R99-013 02-22-99RESOLUTION NO. R99-13
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 THIRD COAST
PACKAGING, INC. ("THIRD COAST') FOR PURPOSES OF ABATING
THE INCREASED VALUE OF THE PROPERTY OWNED BY THIRD
COAST NEAR MYKAWA ROAD WITHIN THE CITY LIMITS OF PEARLAND
AT A RATE OF SEVENTY-FIVE PERCENT (75%) FOR A PERIOD OF
THREE (3) YEARS BEGINNING JANUARY 1, 2000, AND ENDING
DECEMBER 31, 2002, AND AT A RATE OF FIFTY PERCENT (50%)
ANNUALLY FOR A PERIOD OF TWO (2) YEARS BEGINNING
JANUARY 1, 2003, AND ENDING DECEMBER 31, 2004 FINDING AND
DETERMINING THAT TERMS OF SAID AGREEMENT AND PROPERTY
S UBJECT TO THE AGREEMENT MEET THE REQUIREMENTS OF
CHAPTER 312 OF THE TAX CODE, V.A.T.S. AS AMENDED, ORDINANCE
N O. 805, WHICH ESTABLISHED REINVESTMENT ZONE #3, AND THE
GUIDELINES AND CRITERIA FOR GOVERNING REINVESTMENT ZONES
AND TAX ABATEMENT AGREEMENTS SET FORTH IN RESOLUTION
N O. R98-59.
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BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS:
S ection 1. That certain tax abatement agreement, by and between the
City of Pearland and Third Coast, a copy of which is attached hereto as Exhibit "A" and
incorporated herein for all purposes, is hereby authorized and approved.
S ection 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. 805, which
established Reinvestment Zone #3, and the Guidelines and Criteria for Governing
Reinvestment Zones and Tax Abatement Agreements set forth in
Resolution No. R98-59.
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RESOLUTION NO. R99-13
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 7- day of
A.D., 1999. r
ATTEST:
APPROVED AS TO FORM:
DARRIN M. COKER
CITY ATTORNEY
2
TOM REID
MAYOR
THE STATE OF TEXAS
COUNTIES OF BRAZORIA
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 ofBrazoria and Harris Counties, Texas,
duly acting by and through its City Manager ( City '), and Third Coast Packaging, Inc., duly acting
by and through Partner, Larry Rysavy ("Third Coast").
WITNES SETH.
WHEREAS on the 28th day of July, 1997, the City Council of the City of Pearland, Texas,
passed Ordinance No. 805 establishing Reinvestment Zone #3 in the City of Pearland, Texas, for
commercial/industrial tax abatement, as authorized by Chapter 312, Tax Code, V.A.T.S. as amended
("Code"); and
WHEREAS, the City has adopted Resolution No. R98-59, 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 commercial/industrial
economic and employment base of the Pearland area for the long term interest and benefit of the City,
in accordance with Resolution No. R98-59 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. R98-59 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,
1
THEREFORE
For and in consideration of the mutual agreements and obligations set forth below, the
sufficiency of which is hereby acknowledged by the parties hereto, Third Coast 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 Third Coast's facility on the Premises, described in Exhibit "B"
("Improvements") will cost approximately One Million Two Hundred Thousand Dollars
($1,200,000.00) and is to be substantially complete on or about November 30, 1999; provided, that
Third Coast shall have such additional time to complete the Improvements as may be required in the
event of "force majeure" if Third Coast 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 Third Coast 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 Third Coast), 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. Third Coast 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. Third Coast 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, Third Coast shall thereafter, from the date a Certificate of
Occupancy is issued until the expiration of this Agreement continuously operate and maintain the
Premises as Third Coast, limiting the use of said Premises to that use which is consistent with the
terms of this Agreement and the general purpose of encouraging development or redevelopment of
the Reinvestment Zone during the period that the property tax exemptions evidenced herein are in
effect.
4 Third Coast agrees and covenants that the Improvements shall provide approximately
55 jobs during the period of the abatement, beginning with 30 employees in 1999. Accordingly,
Third Coast shall provide to the City annual manpower reports (Exhibit "E") 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.
Said abatement shall be an amount equal to seventy-five percent (75%) of the taxes assessed upon
the increased value of the Property and Improvements, annually for a period of three (3) years
beginning January 1, 2000, and ending December 31, 2002, and at a rate of fifty percent (50%)
2
annually for a period of two (2) years beginning January 1, 2003, and ending December 31, 2004, in
accordance with the terms of this Agreement and all applicable state and local regulations.
The taxable value shall be determined on a uniform and equal basis of assessment by the methods
used by the Brazoria County Tax Appraisal District, which information necessary for abatement shall
be provided by Third Coast to the chief appraiser of said district Fstimated values, estimated abated
values, and estimated base year values for the Improvements are listed in Exhibit ' C"
("Estimated Values").
6. Third Coast 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. In accordance with Resolution No. R98-59,
the City will conduct at least one inspection annually to ensure compliance. 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 Third Coast written notice of such violation. For the purposes of this
Agreement, Third Coast shall have ten (10) days from the date of the notice to cure or remedy such
violation. If Third Coast fails or refuses to cure or remedy the violation within the ten (10) day
period, Third Coast 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.
7. Third Coast agrees and covenants that the information provided in the attached
Application for Tax Abatement (Exhibit "D") is true and correct and that any materially false or mis-
leading 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) Third Coast 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) Third
Coast breaches any of the terms or conditions of this Agreement, then this Agreement shall be in
default. In the event that Third Coast defaults in its performance of (1), (2), or (3) above, then the
City shall give Third Coast written notice of such default, which notice shall be delivered by personal
delivery or certified mail to• Larry Rysavy, Partner, Third Coast Packaging, Inc., P. O. Box 367,
Friendswood, Texas 77549-0367. If Third Coast 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.
3
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 oftaxes 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 stated in paragraph 8 or the termination date stated in paragraph 9, 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. R98-59.
11. The City represents and warrants that the Premises does not include any property that
is owned by a member of its council or 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 Third Coast only
upon written permission by the City in accordance with Resolution R98-59, which permission shall
not 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 Third Coast, in performing its
obligations hereunder is acting independently, and the City assumes no responsibilities or liabilities
in connection therewith to third parties.
14. THIRD COAST 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 THIRD COAST AND THE CITY AND SHALL
SURVIVE THE TERMINATION, EXPIRATION, OR CANCELLATION OF THIS
AGREEMENT.
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15. It is understood and agreed by the City and Third Coast 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 Third Coast 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 22nd day of February, 1999, authorizing the City Manager to execute the Agreement
on behalf of the City.
17. This Agreement is entered into by Third Coast pursuant to authority granted by its
on the day of , 19 , whereby Partner,
Larry Rysavy, was authorized to execute this Agreement on behalf of Third Coast.
18. This shall constitute a valid and binding Agreement between the City and Third Coast
when executed in accordance herewith.
19. This Agreement is performable in Brazoria County, Texas.
20. Third Coast agrees and covenants to certify annually to the City, while this Agreement
is in effect, that Third Coast is in compliance with each applicable term of this Agreement.
re( Witness our hands this 3 day of NA()a_ rk , 1999.
CITY OF PEARLAND
Glen R Erwin
City Manager
ATTEST:
B
APPROVED AS TO FORM:
By: e <.
Darrin M. Coker
City Attorney
ATTEST:
aich4
LPrmted N. me: P L tt,� �I-
Title: /Yr ASILYNA/7-
THIRD COAST PAC AGING, INC
6
ame:
Title:
THE STATE OF TEXAS
COUNTIES OF BRAZORIA AND
HARRIS
BEFORE ME, the undersigned Notary Public, on this day personally appeared Glen R Erwin,
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.
GIJEn) V NOER My NAND
17PktOF A ARCH, 1999.
4
X
.�•:N;! FIZ4s LISA D. JONES
tit.tati��••s
�%; r�.
NOTARY PUBLIC • STATE OF TEXAS
MY COMMISSION EXPIRES
CEPTEUBER 21, 1999
THE STATE OF TEXAS
COUNTY OF BRAZORIA
SEAL DG DM: Cc 1t4tS
3n.o
Oias
NOTARY PUBLIC! STATE OF TEXAS
PrintedName. Lisa D . Tones
Commission Expires: Vet/ /9 9
§
BEFORE ME, the undersigned Notary Public, on this day personally appeared Larry Rysavy,
Partner, Third Coast Packaging, Inc., 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.
R . E . RAMIREZ
otary Public State of 'texas
rntnission Expues 4-12'V
NOT s PUBLIC, S OF TEXAS
PrintedName: . - -/ .- (Aer
My Commission Expires: ‘'' ,ST /
7
EXxtXBI t 'A"
5 2,719.99 5QU/uu 1- OR )2.0000 ACRLS 01' LAND
OUT ()E AND PART Of CAI.I..1] LOT 14 no. T'L-t1E W.
l Yt YiLINSKI SUI3DIVIS]ON G C9�CI- YI. I . ft. RP CO. SURVEY
NO 3, A.232, IJRAJORIA COUNInV, [ERAS, ACCORDING TO
1 Hi MAP OR PLAT TLORI OI IkECORDED IN VOLUME. 29,
PAGE 43 OF TIIL DEED RECORDS OF BRALO tRIA COUNTY;
LEXAS; SAU) 12,0000 ACRES BEING MORE PA.RTICC.F(ARI,Y
DESCRIBED BY METES AND BOUNDS AS FOLLOW:
COMMENCING, at a (1) inch pinched top pipe found on the east
right-of-way tine of hilyksa ,va Road (60 fit wide) At the ed outfa we tit
corner of afore.ald Lot 34, cif tht W. Z.y+chlix:taki Subdivision;
HENCE, S 89° 58' 22" E, along the south Line of said Lot 34, a distance
of 4cb.64 teet to a 5/8 inch Iron rod set for the POIN1 OF BEGINNING
of the herein described tract;
. TL-E'ENCr,, continuing, S 89' S11' 22" Ir, along the south, line of *aid Lot
14? a distance of 903.10 feet to a point for corner on the westerly
right-of-way line of the G C E S 1 Rait Road right•of`way (called 100
feet wide);
TUCENCE, N 13° 521 24" W, Along the: wcntcfiy a-ight-uf.way tine of said
&.C.E.S.F. Rail Road right-of-way, a distance of 653.01 feet to a 1/2 inch
iron rod found for a point for corner Oft the northeast corner of bald Lot;
34;
THENCE, N 89° 58' 35" W, talking the north line of aattd Lot 34, at
distance of 746.20 feet to a 5,f8 inch iron rod set kr ait point for corners
THENCE, S O(P° 09 41" W, *cross said tot 34, sa distance of 633.34 feet
to the POINT OF BEGINNING of the herein described tract and
cuaataining as aforenald 522 719.99 square feet or 12.0000 acres of'Land.
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EXHIBIT "B"
IMPROVEMENTS
The project will be the construction of a new manufacturing facility that will also include our
sales staff. We expect to have approximately 25 employees on site. We expect the project will
require the construction of a building of approximately 20,000 square feet at a cost of approximately
$1,200,000, including fixed equipment. Tax abatement will be sought on all items allowed by law.
EXHIBIT "C"
ESTIMATED VALUES
PERSONAL
PROPERTY
Estimated value of site as of January 1
immediately preceding abatement
agreement $0.00
Current estimated value $0.00
Estimated value of ineligible property $1,000,000
Estimated value of eligible improvements $750,000
(Fixed Equipment)
Estimated value of abated properties after
abatement expires $2,000,000
•
Value upon completion of project
personal property and project improve-
ments not subject to abatement
IMPROVEMENTS
$0.00
$0.00
N/A
$1,200,000
(Building)
$1,200,000
$1,000,000 N/A
LAND
$42,952
$42,952
$42,952
N/A
N/A
$42,952
APPLICATION FOR TAX ABATEMENT IN THE CITY OF PEARL
This application should be filed at least 90 days prior to the beginning of
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 City Manager, City of Pearland, 3519 Liberty
Drive, Pearland, Texas 77581. Please attach exhibits if additional space is needed.
APPLICANT INFORMATION
Company Name Third Coast Packaging
Address PO Box 367
Friendswood, TX 77549-0367
Corporation (X) Partnership ( )
Date January 15, 1999
Number of Employees 30 est.
Annual Sales $3,000,000
Proprietorship ( )
PROJECT INFORMATION
Type of facility: Manufacturing (X) Reg. Distribution Center ( )
(See Instructions) Regional Service ( ) 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):
r
SEE ATTACHED LEGAL
DESCRIPTION
Description of eligible improvements (real property)
to be constructed: Manufacturing facility with manufacturing equipment
Description of ineligible (taxable) property to be included in project: Inventory, Land
The proposed reinvestment zone is located in:
City Pearland
County Brazoria
School District _Pearland I.S.D.
Other Taxing Jurisdictions Brazoria Co. Drainage District #4
Description of product or service to be provided (proposed use):
Blending and packaging of specialty chemicals for major companies
Project Description:
Attach 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.
NEW PLANT () EXPANSION (X) MODERNIZATION ( )
Attach a proposed time schedule for undertaking and completing the planned improvements.
ECONOMIC INFORMATION
A. Construction Estimates
Commencement Date: 3/15/99
Construction Man Years:
Completion Date: 11/1/99
Peak Construction Jobs 12
B. Permanent Employment Estimates (FTE's)
IF MODERNIZATION:
Estimated Economic Life of
Existing Plant:
Added Economic Life from
Modernization:
Current Employment 30
Number of jobs retained ( ) created (25)
at start/opening 25 in year 2000
5 years into operation in year
, 2000
, 1998
, 1999
Local Transfer
25 0
C. Other Estimated Taxes Generated by Project
(1) Sales Taxes:
199 : $ N/A_
1997:$
1998 : $
1999 : $
19 $
(2) Other (Identify):
Total
Years
Years
Est. Salaries
25 $950,000
D. Estimated Appraised Value on Site
Estimated value of site as of January 1
immediately preceding abatement
agreement
Current estimated value
Estimated value of ineligible property
Estimated value of eligible improvements
Estimated value of abated properties after
abatement expires
Value upon completion of project
personal property and project
improvements not subject to abatement
Personal
Property
Improve-
ments
0 0
0 0
$1 000,000 N/A
$ $750,000 $1,200,000
(Fixed Equipment)(Building)
$ $2,000,000 $1,200,000
$1,000,000 N/A
Land
$42,952
$42,952
$42,952
N/A
N/A
$42,952
TAX ABATEMENT REQUESTED
75 % of eligible property for year 1 through year 3.
50 % of eligible property for year 4 through year 5.
VARIANCE
Is the applicant seeking a variance under Section 3(f)
of the Guidelines?
If "YES" attach required supplementary information.
OTHER ABATEMENTS: Has company made application
for abatement of this project by another taxing
jurisdiction or nearby counties?
If "YES" provide dates of application, hearing dates,
if held or scheduled, name of jurisdictions and
contacts, and letters of intent.
YES ( )
YES ( )
NO (X)
NO (X)
COMPANY REPRESENTATIVE TO BE CONTACTED
Name. Larry Rysavy
Title: Partner
Address: PO Box 367
Friendswood, Texas 77549-0367
Telephone: 281-482-9212
Authorized Com
Official:
BY: _�/ aid �i."tea'
Print!E'me: Carr'isa /
Title: Partner f
EXHIBIT "E"
MANPOWER REPORT
I, La-d'rs.06: f 6,-tiny%
✓� ep rC ik % of Third Coast
Packaging, Inc. ("Third Coast"), do certify that on r6 , 19
individuals employed full time at Third Coast.
THE STATE OF TEXAS §
COUNTY OF ''770k f4 §
7
Printed Name: L - e -1/
Title: Vf A f f3 •
Date: i
there were /2
BEFORE ME, the undersigned Notary Public, on this day personally appeared
7 , (lG-a- P,Q trS • of Third Coast Packaging, Inc., 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.
SR
SUBSCRIBED AND SWORN TO BEFORE ME on the 1 day of Mkorived
19 , to certify which witness my hand and official seal.
Printed Name.
My Commission Expires:
,y --
Notary Pubhc State of Texu.o
Commission Ex 'pros 4-12_, '
OF TEXAS
Mit(
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