R2010-113 - 2010-08-23RESOLUTION NO. R2010 -113
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
PEARLAND, TEXAS, NOMINATING THIRD COAST PACKAGING, INC.
AS A PROJECT UNDER THE TEXAS ENTERPRISE ZONE ACT.
WHEREAS, the City of PEARLAND (City) has previously passed Ordinance No.
1376 electing to participate in the Texas Enterprise Zone Program, and the local
incentives offered under this resolution are the same on this date as were outlined in
Ordinance No. 1376;
WHEREAS, the Office of the Governor Economic Development and Tourism
(EDT) through the Economic Development Bank (Bank) will consider THIRD COAST
PACKAGING, INC. DIBIA THIRD COAST TERMINALS (THIRD COAST) as an
enterprise project pursuant to a nomination and an application made by the City;
WHEREAS, the City desires to pursue the creation of the proper economic and
social environment in order to induce the investment of private resources in productive
business enterprises located in the City and to provide employment to residents of
enterprise zones and to other economically disadvantaged individuals;
WHEREAS, pursuant to Chapter 2303, Subchapter F of the Texas Enterprise
Zone Act, Texas Government Code (the "Act THIRD COAST has applied to the City
for designation as an enterprise project;
WHEREAS, the City finds that THIRD COAST meets the criteria for designation
as an enterprise project under Chapter 2303, Subchapter F of the Act on the following
grounds:
1. THIRD COAST is a "qualified business" under Section 2303.402 of the Act since
it will be engaged in the active conduct of a trade or business at a qualified
business site within the governing body's jurisdiction located outside of an
enterprise zone and at least thirty -five percent (35.0 of the business' new
employees will be residents of an enterprise zone or economically disadvantaged
individuals; and
RESOLUTION NO. R2010 -113
2. There has been and will continue to be a high level of cooperation between
public, private, and neighborhood entities within the area„ and
3. The designation of THIRD COAST as an enterprise project will contribute
significantly to the achievement of the plans of the City for development and
revitalization of the area.
WHEREAS, the City finds that THIRD COAST meets the criteria for tax relief and
other incentives adopted by the City and nominates THIRD COAST for enterprise
project status on the grounds that it will be located at the qualified business site, will
create a higher level of employment, economic activity and stability; and
WHEREAS, the City finds that it is in the best interest of the City to nominate
THIRD COAST as an enterprise project pursuant to the Act;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
PEARLAND:
That the findings of the City and its actions approving this resolution taken
at the council meeting are hereby approved and adopted.
BE IT FURTHER RESOLVED that THIRD COAST is a "qualified business as defined
in Section 2303.402 of the Act, and meets the criteria for designation as an enterprise
project, as set forth in Section 2303, Subchapter F of the Act.
BE IT FURTHER RESOLVED that the enterprise project shall take effect on the date of
designation of the enterprise project by EDT and terminate on August 31, 2015.
RESOLUTION NO. R2010 -113
PASSED BY THE CITY COUNCIL of the City of PEARLAND this 23 d day of August,
2010.
(SEAL)
TOM REID
MAYOR
THE STATE OF TEXAS
COUNTY OF BRAZORIA
QV�G_ -u�ri G L i-r-P' of the City of PEARLAND,
Texas do hereby certify that the above and foregoing is a true and correct copy of
Resolution Number ,-(Z?o,ro passed by the City of PEARLAND City Council on the
this day of August, 2010.
fig:
O )TNG 1 P
C"
Ctf Y SE ETARY
THE STATE OF TEXAS
COUNTY OF BRAZORIA
BEFORE ME, the undersigned authority, on this day personally appeared urn
Lo .k� r\- p of the City of PEARLAND, Texas, known to me to bd the person
whose name is subscribed to the foregoing instrument, and acknowledged to me that
he/she executed the same for the purposes and consideration therein expressed.
GIVEN under my hand and seal of office this 03 day of August, 2010.
Notary Public, State of Texas
`•Q; My commission expires: 1 dc, 01`�
tk N 1
a i A
EXHIBIT A
Overview of Third Coast Terminals Planned$4,460,000 Capital Investment and Expansion
Third Coast Terminals is currently planning to expand their operations in Pearland. A summary
of their plans include investments in the following areas:
Real Property($450,000)
The acquisition of 13 acres of land adjacent to their current operations is estimated to have an
investment cost of $450,000. This land is intended to increase their rail car and bulk storage
operations as well as to provide for additional truck trailer parking. The long term objective is to
handle a max capacity of 270 rail cars and raise an additional 21 tanks for customer bulk storage.
New Construction-Materials and Labor ($1,750,000)
The construction of a 65,000 sq/ft warehouse at an estimated cost of$1,000,000 will allow for
additional packed product storage. Additional warehouse space will be required to coincide with
additional packaging capacity. An additional trailer lot will be included at an additional
$250,000.
The estimated labor cost of $500,000 is based on warehouse building requirements. Actual
warehouse specifications have yet to be determined; however based on previous warehouse
construction anticipated total labor cost is at$500,000.
New Machinery and Equipment($2,260,000)
The Fegie filler and additional 21 new tanks have an estimated construction and installation cost
of$2,260,000. The Fegie filler will allow them to handle customer products that have not been
handled in the past. The Fegie filler is tied in with a new vapor control system currently being
permitted with the state. The extra tanks will provide for product storage and manufacturing
capabilities for customer products(i.e. global chemical companies).
75 Retained Employees
The expansion of the Third Coast Terminal's facilities is an essential part of their management's
business plan to continue operations and retain the current workforce. Third Coast Terminals
wants to partner with the City of Pearland in its request for an enterprise project nomination for
this refund of state sales and use taxes so that it may continue its employment at current levels
for the period designated as an enterprise zone project.
Third Coast Terminals Operational Units
Petrochemical Warehouse Storage&Distribution Transloading Services
Third Coast Terminals has a fully fire protected dock high warehouse with combined capacity
of 65,000 sq. ft. utilizing 12 dock high doors for receiving and shipping. They have the ability
to warehouse up to 10,000 drums, and its shipping department can stage and ship more than
1,000 drums per day. Petrochemical storage and distribution services include order
preparation, documentation, WMS Warehouse Management System inventory control system,
containerization and freight/logistics procurement.
Complete Petrochemical Rail& Transportation Transloading Services
Third Coast Terminals has on site storage for 26 rail cars including 12 process storage
positions. Third Coast is served by the BNSF main line which provides service/logistics and
access to an adjoining team track which provides flexibility and additional storage capacity for
up to 100 cars. Third Coast Terminals has the capability to perform all of the transloading
services related to rail such as rail to truck transfers, rail access to their drumming facility and
rail to terminal transfers.
Petrochemical Company Offering White Room Packaging
Third Coast Terminals' white room packaging lines have access to inbound truck, rail car and
terminal operation with combined capacities in excess of 30,000 gallons per day. Third Coast
can also offer packaging for select electronic grade products in drums and IBC's through their
white room facilities. All filling is conducted by weight.
Chemical Packaging& Chemical Handling Services
Third Coast Terminals has three chemical packaging lines for industrial products to
accommodate both drums and IBC containers for industrial products. Two of its packaging
lines are designed to handle light to medium viscosity products while the third is a flexible
fill/high viscosity, high temperature line. All of its chemical packaging lines are weight fill
and have access to inbound truck, rail car and terminal operations. Third Coast has over
40,000 gallons of daily capacity and the flexibility to provide chemical packaging for a wide
variety of products within our operations.
Bulk Terminals for Tank Terminal&Blending Services
Third Coast has an extensive terminal and blending operation that comprised more than 50
bulk tanks with combined capacities of over 1,000,000 gallons and covered operations of
10,000 square feet. In conjunction with storage tanks ranging from capacities of 1000 to
50,000 gallons, Third Coast also has 13 blend tanks for contract manufacturing from 1000 to
30,000 gallons.
Laboratory Services
Third Coast Terminals has an extensive laboratory and can provide its customers with ISO
9001-2000 certified quality control testing for all manufactured products. Its personnel have a
combined experience in laboratory, analytical and formulating of over 75 years. Its equipment
is continuously monitored for accuracy via, round robin testing with its customers, outside
laboratory confirmation and contract calibration. Third Coast can also add testing and
equipment to meet customer requirements for their Quality Control management programs.
•
EXHIBIT B
Overview of the Texas Enterprise Zone
Overview of the Texas Enterprise Zone Program
Texas Government Code Chapter 2303 (also known as the Texas Enterprise Zone Act) sets forth
the statutory framework for the Texas Enterprise Zone (EZ)program. The EZ program provides
for a refund of the state portion (6.25%) of sales and use tax spent by qualifying businesses that
make capital investment and either create new jobs or retain current jobs. The EZ program
requires a local nomination for the incentive by a municipality or county and an application to be
filed with the Office of the Governor. The program is designed as a state-funded incentive that
presents no negative fiscal impact to the nominating municipality or county.
Securing the Incentive—Local Nomination and Governor's Application
In order to satisfy the local nomination requirement a municipality or county must pass a
resolution formally nominating the company and its capital investment as an enterprise project
(EP). The EP designation is awarded by the Office of the Governor after reviewing and
approving the company's application.
Determining the Amount of the Potential Refund of State Sales and Use Tax
The amount of the incentive, which is a refund of only the state portion (6.25%) of the sales and
use tax, is based upon the size of the capital investment the company makes and the number of
new jobs created or current jobs retained. The table below shows the matrix of maximum
potential sales and use tax refund based upon a given level of capital investment and job creation
or retention.
Capital`Investment r Maximum No ,Maximum Refund :Maximum
s, ��YYY of Jobs, er Job 1A.l�located k Potential Refund ; F"
� l Allocated i t
$40K $399,999 10 $2,500 $25,000 4
F _
$4001( $999,999 25 $2,500 $62,500
$1M $4999,999 125 $2,500 $312,500
$5M $149,999,999 500 $2 500 $1,250,000
$150M $249999,999 17 500 $5,000 $2,500,000
$250M or> 500 $7,500 $3,750,000
Enterprise Zones Explained
From 1993 until 2003 Texas EZ program was based upon a jurisdiction-by-jurisdiction adoption
of guidelines offering incentives within specified economically depressed geographical
boundaries. The EZ program's effectiveness was eroded by the difficulty in establishing these
boundaries and identifying the places to direct the benefit. The legislature felt the program had
become unduly burdensome and that this affected its usefulness. In 2003 the legislature changed
the guidelines so that business could take advantage of the EZ benefit in one of two ways:
1. Capital Investment in an EZ: An EZ was redefined as any "census tract and block
group"within the decennial census with 20%or more of its residents living below the
poverty line. Companies that make a capital investment in a census tract and block
group meeting these criteria is deemed may become an EP if it agrees to that 25% of
its new employees or replacements for retained employees will be EZ residents or
economically disadvantaged.
2. Capital Investment Outside an EZ: Companies that make a capital investment outside
of an EZ (a census tract or block group with less than 20% of its residents living
below the poverty line) may be designated as an EP if it agrees to that 35% of its new
employees or replacements for retained employees will be EZ residents or
economically disadvantaged.
EXHIBIT C
Nominating Resolution
Exhibit D
Application