation of a Reinvestment Zone and finds that the improvements sought are feasible and practical and would be a benefit to the land to be included in the zone and to the municipality after the expiration of an agreement under the Property Redevelopment and Tax Abatement Act; now, therefore, ORDINANCE NO. 1299 BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS: Section 1. That pursuant to the Property Redevelopment and Tax Abatement Act, the City Council of the City of Pearland, Texas, hereby designates as a Reinvestment Zone the area described in Exhibit "A" attached hereto and made a part hereof for all purposes, to be known as Reinvestment Zone #1 5. Section 2. That the area described in Exhibit "A" is reasonably likely, as a result of this designation, to contribute to the retention or expansion of primary employment, or to attract major investment into the zone that would be a benefit to the property and that would contribute to the economic development of the City, and that the improvements sought are feasible and practical and would be a benefit to the land to be included into the zone and to the municipality after the expiration of a Tax Abatement Agreement as authorized by the Property Redevelopment and Tax Abatement Act. Section 3. That the designation of the Reinvestment Zone herein expires five (5) years from the effective date of this ordinance and may be renewed by a subsequent ordinance of the City Council for a period not to exceed an additional five (5) years. That expiration of the original designation shall not affect an agreement entered into under the provisions of this ordinance. Section 4. That the City Council hereby authorizes agreements in writing with the owner of any taxable real estate located within the designated Reinvestment Zone, 2 ORDINANCE NO. 1299 Abatement Act and the conditions of the Guidelines and Criteria for Granting Tax Abatement heretofore adopted by the City Council. Section 5. That any agreement to be entered into under the provisions of this ordinance must be approved by the affirmative vote of a majority of the members of the City Council at a regularly scheduled meeting of the City Council. On approval by the City Council, the agreement may be executed by the City Manager. Section 6. Savings. All rights and remedies which have accrued in favor of the City under this Ordinance shall be and are preserved for the benefit of the City. Section 7. Severability. If any section, subsection, sentence, clause, phrase or portion of this Ordinance is for any reason held invalid, unconstitutional or otherwise unenforceable by any court of competent jurisdiction, such portion shall be deemed a separate, distinct, and independent provision and such holding shall not affect the validity of the remaining portions thereof. Section 8. Effective Date. This Ordinance shall become effective upon passage and approval of its second reading. PASSED and APPROVED ON FIRST READING this the 11th day of September, A.D., 2006. TOM REID MAYOR 3 ORDINANCE NO. 1299 ATTEST: UNG�NG TY S'" RETAR PASSED and APPROVED ON SECOND AND FINAL READING this the 25th day of September, A.D., 2006. ATTEST: UNG I TY S = RETARY APPROVED AS TO FORM: itori, DARRIN M. COKER CITY ATTORNEY -=-09,11) -; ..„,, TOM REID MAYOR 4 Exhibit page 1 of 3 pages County: Brazoria Project: Kemlon Pearland M.S.G. No.: 061338 Job Number: 1201 FIELD NOTES FOR 11.505 ACRES EXHIBIT tt /A te Being a tract of land containing 11.505 acres, located in the H.T.& B. R.R. Company Survey, Section 2, Abstract 542, and the H.T.& B. R.R. Company Survey, Section 3, Abstract 232, in Brazoria County, Texas; Said 11.505 acres being all of a call 10.06 acre tract of land as described in Brazoria County Clerk's File (B.C.C.F.) Number 98-021423 and being out of a call 29.90 acre tract of land recorded in the name of Pearland Building II Limited Partnership in B.C.C.F. Number 97-022679 and being out of Lots 64 and 65 of the Zychlinski Subdivision as recorded in Volume 29, Page 43, of the Brazoria County Deed Records (B.C.D.R.); Said 11.505 acres being more particularly described by metes and bounds as follows (bearings are based on the description of said 29.90 acre tract of land as recorded in B.C.C.F. Number 97-022679): BEGINNING at a concrete monument found on the west right-of-way line of State Highway 35 (one hundred feet wide) at the southeast corner of said 29.90 acre tract and said 10.06 acre tract and the northeast corner of a call 6.0460 acre tract of land recorded in the name of Brazoria County Drainage District No. 4 in B.C.C.F. Number 95-033401; Thence, with the south line of said 29.90 acre tract and said 10.06 acre tract and the north lines of said 6.0460 acre tract and a tract of land recorded in the naive of John Ward Williams in Volume 752, Page 405, of the B.C.D.R., South 89 degrees 59 minutes 42 seconds West, at 731.00 feet pass a 1/2 inch iron rod found at the southwest corner of said 10.06 acre tract and continuing an overall distance of 836.39 feet to a 5/8 inch iron rod set for the southwest comer of the herein described tract; Thence, through and across said 29.90 acre tract, North 00 degrees 03 minutes 54 seconds West, a distance of 599.34 feet to a 5/8 inch iron rod set for the northwest comer of the herein described tract on the north line of said 29.90 acre tract and the south line of a tract of land recorded in the name of Raymond Haak in Volume (91)922, Page 738, of the B.C.D.R.; Thence, with the north line of said 29.90 acre tract and the south line of said Haak tract, South 89 degrees 59 minutes 00 seconds East, at 105.39 feet pass a 1/2 inch iron rod found at the northwest corner of said 10.06 acre tract and continuing an overall distance of 836.39 feet to a 1/2 inch iron rod found on the west right-of-way line of said State Highway 35 at the northeast comer of said 29.90 acre tract and said 10.06 acre tract; Exhibit page 2 of 3 pages Thence, with said west right-of-way line and the east line of. said 29.90 acre tract and said 10.06 acre tract, South 00 degrees 03 minutes 54 seconds East, a distance of 599.02 feet to the POINT OF BEGINNING and containing 11.505 acres of land. Michael Hall, R.P.L.S. Texas Registration No. 5765 Miller Survey Group Ph: (713) 413-1900 July 20, 2006 061338 SET bf8' IR EXHIBIT ___, PAGE 3 OF 3 PAGES 105.39E---tN0 1/2' IR 4f1."" - 4►RtF t-p14 w io 0 0 O 105.39' —'szr 6/e" LEGEND S89`59'00"E 838.38' 40 1/2• IR t5 WNtC PD. 106. VD, 766A FND = FOUND CON. = CONCRETE MON. = MONUMENT VOL. = VOLUME PG. = PAGE No. - NUMBER IR = IRON ROD P.O.C. = POINT OF COMMENCEMENT P.O.B. - POINT OF BEGINNING R.O.W. = RIGHT—OF—WAY B.C.D.R. = BRAZORIA COUNTY DEED RECORDS B.C.C.F. = BRAZORIA COUNTY CLERK'S FILE NOTES: 1. BEARINGS ARE BASED THE DESCRIPTION OF A CALL 10.08 ACRE TRACT AS RECORDED IN B.C.C.F. No. 98-021423. 2. A METES AND BOUNDS DESCRIPTION OF THE SUBJECT EASEMENT HAS BEEN PREPARED BY MILLER SURVEY GROUP AND ACCOMPANIES THIS EXHIBIT. 731.00' ems„ ' N eR 4:t3 11.505 ACRES 731.00' S89'59'42" W 836.3D / CS�'DH FNO CON. MON. 9A015 33 EXHIBIT BEING 11.505 ACRES LOCATED WITHIN THE H.T. & B.R.R. COMPANY SURVEY, SECTION 3, A-232, AND THE H.T. & B.R.R. COMPANY SURVEY, SECTION 2, A-542 AND BEING OUT OF A CALLED 29.90 ACRE TRACT OF LAND AS DESRCIBED IN B.C.C.F. No. 97—D22679 IN BRAZORIA COUNTY, TEXAS SURVEY*GROUP 1760 WEST SAM HOUSTON PARKWAY NORTH HOUSfON, TEXAS 77043 PHONE 713-413-1900 FAX 713-413-1944 JOB NO.: 1201 DWG. NO.: 1201-EXH1 SCALE: 1 "=200' DATE: 07-20-05 DRAWN BY: PBC CHK. BY: MWH FIELD BOOK: N/A 1.4248 NO.: 061336 APPLICATION FOR TAX ABATEMENT IN THE CITY OF PEARLAND It is recommended that this application be filed at least 90 days prior to the beginning of construction of the installation of equipment. The filing of this document acknowledges familiarity and conformance with Guidelines and Criteria for Granting Tax Abatement in a Reinvestment Zone Created in the City of Pearland (attached). Please review Instructions attached before executing this application. This application will become part of the agreement and any knowingly false representations will be grounds for the City to void the agreement. Original copy of this request should be submitted to the Pearland Economic Development Corp. Executive Director, City of Pearland, 3519 Liberty Drive, Pearland, Texas 77581. Please attach exhibits and additional information. APPLICANT INFORMATION 4-w, 10.4/ ;Prod i 5> ax4 J Company Name 3%0de%ft4,./ i ( - Z; to Address %ci_,72( ,�//1 ��cr,✓j 6 Consecutive years in business Corporation ( ) Application Date Number of Current Employees(a Annual Sales $, 49/ "352 047) Partnership ( Proprietorship ( ) Please submit financial statements for the prior two years. PROJECT INFORMATION Type of facility: Manufacturing (See Instructions) Regional Service Reg. Distribution Center Reg. Entertainment Center Other Basic Industry ) () () Location address and description of area to be designated as reinvestment zone (attach map showing site and legal description): 1 y a Li /1/6 r %h Description of eligible improvements (real property) to be constructed (This includes fixed equipment, buildings, parking lots, etc.): 84,/,> e pa�.S;�y7 A% Li) 172-i � Ur � d i r l�✓ ; C y .1 dy � w� yo r Jr wr r Description of ineligible property to be included in project. (This includes inventory and personal property.): i' -: ,7�?, � :� 2/ r3-v Will this project require any permits by other federal, state or county agencies? If so, please list the name of the permit, the permitting agency and a description of why and what the permit is needed for: /j/�%-} The proposed reinvestment zone is located in: City County School District College District Other Taxing Jurisdictions a -Z R i 4 ✓/4 Tax ID number 0� 3d 00; oo 00.25 - / O Description of product(s) or service to be provided (proposed use): 4,cce ; ,-. ✓__ Description of operations, processes involved, general overview:z �✓/,'�i Sr Sc�cl>t ATTACH A STATEMENT explaining the general nature and extent of the project, describing existing site and improvements; describe all proposed improvements and provide list of improvements and equipment for which abatement is requested. Include a proposed time schedule for undertaking and completing the planned improvements as well as the company officials and agents who will oversee the construction. Describe other sites that are under consideration. NEW PLANT ( ) EXPANSION MODERNIZATION ( ) ECONOMIC INFORMATION A. Construction Estimates Commencement Date: Construction Man Years: Completion Date: Peak Construction Jobs / r-: I U 7 IF MODERNIZATION: Estimated Economic Life of Existing Plant: 30 Years Added Economic Life from Modernization: .S Years B. Permanent Employment Estimates (FTE's) Current Employment 35 S 0 Current Annual Payroll g//h. &, 7 -// 640 average annual or hourly salary /) Number of jobs retained ( .ii ) created ( SCD) at start/opening of this project / in year 5 years into operation S _4; in year Local Transfer Total Est. Salaries , 20 0 7 is- Lc - ./i esUG , 20 S- c 0 ,2 0 -.-4's36,, 002) ,20U5 20 :24-) -- c-30s42 C. Other Estimated Taxes Generated by Project (1) Sales Taxes: 20 : $ 20 :$ e)2- /l3 20 : $ // '` f ,L, 20 : $ 20 :$ 20 : $ 20 : $ 20 : $ 20 : $ (2) Other Taxes or fees (if known, impact fees, building fees, etc.): D. Estimated Appraised Value on Site: Land Building & Fixed Equipment Bus. Personal Property & Inventory I. Total of pre-existing value (Jan 1 preceding abatement) / No., S'OQ : , .7657 1 o 3) 2/4)6) UpV II. Estimated value of NEW land added Estimated value of NEW improvements Estimated value of NEW fixed equipment Estimated value of NEW personal property and inventory added Total of NEW value added (Total columns in Sec. II above) 7iioo _ .3 w, 0 4d 0 o z., avo _ 6-4 U,, ved evv iaz) III. Total value at end of Tax Abatement (Total Part I & II) / `/6, aco �c.: 7j t o y1 -Lid-4 6366 TAX ABATEMENT REQUESTED % of eligible property for a term of years (Or) ( Requesting Staggered Tax Abatement Terms as follows: INSTRUCTIONS Applicants and projects must meet the requirements established by the City of Pearland Guidelines and Criteria for Granting Tax Abatement in a Reinvestment Zone found in Resolution No. R98-59 (attached) in order to receive positive consideration. Section 2 of the Guidelines, for example, sets out regulations governing eligible facilities, eligible and ineligible improvements, terms and economic qualifications. Conformance with all sections, however, is required for eligibility. APPLICANT INFORMATION The taxing unit may consider applicant financial capacity in determining whether to enter into an abatement agreement. Established companies for which public information is available, or the wholly owned businesses of such companies, should include with the application a copy of their latest annual report to stockholders. Other applicants and new companies should attach a statement showing when the company was established, business references (name, contact and telephone number of principal bank, accountant and attorney) and may be required to submit an audited financial statement and business plan. PROJECT INFORMATION Only facilities listed in Section 2(a) of the Guidelines may receive abatement without applying for a variance. Check guideline definitions in Section 1 to see if project qualifies. If project is a Regional Entertainment Facility, Regional Service Facility, Regional Distribution Center Facility or Other Basic Industry, the application should include market studies, business plans, agreements or other materials demonstrating that the facility is intended to serve a market the majority of which is outside of the City of Pearland region. ECONOMIC INFORMATION Permanent Employment Estimates - In estimating the permanent employment, include the total number of jobs retained or created at this site by your firm as well as known permanent jobs of service contractors required for operation. Estimated Appraised Value on Site - The value as of January 1 immediately preceding abatement should be the value established by the Brazoria County Appraisal District. If the applicant must estimate value because the taxable value is not known or is combined with other properties under a single tax account, please so state. Projections of value should be a "best estimate" based on taxability in Texas. The projection of project values not abated should include personal property and ineligible project -related improvements such as office space in excess of that used for plant administration, housing, etc. SAMPLE PROJECT DESCRIPTION The project will be the construction of a new manufacturing facility that will also include our sales and engineering staff. We expect to have approximately 150-160 employees on site. We expect the project will require the construction of a building of approximately 70,000 square feet at a cost of approximately $2.6-$2.8 million. It is anticipated that fixed manufacturing equipment of approximately $1,500,000 will be included in the project. Tax abatement will be sought on all items allowed by law. SAMPLE TIME SCHEDULE September - Dec 31, 2001 Legal work, conceptual phase, contractor selection January 1 - Jan 30, 2002 Wetlands study, 15C phase architecture, soils engineering, topographical mapping, detention pond engineering February 1-February 28, 2002 Architectural drawings, final engineering, permits and applications March 1 - March 30, 2002 Bids and initial site work April 1-November 15, 2002 Construction November 16 - December 25, 2002 Move -in, start up December 30, 2002 Completion DO NOT WRITE IN THIS AREA -- FOR PROCESSING PURPOSES ONLY 1. EDC contact 2. Precinct 3. Jurisdictions notified / / 4. Initial review completed / / 5. Review circulated / / 6. ISD concurrence? 7. College concurrence? 8. City concurrence? 9. Letter of Intent / / 10. Hearing noticed on agenda / / 11. Public hearing / / 12. ISD action / / 13. College action / / 14. City action / / 15. Agreement signed / / Kemlon Products & Development Co., Ltd. P.O. Box 2189 Pearland, TX 77588-2189 Ph. (281) 997-3300 fax (281) 997- 1300 July 1, 2006 Mr. Fred Welch, Executive Director Mr. Eric W. Gage, Marketing Manager Pearland Economic Development Corporation 3519 Liberty Drive Pearland, TX 77581 Dear Messer Welch and Gage, Thank you for meeting with me a few weeks ago. As I mentioned, Kemlon is considering expanding its manufacturing facility at the Pearland location on North Main. This will involve the construction of an additional 43,000 square feet of manufacturing space. The construction will be architecturally identical to our existing structure and will compliment an already aesthetically pleasing site. We will have two components for this transaction. Kemlon will be the first component and will occupy the building as the tenant. Kemlon will add leasehold improvements to the new expansion building and capital equipment in the form of manufacturing equipment. Typically this covers lathes, mills, saws, EDMs, welders and other metal working personal property. Kemlon employs approximately 239 people at the site at this time. We would expect this to grow over time. We would expect our growth to follow the growth of the oil industry. The second component will involve the landlord. The landlord is Pearland Building II Limited Partnership (Pearland Building II). Pearland Building II is the current owner of the existing site and will be the owner of the 43,000 square foot expanded site. Pearland Building II will contract to build the expansion. Preliminary estimates place the cost of the expansion at somewhere between $2.5 mil and $3.2 mil. Pearland Building II has no employees. Kemlon will be adding additional production equipment in the amount of at least $500,000.00 initially so that the project will produce an additional taxable value of between $3.0 to $3.5 mil initially and perhaps more. The current site already has a taxable value of $6.395 mil. This expansion would ultimately increase the taxable value to almost $10.0 mil. Because there are 2 entities involved, I am enclosing Applications for both. In reality Kemlon and Pearland Building II are related parties and should be viewed as one. Two entities were listed but treated as one in our 1998 application for the first building project. There are many ways in which the PEDC could be of assistance to us in this proposed expansion. These include: 1. Assistance in satisfying the City's Permitting process with an expedited decision making on the part of the City of Pearland. 2. Making available Regional Detention if possible so that no more on site detention is required. 3. Tax abatements with the City, County, and other taxing entities where available. 4. Others deemed valuable by the PEDC. There may be other ways in which we can work together to make this project beneficial to both which we would like to consider as we proceed. I think by any standard it is clear that Kemlon was good for Pearland and I can say that Pearland has been good for Kemlon. With this expansion we may be able to add as many as 175 people over the years and millions of dollars in plant and equipment. All of this would benefit the taxpayers, businesses and residents of Pearland and Brazoria County. Please take time to look at what we have provided and let us know if we are heading in the right direction. If we need more information let us know. I look forward to meeting with you in the near future. Very truly yours, John H. Ring Vice President and General Counsel Kemlon Products & Development Company tt INCOME STATEMENT Sales Less cost of goods sold Gross profit Operating Expenses Depreciation/Amortization Rent Salaries and wages Taxes and insurance Subtotal Net operating profit,<Ioss> Other income & expense Total income before tax Provision for income tax Net income Sept 30,2001 Sept 30,2002 Sept 30,2005 Sept 30,2003 Sept 30,2004 Preliminary $18,261,756.00 $18,262,331.86 $18,024,884.42 7,659,085.32 7,153,076.19 7,177,737.95 $10,602,670.68 $11,109,255.67 $10,847,146.47 $1,978,230.87 885,342.00 450,470.76 4,139,633.31 1,231,075.13 $8,684,752.07 $1,917,918.61 214,901.37 $2,132,819.98 996,714.46 $1,136,105.52 $1,356,038.38 1,121,198.24 461,396.38 2,593,507.18 1,461,819.98 $6,993,960.16 $4,115,295.51 105,840.22 $4,221,135.73 0.00 $4,221,135.73 $1,475,027.26 927,271.11 460,924.43 2,713,938.50 1,485,632.00 $7,062,793.30 $19,949,461.59 9,008,475.08 $26,981,401.29 11,298,322.07 $10,940,986.51 $15,683,079.22 $1,746,605.87 1,366,336.23 503,516.83 2,992,782.45 1,629,187.44 $2,003,128.53 1,016,952.21 581,349.25 3,320,062.68 1,977,860.90 $8,238,428.82 $8,899,353.57 $3,784,353.17 $2,702,557.69 $6,783,725.65 89,191.38 72,661.25 153,243.06 $3,873,544.55 $2,775,218.94 $6,936,968.71 0.00 0.00 0.00 $3,873,544.55 $2,775,218.94 $6,936,968.71 Kemlon Products & Development Company ASSETS Cash & cash equivalents Accounts receivable Inventory Prepaid expenses & deposits Total current assets Equipment Stocks Total assets LIABILITIES Current portion Notes payable Accounts payable Other accrued liabilities Total current liabilities Long term portion Notes payable banks Other secured parties Total liabilities CAPITAL Capital stock Retained earnings Total capital and liabilities Sept 30,2005 Sept 30,2001 Sept 30,2002 Sept 30,2003 Sept 30,2004 Preliminary $3,515,491.64 $5,288,452.20 $7,681,320.44 $6,903,393.74 $9,559,427.55 2,372,094.95 1,724,924.64 1,953,927.06 2,300,759.85 3,262,710.72 766,744.44 847,790.48 1,131,641.33 1,198,324.08 1,198,324.08 196,016.12 316,327.88 293,620.40 360,050.47 477,920.15 $6,850,347.15 $8,177,495.20 $11,060,509.23 $10,762,528.14 $14,498,382.50 $ 3,747,563.45 $ 3,308,243.19 $ 2,775,916.70 $ 3,103,775.83 2,204.20 2,204.20 2,205.20 2,205.20 $10,600,114.80 $11,487,942.59 $66,073.94 $63,924.84 348,452.18 411,772.68 571,007.48 444,698.78 $985,533.60 $920,396.30 $0.00 $0.00 81,686.40 23,885.10 $13,838,631.13 $13,868,509.17 $11,795.36 259, 301.30 553, 026.11 $824,122.77 $ 3,828,778.00 2,205.20 $18,329,365.70 $12,323.62 $12,855.52 424,030.47 542,088.36 291,373.94 292,071.77 $727,728.03 $847,015.65 $0.00 $0.00 $0.00 18,507.37 12,910.50 7,580.01 $1,067,220.00 $944,281.40 $842,630.14 $740,638.53 $854,595.66 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 9,531,894.80 10,542,661.19 12,995,000.99 13,126,870.64 17,473,770.04 $10,600,114.80 $11,487,942.59 $13,838,631.13 $13,868,509.17 $18,329,365.70 PEARLAND BUILDING II, L.P. STATEMENT OF FINANCIAL CONDITION As of December 31, 2004 and 2005 (unaudited) ASSETS Cash and Cash Equivalents Receivables Escrow Accounts Total Current Assets Building, net of depreciation Land TOTAL ASSETS LIABILITIES Notes Payable Lessee Deposits TOTAL LIABILITIES PARTNERS CAPITAL Contributions Retained Earnings TOTAL PARTNERS CAPITAL TOTAL LIABILITIES AND PARTNERS CAPITAL 2004 203,013 400 64,200 2005 202,233 400 73,783 267,613 276,416 1,780,052 1,725,672 257,285 257,285 2,037,337 1,982,957 2,304,950 2,259,373 1,564,919 1,427,811 67,014 67,014 1,631,933 284,663 388,354 673,017 1,494,825 284,663 479,885 764,548 2,304,950 2,259,373 PEARLAND BUILDING II, L.P. STATEMENT OF INCOME For the Twelve Months Ending December 31, 2004 and 2005 (unaudited) Rental Revenue Interest Expense, net Depreciation Income 2004 2005 467,749 514,591 126,613 116,349 54,381 54,381 286,755 343,861 Pro Forma Net Income: Income 286,755 343,861 Federal Income Tax @ 35% 100,364 120,351 Pro Forma Net Income 186,391 223,510 P511760 Datasheet http://www.txeountydata.cora/datasheet.asp?County=020&Propert P511760 r Datasheet r Assessment History r. Land Information e Improvements e: Improvement S ketch e: Location Map Brazoria le County Info e: Account Search Owner Search Address Search . Property ID Search Search . New County Assistance FAQs . Links Forms Owner Address KEMLON PRODUCTS DEVELOPMENT CO & WHK FAMILY INTEREST LTD %JOHN H RING PEARLAND, TX 77588-2189 Taxing Entities GBC - Brazoria County RDB - Road & Bridge SPL - Pearland ISD CPL - City Pearland DR4 - Braz Co Drain #4 Account Number 8900-2600-000 Property Description Property Situs Address Legal Description 1424 N MAIN FURN EQUIP OTHER PEARLAND, TX 77581 PERSONAL PROPERTY Exemptions Abstract/Subdivision Deed Book: Page: Type: Neighborhood Value Information Type Total Land HS/NHS Total Productivity Market Total Improvement HS/NHS Value $0 $0 $3,481,870 Total Market Value $3,481,870 * This value information is preliminary and not certified. These values should not be used in the estimation of taxes as they are subject to change. Prior year certified value information can be obtained by selecting the "Assessments" option. Main Area Building Attributes Cont Style 0 Foundation 0 Ext. Finish ® Int. Finish Q Roof Style 0 Flooring 0 Heat/AC Q Plumbing Fireplace Builtins Rooms Bedrooms Tyler Technologies, Inc. The Software Group Division Copynght 0 2006 Tyler Technologies, Inc. I The Software Group Dcrsion. NI rights reserved. For technical problems vnlh this Web slte, please email the Webmester. Abut isUcrk llwaata teat tdah Secarmen( Raxke;Resickn .and car menelfcof£surem 8unrc1twMrbrev2Slira S12-766-1120 3013No th Water • Burnet fax512-7564601 ce11512-756-3220 C7 75-12 Ct6 C. R177106 Datasheet http://www.txcountydata.com/datasheet.asp?County=020&Propert R177106 r Datasheet Assessment History Land Information r. Improvements e Improvement Sketch Location Map Brazoria County Info Account Search Owner Search r Address Search Property ID Search Search New County Assistance FAQs Links Forms Owner Address PEARLAND BUILDING II LIMITED PARTNERSHIP 202 E VIEJO DR FRIENDSWOOD, TX 77546-5549 Property Description Property Situs Address Legal Description 1424NMAIN STHWY A0542HT&BRR, 35 TRACT 64A,ACRES PEARLAND, TX 77581 9.12 Taxing Entities Q Exemptions Q Deed GBC - Brazoria County RDB - Road & Bridge SPL - Pearland ISD CPL - City Pearland DR4 - Braz Co Drain #4 Account Number 0542-0050-000 Book: 97 Page: 022679 Type: DV 07/02/97 Abstract/Subdivision Neighborhood A0542 - H T &BRR SPL.4 - Spl Abst/Strata 4 Value Information Type Value Total Land HS/NHS $136,800 Total Productivity Market $0 Total Improvement HS/NHS $2,570,320 Total Market Value $2,707,120 * This value information is preliminary and not certified. These values should not be used in the estimation of taxes as they are subject to change. Prior year certified value information can be obtained by selecting the "Assessments" option. Main Area Building Attributes Cont Style Q Foundation Q Ext. Finish Q Int. Finish Q Roof Style Q Flooring Q Heat/AC Q Plumbing Fireplace Builtins Rooms Bedrooms Tyler Technologies, Inc. The Software Group Division Copyright © 2006 Tyler Technologies, Inc. I The Sonwere Group Divsion 011 rights reserved. For technical problems Mth Mls Web sae, please small the Webmester f Man in1Mr (dsncIatex teal Estate Selling bnt es icsfdrntia1,and tnmmmle geolatateln Boma Count roq 25 Yam 512-756-1120 3ne North Water • Burnet fee 572-756-1601 ce1I512-756-3220 R165711 Datasheet http://www.txeountydata.com/datasheet.asp?County=020&Propert R165711 Datasheet Assessment History I Land Information r, Improvements r Improvement Sketch r Location Map Brazoria County Info r Account Search r Owner Search r Address Search Property ID Search Search New County Assistance FAQs Links r Forms Owner Address PEARLAND BUILDING II LIMITED PARTNERSHIP 202 E VIEJO DR FRIENDSWOOD, TX 77546-5549 Taxing Entities Q GBC - Brazoria County RDB - Road & Bridge SPL - Pearland ISD CPL - City Pearland DR4 - Braz Co Drain #4 Account Number 0232-0029-000 Property Description Property Situs Address HWY 35 OFF PEARLAND, TX 77581 Exemptions Legal Description A0232 HT&BRR, TRACT 65, ACRES 19.76 Deed Book: 97 Page: 022679 Type: DV 07/02/97 Abstract/Subdivision Neighborhood A0232-HT&BRR SPL.6-Spl Abst/Strata6 Value Information Type Value Total Land HS/NHS Total Productivity Market Total Improvement HS/NHS $197,600 $0 $o Total Market Value $197,600 * This value information is preliminary and not certified. These values should not be used in the estimation of taxes as they are subject to change. Prior year certified value information can be obtained by selecting the "Assessments" option. Main Area Building Attributes Cont Style Q Foundation © Ext. Finish 0 Int. Finish 0 Roof Style cji Flooring Fireplace Bulltins Heat/AC Q Plumbing Rooms Bedrooms Tyler Technologies, Inc. The Software Group Division Copyright 0 2006 Tyler Technologies. Inc.I The Software Group Dlv,sion. All rights reserved. For technical problems with this Web slte, please email the Webmester. Alan Haider dt 4audates hai Walt Selog Ronrkes,e Erentiaeand rammerooi1ecl SIoteN Rurlrcr(Glop yW m 2S rars SI2-756-1120 305 North Water • Burnet fax 512-756-1601 ce11512-756-3220 R508341 Datasheet http://www.txcountydata.corn/datasheet.asp?County--020&Properi R508341 Datasheet c. Assessment History L Land Information Improvements Improvement Sketch x Location Map Brazoria t County Info a Account Search Owner Search t Address Search a Property ID Search Search New County Assistance FAQs r Links a Forms Owner Address PEARLAND BUILDING II LIMITED PARTNERSHIP 202 E VIEJO DR FRIENDSWOOD, TX 77546-5549 Taxing Entities GBC - Brazoria County RDB - Road & Bridge SPL - Pearland ISD CPL - City Pearland DR4 - Braz Co Drain #4 Account Number 0232-0029-120 Property Description Property Situs Address HWY 35 OFF PEARLAND, TX 77581 Exemptions Legal Description A0232 HT&BRR, TRACT 65B, ACRES .94 Book: Page: Type: Deed Abstract/Subdivision Neighborhood A0232 - H T &BRR SPL.1 - Spl Abst/Strata 1 Value Information Type Total Land HS/NHS Total Productivity Market Total Improvement HS/NHS Value $ 9,400 so $0 Total Market Value $9,400 * This value information is preliminary and not certified. These values should not be used in the estimation of taxes as they are subject to change. Prior year certified value information can be obtained by selecting the "Assessments" option. Main Area Building Attributes Cont Style 0 Foundation CO Ext. Finish 0 Int. Finish p Roof Style ? Flooring a Fireplace Builtins Heat/AC Plumbing Rooms Bedrooms Tyler Technologies, Inc. The Software Group Division Copynghtm 2006 Tyler Technologies, Inc I The Software Group Dossier, lilt rights reserved. For technical problems wtn ttse web site, please email the webmesler. 81w Salim l ►uodates fee{ Lnate Seghg RanckeVieseentiaC and (atlnrrtlo/Reafinote SMOCauntyfworl 51'<vn 812-756-1120 30R Nath Water • 8unae fax512-756-1601 ce11512-756.3220 Exhibit page 1 of 3 pages County: Brazoria Project: Kemlon Pearland M.S.G. No.: 061338 Job Number: 1201 FIELD NOTES FOR 11.505 ACRES Being a tract of land containing 11.505 acres, located in the H.T.& B. R.R. Company Survey, Section 2, Abstract 542, and the H.T.& B. R.R. Company Survey, Section 3, Abstract 232, in Brazoria County, Texas; Said 11.505 acres being all of a call 10.06 acre tract of land as described in Brazoria County Clerk's File (B.C.C.F.) Number 98-021423 and being out of a call 29.90 acre tract of land recorded in the name of Pearland Building II Limited Partnership in B.C.C.F. Number 97-022679 and being out of Lots 64 and 65 of the Zycbllnski Subdivision as recorded in Volume 29, Page 43, of the Brazoria County Deed Records (B.C.D.R.); Said 11.505 acres being more particularly described by metes and bounds as follows (bearings are based on the description of said 29.90 acre tract of land as recorded in B.C.C.F. Number 97-022679): BEGINNING at a concrete monument found on the west right-of-way line of State Highway 35 (one hundred feet wide) at the southeast corner of said 29.90 acre tract and said 10.06 acre tract and the northeast comer of a call 6.0460 acre tract of land recorded in the name of Brazoria County Drainage District No. 4 in B.C.C.F. Number 95-033401; Thence, with the south line of said 29.90 acre tract and said 10.06 acre tract and the north lines of said 6.0460 acre tract and a tract of land recorded in the naive of John Ward Williams in Volume 752, Page 405, of the B.C.D.R., South 89 degrees 59 minutes 42 seconds West, at 731.00 feet pass a 1/2 inch iron rod found at the southwest corner of said 10.06 acre tract and continuing an overall distance of 836.39 feet to a 5/8 inch iron rod set for the southwest comer of the herein described tract; Thence, through and across said 29.90 acre tract, North 00 degrees 03 minutes 54 seconds West, a distance of 599.34 feet to a 5/8 inch iron rod set for the northwest comer of the herein described tract on the north line of said 29.90 acre tract and the south line of a tract of land recorded in the name of Raymond Haak in Volume (91)922, Page 738, of the B.C.D.R.; Thence, with the north line of said 29.90 acre tract and the south line of said Haak tract, South 89 degrees 59 minutes 00 seconds East, at 105.39 feet pass a 1/2 inch iron rod found at the northwest corner of said 10.06 acre tract and continuing an overall distance of 836.39 feet to a 1/2 inch iron rod found on the west right-of-way line of said State Highway 35 at the northeast comer of said 29.90 acre tract and said 10.06 acre tract; Exhibit page 2 of 3 pages Thence, with said west right-of-way line and the east line of said 29.90 acre tract and said 10.06 acre tract, South 00 degrees 03 minutes 54 seconds East, a distance of 599.02 feet to the POINT OF BEGINNING and containing 11.505 acres of land. Michael Hall, R.P.L.S. Texas Registration No. 5765 Miller Survey Group Ph: (713) 413-1900 July 20, 2006 061338 SET 5/8' IR EXHIBIT ___, PAGE 3 OF 3 PAGES 00.10. va (01roDR. MD 1/2' GNP' gtS41911i05P B1a 4e1�' e► tI 1-07s aG�F. r QUO' 1R S89.59'OD"E 836.39' 731.00' 4005 BS N 9042'+ 11.505 ACRES 731.00' RID ,rr +R� s"1 r air a1 LEGEND tsm wain"5 w7 23pc 4os, V1W1 . FND = FOUND CON. = CONCRETE MON. = MONUMENT VOL. = VOLUME PG. = PAGE No. = NUMBER IR = IRON ROD P.O.C. = POINT OF COMMENCEMENT P.O.B. = POINT OF BEGINNING R.O.W. = RIGHT—OF—WAY B.C.D.R. = BRAZORIA COUNTY DEED RECORDS B.C.C.F. BRAZORIA COUNTY CLERK'S FILE NOTES: 1. BEARINGS ARE BASED THE DESCRIPTION OF A CALL 10.06 ACRE TRACT AS RECORDED IN B.C.C.F. No. 9B-021423. 2. A METES AND BOUNDS DESCRIPTION OF THE SUBJECT EASEMENT HAS BEEN PREPARED BY MILLER SURVEY GROUP AND ACCOMPANIES THIS EXHIBIT. S89'59'42"W 836.39 /dos t5c 4 _ C GA51y�,p3ap1 f B.G.Cg.• N"' p.0.B. P80 CDti. MOM. EXHIBIT BEING 11.505 ACRES LOCATED WITHIN THE H.T. & B.R.R. COMPANY SURVEY, SECTION 3, A-232, AND THE H.T. & B.R.R. COMPANY SURVEY, SECTION 2, A-542 AND BEING OUT OF A CALLED 29.90 ACRE TRACT OF LAND AS DESRCIBED IN B.C.C.F. No. 97-022679 IN BRAZORIA COUNTY, TEXAS JOB NO.: 1201 DWG. NO.: 1201-EXH1 SURVEY*GROUP 1760 WEST SAM HOUSTON PARKWAY NORTH HOUSTON, TEXAS 77043 PHONE 713-413-1900 FAX 713-413-1944 SCALE: 1'=200' DATE: 07--20-06 DRAWN BY: PBC CHI(' BY: MWH FIELD 1300K: N/A M&B NO.: 0B1338 Exhibit page 1 of 3 pages County: Brazoria Project: Keinlon Pearland M.S.G. No.: 061338 Job Number: 1201 FIELD NOTES FOR 11.505 ACRES Being a tract of land containing 11.505 acres, located in the H.T.& B. R.R. Company Survey, Section 2, Abstract 542, and the H.T.& B. R.R. Company Survey, Section 3, Abstract 232, in Brazoria County, Texas; Said 11.505 acres being all of a call 10.06 acre tract of land as described in Brazoria County Clerk's File (B.C.C.F.) Number 98-021423 and being out of a call 29.90 acre tract of land recorded in the name of Pearland Building 11 Limited Partnership in B.C.C.F. Number 97-022679 and being out of Lots 64 and 65 of the Zychiinski Subdivision as recorded in Volume 29, Page 43, of the Brazoria County Deed Records (B.C.D.R.); Said 11.505 acres being more particularly described by metes and bounds as follows (bearings are based on the description of said 29.90 acre tract of land as recorded in B.C.C.F. Number 97-022679): BEGINNING at a concrete monument found on the west right-of-way line of State Highway 35 (one hundred feet wide) at the southeast corner of said 29.90 acre tract and said 10.06 acre tract and the northeast corner of a call 6.0460 acre tract of land recorded in the name of Brazoria County Drainage District No. 4 in B.C.C.F. Number 95-033401; Thence, with the south line of said 29.90 acre tract and said 10.06 acre tract and the north lines of said 6.0460 acre tract and a tract of land recorded in the naive of John Ward Williams in Volume 752, Page 405, of the B.C.D.R., South 89 degrees 59 minutes 42 seconds West, at 731.00 feet pass a 1/2 inch iron rod found at the southwest corner of said 10.06 acre tract and continuing an overall distance of 836.39 feet to a 5/8 inch iron rod set for the southwest corner of the herein described tract; Thence, through and across said 29.90 acre tract, North 00 degrees 03 minutes 54 seconds West, a distance of 599.34 feet to a 5/8 inch iron rod set for the northwest comer of the herein described tract on the north line of said 29.90 acre tract and the south line of a tract of land recorded in the name of Raymond Haak in Volume (91)922, Page 738, of the B.C.D.R.; Thence, with the north line of said 29.90 acre tract and the south line of said Haak tract, South 89 degrees 59 minutes 00 seconds East, at 105.39 feet pass a 1/2 inch iron rod found at the northwest comer of said 10.06 acre tract and continuing an overall distance of 836.39 feet to a 1/2 inch iron rod found on the west right-of-way line of said State Highway 35 at the northeast corner of said 29.90 acre tract and said 10.06 acre tract; Exhibit page 2 of 3 pages Thence, with said west right-of-way line and the east line of said 29.90 acre tract and said 10.06 acre tract, South 00 degrees 03 minutes 54 seconds East, a distance of 599.02 feet to the POINT OF BEGINNING and containing 11.505 acres of land. Michael Hall, R.P.L.S. Texas Registration No. 5765 Miller Survey Group Ph: (713) 413-1900 July 20, 2006 061338 SET 5/8' IR EXHIBIT .,____, PAGE 3 OF 3 PAGES Na^ (6119C0R. 105,39' FND 1/2' 1R a0 A 5 ,tiif9 CIS3- gU1191K�� g 7 �'�e�•lettagz..o� gccS• N 03 00 is 10 'ra O !CT 6/8' 91 LEGEND 105.39' FNo 1/2' IR aa3015 113, FND = FOUND CON. = CONCRETE MON. = MONUMENT VOL. = VOLUME PG. = PAGE No. = NUMBER IR = IRON ROD P.O.C. = POINT OF COMMENCEMENT P.O.B. = POINT OF BEGINNING R.O.W. = RIGHT—OF—WAY B.C.D.R. = BRAZORIA COUNTY DEED RECORDS B.C.C.F. = BRAZORIA COUNTY CLERK'S FILE NOTES; 1. BEARINGS ARE BASED THE DESCRIPTION OF A CALL 10.06 ACRE TRACT AS RECORDED IN B.C.C.F. No. 9B-021423. 2. A METES AND BOUNDS DESCRIPTION OF THE SUBJECT EASEMENT HAS BEEN PREPARED BY MILLER SURVEY GROUP AND ACCOMPANIES THIS EXHIBIT. S89'59'00"E 838.99' 11.505 ACRES 731.00' 731.00' S89`59'42"W 836.99 FNQ 1/2' 1Rn '869 3„1'5,£0.00 n1 6. 23 173 rn .0.B. FND CON. MON. EXHIBIT BEING 11.505 ACRES LOCATED WITHIN THE H.T. & B.R.R. COMPANY SURVEY, SECTION 3, A-232, AND THE H.T. & B,R.R. COMPANY SURVEY, SECTION 2, A-542 AND BEING OUT OF A CALLED 29.90 ACRE TRACT OF LAND AS DESRCIBED IN 3.C.C.F. No. 97-022679 IN BRAZORIA COUNTY, TEXAS SURVEY*GROUP 1760 WEST SAM HOUSTON PARKWAY NORTH JOB NO.: 1201 DWG. NO.: 1201-EXH1 HOUSTON, TEXAS 77043 PHONE 713-413-1900 FAX 713.413-1944 SCALE: 1'=200' DATE: 07-20-06 DRAWN BY: PBC CH14 BY: MWH FIELD BOOK: N/A M&B NO.: 061338 'ea Land Eeo omit Deve 0 0. oration Assistance Application Form Applicant Information Company Name: Address: Company Official: Title: Telephone: FAX: `� is ]Vi,L.,v t� ( u C Ts L '� D �Lt2q jJ, kr , I x 7-1S &- Z('s`� Jam., 2 t 2(..t✓k. Zvi-33o ).-gi-i.1 L3o0 Please submit third party reviewed financial statements or IRS tax filings for the prior two years. Proj ect Description Applicant MUST attach a statement fully explaining the project. Describe future site improvements, business operations, and economic impacts of the proposed project. If the company will be required to obtain any State or Federal permits, please detail which permits and why they are required. The company must ask for assistance from the PEDC. Description of Facility (Select those that apply) Corporation ( ) Partnership_ )' Expansion ( ) Modernization ( ) Office/ Professional ( ) Proprietorship ( ) Manufacturing ( ) Other Industry ( ) New Plant ( ) Sales ( ) Distribution Center ( ) Project Location (Attach site plan): (4 '2_- K.i • Ft Total Capital Investment (Excluding Land Value): $ 3 : 0 "' 3 Estimated Expenses of Bringing Utilities to Site: $ 0 Building Size (Sq. Ft.): - 5! 0 Estimated Moving Expenses: $ Estimated Annual Sales Tax Contribution: $ Estimated Value of Fixed Equipment: $ .5-OC r 0 0 Q Sales Tax Sent to State of Texas (Last year): $ Company Profile: Employment: Current Employment: G a g l C- Em to p ymentin 5 y 4-Gross Annual Payroll: $ l 0, (0'1 �{-. vo Annual Payroll in 5 years: $ 5 %Average Hourly Wage: $ ('� I Avg. Wage in 5 years: $ p (e'l.5 sCI64,.. v�) (tom 1G�l 4,�. ears: szc c_ 0, V you. r .CX;(33 0s Pearland Economic Develop Assistance Application Form Applicant Information Company Name: Address: 6liplN6"7 LID Z. `-i A I (Ni p. . >C. Company Official: Jo Z.1 Title: V P . C L /v E Telephone: Z q (,� - 3 3 0 FAX: fbr•LI Please submit third party reviewed financial statements or IRS tax filings for the prior two years. Project Description Applicant MUST attach a statement fully explaining the project. Describe future site improvements, business operations, and economic impacts of the proposed project. If the company will be required to obtain any State or Federal permits, please detail which permits and why they are required. The company must ask for assistance from the PEDC. Description of Facility (Select those that apply) Corporation ( ) Partnership ( ) Expansion N Modernization ( ) Office/ Professional ( ) Proprietorship ( ) Manufacturing(, Other Industry ( ) New Plant ( ) Sales ( ) Distribution Center ( ) Project Location (Attach site plan): (`1 ZLi t M A-( Total Capital Investment (Excluding Land Value): $ 3 .0 ' " - ✓vim- )� ,St E Estimated Expenses of Bringing Utilities to Site: $ Building Size (Sq. Ft.): 4 3 ; v c-> Estimated Moving Expenses: $ Estimated Annual Sales Tax Contribution: $ Estimated Value of Fixed Equipment: $ Sales Tax Sent to State of Texas (Last year): $ Company Profile: Employment: Current Employment: Employment in 5 years: Gross Annual Payroll: $ Annual Payroll in 5 years: $ Average Hourly Wage: $ Avg. Wage in 5 years: $ r 1' r 71111 111111IIIIIr ®I IIIIIIIIIillll)C1111111111111111111illlllllf NW CCM MN al' ,111111111111111111 IIIIII IIII IIIII11111111111 III II111111111111111111 I UIIIIU IIIIIII111111111111111111111111 n1II IlIlI11111111111111I111111111;; ��� Il 1 1 1 11 l 11 l 111 1 1 1 11 l 11 l 111 l 11 1 1 1 111 1 1 1 111 11 l 111 llf llll l u l l 11 l 11 l 11 l 11 l 111 l 11 l 11 l 11 11 1 1 111 11 l llt 11 l 11 l 111 11 l ill l 111 11 l llll 111 11 1 1 llll 11111111111, no�na rev I u. m 1.45 ACRES ADDITIONAL LAND REQUIRED !FOR DEVELOPMENT 2990 ACRES TOTAL SITE Q Q FUTURE EXPANSION AND DEVELOPMENT WHK FAMILY INVESTMENTS PARTNERSHIP LIMITED 18.39 ACRES AVAILABLE FOR SALE OR DEVELOPMENT VLO\ PROD,C C PR V \ARY IXPA\S \ PLA\