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R99-091 11-08-99RESOLUTION NO. R99-91 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 PACKAGING SERVICE CO., INC. ("PSCI") FOR PURPOSES OF ABATING THE INCREASED VALUE OF THE PROPERTY OWNED BY PSCI AT 1904 MYKAWA WITHIN THE CITY LIMITS OF PEARLAND ATA RATE OF ONE HUNDRED PERCENT (100%) FOR A PERIOD OF TH REE (3) YEARS BEGINNING JANUARY 1,2001, AND ENDING DECEMBER 31,2003, AND AT A RATE OF FIFTY PERCENT (50%) FORA PERIOD OF ONE (1) YEAR BEGINNING JANUARY 1, 2004, AND ENDING DECEMBER 31, 2004; FIN DING AND DETERMINING THAT TERMS OF SAID AGREEMENT AND PROPERTY SUBJECT TO THE AGREEMENT MEET THE REQUIRE- MENTS OF CHAPTER 312 OF THE TAX CODE, V.A.T.S. AS AMENDED, ORDINANCE NO. 933, WHICH ESTABLISHED REINVESTMENT ZONE #6, AND THE GUIDELINES AND CRITERIA FOR GOVERNING REINVESTMENT ZONES AND TAX ABATEMENT AGREEMENTS SET FORTH IN RESOLUTION NO. R98-59. 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 PSCI, 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 Chapter 312 of the Tax Code, V.A.T.S. established Reinvestment Zone #6, and this agreement meet the requirements of as amended, Ordinance No. 933, which the Guidelines and Criteria for Governing Reinvestment Zones and Tax Abatement Agreements set forth in Resolution No. R98-59. 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. RESOLUTION NO. R99-91 PASSED, APPROVED, AND ADOPTED this the 8th day of i~ovember A.D., 1999. TOM REID MAYOR ATTEST: ~RETARY APPROVED AS TO FORM: DARRIN M. COKER CITY ATTORNEY 2 THE STATE OF TEXAS 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 Packaging Service Co., Inc., duly acting by and through its President, Gabriel Baizfin ("PSCI"). WITNESSETH: WHEREAS, on the 25th day of October, 1999, the City Council of the City of Pearland, Texas, passed Ordinance No. 933 establishing Reinvestment Zone #6 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 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 generalbusiness 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 proposes 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, ~EREFORE: For and in consideration of the mutual agreements and obligations set forth below, the sufficiency of which is hereby acknowledged by the parties hereto, PSCI 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 PSCI's facility On the Premises, described in Exhibit "B" ("Improvements") will cost approximately One Million Three Hundred Twenty Thousand Dollars ($1,320,000.00) and is to be substantially complete on or about January 30, 2000; provided, that PSCI shall have such additional time to complete the Improvements as may be required in the event of"force majeure" if PSCI is diligently and faithfully pursuing completion of the Improvements. For this propose, "force majeure" shall mean any contingency or cause beyond the reasonable control of PSCI 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 PSCI), 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. PSCI 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. PSCI 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, PSCI shall thereafter, from the date a Certificate of Occupancy is issued until the expiration of this Agreement, continuously operate and maintain the Premises as PSCI, 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. PSCI agrees and covenants that the Improvements shall provide approximately wl~ll ~.~.~. 1,,y ....., .t~',J':. 50 jobs during the ~len~4mxi~ period of the abatement, l~gi,t~ .... ' -: ~' Accordingly, PS CI 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 one hundred percent (100%) of the taxes assessed upon the increased value of the Property and Improvements, annually for a period of three (3) years beginning January 1, 2001, and ending December 31, 2003, and fifty percent (50%) of the taxes assessed upon the increased value of the Property and Improvements, and armually for a period of one (1) year beginning January 1, 2004, and ending December 31, 2004, in accordance with the 2 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 PSCI to the chief appraiser of said district. Estimated values, estimated abated values, and estimated base year values for the Improvements are listed in Exhibit "C" ("Estimated Values"). 6. PSCI 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 s~ll have the continuing right to enter upon and inspect the Premises at any reasonable time, afteP~p~t 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 PSCI written notice of such violation. For the proposes of this Agreement, PSCI shall have ten (10) days from the date of the notice to cure or remedy such violation. IfPSCI fails or refuses to cure or remedy the violation within the ten (10) day period, PSCI 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. PSCI agrees and covenants that the information provided in the attached Application for Tax Abatement (Exhibit "D") is tree 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) PSCI 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) PSCI breaches any of the terms or conditions of this Agreement, then this Agreement shall be in default. In the event that PSCI defaults in its performance of(l), (2), or (3) above, then the City shall give PSCI written notice of such default, which notice shall be delivered by personal delivery or certified mail to: Gabriel Baiz~in, President, 1904 Mykawa, Pearland, Texas 77588. If PSCI 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 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 PSCI 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 PSCI, in performing its obligations hereunder, is acting independently, and the City assumes no responsibilities or liabilities in connection therewith to third parties. 14. PSCI 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 PSCI AND THE CITY AND SHALL SURVIVE THE TERMINATION, EXPIRATION, OR CANCELLATION OF THIS AGREEMENT. 15. It is understood and agreed by the City and PSCI 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 PSCI 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 8th day of November, 1999, authorizing the City Manager to execute the Agreement on behalf of the City. 4 17. This Agreement is entered into by~ PSCI pursuant to authority granted by its onthe ~ dayOf ~e(~arv/~W~- _, 19c~c] , whereby President, Gabriel Baizfin, was authorized to execute this Agreement on behalf of PSCI. 18. This shall constitute a valid and binding Agreement between the City and PSCI when executed in accordance herewith. 19. This Agreement is performable in Brazoria County, Texas. 20. PSCI agrees and covenants to certify annually to the City, while this Agreement is in effect, that PSCI is in compliance with each applicable term of this Agreement, Witness our hands this ]~s~ dayof '~D~e~ew.~/ ,1999. APPROVED AS TO FORM: By: Dan/n M. Coker City Attorney CITY OF PEARLAND City Manager ATTEST: By: Printed Name: ,3exn-~t'er re Title: PACKA~ ;ING SERVICE CO., 1NC. Gabri B aizban Pre,, nt 5 THE STATE OF TEXAS COUNTY OF BRAZORIA 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. GIVEN UNDER MY HAND AND SEAL OF OFFICE THIS j~ DAY OF '~>~,~,~,o4" , A.D., !9 ~ NOTARy I~BLIC, STATE OF TEXAS PrintedName:--~,*b~ L, Commission Expires: ~ ~ -&t THE STATE OF TEXAS COUNTY OF BRAZORIA BEFORE ME, the undersigned Notary Public, on this day personally appeared Gabriel Baizfin, President, Packaging Service Co., 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. GIVEN UNDER MY HAND AND "~See~e..MeC , A.D., 19 q c[ SEAL OF OFFICE THIS ]a;[ DAY OF N~TARY ~UBLIC, STATE OF TEXAS My Commission Expires: ~ ~.-A ~ -q c~ 6 WALKER L. ?REESH Rsgist~e~ Prof~ssion~! Lo~d P.O. tBox 21'~3 Pearland, Tex~l$ ??~88 EXHIBIT PAKk~(~Y DESCRIBtD AS l~S:' Bm~Imqi~g a~ :h,~ ~eozt corner of ~ ,~i~ ~t 30, g~d . ~e ~t~l~ ~t~aec~ of ~ ~ (~' R.O.W.) ~ ~a ~ (~' %~ S 000 01" 00" E ~.~e e~tl~df s~d'~t 30 ~:~e ~erl~ of ~ 8 89~ 51' 00"W ~t ~.~t~:o~ 30.00 fe~ pmam m % in~ i~ r~ ~e~st ~ ofw~ li~'Of~~, ~t~i~ in ~1 a to~ ~s~ of~0.00 f~t to a ~ ~'~ rod'f~ f~ ~ ~ ~e'~st 1.{~ of. a 20 ~t ~ad ~[ut~ ~ S 00° ~' 00" E ~o~'~e~st itm of s~d ~ad ~.Ut~ity e~, a ~ S 89" 42~ 00"'W.a.~gm~ of'~0;92 f~t to a% i~ ~n~d f~ ~ N 00~ 0~' 00"W a ~St~.of '315~96 f~t.to a ~ in~ .~r~.r~ ~ ~, ~ a d~ of 290.00 'f~t p~s-~ % i~,..i~1 ~' '~ ~or ~ {n~e s~ ~ of way li~'of ~ ~, ~i~ ~ a of 320.30'f~t ~ a ~t for ~'in ~e ~t~ll~ of ~k ~; ~ ~ ~ me ~t~i~ of ~ .~ a d~u~ of 136.00 f~t ~ S 89° 50' 32" E ~ ~e ~1~ of ~ ~ a dist~ o~6~.52 to ~e ~ ~ B~ ~ ~n~ '10.5241 ~s .of l~d, ~ or !~s. : . '~ ~si~ on ~' 18, 1995. ' W~ L. ~eesh, 'R.P.L.~' 'No7 1895 '~1 26, 1995 . 1999 Exhibit "B" IMPROVEMENTS The project will be the construction of tkree new buildings that wilful house the production lines and distribution for Packaging Service Co., Inc. We expect to have~ employees ~ by 2005. The project will entail the completion of buildings of approximately 80,000 square feet total at a cost orS 1.32 million. Tax abatement will be sought on all items allowed by law. Exhibit "C" ESTIMATED VALUES Estimated value of site as of January 1 immediately preceding abatement agreement Ourrent 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 improve- ments not subject to abatement PERSONAL PROPERTY (Fixed Equipment) IMPR 0 VEMENTS i,$~o,ooo (Building) LAND 11/05/i999 85:51 281-485-6543 PACKAGING SERVICE CO PAGE 82 APPLICATION FOR TAX ABATEMENT IN THI( CI'FY OF PEARLAND Creat~ ~ t~ Ci~ of Pe~ (aua~d), P~n~ mvlew [~tr~io~s' attached ~ ~dou. ~ a~l~at~n will ~o~ pu~ of thc ~r~ut ~ t~e~tat;o~ w~l ~ ~ou~s ~r t~ CRy 10 vo~ the ~ree~nt. Orig~ s~uld ~ su~tt~ to thC C~y Manger, C~y of Pe~, 3519 Li~y Texas ~7581. Ple~ attach e~bJts ifaddk~ ~e a ~d. APPLICANT 1N~RMATION Coml~ny Name Paekanlnn Se~iee C'o. lac. Ad~'m~ss: !904M~kawa R,d~ Pearlaad. T~, 97~tl1 Co~uti~: years in buaine~ ~ Number or'Current Employees.L Cotpor#t~n (X) Pammrakip ( ) P~optWtotskip ( ) PROJECT INFORMATION Type or' thcility: Manufactt~'~l; ( ) Reg. Distribution Center ~%'e ln.rl~lo~) Rcg~i ~vic~ ( ) Rog, Ent~a~ Center ~ B~ Indust~ Location a~d~ a~d ~esc~ption or,ca to ~ do~neted ~ r~ve:am~mt ~ Pi'evlua~ly dellver~ (at~ ~p.~wing site a~ legal de~ript~n): Description o~'elig~le iml~rovements (real property) to I~ constructed: 3 buildlnlp~ ¢ovcdn~ 80,000 si'. L~ of in~gtble (taxable) propmy to t~ i~lu4ed in project; Tnei~de~ ~ixe~ Equipment; $140~O we~h of equlpment for ¢~pansien The pt'oposed te~nvestment zone is k~ated in: County S~hooi District ~llege riL,~,rict Other Taxing JtM~Wtions Pearland ............ Bragorla HSD DD #4 Road &'~rldae 11/05/1999 e5:5i 281-48§-6543 PACKAGING SERVICE CO PAGE 03 T~x ID ~umber Dcscrlption of predmt or s*~rvi~o to b~ provided (pr. posed uae)'. paekallJnlI and dtstrlbuiton of pa~kall,d ~,'hemkab P~oject DescriptiOn; PreviouMy ~bmitted .¥1'TACN i STATEMF, NI' e~laiain$ the ge~enfl nature a~l exten! o['. the project, describir~ e~ist~n$ site and imprtwements; c~ribe all propo~.'~ improvements u~d provide iisi of' imptovmnents aed equipl~:nt for which abates-ant ia requested. Include a proposud tir~ ~ehcdul¢ ~br um:l~ttakL'~ and ,a~mp~tlnllt tho pb,~ned lml~'ovemenls a~ well mt the ~;,~-~.-~ay offioiatq and agents w~ wRl ov~ t~ constt~t~n, ~fi~ ot~ sites t~t ~ ~d~ ~ltio~ NEW PL~T ( ) E~81ON (X) MODE~i~TION ( ) ECONOMIC INFORMATION _Oct 7.~ _NIA 1%'~ 20 R. P.~l~.l~e nt .Estimates tFTE'sl Current Eraployme~ ,_ii~, ~..____ ...... Curt,mi A.n~l e~o~l ~Z '~ ~ - Nm~r of~ t~t~ (9~ ) c~at~ ( ~0 ) at ~o~ 98 in y~r 5 years ~o o~a ~4~ ~ ~ ~_2005 l~al T~fer Total .... 19 ~al. S~atics Other Estil~ai~ai 'l*axcs Gctteratcd by Pro_igor ~£.0 0§:51 281-40§-6S40 PACKAGING SERVIOE 00 PAGE 04 S9 ~$ (2) O~h~ ([O~tir~): D. Est/mated Aooraistxi Valu~ on ~itv ~$140,00~_ lqo,_.q2° TAX ABATIC, MKNT REQUESTED lO0 .% of ¢lisible pmpe~ for a term of --$0 % Ibr .... Year number 4, Total abateratmt term: 4 y~ 3 .y~ars. ( X ) ReqoesO~g Sttt~$ered Ta~ Ah~temtm VARIANCE Ts the appUca~t socking a v~rm,,r.,e unCer 5~lion 3(0 oCtl~ G, uidelines? ~ ( ) NO ( X ) Gl'tIER ~A'FF~N~; ~r a~m of~b p~t ju~t~n or ~ ~ou~9 YES ( ) NO (X) [f"YE8" ~v~c d~m ofappJ~atD., h~ag date~ tZ/05/1999 05:51 281-485-6543 P~CKAGZN6 SERVZCE CO PAGE 85 frigid or gh~ulgd, name of jurisdictions ~d ~nm~'~s, ami Igtt~ of ~mu, COMPANY RF, Pltg,$ENTATIVg, TO llg,, CONTACTED .~0'~ '.O0'ON ¢¢:0~. 66,~'0 AON 8869~8f~.l,!:~I 3n34 Exhibit "E" MANPOWER REPORT · ! I, ~iSJor~[ t~;~um., 9(E~c~xe~- of Packaging Service Co., Inc., do certify that on ~ve~eF I ,19 c~ c/ there were q~) individuals employed full time at Packaging Service Co., Inc. Printed Name: ~_~3~br [e~ Title: THE STATE OF TEXAS § COUNTY OF ~)')c0~243c~c~ BEFORE ME, the undqrsigned Notary Public, on this day personally appeared ~c~3 r ~ el_ ~c4;2~., '~ es~,~ ~'~ ofeackaging Service Co., 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. SUBSCRIBED AND SWORN TO BEFORE ME on the \f~- day of *'~e~¢e,,~h~C- , 19 ~ , to certify which wimess my hand and official seal. NOTARY PUBLIC, STATE OF TEXAS PrintedName: ~/~obq ~. ~e. llw~3 My CommissionExpires: \ ~, - O, ~- CI i e CJO/1777 ua:of Zdl-4db-b543 PACKAGING SERVICE CO PAGE 05 if hetd or scheduled, name of jurisdictions and contacts,uncl letters of intent. COMPANY RF,PkESEN'i'A'I'1VE TO BE CONTACTED Name: Jean-Pierre Balm Title: * Vice President Address. lAtaitykawa Rd. Pcarland,'1'x 7758I "Telephone: 81) 485.1458 Autluorizud rcpaz y Official: j By: � _ Printed Nam:: r\Q?in re i',. Title: Vic& 2176t' sJ' c -sD' oN z : o: 66. 7C) AGN 8869S8biTL : 11 3U3d