R2006-169 10-23-06 FAILED
FAILED
October 23,2006
RESOLUTION NO. R2006-169
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PEARLAND,
TEXAS, AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE TO
ENTER INTO A TAX ABATEMENT AGREEMENT WITH BISON BUILDING
MATERIALS, LTD. ("BISON"); FINDING AND DETERMINING THAT
TERMS OF SAID AGREEMENT MEET THE REQUIREMENTS OF CHAPTER
312 OF THE TAX CODE, V.A.T.S. AS AMENDED, ORDINANCE NO.
1300, ESTABLISHING REINVESTMENT ZONE #14, AND THE
GUIDELINES AND CRITERIA FOR GOVERNING REINVESTMENT ZONES
AND TAX ABATEMENT AGREEMENTS SET FORTH IN RESOLUTION NO.
R2006-121.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS:
Section 1. That certain Tax Abatement Agreement, by and between the
City of Pearland and Bison, a copy of which is attached hereto as Exhibit "A" and
incorporated herein for all purposes, is hereby authorized and approved.
Section 2. The City Council finds and determines that the Tax Abatement
Agreement and the property subject to this agreement meet the requirements of
Chapter 312 of the Tax Code, V.A.T.S. as amended, Ordinance No. 1300, which
established Reinvestment Zone #14, and the Guidelines and Criteria for Governing
Reinvestment Zones and Tax Abatement Agreements set forth In
Resolution No. R2006-121.
Section 3. The City Manager or his designee is hereby authorized to execute,
and the City Secretary to attest, said Tax Abatement Agreement and any counterparts
thereof.
PASSED, APPROVED, AND ADOPTED this the
day of
A.D., 2006.
RESOLUTION NO. 2006-169
ATTEST:
YOUNG LORFING, TRMC
CITY SECRETARY
APPROVED AS TO FORM:
DARRIN M. COKER
CITY ATTORNEY
2
EXHIBIT
j "A ..
THE STATE OF TEXAS
~
~
~
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COUNTIES OF BRAZORIA,
FORT BEND, AND HARRIS
TAX ABATEMENT AGREEMENT
This Tax Abatement Agreement ("Agreement") is entered into by and between the City of
Pearland, Texas, a home rule city and Municipal Corporation of Brazoria, Fort Bend, and
Harris Counties, Texas, duly acting by and through its City Manager ("City"), and Bison Building
Materials, LTD. ("Bison"), duly acting by and through , its
WIIN~.s..s.~IH :
WHEREAS, on the 25th day of September, 2006 the City Council of the City of Pearland,
Texas, passed Ordinance No. 1300 establishing Reinvestment Zone #14 in the City of Pearland,
Texas, for general business tax abatement, as authorized by Chapter 312, Tax Code, V.A.T.S. as
amended ("Code"); and
WHEREAS, the City previously adopted Resolution No. R2006-121, which established
appropriate guidelines and criteria for governing reinvestment zones and tax abatement agreements
to be entered into by the City as contemplated by the Code; and
WHEREAS, the City's objective is to maintain and/or enhance the general business economic
and employment base of the Pearland area for the long term interest and benefit of the City, in
accordance with Resolution No. R2006-121 and the Code; and
WHEREAS, the contemplated use of the Premises, as hereinafter defined, the contemplated
improvements to the Premises in the amount as set forth in this Agreement and the other terms
hereof are consistent with encouraging development of said Reinvestment Zone in accordance with
the purposes for its creation and are in compliance with Resolution No. 2006-121 and the guidelines
and criteria adopted by the City and all applicable law; and
WHEREAS, the Improvements as defined below constitute a major investment within the
Reinvestment Zone that will substantially increase the appraised value of property within the zone
and will contribute to the retention or expansion of primary and secondary employment within the
City; and
WHEREAS, there will be no substantial adverse affect on the provision of city services or on
its tax base and the planned use of the Premises will not constitute a hazard to public safety, health,
or welfare; now,
IHEREfORE:
For and in consideration of the mutual agreements and obligations set forth below, the
sufficiency of which is hereby acknowledged by the parties hereto, Bison and City mutually agree as
follows:
1. The property to be the subject of this Agreement shall be that property described by
metes and bounds and map attached hereto as Exhibit "A" ("Premises").
2. Construction of Bison's improvements on the Premises, described in Exhibit "B"
("Improvements") will cost approximately four million dollars ($4,000,000.) and is to be
substantially complete on or about June 30, 2007; provided, that Bison shall have such additional
time to complete the Improvements as may be required in the event of "force majeure" if Bison is
diligently and faithfully pursuing completion of the Improvements. For this purpose, "force
majeure" shall mean any contingency or cause beyond the reasonable control of Bison including,
without limitation, acts of God or the public enemy, war, riot, civil commotion, insurrection,
governmental or de facto governmental action (unless caused by acts or omissions of Bison), fires,
explosions or floods, and strikes. The date of completion of the Improvements shall be defined as
the date a Certificate of Occupancy is issued by the City of Pearland.
3. Bison agrees and covenants that it will diligently and faithfully, in a good and
workmanlike manner, pursue the completion of the Improvements as a good and valuable considera-
tion of this Agreement. Bison further covenants and agrees that all construction of the Improvements
will be in accordance with all applicable state and local laws and regulations or valid waiver thereof.
In further consideration, Bison shall thereafter, from the date a Certificate of Occupancy is issued
until the expiration of this Agreement, continuously operate and maintain the Premises as Bison,
limiting the use of said Premises to that use which is consistent with the terms ofthis Agreement and
the general purpose of encouraging development or redevelopment ofthe Reinvestment Zone during
the period that the property tax exemptions evidenced herein are in effect.
4. Bison agrees and covenants that the Improvements shall provide a minimum ofthirty
five (35) jobs during the period ofthe abatement. Accordingly, Bison shall provide to the City annual
manpower reports ( Exhibit "D") within sixty (60) days following the end of each calendar year.
5. Subject to the terms and conditions of this Agreement, and subject to the rights and
holders of any outstanding bonds of the City, a portion of ad valorem property taxes assessed to the
Property and otherwise owed to the City shall be abated. City hereby acknowledges that it is not
aware of any terms or conditions of any outstanding bonds which would invalidate this Agreement.
This Agreement shall be effective with the January 1 sl valuation date immediately following the date
of execution of this Agreement. In each year that this Agreement is in effect, the amount of
abatement shall be an amount equal to the percentage indicated below ofthe taxes assessed upon the
increased value of the Improvements and Fixed Equipment over the market value in the year in
2
which this Agreement is executed. The abatement as herein provided shall be for the following years
and in the following amounts:
Tax Year Abated
Percentage of
Value Abated:
Real Property
2007
2008
2009
2010
2011
50%
50%
50%
50%
50%
a. The abatement shall be conditioned upon Bison generating sales taxable in any
amount up to twenty four million dollars ($24,000,000.) each year that the abatement
is in effect. The amount shall be computed on a calendar year basis, January 151_
December 3151 (Sales must be those subject to the sales and use tax of the City of
Pearland).
b. In the event Bison shall move any time during the term of this Agreement or take any
other action that would prevent the City from getting sales tax revenue, then all
rebates previously earned and paid to Bison by the City shall be refundable to the
City by Bison and no further abatement shall be granted under any remaining term of
this Agreement.
6. Bison further agrees that the City, its agents and employees shall have the right to
enter upon the Premises at any reasonable time and to inspect the Improvements in order to
determine whether the construction of the Improvements is in accordance with this Agreement and
all applicable federal, state, and local laws, ordinances, and regulations or valid waiver thereof.
After completion of the Improvements, the City shall have the continuing right to enter upon and
inspect the Premises at any reasonable time, after 24 hours' notice has been given, to determine
whether the Premises are thereafter maintained and operated in accordance with this Agreement and
all applicable federal, state, and local law, ordinances, and regulations. The City will conduct at least
one inspection annually to ensure compliance with the guidelines contained in Resolution No.
R2006-121. Notwithstanding any other provision of this Agreement, if the City determines that a
violation of a federal, state, or local law, ordinance or regulation exists on the Premises, the City
may, in addition to any other authorized enforcement action, provide to Bison written notice of such
violation. For the purposes of this Agreement, Bison shall have ten (10) days from the date of the
notice to cure or remedy such violation. If Bison fails or refuses to cure or remedy the violation
within the ten (10) day period, Bison is subject to the forfeiture, at the discretion of the City, of any
right to any tax abatement for a portion of the period or the entire period covered by this Agreement.
3
7. Bison agrees and covenants that the information provided in the attached Application
for Tax Abatement (Exhibit "C") is true and correct and that any materially false or misleading
information that is provided to the applicable taxing jurisdictions may be grounds for termination of
the agreement with possible liability for recovery of abated taxes.
8. In the event that (1) the Improvements for which an abatement has been granted are
not completed in accordance with this Agreement; or (2) Bison allows its ad valorem taxes owed to
the applicable taxing jurisdictions to become delinquent and fails to timely and properly follow the
legal procedures for protest and/or contest of any such ad valorem taxes; or (3) Bison breaches any of
the terms or conditions of this Agreement, then this Agreement shall be in default. In the event that
Bison defaults in its performance of (1), (2), or (3) above, then the City shall give Bison written
notice of such default, which notice shall be delivered by personal delivery or certified mail to:
Bison Building Materials, LTD., 1445 W. Sam Houston Parkway, Houston, Texas 77043. If Bison
has not cured such default within sixty (60) days of said written notice, this Agreement may be
modified or terminated by the City. Notwithstanding the provisions set forth herein, this Agreement
may be terminated at any time after the execution hereof by agreement of both parties.
9. In the event that the facility is completed and begins producing product or service, but
subsequently discontinues producing product or service for any reason except fire, explosion or other
casualty or accident or natural disaster for a period of one year during the abatement period, then this
Agreement shall be in default and shall terminate. The abatement of taxes for the calendar year
during which the facility no longer produces shall also terminate.
10. As liquidated damages in the event of default and in accordance with
Section 312.205, Tax Code, V.A.T.S., as amended, all taxes which otherwise would have been paid
to the City without the benefit of abatement (but without the addition of penalty; interest will be
charged at the statutory rate for delinquent taxes as determined by Section 33.01 of the Tax Code)
will become a debt to the City and shall be due, owing and paid to the City within sixty (60) days of
the expiration of the cure period or the termination date, whichever is applicable. The City shall
have all remedies for the recapture and collection of the lost tax revenue as provided generally in the
Tax Code for the collection of delinquent property taxes and in accordance with Resolution No.
R2006-121.
11. The City represents and warrants that the Premises does not include any property that
is owned by a member of its councilor boards, agencies, commissions, or other governmental bodies
approving, or having responsibility for the approval of, this Agreement.
12. The terms and conditions of this Agreement are binding upon the successors and
assigns of all parties hereto. This Agreement may be transferred or assigned by Bison only upon
written permission by the City in accordance with Resolution R2006-121, which permission shall not
4
be unreasonably withheld. No assignment shall be approved if the assignor or assignee are indebted
to the City for ad valorem taxes or other obligations.
13. It is understood and agreed between the parties that Bison, in performing its
obligations hereunder, is acting independently, and the City assumes no responsibilities or liabilities
in connection therewith to third parties.
14. BISON RELEASES, ACQUITS, INDEMNIFIES, AND HOLDS HARMLESS
THE CITY, ITS OFFICERS, AGENTS, EMPLOYEES, SUCCESSORS, AND ASSIGNS,
FROM ANY AND ALL KINDS OF CLAIMS, DEMANDS, LOSSES, DAMAGES, INJURIES,
RIGHTS, CAUSES OF ACTION, OR JUDGMENTS OF WHATSOEVER CHARACTER OR
NATURE, INCLUDING ATTORNEYS' FEES, WHICH MAY ARISE AS A RESULT OF
THIS AGREEMENT. THE PROVISIONS OF THIS SECTION REFLECT THE
EXPRESSED INTENTIONS OF BISON AND THE CITY AND SHALL SURVIVE THE
TERMINATION, EXPIRATION, OR CANCELLATION OF THIS AGREEMENT.
15. It is understood and agreed by the City and Bison that if the Premises has been
designated and taxed as agricultural land pursuant to Chapter 23, Subchapter C, Tax Code, V.A.T.S.,
that this Agreement shall not be effective and no abatement granted until Bison has removed the
agricultural use designation and all taxes due pursuant to Section 23.55, Tax Code, V.A.T.S., as
amended, (roll back taxes) have been paid.
16. This Agreement was authorized by Resolution of the City Council at its council
meeting on the _ day of _, 2006, authorizing the City Manager to execute the Agreement on
behalf of the City.
17.
President,
This Agreement is entered into by Bison pursuant to authority granted by its
,onthe_dayof ,20_
18. This shall constitute a valid and binding Agreement between the City and Bison when
executed in accordance herewith.
19. This Agreement is performable in Brazoria County, Texas.
5
20. Bison agrees and covenants to certify annually to the City, while this Agreement is in
effect, that Bison is in compliance with each applicable term of this Agreement.
Witness our hands this _ day of
ATTEST:
CITY OF PEARLAND
By:
By:
Young Lorfing, TRMC
City Secretary
Bill Eisen
City Manager
APPROVED AS TO FORM:
By:
Darrin M. Coker
City Attorney
ATTEST:
Bison Building Materials, LTD.
By:
Printed Name:
Title:
By:
Printed Name:
Title:
6
THE STATE OF TEXAS ~
~
COUNTY OF BRAZORIA ~
BEFORE ME, the undersigned Notary Public, on this day personally appeared Bill Eisen,
City Manager for the City of Pearland, known to me to be the person whose name is subscribed to
the foregoing instrument and acknowledged to me that he executed the same for the purposes and
consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE THIS
, A.D., 20_
DAY OF
NOTARY PUBLIC, STATE OF TEXAS
Printed Name:
Commission Expires:
THE STATE OF TEXAS
~
~
~
COUNTY OF
BEFORE ME, the undersigned Notary Public, on this day personally appeared
of Bison Building Materials, LTD., known to me to be the
person whose name is subscribed to the foregoing instrument and acknowledged to me that he
executed the same for the purposes and consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE THIS
, A.D., 20_
DAY OF
NOTARY PUBLIC, STATE OF TEXAS
Printed Name:
My Commission Expires:
7
J!!I ~4-Z006 10:53am From-GRUBB' ELLIS
713-6Z6-ZZ88
EXHIBIT
DESCRIPTION
"A "
Of 20.603 acres or 873,944 square feet ot land, being out of Lots 55,60, 66 and
Two un-numbered lots in the W. Zychlinski Subdivision as recorded in Volume
29, Page 43 of the Brazoria County Deed Records and is further described in a
Deed conveyed to Bedford Realty, LLC, recorded in County Clerk's File No.
2004028486, of the Official Public Records of Brazoria County, Texas, located in
the H.T. & B.R.R. Co. Survey, Abstract No. 232, Brazoria County, Texas (said
20.603 acres being more particularly described by metes and bounds as follows,
(bearings based on File No. 99036982 of the Official Public Records of Brazoria
County, Texas);
BEGINNING at a 5/8 inch iron rod set at the point of intersection of the Northerly
Right-Of-Way line of McHard Road (Variable width R.O.W.) with the Easterly
Right-Ot-Way line of MYkawa Road (100' wide R.O.W.);
THENCE North 02038'49" West, along the Easterly Right-Ot-Way line at said
Mykawa Road, a distance of 2791.70 feet to a 5/8 inch iron rod found for comer
of the herein described tract of land, said point being in the Westerly line of a
100' wide AtChison Topeka and Santa Fe Railroad Right-Of-Way;
THENCE South 16<>23'22" East, along the Westerly line of said Railroad Right-
Of-Way, a distance of 2673.36 feet, to a 5/8 inch iron rod set for corner of the
herein described tract of land, said point being in the Northerly Right-Of-Way line
of said McHard Road;
THENCE South 73030'10" West, along the Northerly Right-Of~Way line of said
McHard Road, a distance of 64. 18 teet to a 5J8 inch iron rod set for corner of the
herein described tract of land;
THENCE South 64051'48" West, continuing along the Northerly Right-Of-Way
line of said McHard Road, a distance of 366.98 feet to a 5/8 inch iron rod set for
comer of the herein described tract of land, said point being the beginning of a
curve to the right;
THENCE continuing along the Northerly Right-Of-Way line of said McHard Road
and along said curve to the right, having a central angle of 22026'28", a radius of
515.00 feet, an arc length of 201.71 feet, a chord bearing of South 761105'02"
West, and a chord distance of 200.42 feet to a 5/8 inch iron rod set for point of
tangency; ~
PAGE 1 0 F 2
~~lc24-2006 10:53am FrDm-GRUBB , ELLIS
713-626-2288
T-430 P.004/004 F-665
DESCRIPTION (CONTINUED)
THENCE South 87018'16" West, continuing along the Northerly Right-Ot-Way
line of.said McHard Road, a distance of 37.40-feet t()the PLACE OF
BEGINNING of the herein described tract of land and containing within these
calls 20.603 acres or 873,944 square feet of land.
..
WITNESS.MY HAND AND SEAL THIS 28th DAY OF FEBRUARY, 2006.
J. GARLYN RAINWATER
Registered Professional Land Surveyor No. 4722
FOSTER-RAINWATER & ASSOCIATES SURVEYING
P. O. BOX.1339
P EAR LAN 0, TEXAS 77588
PHONE:(281).412-6586
FAX: (281) 412-9025 .
Job No. 99066-05
.,
PAGE 2 OF 2
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.....
c.
Other Estimated Taxes Generated bv Proiect
Gi(o(.5 $+t.E~
(1) Sales Taxes: 2007: $ z. D,ODO,llOO
20~: $ Z.'(,oilO,OOO
.
20.n1-: $ ;2." f O~ D,!)",)
20~; $ llo,ooo,o'{)()
20.1.1.-: $ ~P,D{)O})DO
20lL: $ ~a,ooO,,(JD~
2011-: $ ~O,OPOIO(JO
20EI-: $ ~~,'i)Cl',OOo
20-11-: $ "J If. iJ~ J" 00 i1
20~: $ 3~,Qt)oJooo
EXHIBIT
...,..
:2% ~U:~. II-
"e:
I/OO/j~U
WD, {)(}t:l
,to,oDV
f,oo,ooV
~oq coo
(,00,07> ()
(. f)O,Do iJ
&'ID,DOO
UO,otiIJ
724 000
(2) Other Taxes or fees (iffuown, impact fees, building fees, etc.): IlolJc K/lOL(jfJ
D. Estimated Appraised Value on Site:
Buildblg Bus. PersO/lal
Land & Fixed Property
Equipment & IIlJ'elltory
1. Total of pre-existing value 700,000 0 0
(Jan 1 preceding abatement)
n. Estimated value of NEW land added b
Estimated value of NEW improvements ,..I)oo/uoo
Estimated value of NEW fixed equipment ~'DO ,000 -
Estimated value of NEW personal "f,. >0" I,O(H;)I
property and inventory added
Total of NEW value added 0 ~ODdtOOO tf, S' DO, 000
(Total columns in Sec. 11 above)
Ill. Total value at end of Tax Abatement 7Uo/o~)Q L6oo0,OI:JO if, 5010/000
(Total Part I & II)
----~----------------~~*-__~__W"______~____~~N________________________________________________~___________________
TAX ABATEMENT REQUESTED
50 % of eligible property for a term of 10 years (Or)
( ) Requesting Staggered Tax Abatement Terms as follows:
-------------------------~----"---------------____MW_~___________________________________________________________
EXHIBIT
~ ,'4
~ e...
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 aclmowledges
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 lmowingly 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 Pearl and, 3519 Liberty Drive, Pearland, Texas 77581. Please attach
exhibits and additional information.
--------------------------------------~---~-----------------_________________________W__M___________________________~
APPLICANT INFORMATION
Application Date 7,.../ ~()Cc
Company Name BISON 8(,( (uJ)tNGr /l11t-7EI< 1A-{.5~ber of Current Employees I () i)'D T
Address l'f'f)" tJ. S1tn~ ~7 AI" ~S"tQ1I)
Consecutive years in business i:f5
{;:
Annual Sales ii/X), DOC, 000
Corporation ( )
Partnership (>Q I-Tf), Proprietorship ( )
Please sllbmitfillallcial statemel1ts for the priol' two years,
-
----------------------------------------------------------------------------------~----------------------------------
PROJECT INFORMATION
Type of facility:
(See Insh'Z/ctions)
Manufacturing
Regional Service
( )
( )
Reg. Distribution Center ( )
Reg. Entertainment Center ()
Other Basic Industry (X)
~____M_________________________________________~________________________________________~__________________________
Location address and description of area to be designated as reinveslment zone (attach map
showing site and legal description): /t;jOO My~w/t ,el(JJH> >.oIlTH. ~lJIHV(), 7;:,
'20. (a() 3 Aeru',- , .
t -------------------------------------~-~--"-----------------________________M_____________________________________
Description of eligible improvements (real property) to be constructed (This includes fixed
equipment, buildings, parking lots, etc.): J DrAa=- BuG , 5' Lu/116'l... S~~C ga ('-!JIM> .
1(11-1/.. iJJ~/)(IJG DOCle. 10 A~e> GIffC/((;7E 5l..1J1J" . I
.
----------------------------------------------------__________M______________________________~________________________
-----------------------------"---------------------------------------~~---------------------------~~--------------
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: NJ 1/ .. .
------------------------------------------------------------------------------------------------------~-----------
The proposed reinvestment zone is located in:
City
County
School District
College District
Other Taxing Jurisdictions
Tax ill number
P/It
~ 11-z..o,q. I A
~UlN~
Brc:;;1...0,- 1 (; D I) Y
70-- 06 0 ~K'>
Description ofproduct(s) or service to be provided (proposed use): ~~ ((..j}fN& h1/r7E/!.1Ik-t;
IAlCLaDlfvG Lv.fJI8&. I MIU-IAfOIlK,. 1i...t1<;$E-S,
Description of operations, processes involved, general overview: RC1:J;.,I'L_. ~JC.IJGC1"!A-hj)
..Df577t(B/{'T1Ci!J DF r",.(.'bJ}1IC7S U5/AfG DClJJJetJ 7R.(Jef< Ff..$...,- CZlOqi 7i{.ttQt:S) -
.
___________________________________________________________________________M__W___w___________________________________
A TT ACH 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 9<l
ECONOMIC INFORMATION
A. Construction Estimates
EXPANSION ( )
MODERNIZATION ( )
Commencement Date: :5i=rr Zoob
Construction Man Years:
Completion Date: A1!1l '"Zo07
Peak Construction Jobs
IF MODERNlZA TION:
Estimated Economic Life of
Existing Plant:
Added Economic Life from
Modernization:
Years
Years
" B. Permanent Employment Estimates (PTE's)
Current Employment If.O
Current Annual Payroll f;/,3 /J1 average annual or hourly salary ZS";,)i)i)
Number of jobs retained ( 33 ) created (J.> )
at start/opening of this project _Lf.'i in year Zcc 7
5 years into operation bo in year 7.D I 'J....
/J1#..
h!tM
/J111tL
,201)7
, 20 J2.L
, 20.!:b:-
Local
/>
/~
I{b
Transfer
33
?3
1-.0
Total
'-If
~
Est. Salaries
frl.5 PI
/. 51/1
2.~M
c.
Other Estimated Taxes Generated bv Proiect
GI'..O~~ $+-LE.>
(1) Sales Taxes: 20 07 : $ Z D,ODO/ODO
20&..: $ 7-t.LoDO,oDO
.
20~: $ :.z.{",O~D,~il0
20~: $ 'fl{},OOOrO~()
20....Ll-: $ ~PIOOv/DDO
20~: $ 30IoOO,D()~
2012--: $ "jO,OpO,DHJ
20.d-: $ 3~,i:l~,ovO
20--LL-: $ 'J If. D' J, oc;1
20~: $ 3~/MO.l 000
.......
2% ~u:,.- IA"{O
I/oo/)~O
WD, boO
$20,00 v
(,00,00</
~oq coo
(,00107) c)
~ DO, 0/) 0
&,/O,DOO
UO,OUI.)
7ZAOOO
(2) Other Taxes or fees (ifkhown, impact fees, building fees, etc.): ).loMe KJ/otJJrJ
D. Estimated Apuraised Value on Site:
Building BllS. Persoltal
Land & Fixed Property
Equipmellt & Im1elltory
1. Total of pre-existing value 70D,000 0 0
(Jan 1 preceding abatement)
II. Estimated value of NEW land added 0
Estimated value of NEW improvements 3..~oo,O()0
Estimated value of NEW fixed equipment ~'Do,OOO -
Estimated value of NEW personal If,. So C' 1,0001
property and inventory added
Total of NEW value added 0 'It ODd.. 000 ll,SOo,ODO
(Total columns in Sec. II above)
Ill. Total value at end of Tax Abatement 7Uu,oC(;)Q '-Ii 000,0190 if, SOiO,tlOO
(Total Part 1 & II)
--_____________________~W~____~M____W_~_____~____~_________________________________________HW_~___________________
TAX ABATEMENT REQUESTED
50 % of eligible property for a term of 10 years (Or)
( ) Requesting Staggered Tax Abatement Terms as follows:
-------------------__________________~_M~__________~_~___-____________________________M__________________________
VARIANCE
Is the applicant seeking a variance under Section 3(f)
of the Guidelines?
YES ( )
NOn
If "YES" attach required supplementary information,
OTHER ABATEMENTS: Has company made application
for abatement ofthis project by another taxing
jurisdiction or nearby counties? YES C )
NO~
If lIYES II provide dates of application, hearing dates,
ifheld or scheduled, name of jurisdictions and
contacts, and letters of intent
--------------------------------------"-~---------------------------------------------------*--------------------
COMPANY REPRESENTATIVE TO BE CONTACTED
Name: 6!:!1 {;U61..
Title: GNTlt.oq.f5<...
Address: 11('15' W. SA""IInLnW ~ ii,
~DN. 7k "f7W'1
Telephone: 7/~ ,.q~7'- "'700
Authorized Company Official:
BY:fC~
P?n1~d Name~1;:~ V~~!'::-
TItle. c/^,~ . ~ 2f7,L
Revised November 2 J, 2000
Pearland Economic Develo ment Corporation
Assistance Application Form
Applicant Information
Company Name: .~~~)~~}J})G}I'C\{\- ~~ ~.
J
Address: Q~ 6~ \ C1:'b4S.
~'0~") ~
YLf)...) 4 - q~~ q
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Company Official:
Title:
Telephone:
FAX:
Please submit third parly 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 M
Expansion ( ) Modernization ( )
Office! Professional ( )
Proprietorship ( ) New Plant (...,--
Manufacturing ( ) Sales ( )
Other Industry () Distribution Center (yf-'
~~~ ~~~
Project Location (Attach site plan): .1V' Y\'- l-- "\ f\- ~ Y\rt C" \~- ~ .
Total Capital Investment (Excluding Land Value): $ '3. S '\.f"'(\f\ U \ ~ ")
Estimated Expenses of Bringing Utilities to Site: $ I'\.St \'\:
BuildingSize(Sq.Ft.):~ - ~')~~ ~ -~......~ ~~ *
Estimated Moving Expenses: $ ~ VT
Estimated Annual Sales Tax Contribution: S ~ ~ '2- <:s""C.b - ~'tS" ~
Estimated Value of Fixed Equipment: $ 2.SOJ oe::> 0
Sales Tax Sent to State of Texas (Last year): $ ~ ~~"\x. ~
Company Profile: Employment:
Current Employment: t~ Employment in 5 years: '5 S'
Gross Annual Payroll: $ . . ~ \~~)Annual Payroll in 5 years: $ .3. '8 ~ u..u."'t-
Average Hourly Wage; $ \:;t.,.. Avg. Wage in 5 years: $ \ lo.
BUILDING MATERIALS, LTD.
1445 WEST SAM HOUSTON PKWY. NORTH (7131467-6700
P.O. BOX 19849 HOUSTON. TEXAS n224
May 10, 2006
Bison Building Materials, Ltd. provides the residential construction industry with a
variety of products and services including lumber, millwork, and
engineered/manufactured products. The contemplated project is the relocation and
expansion of our distribution center located in La Marque, TX. Bison opened the current
facility in 1988. The 4.3 acre property contains one enclosed building with:!: 19,000 sq.
ft. and a number of T -shed storage buildings. The remainder of the site is hard-surfaced
There is no rail service to the facility. Surrounding property is occupied and not for sale.
The La Marque facility has served Bison well for many years; however, we now find
ourselves with a need to add product lines, equipment and inventory amounts if we are to
service the increased business opportunity south and east of the city of Houston. We
believe Pearland offers an opportunity to meet the requirements for us to be successful in
this endeavor.
Our concept plans are fOT the construction of a rail served distribution facility to be
located at the intersection of Mykawa Rd. and McHard Dr. The 20 acre site allows for
substantial growth that is not feasible at our current location. Initially we plan to
construct a facility on 16 acres that includes approximately 5.5 acres for a floodwater
retention structure. The remaining acreage is to be retained for future use in the existing
business or for additional related business ventures. Preliminary estimates for
construction, based on concept plans, are approximately $3.5 Million + rail spur
installation. This construction includes a hard-surfaced lumber/millwork facility with
four metal buildings totaling approximately 80,000 square feet of space. There will be
operational offices in a portion of one of the buildings with a retail sales counter and
showroom to highlight available products.
The business unit we are contemplating moving closed their fiscal year in April, 2006
with $25.3 Million in deliveries. This amount has been reported as sales from our
Rosenberg, TX facility as the LM yard was treated as a distribution-only facility; not
making on-site sales. The future facility will report as a local business, particularly since
we will be making retail sales on-site. It is expect that the business will continue to grow
with the expanded capabilities to in excess of $50 Million within three years, provided
economic factors continue to be positive as expected. lhis facility will be similar in
service capabilities to our Rosenberg unit that finished the year in excess of $70 Million,
not including the deliveries made from LM
We currently employ 37 persons at the LM facility. As our offerings and capability
increase, we expect to add personnel to meet the needs. We anticipate requiring in excess
of 50 people to conduct business within 3-5 years. Payroll and related personnel
expenses are expected to exceed $3.8 Million at that time. It is not know at this time how
many people will move with tbe business.
Bison Building Materials, Ltd. is contemplating a project that far exceeds what current
business requires. We are considering investing in the future of our business and also,
the future of Pearl and. We hereby request that the Pearland EDC aid us in moving
towards that successful future by providing financial assistance to make this happen.
Respectfully,
c-~~~~"-~
Pat W. Bierschwale
President
Bison Building Materials, Ltd.
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R165689 Datasheet
R165689
~.. D atasheet
iL Assessment
History
!c Land
Information
10, Improvements
t Improvement
Sketch
( Location Map
Brazoria
t. County Info
It Account Search
'" Owner Search
f: Address Search
t3 Property I D
Search
Search
IE New County
Ass i sta n ce
@. FAQs
~.. Links
(: Forms
Page 1 of2
Property Description
Owner Address Property Situs Legal Description
Address
BEDFORD REALTY MYKAWA RD CR 112 A0232 H T & B R R,
LLC PEARLAND, TX TRACT 55-60-66,
%QUINTIN AND 77581 ACRES 20.603,
ASSOCIATES PEARLAN D
PO BOX 801707
DALLAS, TX 75380-
1707 -
Taxing Entities ra Exemptions (J Deed
GBC - Brazoria Book: 04
County Page: 028486
RDB - Road & Bridge Type: WD
SPL - Pearland ISD 03/18/04
CPL - City Pearland
DR4 - Braz Co Drain
#4
Account Number Abstract/Subdivision Neighborhood
0232-0012-000 A0232 - H T & B R R SPL. 7 - Spl
Abst/Strata 7
Value Information
Type Value
Total Land HS/NHS $247,240
Total Productivity Market $0
Total Improvement HS/NHS $0
Total Market Value $247,240
* 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.
Iv'iain Area Building Attributes
Cont Style @ Foundation ~ Ext. Finish (.iJ Int. Finish ~
Roof Style ~ Flooring @ Heat/ AC (jJ Plumbing
L.L..L__.I'-______ ..01..__ _ _____""-__..1_.1.._ __~__ /..l_.L~_L _~.L _~__()n~~___~_{)"""1\ o_n~a~d.-.-4-"'TTn_n 11!::~LO()
'i 1"1 A I"IAAL
R165689 Datasheet
1. .L.I.___ II
Fireplace
Builtins
Rooms
Bedrooms
Tyler Technologies, Inc. I The Software Group Division
Copyright@2006 Tyler Technologies, Inc.1 The Software Group Division. All rights reserved. For technical
problems with this Web site, please email the Webmaster.
.. _1_.L_ _ _ "__ l_l_.L_ _1_ _ _J... _ ___()T'1_____.L-_(\f"\f\ o_n_____ ~~-L__TT"'\_n 1 L~CO()
Page 2 of2
'11"..1 I"'f\f\f
BISON BUILDING MATERIALS, INC. AND
SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED APRIL 30, 2005 AND 2004
GAl N E ROO N NELLY &D ES ROCH ES
BIS.oN BUILDING MA TERlALS, INC. AND SUBSIDIARIES
TABLE .oF C.oNTENTS
INDEPENDENT AUDIT.oR'S REPORT ... ..................... .............................. ............. ........ ...... ....... ............. ................1
CONS.oLIDATED FINANCIAL STATEMENTS
Consolidated Balance Sheets........................... .................... ................. .................................................. .........2
Consolidated Statements of Income... ........ ................................. ................. ...... ........ ........... ...............:.........4
Consolidated Statements of Changes in Stockholders' Equity .........................................................................5
Consolidated Statements of Cash Flows ....................................................... ...................................... ..... ........6
Notes to Consolidated Financial Statements............................ .... ................. ........................................... ........8
GD&D
GAIN EROON NELLY &0 ESROCH IS
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders
Bison Building Materials, Inc.
Houston, Texas
We have audited the accompanying consolidated balance sheets of Bison Building Materials, me. and Subsidiaries
(collectively, the "Company") as of April 30, 2005 and 2004, and the related consolidated statements of income, changes
in stockholders' equity and cash flows for the years then ended. These consolidated fmancial statements are the
responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with accounting principles generally accepted in the United States of America.
Those standards require that we plan and perfonn the audit to obtain reasonable assurance about whether the fmancial
statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the fmancial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated fmancial statements referred to above present fairly, in all material respects, the fmancial
position of Bison Building Materials, Inc. and Subsidiaries as of April 3D, 2005 and 2004, and the results of their
operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in
the United States of America.
=~~~,l-LV
G3iner, DOlln~l1y & D~srocheSr LLP
Cenified Pul;;ij.: i\ccount,;nts
5847 San Felipe, Suite 1100
H oustc.". Texas 77057
HL 713.521.80~O
,,' 713 .621.6907
" ,-\,\t\I\:.r!i::!~.l:',"l..:~Ci!'li
BISON BUll..DING MATERIALS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
APRlL 30, 2005 AND 2004
ASSETS
2005 2004
CURRENT ASSETS:
Cash and Cash Equivalents $ 2,006,594 1,426,140
Accounts Receivable 44,753,705 31,199,668
Inventories 31,231,735 31,884,093
Prepaid Expenses and Other 1,132,483 623,393
Refundable Income Taxes 13,588 523,537
Deferred Income Taxes 743,785 763,413
Total Current Assets 79,881,890 66,420,244
PROPERTY, PLANT AND EQUIPMENT:
Land 1,118,349 1,118,349
Buildings and Improvements 15,068,766 12,496,569
Machinery and Equipment 7,445,625 6,495,277
Furniture and Fixtures 4,183,517 3,938,155
Transportation Equipment 3,310,495 2,768,531
Construction in Progress 359,063 169,871
31,485,815 26,986,752
Less: Accumulated Depreciation (15,954,173) (14,303,767)
Net Property, Plant and Equipment 15,531,642 12,682,985
OTHER ASSETS:
Accounts Receivable. Affiliate 265,908 220,016
Note Receivable - Affiliate 849,775 849,775
Deposits and Other Assets 49,035 35,361
Investments:
Closely Held Corporation 200,000
Real Estate 1,456,935 1,456,935
Goodwill 2,976,039 3,004,871
Total Other Assets 5,797,692 5,566,958
TOTAL ASSETS $ 101,211,224 $ 84,670,187
The accompanying notes are an integral part of these consolidated financial statements.
2
BISON BUILDIN'G MATERIALS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
APRIL 30, 2005 AND 2004
LIABILITIES AND STOCKHOLDERS' EQUITY
2005 2004
CURRENT LIABILITIES:
Line of Credit $ 42,600,00] $ 31,600,001
Current Maturities of Long-Tenn Debt 1,508,103 1,130,661
Current Maturities of Capital Lease Obligations 511 ,940 266,155
Accounts Payable 20,502,779 18,730,196
Accrued and Other Liabilities 4,851,945 4,269,575
Total Current Liabilities 69,974,768 55,226,588
LONG-TERM LIABILITIES:
Long-Tenn Debt, Net of Current Maturities 8,832,118 8,599,992
Capital Lease Obligations, Net of Current Maturities 1,116,276 770,452
Deferred Income Taxes 251,198 907,895
Total Long-Term Liabilities 10,199,592 10,278,339
TOTAL LIABILITIES 80,174,360 66,274,927
CO~TMENTSANDCONTmGENCIES
STOCKHOLDERS' EQUITY:
Class A Common Stock, $.01 Par Value, ]50,000 Shares Authorized,
104,500 Shares Issued; 96,500 Shares Outstanding ],045 1,045
Class B Nonvoting Common Stock, $.01 Par Value,
450,000 Shares Authorized, 440,300 Shares Issued;
416,800 Shares Outstanding 4,383 4,383
Retained Earnings 22,039,836 18,722,929
22,045,264 18,728,357
Less; Treasury Stock, at Cost:
Class A - 8,000 and 1,000 Shares at April 30, 2005 and 2004,
respectively; Class B - 23,500 and] 0,500 shares at April 30,
2005 and 2004, respectively (J ,008,400) (333,097)
TOTAL STOCKHOLDERS' EQUITY 21,036,864 18,395,260
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ ]01,211,224 $ 84,670,187
The accompanying notes are an integral part of these consolidated financial statements.
3
BISON BUILDING MATERIALS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR TIlE YEARS ENDED APRIL 30, 2005 AND 2004
2005 2004
SALES $ 324,103,9&3 $ 257,933,458
COST OF SALES 249,900, III 194,045,204
GROSS MARGIN 74,203,872 63,888,254
OPERATING EXPENSES:
Salaries and Employee Benefits 45,774,772 40,516,315
General and Administrative Expenses 19,190,036 16,061,336
Depreciation and Amortization 2,312,982 2,220,705
Total Operating Expenses 67,277,790 58,798,356
INCOME FROM OPERATIONS 6,926,082 5,089,898
OTHER INCOME (EXPENSE):
Interest Expense (2,227,28 J) (1,559,088)
Goodwill Impairment Loss (361,421 )
Loss on Sale of Leakey Ranch (532,515)
Other Income (Expense) 194,819 (253,342)
Total Other Income (Expense) (2,032,462) (2,706,366)
INCOME BEFORE PROVISION FOR INCOME TAXES 4,893,620 2,383,532
PROVISION FOR INCOME TAXES 1,576,713 770,073
INCOME BEFORE MINORITY INTEREST 3,316,907 1,613,459
MINORITY INTEREST (27,919)
NET INCOME $ 3,316,907 $ 1,641,378
The accompanying notes are an integral part of these consolidated financial statements.
4
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BISON BUILDING MATERIALS, INC. AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED APRIL 30, 2005 AND 2004
2005 2004
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 3,316,907 $ 1,641,378
Adjustments to Reconcile Net Income to Net Cash
Used in Operating Activities:
Depreciation and Amortization 2,312,982 2,220,705
Net Gains on Disposal of Assets (25,997) (69,269)
Minority Interest in Loss of Subsidiary (27,919)
Goodwill Impairment Loss 361,421
Loss on Sale of Leakey Ranch 5].2,515
Deferred Income Taxes (637,069) 220,032
Changes In:
Accounts Receivable (13,367,994) (1,079,823)
Inventories 512,518 (11,485,120)
Accounts Payable and Accrued Expenses 7,968,414 5,465,317
Other Assets and Liabilities (5,672,168) 40,145
Total Adjustments (8,909,314) (3,821,996)
Net Cash Used in Operating Activities (5,592,407) (2,180,618)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of Property, Plant and Equipment (4,313,228) (2,502,475)
Proceeds from Disposal of Property, Plant and Equipment 134,688 207,946
Proceeds upon Sale of Facility 360,000
Investment in Closely Held Corporation (200,000)
Net Cash Used in Investing Activities $ (4,378,540) $ (I,934,529)
The accompanying notes are an integral part of these consolidated financial statements.
6
BISON BUILDING MATERIALS, INC. AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS - CONTINUED
FOR THE YEARS ENDED APRIL 30, 2005 AND 2004
2005 2004
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Advances on Line of Credit $ 11,000,000 $ 6,400,000
Proceeds from Issuance of Long-Term Debt 1,400,000
Principal Payments on Long-Term Debt (790,432) (899,439)
Principal Payments on Capital Lease Obligations (382,864) (250,962)
Purchase of Treasury Stock (675,303)
Net Cash Provided by Financing Activities 10,551,401 5,249,599
NET INCREASE IN CASH AND CASH EQUIVALENTS 580,454 1,134,452
CASH AND CASH EQUrV ALENTS, BEGINNING OF YEAR 1,426,140 291,688
CASH AND CASH EQUIVALENTS, END OF YEAR $ 2,006,594 $ 1,426,140
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash Paid for Interest $ 2,050,642 $ 1,586,292
Cash Paid for Income Taxes $ 1,700,000 $ 842,000
SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Property and Equipment Acquired via Debt Assumption $ 974,473 $ 251,814
Note Receivable Received on Sale of Leakey Ranch Interest $ $ 849,775
Accounts Receivable Received on Sale of Division to
Related Party $ 186,043 $
The accompanying notes are an integral part of these consolidated financial statements.
7
BISON BUILDING MATERIALS, INC. AND SUBSIDlARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Business Activity
Bison Building Materials, Inc. and Subsidiaries (collectively, the "Company") were founded to serve primarily as a
supplier of building materials to contractors and home builders. The Company extends credit to its customers who
consist primarily of various industrial corporations, individuals, commercial contractors and subcontractors in the single-
family housing market. The Company currently has three divisions; the Millwork Division, the Lwnber Division, and the
Truss Manufacturing Division.
The Millwork Division, located primarily in Houston, Texas, serves as a manufacturer and distributor of millwork
products. The Millwork Division has an additional location in Denver, Colorado. The Lumber Division, wruch has
locations in Houston, Conroe, San Antonio and LaMarque, Texas, and Las Vegas, Nevada serves as a distributor of
building materials and supplies. These divisions sell primarily to cOImnercial contractors and homebuilders.
The Truss Manufacturing Division, located in Houston and San Antonio, Texas, serves as a manufacturer of engineered
wood trusses for various commercial contractors and homebuilders throughout central and southeast Texas.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries Bison
Building Materials, Ltd. (BBML), Bison Building GP, Inc., MilItech, Inc. (Milltech), All Pan, Ltd. (All Pan), Bison
Building Materials Nevada, LLC (Nevada) and Gino Guido, Inc. (GGI) and its wholly owned subsidiary HLBM
Company (HLBM). The 2004 consolidated financial statements also include the accounts ofitsjointly owned subsidiary
Leakey Ranch, Ltd. (Leakey). All significant intercompany accounts and transactions have been eliminated in
consolidation.
Leakey was formed in July 2002 as a Texas limited partnership. The Company contributed land and improved property
for a 62.74 percent interest in the partnership. The Company's ownership interest in Leakey was sold to a stockholder in
April 2004. (See also Note 10.)
Revenue Recognition
The Company recognizes revenue when the following criteria are met: persuasive evidence of an agreement exists,
delivery has occurred or services have been rendered, the Company's price to the buyer is fixed and determinable, and
collection is reasonably assured.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, cash in banks, and all highly liquid investments with a maturity of three
months or less at the time of purchase. The Company maintains its cash in bank deposit accounts which, at times, may
exceed federally insured limits.
Accounts Receivable
Accounts receivable represent amounts owed to the Company which are expected to be collected within the next twelve
months. Management evaluates receivables on an ongoing basis by analyzing customer relationships and previous
payment histories. An allowance for doubtful accounts is established for specific accounts the Company considers
uncollectible. Accounts receivable are ordinarily due 30 days after the issuance of the invoice. Accounts past due more
than 120 days are considered delinquent. Delinquent receivables are written offbased on individual credit evaluation and
specific circumstances ofthe customer. At April 30, 2005, no allowance for doubtful accounts was considered necessary.
8
BISON BUILDING MATERIALS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTfNG POLICIES - CONTINUED
Inventories
Inventories are stated at the lower of cost, determined on a weighted average basis, or market.
Property. Plant and Equipment
Property, plant and equipment, including bettennents and renewals, are stated at cost, while maintenance and repairs are
expensed currently. Upon retirement or other disposal of property, plant and equipment, the cost and related accumulated
depreciation are removed from the respective accounts and any gains or losses are included in the results of operations.
The Company depreciates its assets using the straight-line and accelerated methods over three to thirty years for buildings
and improvements, two to fifteen years for machinery and equipment, two to seven years for furniture and fIXtures, and
five to seven years for transportation equipment. Depreciation and amortization expense charged to operations was
$2,312,982 and $2,220,705 for the years ended April 30, 2005 and 2004, respectively.
Investment in Closely Held Corporation
The Company owns 10% of the common stock ofT.D.G. The Designers Guild, a Nevada corporation. The Company
accounts for this investment utilizing the cbst method of accounting.
Checks in Process of Clearing
The Company includes checks in process of clearing in accounts payable on the accompanying consolidated balance
sheets. At April 30, 2005 and 2004, checks in process of clearing totaled $6,695,368 and $6,195,831, respectively
Impairment of Long-Lived Assets
Statement of Financial Accounting Standards (SFAS) No. 121 as amended by SFAS No. 144, "Accounting for the
Impairment of Disposal of Long-Lived Assets" requires that long-lived assets and certain identifiable intangibles be
reviewed for impairment whenever events or changes in circumstances indicated that the carrying amounts of any asset
may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount
of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the
irnpainnent to be recognized is measured by the amount the carrying amount exceeds the fair value of the assets. Based
upon management's assessment of existing assets, no impairment loss needs to be recognized at April 30, 2005.
Shipping and Handling: Costs
All costs incurred by the Company to receive a product from a vendor or ship a product to a customer are included as a
component of cost of sales.
Income Taxes
Deferred tax liabilities and assets are recognized for the tax effects of differences between the fmancial statement and tax
bases of assets and liabilities. A valuation allowance is established to reduce deferred tax assets ifit is more likely than
not that a deferred tax asset will not be realized. The Company files consolidated income tax returns with its subsidiaries.
Estimates
Management uses estimates and assumptions in preparing these consolidated fmancial statements in accordance with
accounting principles generally accepted in the United States of America. Those estimates and assumptions affect the
reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and
expenses. Actual results could vary from the estimates that were used.
9
BISON BUJLDING MATERIALS, INC. AND SUBSIDJARlES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Financial Instruments
The Company's fInancial instruments (primarily cash and cash equivalents, accounts receivable, borrowings, and payables)
are carried in the accompanying consolidated balance sheets at amounts which reasonably approximate fair value.
Self-Insurance
The Company has elected to self-insure certain costs related to employee health and accident benefit programs. Costs
resulting from non-insured losses are charged to income when incurred. The Company has purchased insurance that limits
its exposure for individual claims and that limits its exposure to $140,000 per occurrence, with and aggregate exposure
limit of approximately $3,000,000.
Advertising
Advertising costs are charged to operations when the advertising first takes place. The Company uses no direct-response
advertising. Advertising expense for the years ended April 30, 2005 and 2004 totaled $308,236 and $176,646,
respectively.
NOTE 2 - INVENTORIES
Inventories at April 30, 2005 and 2004 consist of the following:
2005 2004
Raw Materials $ 912,471 $ 506,633
Work in Process 630,003 40] ,833
Finished Goods 29,689,26] 28,433,270
In-Transit 2,542.357
$ 3 1.231.735 $ 31.884 093
NOTE 3 - ACCRUED AND OTHER LIABILITIES
Accrued and other liabilities at April 30, 2005 and 2004 consist of the following:
2005 2004
Accrued Salaries, Employee Benefits and Withholdings $ 2,938,831 $ 2,879,575
Accrued Interest 182,776 6,137
Property Taxes Payable 610,311 433,271
Sales Taxes Payable ],107,042 930,791
Other Accrued Expenses 12,985 19,801
$ 4.851.945 $ 4 269.575
10
BISON BUILDING MA TERJALS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4 - GOODWILL
The changes in the canying amount of goodwill for the years ended April 30,2005 and 2004:
Balance, Beginning of Year
Goodwill Written-off During the Year
Goodwill Related to Disposed Business Unit
$
Balance, End of Year
$
Goodwill is assigned to specific reporting units and is reviewed for possible impainnent at least annually or more
frequently upon the occurrence of an event or when circumstances indicate that a reporting unit's canying amount is
greater than its fair value. During the year ended April 30, 2004, the Company detennined the carrying amount of the San
Antonio reporting unit exceeded its fair value, which was estimated based upon the present value of expected future cash
flows. Accordingly, a goodwill impairment loss of$361,421 was recognized during 2004. No impainnent loss was
deemed necessary for 2005.
NOTE 5 - LINE OF CREDIT
At April 30, 2005, the Company maintains a revolving line of credit agreement with a two banks which provides for
borrowings up to a maximum of $45,000,000 for working capital financing with all accrued but unpaid interest and
principal due August 2005. Borrowings under the revolving line of credit agreement are limited to the amount of certain
accounts receivable and inventories of the Company. Under the terms of the agreement, interest is payable monthly at the
banks' adjusted base rate or LIB OR plus 1.75% to 2.5% (based on a fmancial ratio). The loan is secured by substantially
all ofthe Company's assets and guarantees of the Company and a stockholder. In connection with the line of credit, the
Company is subject to certain restrictive covenants, including certain financial and operating ratios, limitations on
purchases offIXed assets from other fmancial institutions, and various other covenants. The Company was in violation of
one covenant at April 30, 2005. This violation has been waived as of April 30, 2005.
At April 30, 2005 and 2004, the Company had outstanding balances related to their line of credit of $42,600,00 1 and
$31,600,001, respectively.
NOTE 6 - LONG- TERM DEBT
Following is a swnmary oflong-term debt as of April 30, 2005 and 2004:
2005
2004
Notes payable to the estate of a fOlU1er stockholder; payable on demand,
interest payable at 10%; unsecured.
$
200,000
$ 200,000
Notes payable to a stockholder, payable on April 15, 2006, interest payable
at 10%, unsecured and subordinated to the line of credit and certain long-tenn
debt.
400,000
Effective May 2002, notes payable to a fmancial institution were refmanced
into one note for $6,600,000 payable in monthly principal installments of
$144,000 for the fIrst four months and $44,000 thereafter, plus interest at rates
discussed in Note 5, with fmal payment of outstanding principal and accrued
interest due in May 2007; collateralized and guaranteed as discussed
in Note 5.
4,660,000
5,144,000
11
BISON BUILDING MATERIALS, INC. AND SUBSIDlARlES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6 - LONG-TERM DEBT - CONTINUED
Notes payable to a financial institution; payable in monthly principal
installments of $10,000, plus interest at rates discussed in Note 5, with
fmal payment of outstanding principal and accrued interest due in May
2007; collateralized and guaranteed as discussed in Note 5.
$
1,540,000 $
1,650,000
Notes payable to a financing company; payable in monthly installments
of$26,506, including interest at 7.27%, maturinz May 1,2016; secured
by real estate.
2,447,214
2,541,711
Notes payable to a fmancing company, payable in monthly installments
of$1O,389, including interest at 6.46%, maturing May 1,2016, secured
by real estate
979,815
36,000
113.192 158.942
10,340,221 9,730,653
(1.508.1 03) (1.130.661)
$ 8.832.118 $ 8 599 992
Notes payable to fonner stockholders; payable in monthly installments
of $3,000, including interest at 5.21 %, paid-off in 2005
Notes payable to a former stockholder; payable in monthly installments
of$4,479, including interest at 5.75%, maturing July 22,2007; unsecured
Less: Current Maturities
Long- Tenn Debt
Maturities on long-tenn debt for the next five years and thereafter are as follows:
For Year Ending
April 30.
2006
2007
2008
2009
2010
Thereafter
Total
$ 1,508,103
927,884
5,162,073
262,653
281,739
2.197.769
$ 10.340.221
NOTE 7 - CAPITAL LEASE OBLIGATIONS
T~e Company is a lessee of certain equipment and vehicles under capital leases expiring in various years through
February 2010. The assets and liabilities under capital leases are recorded at the lower of the present value of the
minimum lease payments or the fair value of the asset. The assets are depreciated over the lower of their related lease
tenns or their estimate productive lives. Depreciation of the assets under capital leases is included in depreciation
expense.
12
BISON BUILDING MATERIALS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL ST A TE'MENTS
1ill.IE 7 - CAPITAL LEASE OBLIGA nONS - CONTINUE!:)
Following is a smmnary of the property held under capital leases:
2005 2004
Machinery and Equipment $ 1,323,112 $ 896,157
Transportation Equipment 900.662 441,937
2,223,774 1,338,094
Less: Accumulated Depreciation (931.628) (453.739)
$ 1.292.l46 $ 884.355
Future minimum lease payments under the capital leases are as follows:
Year Ending
April 30.
2006
2007
2008
2009
2010
$
574,079
574,079
439,866
122,220
73.781
Total Minimum Lease Payments
1,784,025
Less: Amounts Representing Interest
(I55,809)
Present Value of Net Minimum Lease Payments
Less: Current Maturities
1,628,216
(511.940)
Long- Term Capital Lease Obligations
$ 1.116276
NOTE 8 - OPERATING LEASES
The Company has various equipment leases, including leases with a related party (Note 10), which expire on various
dates through 20] 1. Rental expense totaled approximately $3,525,000 and $1,997,000 for the years ending April 30,
2005 and 2004, respectively.
Future minimum lease payments (approximate) at April 30, 2005, were:
Year Ending
April 30,
2006
2007
2008
2009
2010
Thereafter
$ 2,966,397
2,085,291
1,794,217
1,315,231
857,]06
94.580
Total
$ 9112.822
13
BISON BUILDING MA TERlALS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9 - INCOME TAXES
Provision for income taxes includes these components:
Current Tax Expense
Deferred Tax Expense (Benefit)
2005
2004
$
2,213,781 $
(637.068)
550,041
220.032
$
1.576.713 $
770.073
A reconciliation of income tax expense at the statutory rate to the Company's actual income tax expense is as follows:
Computed at the Statutory Rate (34%)
Increase (Decrease) resulting from:
Nondeductible Meals and Entertainment
State Income Taxes
Change in Deferred Tax Asset Valuation Allowance
Other
At:tual Tax Provision
$
2005 2004
1,663,831 $ 810,401
80,649 34,865
2,563 5,808
60,931 44,104
(231.261) (125.1 02)
1.576713 $ 770.073
$
The tax effects of temporary differences related to deferred taxes shown on the consolidated balance sheets were:
Deferred Tax Assets:
Accrued Compensated Absences
Net Operating Loss Carry Forwards
Inventory Overhead Costs Capitalized for Tax Purposes
Loss on Sale of Leakey Ranch Interest
Deferred Tax Liabilities:
Basis of Property
Net deferred tax asset before valuation allowance
Valuation Allowance:
Beginning Balance
Increase during the Period
Ending Balance
Net Deferred Tax Asset (Liability)
14
$
2005 2004
50,917 $ 47,230
429,933 377,897
692,867 455,078
18 1.055 181.055
1,354,772 1,061,260
(503.407) (907.895)
851.365 $ ] 53.365
$
(297,847)
(60.931)
(253,743)
(44.104)
$
(358.778) $
(297.847)
$
492.587 $
(] 44 482)
BISON BUILDING MATERIALS, INC. AND SUBSIDlAR1ES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9 - INCOME TAXES. CONTINUED
The net deferred tax asset (liability) shown above is presented in the consolidated balance sheets as follows:
Deferred Tax Asset, Current
Deferred Tax Liability, Long-term
2005 .2004
$ 743,785 $ 763,413
(251.198) (907.895)
$ 492.587 $ (144482)
Net Deferred Tax Asset
As of April 30, 2005, the Company has unused operating loss carryforwards of approximately $209,000 for federal
income tax purposes that expire through 2013. The Company also has unused operating loss carryforwards of
approximately $8,000,000 for state income tax purposes that expire through 2010.
NOTE]O - RELATED PARTY TRANSACTIONS
The Company leases various equipment from an entity owned by the principal stockholders. The Company also pays for
certain expenses and/or advances funds to other affiliates related through COllunon ownership. Net activity with these
affiliates totaled approximately $224,000 and $66,000 for the years ended April 30, 2005 and 2004, respectively.
Significant related party transactions and balances as of April 30, 2005 and 2004 and for the years then ended, were as
follows;
2005
2004
Interest Paid on Notes to Fonner Stockholders
Rent Expense on Operating Leases with Affiliate
Note Payable - Former Stockholder's Estate
Note Payable - Stockholder
Accounts Receivable from Affiliates ·
Accounts Receivable from Related Party (Note 11)
Accounts Receivable - Stockholder ·
Accounts Receivable - Leakey Ranch, Ltd. *
$ 29,000
477,000
200,000
400,000
619,000
266,000
$ 33,000
371,000
200,000
121,670
208,000
221,000
44,725
308,352
During the year ended April 30, 2004, the Company sold its limited partner interest in Leakey Ranch to a stockholder for
$894,500. The Company recorded a loss of approximately $532,000 related to this sale. In conjunction with the
purchase, the stockholder has a note receivable to the Company for $849,775 which accrues interest at 3.15% through
maturity in April 2013.
During the year ended April 30,2005, the Company sold its Seidel division of All Pan to an affiliate. All assets ofllie
division were sold at their net book value which totaled $186,043. The assets sold included inventory of$139,840,
property and equipment of$17,371 (net of accumulated depreciation), and goodwill of$28,832. At April 30,2005, this
affiliate owed the Company $473,000. This amount is included in Accounts Receivable from Affiliates above.
* Included in accounts receivable on consolidated balance sheets.
15
BISON BUILDING MATERIALS, me. AND SUBSIDIARlES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11 - RELATED PARTY RECEIVABLE
The Company has entered into a split-dollar arrangement with the trust of one of the Company's stockholders. Under the
terms of the agreement, the Company pays the premium on a life insurance policy. The trust is the named beneficiary of
the policy and the trust has made a collateral assignment of proceeds from the policy equal to the premiums paid by the
Company. Upon the death of the insured, the Company is entitled to recover all premiums paid. At April 30, 2005 and
2004, respectively, premiums paid by the Company total approximately $266,000 and $221,000.
NOTE 12- PROFIT SHARING PLAN
The Company has a contributory 40 I (k) profit sharing plan that covers substantially all employees. Contributions are
made by the Company on a discretionary basis subject to approval by the Board of Directors. The Company recognized
plan administrative and contribution costs of approximately $130,000 and $50,000 for the years ended April 30, 2005
and 2004, respectively.
NOTE 13 - COMMITMENTS AND CONTINGENCIES
The Company may, from time to time, be named in lawsuits in the ordinary course of business. The Company believes
that it has adequately provided for any liabilities which may result from litigation.
NOTE 14 - SELF-INSURANCE
The Company has a self-funded major medical and accidental death and dismembennent program and has purchased
excess loss insurance to mitigate potential major losses. The Plan is administered by an insurance company which
determines the current funding requirements under the terms of the plan and the liability for claims and assessments that
would be payable at any given point in time. Provisions for losses expected under these programs are recorded based
upon estimates of the aggregate liability for claims incurred. The amount of actual losses incurred could differ materially
from the estimates reflected in these consolidated fmancial statements. Historically, the Company has not incurred
significant losses on medical claims, and management believes the Company's reserves at April 30, 2005, are sufficient
to cover the Company's liabilities for claims incurred. The Company had accrued reserves of$199,OOO and $168,000 as
of April 30, 2005 and 2004, respectively.
NQTE 15 - RECLASSIFICATIONS
Certain amounts from 2004 have been reclassified to conform to the current year presentation. These reclassifications
have no effect on previously reported net income.
NOTEI6-SUBSEOUENTEVENT
The Company is planning to elect S Corporation status for Bison Building Materials, Inc. for federal income tax
purposes.
16
EXHIBIT "0"
MANPOWER REPORT
I,
of Bison Building Materials, LTD., do
certify that on
, 20_ there were _ individuals employed full time at
Bison Building Materials, LTD.
Printed Name:
Title:
Date:
THE STATE OF TEXAS
s
s
s
COUNTY OF
BEFORE ME, the undersigned Notary Public, on this day personally appeared
of Bison Building Materials, LTD., being by
me duly sworn on his/her oath deposed and said that he/she is duly qualified and authorized in all
respects to make this affidavit; and that every statement contained in the Manpower Report is within
his/her knowledge and true and correct.
SUBSCRIBED AND SWORN TO BEFORE ME on the _ day of
, to certify which witness my hand and official seal.
NOTARY PUBLIC, STATE OF TEXAS
Printed Name:
My Commission Expires:
Ct
AFFIDAVIT OF PUBLICATION
The Pearland Reporter.News
2404 South Park
Pearland, Texas 77581 •
State of Texas
= Brazoria and Harris Counties
I, Lloyd Morrow, hereby certify that the notice hereby appended was published
in THE REPORTER NEWS, a newspaper of general circulation in Brazoria, Harris
•
and Galveston Counties, for / issues, as follows:
No. / Date ati 20 a_.
No. Date 20
No.. Date 20
No. Date 20
No. Date 20
d -
CFO_
Subscribe and sworn t, •;: ', .-,z;R. -:="',a,:. ""s> .,..;. : day of
•
• kis`* p`B LAURA ANN EMMONS
•
• 20 et ' • fa • Notary.Public, State of Texas •
i Commission Expires 09-09-2006
.+..
•
slwa s rani^ni *Awn*4r+ ;i'•s i�>sa i•• •; 'i.
•
Laura Ann Ernmons, Publisher
Notary Public, State of Texas
e ar ' /(0.
r Published August 16,and
August 23,2006
NOTICE OF PUBLIC
HEARING OF THE CITY
OF PEARLAND
Notice is hereby given that
Ion the 11th day of
September, 2006, at 6:30
p.m.,the City Council of the
City of Pearland, Brazoria,
iFort Bend, and Harris
Counties, Texas, will con-
r duct a Public Hearing in the
Council Chambers, City •
Hall, 3519 Liberty Drive,
Pearland,Texas,to consider
the creation of a reinvest-
ment zone and tax abate-
; ment for Bison Building '
Materials, LTD in accor-
dance with Section 312.201
of the Tax Code and City of
Pearland's Guidelines For
Granting Taxing
Abatements.
At said hearing all interested
parties shall have the right
and opportunity to,appear
and be heard on the sub-
ject.
/s/Young Lorfing,TRMC
City Secretary
This site is accessible to dis-
abled individuals. For spe-.
cial assistance, please call
Young Lorfing at(281)652-
1655,prior to the meeting so
that appropriate arrange-
ments can be made.__
, .:
..
AFFIDAVIT OF PUBLICATION
• The Pearland Reporter.News , '
2404 South Park -
Pearl.and, Texas 77581
•
State of exas
D razoria :nd Harris Counties
I,.Lloyd orrow, hereby certify that the notice hereby appended was published
in THE EPORTER NEWS, a newspaper of general circulation in Brazoria, Harris
and Gal -ston Counties, for 4 issues, as follows:
No / Date 7 -- 2 _... ...:...:20 e o
No Date . - . 20 . .
No Date 20
-No .Date 20
No Date • - 20
l - •
Affika �!ii��L
. P. ` • • ( FO .
•
' ?fiti 161.
Subscnb and tswom to before me this i K day.of
20
; •
Laura Ann Emmons, Publisher-
. . � � � � � � � . . ,
Notary Public, State of.Texas .
j Pal-- 0 i SbI
Published August 16,and
August 23,2006
NOTICE OF PUBLIC
HEARING OF THE CITY
OF PEARLAND
Notice is hereby given that
on the 11th ,day o1
September, 2006, at 6:30
p.m.,'the City Council of the
City of Pearland, Brazoria,,
Fort Bend, and Harris'
CoUntes, Texas, will con-
duct a Public Hearing in the,
Council Chambers, City
Hall, 3519 Liberty Drive,;
Pearland,Texas,to consider-
the creation of a 'reinvest-I
' ment zone and tax abate-
ment for Bison Building
Materials, LTD in accor-'
dance with Section 312.201
of the Tax Code and City of'
Pearland's Guidelines For!
Granting Taxing;
Abatements.
At said hearing all Interested+
parties shall have the right
and opportunity to appear
C and be heard on the sub,
ject.
Isl Young Lorfing,TRMC
City Secretary
This site Is accessible to dis-1
I abled individuals. For spe-'
cial assistance, please call
Young Lorfing at(281)652-i
11655,prior to the meeting so'
that appropriate arrange-'
1 ments can be made.
L