R2000-008 01-10-00RESOLUTION NO. R2000-8
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 WEATHERFORD
U.S., L.P. ("WEATHERFORD") FOR PURPOSES OF ABATING THE
INCREASED VALUE OF THE PROPERTY OWNED BY WEATHERFORD
AND LOCATED ON MAGNOLIA ROAD WITHIN THE CITY LIMITS OF
PEARLAND AT A RATE OF ONE HUNDRED PERCENT (100%) FOR A
PERIOD OF TWO (2) YEARS BEGINNING JANUARY 1, 2000, AND
ENDING DECEMBER 31, 2001, AND AT A RATE OF FIFTY PERCENT
(50%) ANNUALLY FOR A PERIOD OF FIVE (5) YEARS BEGINNING
JANUARY 1, 2002, AND ENDING DECEMBER 31, 2006; FINDING AND
DETERMINING THAT TERMS OF SAID AGREEMENT AND PROPERTY
SUBJECT TO THE AGREEMENT MEET THE REQUIREMENTS OF
CHAPTER 312 OF THE TAX CODE, V.A.T.S. AS AMENDED, ORDINANCE
NO. 935, WHICH ESTABLISHED REINVESTMENT ZONE #7, 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 Weatherford U.S., L.P., 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. 935, which
established Reinvestment Zone #7, and the Guidelines and Criteria for Governing
Reinvestment Zones and Tax Abatement Agreements set forth in
Resolution No. R98-59.
RESOLUTION NO. R2000-8
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,
January
APPROVED,
, A.D., 2000.
ATTEST:
CTUNGI/0)~ ~2n~G/-/~
Y SEDRETARY /// ~'
AND ADOPTED this the 10th day of
TOM REID
MAYOR
APPROVED AS TO FORM:
DARRIN M. COKER
CITY ATTORNEY
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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 Weatherford U. S.,
L.P., duly acting by and through Jim Green, its Vice President of Manufacturing ("Weatherford").
WITNESSETH:
WHEREAS, on the 8e~ day of November, 1999, the City Council of the City of Pearland,
Texas, passed Ordinance No. 935 establishing Reinvestment Zone #7 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 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. 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,
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, Weatherford 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 Weatherford's improvements on the Premises, described in
Exhibit "B" ("Improvements") wil! cost approximately One Million Two Hundred Fifty-three
Thousand. Five Hundred Dollar,s.($t~5,,3..~500.00) and is to be substantially complete on or about
~, 20~~d, that Weatherford shall have such additional time to
complete the Improvements as may be required in the event of"force majeure" if Weatherford 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 Weatherford
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
Weatherford), 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.
Additionally, Weatherford anticipates Two Million Seven Hundred Thousand Dollars
($2,700,000.00) in fixed equipment.
3. Weatherford 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. Weatherford 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, Weatherford shall thereafter, from the date a Certificate of
Occupancy is issued until the expiration of this Agreement, continuously operate and maintain the
Premises as Weatherford, 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. Weatherford agrees and covenants that the Improvements shall provide approximately
39 jobs during the beginning period of the abatement, beginning with 39 employees in 2000.
Accordingly, Weatherford 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.
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Said abatement shall be an amount equal to one hundred pement (100%) of the taxes assessed upon
the increased value of the Property, Improvements, and Fixed Equipment, annually for a period of
two (2) years beginning January 1, 2000, and ending December 31, 2001, and fifty percent (50%)
of the taxes assessed upon the increased value of the Property, Improvements, and Fixed Equipment,
annually for a period of five (5) years beginning January 1, 2002, and ending December 31, 2006,
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 Weatherford 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".
6. Weatherford 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 Weatherford written notice of such violation.
For the purposes of this Agreement, Weatherford shall have ten (10) days from the date of the notice
to cure or remedy such violation. If Weatherford fails or refuses to cure or remedy the violation
within the ten (10) day period, Weatherford 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. Weatherford 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 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) Weatherford 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) Weatherford breaches any of the terms or conditions of this Agreement, then this Agreement
shall be in default. In the event that Weatherford defaults in its performance of( 1 ), (2), or (3) above,
then the City shall give Weatherford written notice of such default, which notice shall be delivered
by personal delivery or certified mail to: Jim Green, Vice President of Manufacturing,
515 Post Oak Boulevard, Houston, Texas 77027. If Weatherford has not cured such default within
sixty (60) days of said written notice, this Agreement may be modified or tenninated 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 o fits 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 Weatherford 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 Weatherford, in performing it§
obligations hereunder, is acting independently, and the City assumes no responsibilities or liabilities
in connection therewith to third parties.
14. WEATHERFORD 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 ACTIONs OR JUDGMENTS OF WHATSOEVER
CHARACTER OR NATUREs INCLUDING ATTORNEYS~ FEES, WHICH MAY ARISE AS
A RESULT OF THIS AGREEMENT. THE PROVISIONS OF THIS SECTION REFLECT
THE EXPRESSED INTENTIONS OF WEATHERFORD AND THE CITY AND SHALL
SURVIVE THE TERMINATION, EXPIRATION, OR CANCELLATION OF THIS
AGREEMENT.
4
15. It is understood and agreed by the City and Weatherford 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 Weatherford 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 November, 1999, authorizing the City Manager to execute the Agreement
on behalf of the City.
17. This Agreement is entered into by Weatherford pursuant to authority granted by its
on the day of , __, whereby
Vice President of Manufacturing, Jim Greetk ~vas authorized to execute this Ag~,~.,ement on behalf
of Weatherford ~r~,~,,:t--cQ., ,t~ o~,~r~ ~ ~*~,
18. This shall constitute a valid and binding Agreement between the City and
Weatherford when executed in accordance herewith.
19. This Agreement is performable in Brazoria County, Texas.
20. Weatherford agrees and covenants to certify annually to the City, while this
Agreement is in effect, that Weatherford is in compliance with each applicable term of this
Agreement.
Witness our hands this oQ~'~'~ day of V~ k>t'cc~e',) , 2D~) 5.
ATTEST:
~fii~ yUnsge ~
APPROVED AS TO FORM:
Danin M. Coker
City Attorney
CITY OF PEARLAND
City Manager
5
r~~: WEATHERFORD U.S., L.P.
By.~ ~- ~'"'~___~ By:~~~'
'" ~'~4'ri<~_.ae~-~o~.~T~c~"~,~ ~ (~vo~President ofM'''Ji~Green anufacturin'~ g
6
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
~"~a r m~ r,,% ,A.D.,
DAY OF
NOTARY PUBI~IQ,. STATE OF TEXAS
Printed Name: [..[ga. ]),
Commission Expires:
THE STATE OF TEXAS §
COUNTY OF //~ § §
BEFORE ME, the undersigned Notary Public, on this day personally appeared Jim Green,
Vice President o fManufacmring, Weatherford U.S., L.P., 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 oq ~ DAY OF
,I~'OrrA~Y P~IBLIC, ST~__~E_OF T~XAS
PrintedName: ~[// ~. ~"oV*O~
MyC0mmissi0nExpires: ,~- ~'- 12oO.~
7
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ok Z.ei3.*cre, et 1~.
enein ~.lgJO seTS TraCT af
i~U~ly lite ~ irate ~ Ne. ~, a 3M ~ vide attest;
el sa( ~ute ~ ~. ~. s ~st~c, et ISSSI?S feat to a UZ ~n~ t~a roi for
~ta. ~ ~*ld ~tate ~ b. 31. a d~st~M o~ 3~7.S2 feet pecz ~. taterJectien
~.:'fLr:· · -~,,: ~ ~. ,.,.. ,o m~. ~ ..:,,, ,,~ · ,t,,~,.
Pearlaad. TX
Pearland, TX
Exhibit "B"
IMPROVEMENTS
The project will be the modernization of existing facilities that will house the
production lines and distribution for Weatherford, U.S., L.P. We expect to have 39 employees on
site; 100 by 2003. Tax abatement will be sought on all items allowed by law.
The improvements are expected to cost approximately $1,253,500.00. Additional fixed
equipment is expected to cost approximately $2,700,000.00.
APPLICATION FOR TAX ABATEMENT IN ~ CITY OF PEARLAND
This application should be filed at least ~0 days prior to the beglnnlnE of construction of
nztallation of equipment. The ~ of thi~ document acknowledges familiarity und
~_ ,.~m0e with Guidelims and Criteria for G-m-~h~ Tax Ab~emeat in a-Rein~ Zorn
Created ia thc City of Pcarland (attached). Please mvi~w lnsm~ons attached before cxccutln.O.o
-~h~uld be ~ to ~e City Mamger, City of Pearland, 3519 Liberty Drive, Pcarlsrut.
Texas 77581. Plcaseattacherh;l~zifadditiomlspaceisneeded..
APPLICANT INFORMATION
ApplicationDat~ fl!lo! qq
Number of Cuxrcut Employees ilo
Corporatio~ (,,5/' ?~( )
PROJECT INFORMATION
Type o f facility:. Manufactming (v)/
(Xee Instructions) R~¢onal Service(.)
.,M~ual ~ ~ 0,ooO,ooo
Proprietor~¥ ( )
Reg. Distn'bution C. cntcr ( )
Reg. EntcOuinment Center ( )
Other Basic hdust~ ( )
Location address snd dc~Mt,flon of area to bc
dcsigna~ as rcinv~tmcnt zone
(a.-ch ? showing site and legal dc~iption):
Description of eligible improvemems (real propcn'y)
Dcscdptioa of inelig~'ole (taxable) prop~y to b~ iaduixi in proj~x;
lndudesFixedEquipmcat: t~o,c:..%,~¢ -~o~. ~ ~.,,,~,,..~::~
c~
Couay
School District
College District
Other Taxing Jurisdictions
Tax ID number
Dc~;ptioa of product or service to bc providcd (proposed use):
ATTACH A STATEMENT e~plnining th~ general natu~ and ~ of the project, dczcrfl~g
existing site and improvcm~-s: dc~'[~ all proposed improvements and provide list of
ior and
.. NEWPLANT ( ) EXPANSION (~/ MODI~NIZATION ~/
ECONOMIC II'FORMATION
Coa~,,?:~m~t Date: .'~t aooo
Construction Man Yearn:
Compl~on Date: ~l ;;tOoo
Peak Construction $ob~
Be
.P¢i,.anent Employment Esthnnt~ (FTE's)
~*a:i F..conongt~. Life of
Existing Plato:
Added Economic Life from
Modemb~m
Years
_o~.t~ Years
Current Employment ~ [ O
Current Annual Payroll 5,o ~c, coo
Numberofjobsretained( //o )created( AG )
at start]opening ~,(o in year
5 years into operation - t~ in year
,19.
Total Est. Salaries
36 t 5~'1 oco
vi.,
Other F_,.St ~,,~
(1) Sales Taxes: 19_.__.:$
(z) o er
Do
E~timaz~d Apprai~nt Value On $i.t.,~
~ Building & Bus. P~scmal
Ftxed Equip. Prop~r(y &
Inventory
L Total ofpr..e-exbtlnl~ value
(/an t, -I"'~:~--aSaSmm~at)
IL Estimated value of NEW land added
Es~m~ted value of NEW improvements
Estimated value of NEW fixed ~uipm~i
~. n~. ~-
~ted v~ue ofNEW p~
pro~ & ~v~t~ add~ .
Tolal of NEW value added
LIJL Total valuo at ~tl of Tan Abate-merit
Goal l'ntt I & ti)
TAX ABATEIVLF. NT REQUESTED
% of c~~ole property for a term of __ years.
( JKequestin8 Stagsered Tax Abatement Terms
VARIANCE
la the {,pplic~ut seeking a vadanc~ und~ Saction 3(0
of~ ~idd~s? ~S ( )
[f"~' atta~ ~ suppl~e~ i~o~tjon,
O~ ~A~S: Has ~m~ ~e appli~ion
For abat~t of~ p~j~ by anotaer ~xlng
juri~i~on or he.by ~i~? ~ ( )
~:0'd lO0'CN £P:0[ 66,~ 33(1 886§~81~£IZ:11I DCI]d
COMPANY REPRESENTATIVE TO BE CONTACTED
PROJECT DESCRIPTION
The scope of this project, if approved, will result in an initial increase in employment of
twenty-eight employees. This increase is a mix of managers, engineers, supervisors, in
addition to the clerical and direct labor. An additional twenty employees will be added
before the end of the year 2000.
Extensive modifications and enhancements will be required. Cost of this work will
exceed $1,000,000.
New equipment costing approximately $750,000 will also be purchased. In addition,
computers, office furniture, and shop machinery will be transferred form Couroe, Tx. to
Pearland.
EXHIBIT "D"
MANPOWER REPORT
L.P., do certify that on / o~'~n/z~,~-v
!
time at Weatherford U.S., L.P.
of Weatherford U.S.,
,20 ~ff there were/~7' individuals employed full
Title:
Date: /
THE STATE OF TEXAS §
COUNTY OF ~
BEFORE ME, the undersigned Notary Public, on this day personally appeared
~oo~ /'/]~,..//~/ff- , of Weatherford U.S., L.P., 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 tree and correct.
SUBSCRIBED AND SWORN TO BEFORE ME on the 3J '~ay of d/q'rl/.OC-~Z4 ,
t~-,~zg~, to certify which witness my hand and official seal.
"~OTAR4[ PUBLICj STATE OF TEX/~
P ri nt ed Name: ~'~,,J*~"~',--'~-'~/'.,'-~',,~
My Commission Expires: