R-2015-019 2015-02-09RESOLUTION NO. R2015.19
A Resolution of the City Council of the City of Pearland, Texas,
updating and approving the City's Guidelines and Criteria for
Granting Tax Abatement in a reinvestment zone created in the City
of Pearland, Brazoria County, Fort Bend County, and Harris County,
Texas; having a savings clause, a repealer clause, and a severability
clause.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS:
Section 1. That Resolution No. R2015-19 ("Guidelines and Criteria for Granting
Tax Abatement") is hereby adopted in compliance with state law and shall read as
follows:
"GUIDELINES AND CRITERIA FOR GRANTING TAX ABATEMENT
INA REINVESTMENT ZONE CREATED IN THE CITY OF PEARLAND,
BRAZORIA COUNTY, FORT BEND COUNTY, AND HARRIS COUNTY, TEXAS
WHEREAS, the creation and retention of job opportunities that bring economic
growth is one of the highest civic priorities for the City of Pearland (the "City"); and
WHEREAS, new jobs and capital investment will benefit the area economy,
provide needed opportunities, strengthen the real estate market and generate tax
revenue to support local services; and
WHEREAS, the City must compete with other localities across the nation
currently offering tax inducements to attract new Eligible Projects; and
WHEREAS, any tax incentives offered in the City may reduce needed
tax revenue unless strictly limited in application to those new and existing industries that
bring new wealth to the community; and
WHEREAS, any tax incentives should not adversely affect the competitive
position of existing companies operating in the City; and
WHEREAS, the abatement of ad valorem property taxes levied by the City, when
offered to attract primary jobs in industries which bring Job creation and capital
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RESOLUTION NO. R2015-19
investment from outside a community instead of merely circulating dollars within a
community, has been shown to be an effective method of enhancing and diversifying an
area's economy; and
WHEREAS, effective September 1, 1987, Texas law requires any eligible taxing
jurisdiction to establish Guidelines and Criteria as to eligibility for tax Abatement
Agreements prior to granting of any future tax abatement, said Guidelines and Criteria
to be unchanged for a two year period unless amended by a three-quarters vote of the
City Council;
Now, therefore, be it resolved that the City Council of the City does hereby
propose for consideration and adoption these Guidelines and Criteria for granting tax
abatement in reinvestment zones in the City, as amended.
DEFINITIONS Section 1
(a) "Abatement" means the full or partial exemption from ad valorem taxes of certain
real property in a reinvestment zone designated by the City for economic
development purposes.
(b) "Abatement Agreement" and "Agreement" mean a contractual agreement
between a property owner and/or lessee and the City for the purposes of
permitting abatement of a portion of ad valorem property taxes assessed to the
Premises and Improvements as defined herein and otherwise owed to the City.
(c) "Base Value of Premises" means the assessed value of property located at the
Premises at the time of execution of the Agreement, which shall consist of the
assessed value of the Premises as of January 1 immediately preceding the
execution of the agreement plus the agreed upon value of Improvements made
thereafter, but before the execution of the Agreement.
(d) "Deferred Maintenance" means labor and materials necessary for continued
operations which are scheduled or periodic in nature.
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(e) "Distribution Center Premises" means buildings and structures, including
machinery and equipment, used or to be used primarily to receive, store, service
or distribute goods or materials owned by the Premises operator where a
majority of the goods or services are distributed to points located outside of
Pearland.
(f)
(g)
"Company" means the party receiving the benefit of the abatement of ad
valorem property taxes levied by the City pursuant to an Abatement Agreement
for which this Resolution shall govern and may include a corporation, limited
liability company, partnership, limited partnership, sole proprietorship, joint venture,
natural person(s) or any other form of business association that may be formed
or is recognized by the State of Texas.
"Employment Positions means new full-time equivalent employment positions of
at least 2,000 hours per employee in the City with the Company at the Premises
averaged over a (12) month period, with such hours also to include any vacation
and sick leave, with a specified average annual gross compensation (excluding
benefits) and for which medical benefits must be provided.
(h) "Expansion" means the addition of buildings, structures, machinery or equipment
for purposes of increasing production capacity.
(i)
"Headquarters Facility" means Premises used primarily as the executive
offices for a Company the primary purpose of which is to provide support
services to other entities affiliated through common ownership with the Company.
(j) "Improvements" means Fixed Improvements and Fixed Machinery and Equipment.
(k) "Fixed Improvements" means real property and/or leasehold improvements.
(I) "Fixed Machinery and Equipment" means Tangible Personal Property
excluding vehicles, vessels or aircraft.
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RESOLUTION NO. R2015-19
(m)
"Funding Conditions" means capital Improvements and job creation conditions
outlined in the Agreement. The capital improvements conditions shall specifically
set forth value of the Improvements which must be made by the Improvement
Completion Date. The job creation conditions shall specifically set forth the
number and quality of Employment Positions.
(n) "Hotel and Convention Premises" means buildings and structures, including
machinery and equipment, the primary purpose of which is to provide a
destination conference facility with 250 or more hotel rooms and more than
25,000 square feet of contiguous conference space. This shall also include
facilities with 25,000 square feet or more of contiguous conference space without
the requirement of a related hotel.
(o) "Improvement Completion Date" means the date upon which the Fixed
Improvements and Fixed Equipment shall be substantially completed by the
Company.
(p) "Manufacturing Premises" means buildings and structures, including
machinery and equipment, the primary purpose of which is or will be the
manufacture of tangible goods or materials or the processing of such goods or
materials by physical or chemical change.
(q)
"Modernization" means the replacement and upgrading of existing facilities
which increases the productive input or output, updates the technology or
substantially lowers the unit cost of the operation. Modernization may result from
the construction, alteration or installation of building, structures, fixed machinery
or equipment. Modernization shall not be for the purpose of reconditioning,
refurbishing or repairing including scheduled and periodic maintenance of real
property or Tangible Personal Property.
(r) "New Premises" means a property previously undeveloped which is placed into
service by means other than or in conjunction with Expansion or Modernization.
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RESOLUTION NO. R2015-19
(s) "Office Premises" means one or more multi-level office buildings each one of
which consists of 50,000 square feet of office space no more than 20% of which
is dedicated to retail industry.
(t) "Other Basic Industry" means buildings and structures including Tangible Personal
Property machinery and equipment not elsewhere described, used or to be used
for the production of products or services which serve a market primarily outside
the City and result in the creation of new permanent jobs and create new wealth
in the City.
(u) "Premises" means property Improvements completed or in the process of
construction which together comprises an integral whole and which are the
subject of the Agreement and shall be designated in that Agreement by metes
and bounds or other substantially similar description.
(v) "Productive life" means the number of years a property improvement is
expected to be in service.
(w)
"Regional Entertainment Premises" means buildings and structures, including
machinery and equipment, used or to be used to provide entertainment through
the admission of the general public where the majority of users reside at least 50
miles from its location in the City.
(x) "Research Premises" means building and structures, including machinery and
equipment, used or to be used primarily for research or experimentation to
improve or develop new tangible goods or materials or to improve or develop the
production processes thereto.
(y)
"Regional Service Premises" means buildings and structures, including
machinery and equipment, used or to be used to service goods where a majority
of the goods being serviced originate at least 50 miles from the Premises'
location in the City.
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RESOLUTION NO. R2015-19
(z) "Tangible Personal Property" means (i) personal property that can be seen,
weighed, measured, felt, or otherwise perceived by the senses, (ii) that is owned
for its role in contributing directly to the business's ability to generate profit but
does not include, office furniture and fixtures such as laptop computers, desktop
computers, printers, chairs, desks, decorations, reprographics devices, and other
similar office appurtenances which may indirectly contribute to the business'
ability to generate a profit. Tangible Personal Property also does not include:
intangibles which shall include a document or other perceptible object that
constitutes evidence of a valuable interest, claim, or right and has negligible or
no intrinsic value, inventory and/or supplies and Tangible Personal Property that
was localed in the reinvestment zone prior to execution of the Agreement with
the City or located in the reinvestment zone subsequent to the execution of the
Agreement with the City but not specifically identified in the Agreement.
ABATEMENT AUTHORIZED Section 2
(a) Eligible Premises. Premises may be eligible for abatement if it is a: Hotel and
Convention Premises, Manufacturing Premises , Office Premises, Research
Premises , Distribution Center Premises, Headquarters Premises, Regional
Service Premises , Regional Entertainment Premises or Other Basic Industry.
(b) Creation of New Value. Abatement may only be granted for the additional value
of eligible property and Improvements incorporated into the Premises
subsequent to and specified in an Abatement Agreement between the City and
the property owner, lessee or member of an affiliated group which includes the
property owner and the lessee in which a controlling interest (more than 50%) is
owned by a common owner, subject to such limitations as the City Council may
require.
(c) New and Existing Facilities at the Premises. Abatement may be granted for
new facilities and improvements to existing facilities at the Premises for purposes
of Modernization or Expansion.
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(d) Eligible Property. Abatement may be extended to all or a portion of the value of
Fixed Improvements and Fixed Machinery and Equipment as defined herein, at
the Premises.
(e) Ineligible Property. The following types of property shall be ineligible for
abatement: land; inventories; supplies; tools; furnishings, and other forms of
movable personal property which do not meet the definition of Tangible Personal
Property set forth above; vehicles; vessels; aircraft; housing and dwellings; retail
facilities and Deferred Maintenance
(f)
(g)
Leased Facilities. Leasehold Interest: Abatement may be granted to the owner
of a leasehold interest in real property, including tax-exempt real property,
located in a reinvestment zone designated to exempt all or a portion of the value
of the leasehold interest in the real property Tax Code, Section 312.402 (a-1).
Lessee Interest: Abatement may be granted to a lessee of taxable real property
located in a reinvestment zone to exempt from taxation all or a portion of the
value of Improvements that meet the criteria of Eligible Property set forth above
owned by the lessee and located on the property that is subject to the lease.
Owned/Leased Facilities. If a leased facility is granted abatement, the agreement
shall be executed with the lessor and the lessee. The Lessee shall be required to
submit, with its abatement application, a copy of the executed lease agreement
with the lessor demonstrating a minimum lease term of 5 years. Under no
circumstance will the term of the abatement be longer than the term of the lease.
Publicly owned land leased to private entities shall be eligible if otherwise
qualified.
(h) Value and Term of Abatement. Abatement from ad valorem property taxes
levied by the City shall be granted effective with the January 1 valuation date
immediately following the date of execution of the Agreement. Up to one
hundred percent of the value of new eligible property may be abated for up to two
years during the period of construction and for up to eight years thereafter. The
abatement may be extended through an initial agreement and a subsequent
agreement as may be required to comply with state law regarding the term of a
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RESOLUTION NO. R2015.19
reinvestment zone. If the period of construction exceeds two years, the
Premises shall be considered completed for purposes of abatement and in no
case shall the period of abatement inclusive of construction and completion
exceed ten years. If it is determined that the abatement period would better
benefit the City and the applicant by deferring the commencement date beyond
the January 1st following the City's authorization of the abatement, the City may
defer the commencement date of the abatement period to a future date certain.
The deferral of the commencement date will not allow the duration of the
abatement period to extend beyond ten (10) years. Tax Code 312.00?(b). If a
project includes facility replacement, the abated value shall be the value of the
new unit(s) less the value of the old unit(s).
(i) Economic Qualification. In order to be eligible for designation as a
reinvestment zone and receive tax abatement, the planned improvement:
(1)
(1) Must be reasonably expected to increase the value of the property in the
amount of $500,000 or more if the planned improvements are for the
expansion of facilities already located in the City, or a minimum of
$1,000,000 for new facilities in the City; and
(2) Must be expected to retain or create employment positions for a minimum
of 10 positions in the City if the planned improvements are for the
expansion of facilities already located in the City, or for a minimum of 20
positions for new facilities in the City; and
(3) Must not be expected to solely or primarily have the effect of transferring
employment from one part of the City to another part of the City; and
(4) Must be necessary because capacity cannot be provided efficiently
utilizing existing improved property.
Taxability. From the execution of the Agreement until its termination, taxes shall
be payable as follows;
(1) The value of ineligible property as provided herein shall be fully taxable;
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RESOLUTION NO. R2015-19
(2) The Base Value of Premises, as determined herein, shall be fully taxable;
and,
(3) Only the additional value of new eligible property specifically identified
within the Agreement shall be subject to abatement under the Agreement.
APPLICATION Section 3
(a) Any present or potential owner of taxable property in the City may request the
creation of a reinvestment zone and tax abatement by filing a written request with
the Pearland Economic Development Corporation.
(b) The application shall consist of a completed application, provided by the
Pearland Economic Development Corporation and shall be accompanied by: a
general description of the proposed use and the general nature and extent of the
Modernization, Expansion or new Improvements to be incorporated at the
Premises; a descriptive list of the Improvements which will be a part of the
Premises; a map and property description; and a time schedule for undertaking
and completing the planned Improvements. In all cases a statement of the
assessed value of the Premises, separately stated for real and personal property,
shall be given for the tax year immediately preceding the application. The
application form may require such financial and other information as the City
Council deems appropriate for evaluating the financial capacity and other factors
of the applicant.
(c) Upon receipt of a completed application, the City Manager or his designee shall
notify in writing the presiding officer of the legislative body of each affected
jurisdiction of the application and give written notice of a public hearing, not less
than 15 days prior to the hearing. Notice of the public hearing shall also be
properly posted and published in the City's official newspaper not less than 15
days prior to the hearing. Before acting upon the application, the City shall,
through public hearing, afford any interested party an opportunity to show cause
why the abatement should, or should not, be granted.
RESOLUTION NO. R2015-19
(d) After receipt of an application for creation of a reinvestment zone and application
for abatement, a feasibility study shall be prepared setting out the impact of the
proposed reinvestment zone and tax abatement. The feasibility study shall
include, but not be limited to, an estimate of the economic effect of the creation of
the zone, the abatement of taxes, and the proposed benefit to the affected
jurisdiction and the property to be included in the zone.
(e) The City Council shall not establish a reinvestment zone for the purpose of
abatement if it finds that the request for the abatement was filed after the
announcement or the commencement of construction, alteration, or installation of
Improvements related to a proposed Modernization, Expansion, or new
Premises.
(f)
Variance. Requests for variance from the provisions of Section 2 must be made
in writing to the City Manager of the City, or his designee, provided, however, the
total duration of abatement shall in no instance exceed ten years. The applicant
shall include in the variance request a complete description of the circumstances
the applicant believes supports the requested variance. Approval of a request for
variance requires a three-fourths (3/4) vote of the City Council.
PUBLIC HEARING Section 4
(a) Should any party be able to show cause in the public hearing why the granting of
a tax abatement will have a substantial adverse effect on the City, that showing
shall be reason for the City Council to deny designation of the reinvestment zone,
the granting of Abatement, or both.
(b) Neither a reinvestment zone nor Abatement Agreement shall be authorized if it is
determined that:
(1) There would be a substantial adverse affect on the provision of
government service or tax base;
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RESOLUTION NO. R2015-19
(2) The applicant has insufficient financial capacity to fulfill all of the terms and
obligations of an Abatement Agreement;
(3)
Planned or potential use of the property would, in the sole discretion of
City Council, constitute a hazard to public safety, health, morals, and/or
violation of other applicable codes or laws.
(c) In order for the reinvestment zone to be created, the City must make the
following findings:
(1) find that the Improvements sought are feasible and would be of benefit to
the zone after expiration of the Agreement;
(2) that the zone is reasonably likely to contribute to the retention or
Expansion of primary employment or to attract major investment in the
City; and
AGREEMENT Section 5
At least 7 days before the City Council grants a tax abatement, it must deliver written
notice of its intent to enter into the tax Abatement Agreement to the presiding officer of
the legislative body of each affected jurisdiction pursuant to Chapter 312 of the Texas
Property Tax Code. Said notice must include a copy of the proposed tax Abatement
Agreement.
(a) After proper notice has been given to the affected jurisdictions, the City Council
shall, at a regularly scheduled meeting, cast a vote concerning the adoption of
the tax Abatement Agreement, which may be adopted only by a majority vote of
the City Council and, if adopted, the City Council shall then authorize the City
Manager to execute an Agreement with the owner of the Premises and/or lessee,
as required. The Agreement may include any of the optional provisions allowed
in accordance with Chapter 312 of the Tax Code. The Agreement shall:
(1) Include a list of the kind, number, and location of Improvements to the
property;
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RESOLUTION NO. R2015-19
(2) Authorize inspection of the property to ensure compliance with the
agreement;
(3)
Limit the use of the property consistent with the City's development goals;
(4) Require the filing of an annual compliance report with the City containing
all relevant information necessary for the City's evaluation of Applicant's
compliance with the terms of the agreement; and
(5)
Provide for recapturing property tax revenues that are lost if the owner
fails to make the Improvements or comply with annual compliance
reporting requirements.
(b) If the City Council fails to adopt the Agreement, the City shall notify the applicant
of the disapproval, such notification to be in writing and to be sent within 60 days
of the City Council's decision.
(c) An approved tax Abatement Agreement shall be executed by the City Manager
within 60 days after the applicant has forwarded all necessary information and
documentation to the City.
(d) No later than 90 days after a reinvestment zone has been designated or a tax
Abatement Agreement has been executed or July 1, whichever occurs first, the
City shall notify the Comptroller of the State of Texas as required by law. Upon
execution of an Abatement Agreement, a copy of the agreement shall be
provided to the Chief Appraiser of Appraisal District with jurisdiction over the
reinvestment zone.
(e) The City Manager shall have administrative authority to extend the initial
deadlines ("Extensions"), contained in an Abatement Agreement, for obtaining a
Certificate of Occupancy, Operation of a Facility, and Job Creation/Retention, for
a period not to exceed six (6) months. Any additional Extensions to an
Abatement Agreement must be presented to the City Council for approval.
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RESOLUTION NO. R2015-19
(f) Annual Abatement Filings. The Company is required to make additional filings with
the appropriate County Appraisal District, or other state or local offices or
agencies, annually or from time to time, in order for the Agreement to have full
force, effect and applicability. These filings shall be the responsibility of the
Company and in no way shall the City, it's elected officials, officers, employees or
assigns, including the Pearland Economic Development Corporation, be
responsible for the timely filing of any form or documents, except those set forth
by law, on behalf of the Company. These filings may include, but are not limited
to, the "Application for Property Tax Abatement Exemption" Comptroller Form
No. 50-116 which must be filed with the appropriate County Appraisal District
between January 1st and April 30111 for property owned as of January 1st of the
year in which the abatement is to be applied. Failure of the Company to meet
any filing obligation with the appropriate County Appraisal District, or other state
or local offices or agencies shall not be grounds for extension of the term of the
Agreement.
RECAPTURE Section 6
In the event a Tax Abatement Agreement is approved by City Council, the Agreement
shall include recapture provision substantially similar to the following:
If a Company fails to meet the capital improvements funding conditions of a Tax
Abatement Agreement by the agreed upon improvement completion date, the City may,
at its discretion, terminate the Agreement and require the Company to immediately
repay the entirety of any amounts abated under the Agreement plus interest at the rate
of 4% plus prime, as published in the Wall Street Journal, per year, compounded
annually from January 1 of the year following the execution of the Agreement to the
date of repayment.
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RESOLUTION NO. R2015-19
(a) If after the end of a calendar year a Company fails to provide any annual
compliance reports related to a funding condition, to the City or the Pearland
Economic Development Corporation, required under the Agreement by the
deadline for that year, the abatement for the year for which verification was not
timely provided according to the terms of the Agreement may be forfeited, at the
discretion of the City, and the Company shall have thirty (30) days to pay the City
any outstanding damages for failure to provide verification. If the Company does
not make payment to the City during the thirty (30) day period this Agreement
shall terminate.
(b) If a Company fails to meet a funding condition required under the Agreement by
the deadline for that year, the abatement for the year for which the funding
condition was not met according to the terms of the Agreement may be forfeited,
at the discretion of the City, and the Company shall have thirty (30) days to pay
the City any outstanding damages for failure to meet the Funding Condition. If
the Company does not make payment to the City during the Thirty (30) day
period this Agreement shall terminate.
(c) In the event a Company allows its ad valorem taxes owed to any taxing
jurisdiction to become delinquent and fails to timely and properly follow the legal
procedures for protest and/or contest of any such ad valorem taxes then the
Agreement shall be in default. In the event that the Company defaults in this
manner and has not cured such default within sixty (60) days of said default. the
abatement may be modified or terminated by the City. If ,at its discretion, the
City modifies or terminates an Agreement because a Company allows its ad
valorem taxes owed to any taxing jurisdiction to become delinquent and fails to
timely and properly follow the legal procedures for protest and/or contest of any
such ad valorem taxes the City may, at its discretion require that the Company
immediately repay the part or the entirety of any amounts abated under this
Agreement plus interest, at the rate of 4% plus prime as published in the Wall
Street Journal, per year, compounded annually from January 1 of the year
following the execution of the Agreement to the date of repayment.
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RESOLUTION NO. R2015-19
(d) In the event a Company shall move the Employment Positions or Improvements
outlined in a Agreement from the Premises during the term of the Agreement
then all abatements of tax previously earned under this Agreement may be
refundable to the City by the Company and the Agreement may terminate at the
discretion of the City. After notice, the Company shall have thirty (30) days to
pay outstanding damages to the City for failure to meet any of the requirements
in this Section. If the Company does not make payment to the City during the
Thirty (30) day period this Agreement may terminate at the discretion of the City
(e) No party shall be required to perform any obligation under an Agreement or be
liable or responsible for any loss or damage resulting from its failure to perform
so long as performance is delayed by force majeure or acts of God, including but
not limited to strikes, lockouts or labor shortages, embargo, riot, war, revolution,
terrorism, rebellion, insurrection, flood, natural disaster, or interruption of utilities
from external causes.
(f)
(g)
Should the City determine that a Company is subject to any Recapture provision
according to the terms and conditions of its Tax Abatement Agreement, the City
Manager or his designee need not provide any written notice to the Company of
the fact that it is subject to a Recapture provision. Any notice of Recapture
provided by the City may be' made via electronic mail.
All taxes abated shall be deemed due and owing to the City at any point that the
Company cannot pay its bills as they come due. if after a Company is no longer
able to pay its bills as they come due, it files for protection from its creditors
by any chapter of the bankruptcy code the City may, at its discretion, pursue
the abated taxes as a creditor in the bankruptcy for unpaid property taxes subject
to any and all tax liens applicable thereto.
ADMINISTRATION Section 7
(a) The Agreement shall stipulate that employees and/or designated representatives
of the City will have access to the reinvestment zone during the term of the
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RESOLUTION NO. R2015-19
abatement to inspect the Premises to determine if the terms and conditions of the
Agreement are being met. All inspections will be made only after the giving of
twenty-four (24) hours prior notice and will only be conducted in such manner as
to not unreasonably interfere with the construction and/or operation of the
Premises. All inspections will be made with one or more representatives of the
Company and in accordance with its safety standards.
(b) Upon completion of construction, the City, or its designee, shall annually evaluate
each Premises and prepare a written report of possible violations to the
Abatement Agreement to the City Council, the City Manager, and the City
Attorney and provide written notice of the report to the applicant that such report
has been submitted.
ASSIGNMENT Section 8
The terms and conditions of an Agreement are binding upon the successors and
assigns of all parties hereto. An Agreement may be transferred or assigned by the
Company only upon written permission by the City in accordance with Resolution
R2013-14- , which permission shall not be unreasonably withheld. No assignment shall
be approved if the assignor or assignee is indebted to the City for ad valorem taxes or
other obligations. The Company, or any legal successor thereto or prior assignee
thereof, may assign its rights and obligations under this Agreement, including by merger
or operation of law, to any legal successor or any person or entity that acquires all or
substantially all of its business and operations. In addition, with the prior written consent
of the City, which consent shall not be unreasonably withheld or delayed, the Company,
or any legal successor company thereto or prior assignee thereof, may assign its rights
and obligations under this Agreement to any parent or wholly owned subsidiary that it
currently has in place or later establishes, if it is constituted as a separate legally
recognized business entity. Any such assignment will be made without additional
consideration being payable to the City. An Agreement shall survive any sale, change of
control or similar transaction involving the Company, any successor thereto or prior
assignee thereof and no such transaction shall require the consent of the City. The
Company shall provide the City written notice of any assignment, sale, change of
control or similar transaction pursuant to this section as soon as possible and in no
event not later than thirty (30) calendar days following such event.
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RESOLUTION NO. R2015-19
SUNSET PROVISION Section 9
These Guidelines and Criteria are effective upon the date of their adoption and will
remain in force for two (2) years, at which time all reinvestment zones and tax
abatement contracts created pursuant to its provisions will be reviewed by the City
Council to determine whether the goals have been achieved. Based on that review, the
Guidelines and Criteria will be modified, renewed or eliminated providing that such
actions shall not affect existing Abatement Agreements.
Section 2. Savings. All rights and remedies which have accrued in favor of the
City hereunder and amendments thereto shall be and are preserved for the benefit of
the City of the Pearland.
Section 3. Repealer. All resolutions or portions of resolutions heretofore
passed in conflict with the terms hereof are specifically repealed.
Section 4. Severability. If any section, subsection, sentence, clause, phrase or
portion of this Resolution is prohibited by, or unlawful or unenforceable under, any
applicable law or jurisdiction is void without invalidating the remaining terms of this
Resolution. However, where the provisions of any such applicable law may be waived,
they are hereby waived by either party, as the case may be, to the fullest extent
permitted by the law, and the affected terms are enforceable in accordance with the
parties' original intent.
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RESOLUTION NO. R2015-19
PASSED, APPROVED and ADOPTED this the 9th day of February, A.D., 2015.
TOM REID
MAYOR
ATTEST:
YQ{J G LORF TRM
CI� SECR: A RY
APPROVED AS TO FORM:
DARRIN M. COKER
CITY ATTORNEY
Resolution No. R2015-19
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 (the "City"), duly acting by and through its City Manager,
and Lonza Houston, Inc., a Delaware Corporation (herein "Lonza"), duly acting by and
through Ricardo Jimenez, its Site Director, and Kirby/Pearland, LLC a Texas limited
liability company (hereinafter called "Pinchal"), dully acting by and through Brian
McMackin its Vice President. Unless individually recognized Lonza and Pinchal shall
be collectively referred to as the "Companies."
WITNESSETH:
WHEREAS, on the 16`h day of December, 2013, the City Council of the City
passed Ordinance No.1496 establishing Reinvestment Zone # 25 in the City for general
business tax abatement, as authorized by Chapter 312, Tax Code, V.A.T.S. as
amended (the "Code"); and
WHEREAS, the City previously adopted Resolution No. R2015-19, establishing
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. R2015-19 and the
Code; and
WHEREAS, the contemplated use of the Premises, as defined below, and 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 R2015-19 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
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City of Pearland, Lonza Houston, Inc. and Pinchal and Company Tax Abatement
WHEREAS, there will be no substantial adverse effect 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; and
WHEREAS, but for the benefits provided through this Agreement the
Improvements as defined below would not be made in the City; and
WHEREAS, the Companies declare that they will be the sole beneficiary of the
benefits provided through this Agreement and that the Companies will not share any
portion of the proceeds of the benefits received through this Agreement with any other
party as compensation or award for consulting or other services received by the
Companies contingent upon the successful execution of this Agreement;
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, the Companies and the City mutually agree as follows:
1. DEFINITIONS:
a. Effective Date: The words "Effective Date" mean the date of the
last to execute this Agreement among the City, Lonza and Pinchal.
b. Fixed Improvements: The words "Fixed Improvements" mean real
property and or leasehold improvements, including buildings and
structures affixed to the land.
c. Fixed Machinery and Equipment: The words "Fixed Machinery
and Equipment" means a fixture, machinery, equipment, or fence affixed
to the land such that their removal would cause material damage to Fixed
Improvements.
d. Improvements: The word "Improvements" means the Fixed
Improvements and the Fixed Machinery and Equipment located on the
Premises, exclusive of any investment by the Companies not
contemplated by this Agreement.
e. Premises: The word "Premises" means the property subject to this
Agreement, as described by the metes and bounds and map attached
hereto as Exhibit "A."
f. Tangible Personal Property: The words "Tangible Personal
Property" has the same meaning as Section 1.04(5) of the Texas Tax
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City of Pearland, Lonza Houston, Inc. and Pinchal and Company Tax Abatement
Code, as amended. The term "Tangible Personal Property" does not
include Tangible Personal Property, including inventory and supplies,
which were located on the Premises at any time prior to the Effective Date
of this Agreement.
2. CONFLICT OF INTEREST: 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, other governmental bodies or employees approving, or
having responsibility for the approval of, this Agreement.
3. ABATEMENT: 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 upon the Premises and Improvements only as
defined herein and otherwise owed to the City shall be abated. The City hereby
acknowledges that it is not aware of any terms or conditions of any outstanding bonds
which would invalidate this Agreement or would conflict with the provisions 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 of the taxes assessed upon the
increased value of the Premises due to the Improvements defined herein, exclusive of
future or other capital investment made at the Premises not contemplated herein, over
the market value as of January 1st in the year in which this Agreement is executed. The
abatement as herein provided shall be for the following years and in the following
amounts: (i) One hundred percent (100%) of the taxes assessed upon the increased
value of the Improvements set forth below exclusive of future or other capital investment
made at the Premises, annually for a period of three (3) years beginning January 1,
2017 and ending December 31, 2019: (ii) Seventy five percent (75%) of the taxes
assessed upon the increased value of the Improvements set forth below exclusive of
future or other capital investment made at the Premises, annually for a period of three
(3) years beginning January 1, 2020 and ending December 31, 2022; and (iii) Fifty
percent (50%) of the taxes assessed upon the increased value of the Improvements set
forth below exclusive of future or other capital investment made at the Premises,
annually for a period of four (4) years beginning January 1, 2023 and ending December
31, 2026.
4. FUNDING CONDITIONS: The Companies must meet all of the following
conditions ("Funding Conditions"), or the Companies shall be subject to liquidated
damages and/or repayment of abated taxes in accordance with this Agreement:
a. Capital Improvements: The Companies shall collectively construct
and install various improvements on the Premises, which when complete
shall have a minimum investment value of no less than twelve million
dollars ($12,000,000) for Fixed Improvements and no less than twenty
million dollars ($20,000,000) in Fixed Machinery and Equipment and
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City of Pearland, Lonza Houston, Inc. and Pinchal and Company Tax Abatement
Tangible Personal Property. The improvements more particularly
described in Section 4.d below shall be substantially complete on or
before December 1, 2017 (the "Improvement Completion Date"); provided,
that the Companies shall have such additional time to complete the
Improvements as may be required in the event of "force majeure" (as set
forth herein) if the Companies are diligently and faithfully pursuing
completion of the Improvements. Notwithstanding the foregoing, the
amounts described in this Section 4.a are minimum values only and shall
not be deemed to limit the amount of any tax abatement otherwise
available to the Companies hereunder. The date of completion of the
Improvements shall be defined as the date a Final Certificate of
Occupancy is issued by the City. Notwithstanding the foregoing, the
requirements and deadlines under this Section 4.a shall not apply to any
other Fixed Improvements on the Premises other than those more
particularly described in Section 4.d below.
b. Job Creation: Lonza shall create a total of 97 "Employment
Positions", as defined herein. and (subject to the ninety percent (90%)
threshold described below, in accordance with the following schedule:
Deadline
Employment
Positions
90% Threshold
1/1/2018
50
45
12/31/2019
65
58
12/31/2020
75
67
12/31/2021
85
76
12/31/2022
97
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Lonza shall demonstrate compliance with this Section by maintaining a minimum
of ninety percent (90%) or more of the required Employment for each year as specified
below at the Premises for the term of this Agreement.
c. Employment Positions: For the purposes of this Agreement,
"Employment Positions" shall be defined as Lonza's jobs meeting all of the
following criteria:
1) Employment Positions based at the Premises that
require at least Two Thousand (2,000) hours worked
annually per employee; provided, however, multiple
part-time employees whose hours collectively
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City of Pearland, Lonza Houston, Inc. and Pinchal and Company Tax Abatement
represent one or more Employment Positions may
be aggregated; and
2) Until the lease on Lonza's existing facilities expires
in 2018, the employment positions may include
those positions in which employees perform
services both on the Premises and at such existing
facilities.
3) The Employment Positions must have an average
annual gross compensation of at least $70,000.00
per year (excluding benefits); provided however (i)
multiple part-time employees whose wages
collectively represent those of one or more
Employment Positions may be aggregated: and (ii)
for purposes of determining average annual gross
compensation, the Employment Position equivalent
of part-time employees so aggregated, rather than
the total number of part-time employees, shall be
used; and
4) Medical benefits must be provided for each
Employment Position.
d. Lease agreement: Lonza and Pinchal shall execute an agreement
providing for the construction by Pinchal and leasing to Lonza of a
minimum 75,000 square foot office/manufacturing/distribution facility on
the Premises. The term of the lease of said facility by Lonza as the
tenant shall be at least for the term of this Agreement.
5. APPLICATION FOR TAX ABATEMENT: The Companies agree and
covenant that the information provided in the Application for Tax Abatement attached
hereto as Exhibit "B" is true and correct and that any materially false or misleading
information provided to applicable taxing jurisdictions shall be an event of default and
grounds for termination of this Agreement.
6. GOOD FAITH, COMPLIANCE AND CONSIDERATION: The Companies
agree and covenant that they will diligently and faithfully, in a good and workmanlike
manner, pursue completion of the Improvements as a good and valuable consideration
of this Agreement. The Companies further covenant and agree that all construction of
the Improvements will be in accordance with all applicable federal, state and local laws
and regulations or valid waiver thereof. In further consideration, the Companies shall
thereafter, from the date a Final Certificate of Occupancy is issued until the expiration of
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City of Pearland, Lonza Houston, Inc. and Pinchal and Company Tax Abatement
this Agreement, continuously operate and maintain the Premises and limit 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 term of this Agreement.
7. ANNUAL COMPLIANCE VERIFICATIONS: No later than 60 days after
January 1, 2018, (being the first year in which the Funding Conditions shall have been
met), and continuing every year thereafter through the year 2026, Lonza shall deliver to
the City an Annual Compliance Verification, in the form of Exhibit "C", attached hereto,
signed by duly authorized representatives of Lonza certifying the following information:
a. the number of Employment Positions created and maintained by
Lonza on the Premises, the general description the Employment Positions
existing as of December 31st of the preceding year and the wage
information for all Employment Positions; and
b. the appraised value, as determined by the Central Appraisal
District, of the Improvements as defined herein, supporting evidence that
the Improvements were constructed or installed on or before the
Improvements Completion Date (only delivered once) and a general
description of the Improvements existing as of December 31st of the
preceding year.
There shall be a total of ten (10) Annual Compliance Verifications submitted to the City
for compliance years 2017 through 2026. Each Annual Compliance Verification shall
include specific back-up information supporting the Employment Position data.
Furthermore, all Annual Improvement Compliance Verifications shall consist of a
certified copy of the appraised value of the Improvements as shown by the Central
Appraisal District supported by all correspondence, renditions, appeals or contests and
settlement of appraised value and shall provide appropriate back-up data for the
Improvements exclusive of other investments made at the Premises.
8. APPLICATION FOR PROPERTY TAX ABATEMENT EXEMPTION
FORM 11.28: Companies shall annually submit the Application for Property Tax
Abatement Exemption Form 11.28, in the form of Exhibit "0" to Harris County annually
to qualify for its abatement and shall submit a copy to the City as part of its Annual
Compliance Verification.
9. CERTIFICATION OF GOOD STANDING/DELINQUENT TAXES: By
execution of this Agreement, each of Lonza and Pinchal certify that it is in good
standing under the laws of the State in which it was formed or organized, and have
provided the City evidence of such. In addition, each of Lonza and Pinchal certifies that
it owes no delinquent taxes to any taxing unit of the State of Texas, the City or any other
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City of Pearland, Lonza Houston, Inc. and Pinchal and Company Tax Abatement
local tax levying political subdivision with jurisdiction to levy taxes in or on the
operations and property of the Companies at the Premises.
10. CERTIFICATION RELATING TO UNDOCUMENTED WORKERS: By
execution of this Agreement, each of Lonza and Pinchal, including any business,
branch, division, and department of the Companies, certifies that it does not and will not
knowingly employ an undocumented worker (as defined by Texas Government Code
Section 2264.001(4)). If after any abatement of taxes under the Agreement, either
Lonza or Pinchal, or a business, branch, division, or department thereof, is convicted of
a violation under 8 U.S.C. Section 1324a(f), the convicted company shall repay the
amount of any funds abated plus interest at the rate of 8% per year. The repayment
shall be due and owing not later than the 120th day after the date the City notifies the
convicted company of the conviction and required repayment.
11. ACCESS TO PREMISES: The Companies further agree that the City, its
agents and employees shall have the right to enter upon the Premises at any
reasonable time following one (1) business day advance written notice and subject to
compliance with applicable Lonza Standard Operating Procedures (SOPs) to inspect
the Improvements in order to determine whether the construction and installation 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 one (1) business day's advance written notice
has been given and subject to compliance with Lonza SOPs 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
shall conduct at least one inspection annually during the term of this Agreement to
ensure compliance with the guidelines contained in Resolution No. R2015-19.
Notwithstanding any other provision of this Agreement, if 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 the Companies written notice of
such violation. For the purposes of this Agreement, the Companies shall have ten (10)
days from the date of the notice to cure or remedy such violation. However, if the
Companies demonstrate, to the satisfaction of the City, that the nature of said violation
requires more than ten (10) days to cure, the Companies shall have a reasonable
period of time to cure said violation so long as the effort to cure begins within said ten
(10) day period and is diligently pursued until completion. If the Companies refuse to
cure or remedy the violation within the ten (10) day period (or such longer period as
may be reasonably necessary pursuant to the immediately prior sentence), the
Companies are subject to the forfeiture, at the discretion of the City, of any right to any
tax abatement for the year in which the violation occurred.
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City of Pearland, Lonza Houston, Inc. and Pinchal and Company Tax Abatement
12. LIQUIDATED DAMAGES:
a. Funding Condition Targets: As set forth above, during the term
of this Agreement, Lonza shall deliver to the City an Annual Compliance
Verification demonstrating compliance with the Funding Conditions of this
Agreement for the preceding year. If Lonza fails to timely provide an
Annual Compliance Verification or provides an Annual Compliance
Verification that demonstrates Lonza failed to meet a Funding Condition
target(s) for that year, then the City may, at its sole discretion and in
addition to all other remedies for the recapture of lost tax revenue
provided herein, require the Companies to pay liquidated damages up to
the amount of the abatement received for the year in which the
Companies did not meet the Funding Conditions.
b. General Provisions Related to Liquidated Damages: Liquidated
damages provided for herein shall be construed in accordance with
Section 312.205, Tax Code, V.A.T.S., as amended, and shall include 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) and shall become a debt to the City and shall be due,
owing and paid to the City as liquidated damages subject to the expiration
of any cure period or the termination date, whichever is applicable. The
City shall retain 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. R2015-
19.
13. DEFAULTS AND REMEDIES:
a. Each of the following acts or omissions of the Companies or
occurrences shall constitute an act of default under this Agreement:
1) The Companies fail to meet the Capital Improvements
Funding Conditions contained in Section 4.a by the
Improvement Completion Date.
2) Lonza fails to provide or submit Annual Compliance
Verification Report(s) as required by this Agreement.
3) The Companies fail to meet any of the Funding Conditions
set forth in Section 4 of this Agreement.
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City of Pearland, Lonza Houston, Inc. and Pinchal and Company Tax Abatement
4) The Companies allow their ad valorem taxes owed to any
taxing jurisdiction to become delinquent, and fail to timely
and properly follow the legal procedures for protest and/or
contest of any such ad valorem taxes.
b. In the event of a default of the terms of this Agreement, the City
shall provide the Companies written notice of such default, which notice
shall be delivered by personal delivery or certified mail to:
Ricardo Jimenez
Lonza Houston, Inc.
8066 El Rio
Houston, Texas 77054
Brian McMackin
Kirby/Pearland, LLC
4400 Post Oak Parkway, Suite 2350
Houston, Texas 77027
c. Notwithstanding anything to the contrary contained herein, a default
shall exist under this Agreement if the Companies fail to satisfactorily cure
a default under this Agreement within thirty (30) days of the date of
receiving written notice thereof If the Companies fail to satisfactorily cure
a default under this Agreement within such cure period, this Agreement
may be terminated by the City at its discretion without further notice or
liability to the Companies, and the Companies shall, within ten (10)
business days, refund to the City any amounts abated under this
Agreement for the year to which such default relates (in each case, the
"Default Year") plus interest at the rate of 8% per year, compounded
annually from January 1 of the Default Year to the date of payment of the
refunded taxes.
d. Lonza shall provide the City a written notice a minimum of thirty
(30) days before either (i) any of the Employment Positions are moved
from the Premises (except as otherwise permitted by Section 4(c)(2)) or
terminated that would result in a reduction below the then required
Employment Positions (taking into account the ninety percent (90%)
threshold provided above) or (ii) a material portion of the Improvements
are moved from the Premises (for purposes hereof, a "material portion" of
the Improvements being those Improvements, the removal of which would
drop the investment value of the remaining
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City of Pearland, Lonza Houston, Inc. and Pinchal and Company Tax Abatement
Improvements below the minimum investment values provided for in
Section 4.a). In the event Lonza shall move any of the Employment
Positions or Improvements required by this Agreement from the Premises
during the term of the Agreement in violation of this Section 13.d (and
subject to Lonza's cure period described in Section 13.c above), such
violation shall constitute a default under this Agreement, and the City, in
its sole discretion, may terminate this Agreement and require the
Companies to, within ten (10) business days, refund to the City, the
portion of the taxes previously abated under this Agreement for the
Default Year, plus interest at the rate of 8% per year, compounded
annually from January 1 of the Default Year to the date of repayment.
e. All taxes abated herein shall be deemed due and owing to the City
at any point that the Companies cannot pay their bills as they come due.
If after the Companies are no longer able to pay their bills as they come
due, they file for protection from their creditors under any chapter of the
federal bankruptcy code, the City may, at its discretion, pursue the abated
taxes for the year in which such bankruptcy filing occurs as a creditor in
the bankruptcy for unpaid property taxes subject to any and all tax liens
applicable thereto.
14. CITY AUDIT RIGHTS:
a. Duty to Maintain Records. The Companies shall maintain
adequate records to support its compliance with the terms of this
Agreement. The Companies shall also maintain such records as are
reasonably deemed necessary by the City and auditors of the City, or
such other persons or entities designated by the City, to ensure proper
accounting for all costs and performances related to this Agreement.
b. Records Retention. The Companies shall maintain and retain for
a period of four (4) years after the submission of the final Annual
Compliance Verification report, or until full and final resolution of all audit
or litigation matters which arise prior to the expiration of the four (4) year
period after the submission of the final Annual Compliance Verification
report, whichever time period is longer, such records as are required
under Section 14.a above.
c. Audit Trails. Appropriate audit trails shall be maintained by the
Companies to provide accountability for updates and changes to
automated personnel and financial systems. Audit trails maintained by the
Companies shall, at a minimum, identify the changes made, the individual
making the change and the date the change was made. An adequate
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City of Pearland, Lonza Houston, Inc. and Pinchal and Company Tax Abatement
history of transactions shall be maintained by the Companies to permit an
audit of the system by tracing the activities of individuals through the
system. The Companies' automated systems provide the means whereby
authorized personnel have the ability to audit and establish individual
accountability for any action that can potentially cause access to,
generation of, or modification of information related to the performances of
this Agreement.
d. Access. The Companies shall, upon reasonable advance notice,
(but in no event less than five (5) business days) grant the City, or such
other persons or entities designated by the City for the purposes of
inspecting, auditing, or copying such books and records, access, during
normal business hours on a not to interfere basis, to all paper and
electronic records, books, documents, accounting procedures, practices or
any other items relevant to the performance of this Agreement. All
records, books, documents, accounting procedures, practices or any other
items relevant to the performance of this Agreement shall be subject to
examination or audit by the City, or such other persons or entities
designated by the City in accordance with all applicable state and federal
laws, regulations or directives. Each of the Companies will direct any
subcontractor with whom it has established a contractual relationship to
discharge such Company's obligations to likewise permit access to,
inspection of, and reproduction of all books and records of the Company's
subcontractor(s) which pertain to this Agreement.
e. Location and Reimbursement. Any audit authorized herein shall
be conducted at the Premises during normal business hours and
conducted at the City's expense and in a manner not to unreasonably
interfere with Lonza and Pinchal's business, provided all reasonable costs
incurred by the City in conducting any such audit shall be reimbursed by
the Companies in the event such audit reveals a material discrepancy in
any of the Companies' reporting of compliance as required by this
Agreement. If any audit or examination reveals that the Companies'
reports for the audited period are not accurate for such period, the
Companies shall reimburse the City in accordance with Section 11 of this
Agreement.
f. Corrective Action Plan. If an audit reveals any discrepancies or
inadequacies which must be remedied in order to maintain compliance
with this Agreement, applicable laws, regulations, the Companies'
responsibilities or performance standards, the Companies agree to, within
thirty (30) calendar days after the Companies' receipt of the audit findings,
propose and submit to the City a corrective action plan to correct such
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City of Pearland, Lonza Houston, Inc. and Pinchal and Company Tax Abatement
discrepancies or inadequacies subject to the approval of the City. The
Companies further agree, at the sole cost of the Companies, to complete
the corrective action approved by the City within thirty (30) calendar days
after the City approves the Companies' corrective action plan.
g. Reports. The Companies shall provide to the City periodic status
reports in accordance with the City's audit procedures regarding the
Companies' resolution of any audit -related compliance activity for which
the Companies are responsible.
15. REPORTS AND BRIEFINGS: In a manner consistent with the need to
protect privacy and the intellectual property of the Companies and third parties, the
Companies will provide periodic briefings as reasonably requested by the City on the
general activities, economic impact and progress of the new project development and
business operations in Texas.
16. USE AND RETENTION OF CITY CRAFTSMEN, TRADES AND
SUPPLIERS: Although not an event of default or a condition to this Agreement, the
City requests that the Companies satisfy their need for additional employees from
residents of the City of Pearland, Texas, and purchase all materials, supplies and
services necessary to affect the occupancy of the property from City of Pearland
merchants and businesses.
17. COMMUNITY INVOLVEMENT: Although not an event of default or
condition of any advance hereunder, the Companies agree to actively participate in
community and charitable organizations and/or activities, the purpose of which are to
improve the quality of life in the City of Pearland, Texas, and to actively encourage its
employees to be involved in such organization and/or activities.
18. FINANCIAL INFORMATION: If Lonza's publicly -traded ultimate parent
company is no longer a publicly traded company, Lonza shall furnish the City, if
requested, on an annual basis by February 28, of each year throughout the term of this
Agreement, information regarding the general business status, market and general
summary financial updates regarding Lonza that are relevant to Lonza's compliance
with this Agreement.
19. INDEMNITY AND HOLD HARMLESS: Each of Lonza and Pinchal
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 its breach
of this Agreement. The provisions of this section reflect the expressed intentions of the
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City of Pearland, Lonza Houston, Inc. and Pinchal and Company Tax Abatement
Companies and the City and shall survive the termination, expiration, or cancellation of
this agreement (subject to the terms of Section 22.d below).
20. EXPRESS NEGLIGENCE: The indemnity set forth in this agreement is
intended to be enforceable against the Companies and their successors and assigns in
accordance with the express terms and scope hereof notwithstanding Texas' express
negligence rule or any similar directive that would prohibit or otherwise limit indemnities
because of the negligence (whether sole, concurrent, active or passive) or other fault or
strict liability of the city. Notwithstanding the foregoing, in no event shall the indemnity
set forth in this Agreement apply to the gross negligence or willful misconduct of any
indemnitee thereunder.
21. GENERAL PROVISIONS:
a. Authority. Each party represents that it has obtained all necessary
authority to enter into this Agreement.
b. Relationship of Parties and Disclaimer of Liability. The parties
will perform their respective obligations under this Agreement as
independent contractors and not as agents, employees, partners, joint
ventures, or representatives of the other party. Neither party can make
representations or commitments that bind the other party. The
Companies are not a "governmental body" by virtue of this Agreement or
the City's granting of an abatement.
c. Limitation of Liability. In no event will either party be liable to the
other party for any indirect, special, punitive, exemplary, incidental or
consequential damages. This limitation will apply regardless of whether or
not the other party has been advised of the possibility of such damages.
d. Term. The term of this Agreement commences on the Effective
Date of this Agreement and continues until December 31, 2026 unless
terminated earlier pursuant to the terms of this Agreement.
e. Termination for Cause. Either party may terminate this
Agreement for cause upon thirty (30) days prior written notice to the other
party. "Cause" is any failure to perform a material obligation under this
Agreement within the specified time; including the Companies' failure to
comply with any Funding Conditions contained herein. The sole remedy
for any termination for Cause (and for the "cause" giving rise to the
termination) shall be that each party is relieved of its obligation to perform
hereunder, however, following termination by the City, the Companies will
continue to be obligated to the City for liquidated damages and/or
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City of Pearland, Lonza Houston, Inc. and Pinchal and Company Tax Abatement
repayment of abated taxes in accordance with applicable provisions of this
Agreement.
f. Dispute Resolution and Applicable Law.
1) Informal Meetings. The parties' representatives will meet
as needed to implement the terms of this Agreement and will make
a good faith attempt to informally resolve any disputes.
2) Applicable Law and Venue. This Agreement is made and
entered into in the state of Texas and this Agreement and all
disputes arising out of or relating thereto shall be governed by the
laws of the state of Texas, without regard to any otherwise
applicable conflict of law rules or requirements. The Companies
agree that any action, suit, litigation or other proceeding
(collectively "litigation") arising out of or in any way relating to this
Agreement, or the matters referred to therein, shall be commenced
exclusively in the State of Texas in any court with proper jurisdiction
to hear this matter closest to the City Hall of the City of Pearland,
and hereby irrevocably and unconditionally consent to the exclusive
jurisdiction of those courts for the purpose of prosecuting and/or
defending such litigation. The Companies hereby waive and agree
not to assert by way of motion, as a defense, or otherwise, in any
suit, action or proceeding, any claim that (a) the Companies are not
personally subject to the jurisdiction of the above-named courts, (b)
the suit, action or proceeding is brought in an inconvenient forum or
(c) the venue of the suit, action or proceeding is improper.
22. MISCELLANEOUS PROVISIONS:
a. Counterparts. This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original,
and it shall not be necessary in establishing proof of this Agreement to
produce or account for more than one such counterpart.
b. Merger. This document constitutes the final entire agreement
between the parties and supersedes any and all prior oral or written
communication, representation or agreement relating to the subject matter
of this Agreement.
c. Severability. Any term in this Agreement prohibited by, or unlawful
or unenforceable under, any applicable law or jurisdiction is void without
invalidating the remaining terms of this said Agreement. However, where
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City of Pearland, Lonza Houston, Inc. and Pinchal and Company Tax Abatement
the provisions of any such applicable law may be waived, they are hereby
waived by either party, as the case may be, to the fullest extent permitted
by the law, and the affected terms are enforceable in accordance with the
parties' original intent.
d. Survival of Promises. Notwithstanding any expiration, termination
or cancellation of this Agreement, the rights and obligations pertaining to
the abatement of taxes, payment or repayment of abated taxes and/or
liquidated damages, confidentiality, disclaimers and limitation of liability,
indemnification, and any other provision implying survivability will remain
in effect after this Agreement ends for a period of three (3) years.
e. Binding Effect. This Agreement and all terms, provisions and
obligations set forth herein shall be binding upon and shall inure to the
benefit of the parties and their successors and all other state agencies and
any other agencies, departments, divisions, governmental entities, public
corporations and other entities which shall be successors to each of the
parties or which shall succeed to or become obligated to perform or
become bound by any of the covenants, agreements or obligations
hereunder of each of the parties hereto.
f. Successors and Assigns/Notice. 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 the
Companies only upon written permission by the City in accordance with
Resolution R2015-19, which permission shall not be unreasonably
withheld. No assignment shall be approved if the assignor or assignee is
indebted to the City for ad valorem taxes or other obligations which have
become due and payable (other than taxes that are being contested in
good faith in accordance with applicable law). The Companies, or any
legal successor thereto or prior assignee thereof, may assign their rights
and obligations under this Agreement, including by merger or operation of
law, to any legal successor or any person or entity that acquires all or
substantially all of their business and operations of either of the
Companies. In addition, without the prior written consent of the City, the
Companies, or any legal successor company thereto or prior assignee
thereof, may assign their rights and obligations under this Agreement to
any parent or wholly owned subsidiary that they currently have in place or
later establish, if it is constituted as a separate legally recognized business
entity. Any such assignment will be made without additional consideration
being payable to the City. This Agreement shall survive any sale, change
of control or similar transaction involving the Companies, any successor
thereto or prior assignee thereof and no such transaction shall require the
15
City of Pearland, Lonza Houston, Inc. and Pinchal and Company Tax Abatement
consent of the City. The Companies shall provide the City written notice
of any assignment, sale, change of control or similar transaction pursuant
to this section as soon as possible and in no event not later than thirty (30)
calendar days following such event
g. Force Majeure. Neither party shall be required to perform any
obligation under this Agreement or be liable or responsible for any Toss or
damage resulting from its failure to perform so long as performance is
made impossible by force majeure or acts of God, including but not limited
to strikes, lockouts or labor shortages, embargo, riot, war, revolution,
terrorism, rebellion, insurrection, flood, natural disaster, interruption of
utilities from external causes. If the force majeure only delays
performance, then the Parties shall not be relieved of the duty to perform
their obligations under this Agreement but shall have additional time equal
to said delay to perform.
h. Notice. All notices, requests, demands and other communications
will be in writing and will be deemed given and received (i) on the date of
delivery when delivered by hand or via electronic mail, (ii) on the following
business day when sent by confirmed simultaneous telecopy and (iii) on
the following business day when sent via overnight courier (e.g., Federal
Express).
23. AGRICULTURAL VALUATION: It is understood and agreed by the City
and the Companies 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 the Companies 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.
24. CITY AUTHORIZATION: This Agreement was authorized the City
Council at its council meeting on the 12th day of October, 2015, authorizing the City
Manager to execute the Agreement on behalf of the City.
16
City of Pearland, Lonza Houston, Inc. and Pinchal and Company Tax Abatement
Witness our hands this 5+1‘ day of 3.1311lar i , 2014
ATTEST:
By:
Darrin M. Coker
City Attorney
THE STATE OF TEXAS
COUNTY OF BRAZORIA
CITY
By:
Pear on
ity Man .ger
BEFORE ME, the undersigned Notary Public, on this day personally appeared
Clay Pearson, 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 % DAY OF
).WAA.A-A,� , A.D., 2011
o,.MARIA E. RODRIGUEZ
b NOTARY PUBLIC. STATE OF TEXAS
• * MY COMMISSION EXPIRES
Expies:Febniary 26,2017
a Notary IDM 1069221-7
NOTA UBLIC, STATE OF TF ; S
Printed Name: fl ij I Z
Commission Expires:
17
City of Pearland, Lonza Houston, Inc. and Pinchal and Company Tax Abatement
1
LONZA HOU TON, INC.
By:
THE STATE OF /exa5
COUNTY OF Et f,"1.1c`.
Ricardo .• -nez
Site Di -ctor
BEFORE ME, the undersigned Notary Public, on this day personally appeared,
Ricardo Jimenez, Site Director of Lonza Houston, 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 SEAL OF OFFICE THIS 11}1 DAY OF
ort b v , A.D., 2015.
f'' • 4 ROXANNE LUNA-LARSEN
$O:' * Notary Public, State of Texas
ri My Commission Expires
,;;� September 17, 2018
i2
NOTARY PUf�lr4£1 TATE OF TEXAS r ,,
Printed Name: O�Qyne' r1�' 1'SQv
t1- la
Commission Expires:
18
City of Pearland, Lonza Houston, Inc. and Pinchal and Company Tax Abatement
KIRBY/PEARLAND, LLC
By:
THE STATE OF L ExA..5
COUNTY OF P Akie-LS
rian McMackin
Vice President
BEFORE ME, the undersigned Notary Public, on this day personally appeared
Brian McMackin, Vice President of Kirby/Pearland, LLC, 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 144- DAY OF
lamm. , A.D., 2015.
�: ,,,; -, RUTH A HICKS
►•.;,:
Notary Public, State of Texas
My Commission Expires
```` April 28, 2018
NOTARY PUBLIC, STATE OF TEXAS
Printed Name: (LUT. h. !}ie.kS
Commission Expires: Of/ a _sn' Azia
19
City of Pcarland, Lonza Houston, Inc. and Pinchal and Company Tax Abatement
Exhibit "A"
PREMISES
13060776v.4
METES AND BOUNDS DESCRIPTION
11.0139 ACRES
LOCATED IN THE
JAMES HAMILTON SURVEY, A-876
HARRIS COUNTY, TEXAS
Being a tract or parcel of land containing 11.0139 acres of land or 479,764 square feet, located in the
James Hamilton Survey, Abstract 876, Harris County, Texas, Said 11.0139 acre tract being out of and a
part of a 18.065 acre tract of record in the name of Spectrum 86 Partners, L.P. in Harris County Clerk's
File (H.C.C.F.) Number 20060169567, said 11.0139 acre tract being out of and a part of Lots 55, 55-
1/2, 56 and 56-1/2, Block "F" of the Allison -Richey Gulf Coast Homes Subdivision of record in
Volume 3, Page 40 in the Map Records of Harris County (H.C.M.R.), Texas; Said 11.0139 acre tract
being more particularly described as follows (bearings based on said deed):
BEGINNING at a 5/8 inch iron rod found for the southwest corner of aforesaid 18.065 acre tract,
being the northwest corner of a called 0.6680 acre tract dedicated to the public for Right -of -Way
(R.O.W.) purposes in Film Code Number 640056, H.C.M.R., and being on the east R.O.W. line of
Kirby Drive (width varies);
THENCE, coincident the west line of aforesaid 18.065 acre tract and the east R.O.W. line of
aforesaid Kirby Drive, the following three (3) courses:
1. North 02 degrees 17 minutes 03 seconds West, a distance of 187.52 feet to a 5/8 inch
iron rod found;
2. North 07 degrees 28 minutes 43 seconds West, a distance of 165.68 feet to a 5/8 inch
iron rod found;
3. North 02 degrees 17 minutes 03 seconds West, a distance of 114.41 feet to a 5/8 inch
iron rod with "Gruller" cap set for the northwest corner of the herein described tract;
THENCE, through and across aforesaid 18.065 acre tract, North 87 degrees 25 minutes 57 seconds
East, a distance of 1,036.43 feet to a 5/8 inch iron rod with "Gruller" cap set for the northeast corner
of the herein described tract, being on the west line of a called 3.525 acre tract of record in the name of
the City of Pearland in H.C.C.F. Number Y173146;
THENCE, coincident the east line of aforesaid 18.065 acre tract and the west line of aforesaid 3.525
acre tract, South 02 degrees 10 minutes 59 seconds East, a distance of 467.00 feet to a 5/8 inch iron
rod found for the southeast comer of said 18.065 acre tract, being the southwest comer of said 3.525
acre tract and being on the north line of a called 2.500 acre tract of record in the name of Susie M.
Lorance in H.C.C.F. No. X977828;
THENCE, coincident the south line of aforesaid 18.065 acre tract and the north line of both
aforesaid 2.500 acre tract and aforesaid 0.6680 acre R.O.W., respectively, South 87 degrees 25 minutes
57 seconds West, a distance of 1,020.61 feet to the POINT OF BEGINNING and containing
11.0139 acres of land.
9
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PLAT OF SURVEY
BOUNDARY OF IMPROVEMENT
11.0139 ACRE (479,764 SQ. FT.) TRACT
OUT OF AND A PART OF
A 18.065 ACRE TRACT
H.C.C.F. No. 20060169567
LOCATED IN THE
JAMES HAMILTON SURVEY, A-876
HARRIS COUNTY, TEXAS
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Exhibit "B"
APPLICATION FOR TAX ABATEMENT IN THE CITY
13060776v.4
APPLICATION FOR TAX ABATEMENT IN THE
CITY OF PEARLAND
It is recommended that this application be filed at least 90 days prior to the beginning of construction or 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. 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 Pearland Economic Development Corp. President, 1200 Pearland Parkway,
Suite 200, Pearland, Texas 77581, 281.997.3000, uww.pearlandcdc.com. Please attach exhibits and additional
information.
Applicant Information
Name of Business: Lonza Houston, Inc. Date: 8/28/15
Address: 8066 El Rio St.
City: Houston State: TX Zip: 77054
Contact Person: Ricardo Jimenez Title: Site Director
Phone: 713-568-6190x4041 Fax: Email: ricardo.jimenez@lonza.com
LAKs Codes for primary business operations: 32541
Federal ID Number. 26-4761027
Does the Business file a consolidated tax return under a different tax Ill number?
If yes, please also provide that tax ID number: 22-2188958
What is your State of Texas tax ID number. 3-20394-1605-5
® Yea ❑ No
Is the contact person listed above authorized to obligate the Business?
® Yes ❑No
If no, please provide the name and title of a company officer authorized to obligate the Business:
1)
Business Information
Provide a brief description and history of the Business. Include information about the Business' products or services
and markets served.
Lonza Houston is a contract manufacturing organization focused on the manufacture of viral -based
therapeutics. Lonza Houston is a wholly-owned subsidiary of the Lonza Group established in 1 897 and is
headquartered in Basel, Switzerland. The Lonza Houston was acquired by the Lonza Group in August of
2010. The Lonza Houston facility manufactures clinical based therapeutics for the treatment of different
diseases.
Business Structure:
El Cooperative ® Corporation
❑ Partnership ❑ S -Corporation
❑ Limited Liability Company ❑ Not for Profit
❑ Sole Proprietorship
State of Incorporation: N/A Years in business: >100
Identify the Business' owners and percent ownership: Lonza Group
Annual Sales (Most Recent): $See company Annual report
Projected Total Sales: 'Year I: $0
Year 2: $0 Year 3: $0
How many employees arc currently employed by the Business including all locations, subsidiaries, divisions worldwide?
List the Business' Texas Locations and the Current Number of full-time equivalent FIE) Employees at each Location
(mcluding Pearland if applicable): Worldwide Lonza has 83 locations with 10,000 employees. Lonza Ilouston is the
only Texas location and employs 60 employees.
Current annual payroll of Pearland facility excluding any benefits (if applicable): $NA
Does the Business offer medical and dental insurance? ® Yes ❑ No
If yes, please describe. United Healthcare and Delta Dental insurance are offered to all full time employees.
Docs the Business offer a pension plan, 401(k) plan, and/or retirement plan? ® Yes ❑ No
If yes, please describe. A 401(k) is available for contribution. The company matches up to 6% of the
employees' contribution and also adds an additional 1% to the contributions.
Please provide a brief description of the Business' involvement in the community(ies) that it has locations. Lonza
encourages community participation and grants employees time for community activities.
Project Information
Location and legal description of the area to be designated as reinvestment zone (Provide map showing site and metes
and bounds descnption in attachment AS): +11.01 Acres comprised of HCAD Parcel Numbers: 1359850010001 &
1359850010003
Type of Business Project:
® New Location 0 Modernization of Existing Pearland Facility
O Expansion of Pearland Facility
Type of Facility:
® Manufacturing
❑ Regional Service
❑ Other Basic Industry
❑ Reg. Distribution Center
D Reg. Entertainment Center
Briefly describe the proposed project for which assistance is being sought. (Include project facility size, infrastructure
improvements, proposed products/services, any new markets, etc.)
An approximately 100,000 square foot facility is being designed to relocate the entirety of the Lonza Houston
business from its current location. The facility will consolidate the current operations housed in two non-
adjacent buildings into one building and allow for expansion. The facility will consist of office area, process
development laboratories, quality control laboratories, warehousing, and cleanrooms for the manufacture of
client products.
Has any part of the project started? ❑ Yes ® No
If yes, please explain.
Identify the Business' competitors. If any of these competitors have Pearland locations, please explain the nature of the
competition (e.g. competitive business segment, estimated market share, etc.) and explain what impact the proposed
project may have on the Pearland competitor. There are no competitors in the Pearland region. Current main
competitor in the US is SAFC in Carlsbad, CA.
Will any of the current Pearland employees lose their jobs if this project does not proceed in Pearland? (Existing
Pearland Companies only) ❑ Yes ® No
If yes, please explain why and identify those jobs as "retained jobs" in the Project Jobs section.
Is the Business actively considering locations outside of Pearland? ® Yes 0 No
If yes, where and what assistance is being offered?
Lonza is considering several sites in the Houston area. Lonza has been working with the Greater Houston
Partnership to identify potential sites.
Will any State or Federal Permits be needed for the project? ❑ Yes ® No
If yes, please describe each and current time -frame for receiving each?
Will the project be seeking LEED certification? 0 Yes ® No
If yes, what level of certification is being sought?
Project Jobs
List the jobs that will be created and/or retained as the result of this project. (A retained job is an existing job that would
be eliminated or moved to another location if the project does not proceed in Pearland.) For jobs to be created, include
the starting and final hourly wage rate. For retained jobs, include the current hourly wage rate.
Is the hourly wage rate based on a 40 hour work week, 52 weeks per year? ® Yes ❑ No
If no please explain:
FuIl-Time CREATED Jobs
(Add additional rows as needed)
Job Title/Classification
Number of
CREATED
Jobs
Starting Wage
Wage at End of
year Three
Manufacturing
26
$72,000
$
Quality Assurance
13
$67,000
$
Quality Control
18
$59,000
$
Process Development
19
$81,000
$
Administration
10
$95,000
$
Facility Support
11
$70,000
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
Total RETAINED Jobs
$
$
$
$
$
$
$
$
Total CREATED Jobs
97
$$72,000
$
Full -Time RETAINED Jobs*
(Add additional rows as needed)
Job Title/Classification
Number of
RETAINED Jobs
Current Wage
$
$
$
$
$
$
$
$
$
$
$
$
$
$
Total RETAINED Jobs
$
*Existing jobs based in Pearland
Tax Abatement Information
Description of eligible improvements (real property) to be constructed including fixed equipment fixed equipment,
buildings, parking lots, etc (Provide detail in attachment A6):
1) Improvements of $49 million consisting of
a) One concrete tilt wall building totaling 100,000 sq. ft. The facility will consist of office area, process
development laboratories, quality control laboratories, warehousing, and cleanrooms for the manufacture of
client products. b) 11 acres of land accommodating the building, parking, and landscaped areas.
Description of ineligible property to be included in project, including inventory and personal property: Laboratory
equipment, dean rooms, furniture fixtures and other equipment
The proposed reinvestment zone is located in:
County: Harris
Drainage District Harris County Flood Control
School District Houston ISD
College District: Houston Community College
Other Taxing Jurisdictions: Harris County Hospital District, Harris County Education Department, Port of
Houston Authority, City of Pearland, Lower Kirby Management District
What is the parcel(s) tax identification number(s)?: 0451800000170 Lonza will be acquiring a portion of this parcel
Tax Abatement Requested: % of eligible property for a term of years (or)
Requesting staggered tax abatement terms as follows: 10 -year real property tax abatement. The following percentages and
terms apply (100% for year 1-3, 75% for years 4-6, and 50% for years 7-10).
Is the applicant seeking a variance under Section 3 (f) of the Guidelines: Yes ❑ No
If yes, attached required supplementary information in attachment A8.
Has company made application for abatement for this project by another taxing jurisdiction or nearby counties:
Yes ❑No®
If yes, provide dates of application, hearing dates, if held or scheduled, name of jurisdictions and contacts, and
letters of intent
Construction Estimates
Commencement Date:
Construction Man Years:
Completion Date:
Peak Construction Jobs:
Dec 2015 If Modernization
Estimated Economic life of Existing Plant in years:
May 2017 Added Economic Life from Modernization in years:
20 APPRAISED BASE VALUE ON SITE
ESTIMATED VALUE OF NEW
VALUE ADDED
Land
$1,438,890
Land
$2,011,110
Building and Improvements
$
Fixed Improvements
$10,785,000
Fixed Equipment
$
Fixed Machinery Equipment
$
Personal Property
$
Personal Property
$28,900,000
Inventory
$
Inventory
$
Total of Pre-existing Value
$
Total of New Value Added
$41,696,110
Total Value of Pre-existing and New Value
$1,438,890
Project Budget
AMOUNTS BUDGETED
Use of Funds
Cost
Source
Commitment Status
Land Acquisition
$3,450,000
Creed/Pinchal
LOI Signed
Site Preparation
$1,350,000
Creed/Pinchal
Cost of Utilities to Site
$500,000
Creed/Pinchal
Building Acquisition
NA
Building Construction
$8,935,000
Creed/Pinchal
Building Remodeling
*28,900,000
Lonza
Project approved
Machinery & Equip.
Included above
Lonza
Computer Hardware
Included above
Lonza
Computer Software
Included above
Lonza
Furniture & Fixtures
Included above
Lonza
Working Capital
$5,767,000
Lonza
Project approved
Moving Expenses
$400,000
Lonza
Project approved
Job Training
$100,000
Lonza
Project approved
TOTAL
$49,402,000
Does the Business plan to base the facility? ❑ Yes ® No
If yes, please provide the Annual Base Rent Payment (lease payment minus property taxes, insurance, and
operating/maintenance expenses) and the length of the lease agreement
Financial assistance is need -based, please explain why assistance is needed: Lonza is considering several sites in the
Houston area. Assistance is needed to off -set the cost of property and development. Without those incentives
other competing sites are more economical.
Any recipient of tax abatement is expected to provide security to the City. The security will be exercised, when
necessary, due to non-performance. In addition to a lien and/or mortgage, personal guarantees are expected for
businesses not publicly traded, and corporate guarantees are expected when the business recipient has a parent (or
holding) company. What security will be offered to secure financial assistance and describe what seniority or position
the City will have on any lien or mortgage? Lonza will provide a Promissory Note
Attachments
Please attach the following documents:
Al Completed Economic Impact Data Sheet (If requested)
A2 Business Plan (If requested)
A3 Copy of the most recent payroll report for one pay period must be in Excel format and include the following
information:
• Company name, date of payroll and source of payroll information
• Employee name and/or employee identification number
• Current hourly wage - do not include bonuses or other benefit values
• Indicate if the employee is full time (40 hours per week, 52 weeks per year) or part time.
A4 Financial Information
• Audited profit and Toss statements and balance sheets for past three year -ends;
• Current YTD profit and loss statement and balance sheet; and
• Schedule of aged accounts receivable;
• Schedule of aged accounts payable; and
• Schedule of debts.
A5 Map showing boundaries of proposed site.
A6 Statement explaining general nature and extent of the project, describing existing site and improvements;
describe all proposed improvements and provide a list of all improvements and equipment for which
abatement s requested.
A7 Proposed timeline for undertaking and completing the planned implements.
A8 Variance Request (if applicable)
Certification & Release of Information
I hereby give permission to the City of Pearland and the Pearland Economic Development Corporation (PEDC) to
research the Business' history, make credit checks, contact the Business' financial institutions, insurance carriers, and
perform other related activities necessary for reasonable evaluation of this application.
I understand that all information submitted to the City and PEDC related to this application is subject to Texas Public
Information Act.
I understand this application is subject to final approval by the City of Peadand City Council and the Project may not be
initiated until final approval is secured.
I understand that the City reserves the right to negotiate the financial assistance. Furthermore, I am aware that tax
abatement is not available until an agreement is executed within a reasonable time period following approval.
I certify the Business has not, within the last five years, been cited or convicted for violating any state or federal statutes,
rules, and regulations, including environmental, worker safety and immigration regulations, or, if such violations have
occurred, that there were mitigating circumstances or such violations did not seriously affect public health or safety or
the environment.
I hereby certify that all representations, warranties, or statements made or furnished to the City and PEDC in
connection with this application are true and correct in all material respect. I understand that it is a violation under Texas
law to engage in deception and knowingly make, or cause to be made, directly or indirectly, a false statement in writing
for the purpose of procuring economic development assistance.
For th .Business:
v t
signature
Name and Title (typed or printed)
Date
INSTRUCTIONS
Applicants and projects must meet the requirements established by the City of Pearland Guideknes and Criteriafor Granting
Tax Abatement in a Reinvestment Zone found in Resolution No. R2011-12 (attached) in order to receive positive
consideration. Section 2 of the Guidelines, for example, sets out regulations governing eligible facilities, eligible and
ineligible improvements, terms and economic qualifications. Conformance with all sections, however, is required for
eligibility.
APPLICANT INFORMATION
The taxing unit may consider applicant financial capacity in determining whether to enter into an abatement agreement.
Established companies for which public information is available, or the wholly owned businesses of such companies,
should include with the application a copy of their latest annual report to stockholders. Other applicants and new
companies should attach a statement showing when the company was established, business references (name, contact
and telephone number of principal bank, accountant and attorney) and may be required to submit an audited financial
statement and business plan.
PROJECT INFORMATION
Only facilities listed in Section 2(a) of the Guideknes may receive abatement without applying for a variance. Check
guideline definitions in Section 1 to see if project qualifies.
TAX ABATEMENT INFORMATION
Estimated Appraised Value on Site - The value as of January 1 immediately preceding abatement should be the value
established by the Appraisal District. If the applicant must estimate value because the taxable value is not known or is
combined with other properties under a single tax account, please so state. Projections of value should be a "best
estimate" based on taxability in Texas. The projection of project values not abated should include personal property and
ineligible project -related improvements such as office space in excess of that used for plant administration, housing, etc.
EXHIBIT "C"
FORM OF ANNUAL EMPLOYMENT COMPLIANCE VERIFICATION
13060776v.4
PEARLAND
ECONOMIC DEVELOPMENT CORPORATION
ECONOMIC CORPORATION
CITY OF PEARLAND
TAX ABATEMENT ANNUAL INVESTMENT AND EMPLOYMENT
COMPLIANCE VERIFICATION
Verification should be submitted to the Pearland Economic Development Corporation President, 1200 Pearland
Parkway, Suite 200, Pearland, Texas 77581, 281.997.3000, www.peadandedc.com. Please attach exhibits and additional
information.
Company Information
Name of Business: Lonza Houston
Address:
City: State:
Contact Person:
Phone: Fax:
Title:
Email:
Annual Compliance Verification
Date:
Zip:
Please check the box that applies:
❑ First Time Filing
❑ Subsequent Filing
If subsequent, date last compliance submitted:
Report Covers Period: Begin Date: End Date:
This is compliance of 10.
1
Employment -Position Information
\11 positions must be full-time (2,000 hours or more annually) and permanent, with the Company.
1. Total Number of Employment Positions Reported (previously certified and new):
2. Total Number of Employment Positions Previously Certified:
3. Total Number of New Employment Positions Submitted for Certification (line 1 — line 2):
4. Total Payroll for all Employment Positions Reported this Claim Period:
5. Average annual gross compensation at this Company/Project Facility (line 3/line 4):
Did the Company meet the "Job Target" for this reporting period? 0 Yes ❑ No
If no, please explain why:
Does the Company provide medical and dental benefits to all employees? 0 Yes 0 No
Investment Information
1. Total new value previously certified:
2. Total new value submitted for certification this claim period:
3. Total value reported (previously certified and new line 1 and 2):
Generally describe the improvements existing as of December 31 of the preceding year?
Did the Company install or construct all improvements before the Improvements Completion Date? 0 Yes 0 No
If no, please explain why:
TAXABLE VALUE ON SITE
20 ORIGINAL
BASE VALUE
TAX
YEAR 20_
TOTAL INCREASE
OVER 20_ BASE
Land
$1,438,890
$
$
Building and Improvements
$
$
$
Fixed Equipment
$
$
$
Personal Property
$
$
$
Inventory
$
$
$
Total Value
$
$
$
Please attach the Business Personal Property Rendition form submitted to rhe Appraisal District.
2
Attachments
Please attach the following documents:
Al Employment Verification
A2 Certified copy of the appraised and settled value of the Improvements as shown by the appropriate Central Appraisal
District supported by all correspondence, renditions, appeals or contests and settlement of appraised value and shall
provide appropriate back-up data for the Improvements exclusive of other investments made at the Premises.
A3 Business Personal Property Rendition of Taxable Property Form
Certification
I certify the appraised value of the improvements as defined in our agreement with the City of Pearland.
I certify the Business has not, within the reporting period, been cited or convicted for violating any state or federal
statutes, rules, and regulations, including environmental, worker safety and immigration regulations
Under penalty of perjury, I declare that the information in this document and any attachments are true and correct to the
best of my knowledge and belief.
For the Business:
Signature Date
Name and Title (typed or printed)
3
ANNUAL EMPLOYMENT COMPLIANCE VERIFICATION
Job Certification Period: January 1,
ABC Company
114 Oak Drive
Bluebonnet, Texas 77777
ABC Company, Inc.
Project Approved: 10/23/98
2000 through December 31, 2000
Job No.
Position Title
Social
Employee
Wages
Hours
Date Hired to
City of
Security
Name
During Claim
Worked
Position/Date
Pearland
Number
Period
During Claim
Left Position
Resident
Period
PREVIOUSLY CERTIFIED JOBS (updated):
001 Division ###-##-#### Dennis
Director Director
002 Office
Manager
002A
###-##-####
###-##-####
NEW JOBS THIS CERTIFICATION:
003 Sales ###-##-####
Manager
004 Print Shop ###-##-####
Manager
$68,987
2,318
09/01/98 to
Present
Mary Worker $15,236 1,200 01/15/98 to
8/31//98
Lindsey $12,008 900 9/1/98 to
Sellsmith Present
Delores
Incharge
$29,695 2,080 09/01/99 to
Present
Adam $32,450 2,056
Typeset
Total Jobs Created: 4
Total Payroll: $###,###
Vacant Positions: 0
TOTAL # OF JOBS ON THIS PAGE 4
PAGE # 1 of 1
TOTAL # OF JOBS ON THIS CLAIM 4
4
09/01/99 to
Present
N
Y
Y
N
Y
EXHIBIT "0"
APPLICATION FOR PROPERTY TAX ABATEMENT EXEMPTION
FORM 11.28
13060776v.4
Harris County Appraisal District
Office of the Chief Appraiser/Abatements
P. 0. Box 920975
Houston, TX 77292-0975
(713) 957-5294
Form 11.28 (11/2013)
Application for Property Tax Abatement
Exemption for
Tax Year
This application covers property you owned on January 1' of this year. Be sure to attach any additional documents requested. File this
iPR(tc7kOf1ng address above. The distnct is located at 13013 Northwest Freeway, Houston, Texas 77040.
GENERAL INSTRUCTIONS: This application is for use
§11.28. You must furnish all information and documentation
APPLICATION DEADLINES: You must file the completed
1 and no later than April 30 of the year for which you are
ANNUAL APPLICATION REQUIRED: You must apply for
exemption.
OTHER IMPORTANT INFORMATION
Pursuant to Tax Code §11.45, after considering this application
request additional information from you. You must provide
the application is denied. For good cause shown, the chief
additional information by written order for a single period
in claiming property tax exemptions pursuant to Tax Code
required by the application.
application with all required documentation between January
requesting an exemption.
this exemption each year you claim entitlement to the
and all relevant information, the chief appraiser may
the additional information within 30 days of the request or
appraiser may extend the deadline forfumishing the
not to exceed 15 days.
Step 1. Proyido.Name and Mailing Address of Property Owner and Itdsntity of Porson Preparing Application
Name of Property Owner
Mailing Address
City, State, ZIP Code
Phone (area code and number)
0 Corporation 0 Other (Specify):
Property Owner is a(n) (check one): • Individual In Partnership
Name of Person Preparing this Application Title
Driver's License, Personal I.D Certificate. or
Social Security Number "
If this application Is for an exemption from ad valorem taxation of property owned by a
with a federal tax identification number, that number may be provided here in lieu of a
personal identification certificate number, or social security comber
' Unless the applicant is a charitable organization with a federal tax identification number,
or soca) security account number is required. Pursuant to Tax Code Section 11.48(a),
account number provided in an application for an exemption filed with a chief appraiser
mstgsaf* other than an employee of the appraisal office who appraises property, except
eegaaiteeeral tax Identification number, the applicant may provide the organization's federal
ISlmlthiR4gOmber, or social secunty account number.
charitable organization
driver's license number
the applicant's driver's license number, personal Identification certificate number.
a driver's license number. personal identification certificate number, or social secunty
is confidential and not open to public Inspection. The inicrmation may not be
as authorized by Tax Code Section 11.48(b). If the applicant is a charitable
tax identification number in lieu of a driver's license number personal
Step 2: Describe the Property for Which You are Seeking an Exemption
If you applied last year and nothing has changed, and/or your agreement(s) were not modified, slip to the renewal section.
Legal description of property (Reinvestment Zone) where tax -abated property is or will be located.
Street Address, City, State, and ZIP Code
HCAD Account Number(s) for abated properly
Step 3. List the Taxing Units that have Agreed to Abate your Taxes and Attach Complete, Fully -Executed Copies of the
Abatement Agreement Including Any Amendments for each Unit
FOR EACH TAXING UNIT IDENTIFIED, ATTACH COPIES OF ABATEMENT
AGREEMENTS.
Application for Property Tax Abatement Exemption
Step 4. Answer these Questions About the Abatement(s)
Are the terns and duration of each taxing unit's agreement different or Identical?
• Different • Identical
If different, please copy this form for each taxing unit and complete Step 4 and
In the area where you listed the taxing units, please circle the taxing unit that you
If identical, please describe the nature of the abatement agreements for this year
0 Lump sum exemption of $
the attached Supplemental Abatement Application Questionnaire for each unit.
are summarizing.
by completing the following
abatement. Give dolar value to be exempted this year.)
I Yes II No
El Yes • No
• Percentage exemption of 'h
• Other (Attach a statement describing the method of calculating
Does the agreement abate taxes on personal property?
Are you in compliance with the agreement?
If "No', attach a statement explaining the reason for non-compliance.
Step 5. Read, Sign and Date Application; Complete the Attached Supplemental Abatement Application Questionnaire.
If you applied last year and nothing has changed, skip Step 6 (this step),
By signing this application, you certify that the Information provided
and belief.
sign the Renewal below, and complete the attached questionnaire.
in this application Is true and correct to the best of your knowledge
sign
here
Authorized Signature
Date
On behalf of (name of organization)
Printed Name
Title
RENEWAL of Existing Exemption
I certify that the information given in the application filed for tax
knowledge and belief.
sign
here
year is still true and correct to the best of my
Authorized Signature Date
Printed Name Title
On behalf of (name of organization)
If you make a false statement on this application, you could be found guilty of a Class A misdemeanor or a state Jail
felony under Section 37.10., Penal Code.
Paps 2
❑ Construction In Progress (give beginning and projected compiellon d;
rejected Completion Dale
(11/2013)
Supplemental Abatement Application Questionnaire for Tax Year
This information is needed so that the taxing units can properly monitor your abatement agreement. Rather than sending you
the supplemental questionnaire after you file your initial application, we are including it with the application. Please take the
time to provide the answers below.
Owner's Name Taxing unit(s) rAr. or individual unit name per copy of tNs page)
1. Please list taxing units that have agreed to abatement agreement amendments. if any, that are first -effective for this year.
a. b. c.
2. Please indicate the percentage or amount of exemption that applies to your property in each of the following years (for example, if your
abatement begins in 2003 and entitles you to 100% for the first three years, 50% in the fourth year, 25% in the fifth year and none thereafter,
you would put 2003-100%; 2004-100%; 2005-100%; 2006-50% and 2007-25%).
1004 2005 2006 2007 2008 2009
2014
2015
2016
2017
2018
2019
3. Describe the current construction status for the project.
2010
2020
2011
2021
0 Construction Has Not Begun (give projected start and completion dates)
Projected Start Dale
❑ Construction Complete (give completion date)
les)
Date Begun
Completion Date
2012 2013
2022 t 202
Projected Completion Date
4. Considering only items in the abatement agreement investment budge that were identified as being subject
to abatement. 4a. What is the total budgeted amount stated in the agreement? 4a. $
4b. For those items that were constructed or installed, j;iefore the end of the construction phase defines(
in the agreement what total expenditure was actually made prior to this year? 4b. $
6. Did any of the property, considered in the answer to question 4, receive a Federal. State, or Local
non -abatement exemption (pollution control exemption, for example) in the previous and/or current year? 5. Yes❑ No 0
5a. If 'Yes', attach an additional page to this form that provides a schedule of such property for each tax
year involved, showing the exemption amount for each item.
6. Has the facility begun operation? 6. Yes 0 No ❑ 6a. If "Yes', operation start date'
7. Does your abatement agreement(s) require the annual rendition of all personal property (-PP') in the
reinvestment zone (via reference to Texas Tax Code Chapter 22 or an explicit statement)? 7. Yes ❑ No 0
7a. If 'Yes-, specify the applicable appraisal district PP account numbers
8. Job Creation and Retention at the Facility per Abatement Agreement
a. Number of lobs required by agreement for prosect this year.
1) Permanent, Full -Time Employees
Added
2) Part -Time Employees
Retained Total
(Added + Retained)
Not Stated ( )
3) Contract Workers, Dkect
4) Contractor -Provided Workers
b. Actual project employee counts on January 1 of this year. (per your Texas Workforce Commission fourth quarter (December month) fling for 2013 for
permanent, full-time and part-time employees)
1) Permanent, Full -Time Employees
2) Pert -Time Employees
3) Contract Workers, Direct
4) Contractor -Provided Workers
Added
4—
Retained
Total
c. If your agreement has addlttonal categories of job retention and/or creation, either at the fatuity or elsewhere, attach a letter to this form providing 8a.
and 8b. information for each additional category.
I certify
this
Information
Is true and
correct.
Signature
Name (printed)
Title Phone
E -Mail Address
Date
Fax Number
Company Name (if different from Owner's Name above)