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2016-025 - Approving a Tax Abatement Agreement with Potters Industries, LLCRESOLUTION NO. 2016 -025 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS; APPROVING AND AUTHORIZING A TAX ABATEMENT AGREEMENT WITH POTTERS INDUSTRIES, LLC; MAKING OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND DECLARING AN EFFECTIVE DATE. WHEREAS, the City Council of the City of Paris has been presented a proposed agreement by and between the City of Paris, Texas and Potters Industries, LLC, providing for a commercial and industrial tax abatement for certain improvements, a copy of which is attached hereto as Exhibit "1" and incorporated herein by reference, hereinafter called "Agreement "; and, WHEREAS, the City Council of the City of Paris, Texas, did heretofore, on the 11th day of January, 2016, in Resolution No. 2016 -003, reaffirm its election to be eligible to participate in tax abatement agreements authorized by the Property Redevelopment and Tax abatement Act, Texas Government Code Chapter 312, et seq. (the Act "), in order to maintain and enhance the commercial and industrial economic and employment base of the Paris area for the long term interest and benefit of the City and its citizens; and, WHEREAS, under the Act, the designation of an area as an Enterprise Zone also constitutes designation of the area as a Reinvestment Zone (a "reinvestment zone ") within which local ad valorem property taxes may be abated; and pursuant to the 2010 Census, the Property is included within an Enterprise Zone, as is shown in a document published by the Office of the Governor of the State of Texas in Exhibit A to the Agreement; and WHEREAS, upon review and consideration of the Agreement, and all matters attendant and related thereto, the City Council is of the opinion that the terms and conditions thereof meet the Guidelines and Criteria for Tax Abatement and should be approved, and that the Mayor should be authorized to execute it on behalf of the City of Paris, Texas. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS, THAT: Section 1. The findings set out in the preamble to this resolution are hereby in all things approved. Section 2. That the terms of the Tax Abatement Agreement and the property the subject thereof meet the City's Guidelines and Criteria for Tax Abatement adopted by the City of Paris by Resolution No. 2016 -003. Section 3. That the terms and conditions of the proposed Agreement attached hereto as Exhibit "A ", having been reviewed by the City Council of the City of Paris and found to be acceptable and in the best interests of the City of Paris and its citizens, be, and the same are hereby, in all things approved. Section 4. That the Mayor is hereby authorized to execute the Agreement and all other documents in connection therewith on behalf of the City of Paris substantially according to the terms and conditions set forth in the Agreement attached hereto as Exhibit "1 ". Section S. That the planned use of the property the subject of the tax abatement will not constitute a hazard to public safety, health, or morals. Section 6. That this approval and execution of the agreement on behalf of the City is not conditioned upon approval and execution of any other tax abatement agreement by any other taxing entity. DULY PASSED AND APPROVED this 25th day of July 2016. ice Ellis, City Clerk AP ROVED AS TO FORM: Stephanie H. Harris, City Attorney Billie Sue Lancaster, Mayor Pro -Tem THE STATE OF TEXAS ) COUNTY OF LAMAR ) TAX ABATEMENT AGREEMENT This AGREEMENT (herein so called) is entered into by and between the CITY OF PARIS, TEXAS, a municipal corporation, situated in Lamar County, Texas, acting by and through its duly authorized officer whose signature appears below (hereinafter called "CITY "), and POTTERS INDUSTRIES, LLC, a Delaware limited liability company ( "OWNER "). WITNESSETH: WHEREAS, OWNER is the owner or lessee of the land described herein (the "PROPERTY "); and WHEREAS, OWNER shall own or lease the buildings and manufacturing equipment to be installed within such buildings on the PROPERTY located at 1601 19th St. NW, Paris, Texas 75460 (collectively referred to as the `IMPROVEMENTS ") with respect to which taxes will be abated under this AGREEMENT, and OWNER shall be responsible for paying the ad valorem property taxes assessed against the PROPERTY and the IMPROVEMENTS; and WHEREAS, the City Council of the City of Paris, Texas, did heretofore, on the 11 th day of January, 2016, in Resolution No. 2016 -003, reaffirm its election to be eligible to participate in tax abatement agreements authorized by the Property Redevelopment and Tax abatement Act, Texas Government Code Chapter 312, et seq. (the Act "), in order to maintain and enhance the commercial and industrial economic and employment base of the Paris area for the long term interest and benefit of the CITY and its citizens; and, WHEREAS, under the Act, the designation of an area as an Enterprise Zone also constitutes designation of the area as a Reinvestment Zone (a "REINVESTMENT ZONE ") within which local ad valorem property taxes may be abated; and pursuant to the 2010 Census, the PROPERTY is included within an Enterprise Zone, as is shown in a document published by the Office of the Governor of the State of Texas in Exhibit A, attached hereto and made a part hereof for all purposes; and WHEREAS, the contemplated uses of the IMPROVEMENTS situated on the PROPERTY are consistent with encouraging development of said REINVESTMENT ZONE in accordance with the purposes for which it was created and are in compliance with the CITY's policy on tax abatement incentives and the ordinance creating such REINVESTMENT ZONE adopted by the CITY and all applicable laws; and WHEREAS, the City Council of the City of Paris did heretofore, on the 11th day of January, 2016 in Resolution No. 2016 -003, pass and adopt guidelines and criteria governing tax abatement agreements to be entered into by the CITY as required by Section 312.002 of the Act, as amended (the "GUIDELINES "); 1 NOW, THEREFORE, The Parties hereto do mutually contract and agree as follows: I. Term 1.1 The effective date of this AGREEMENT is the 25th day of July, 2016, with tax abatement being effective from and after January 1, 2017, and terminating on December 31, 2026 (an abatement period of ten (10) years (the "ABATEMENT PERIOD ")). Said ABATEMENT PERIOD will terminate on December 31, 2026 regardless of when OWNER completes the IMPROVEMENTS described in Sections II and III hereinbelow or otherwise becomes eligible to receive the abatement set forth herein, which may result in the number of years in which tax is abated being fewer than ten (10) years. II. Area to be Improved 2.1 The IMPROVEMENTS consist of a new warehouse to be constructed upon the PROPERTY of OWNER and the addition and installation of manufacturing equipment and personal property described in Article III below within such buildings, all to be performed by OWNER at the OWNER'S plant in Paris, Lamar County, Texas. The IMPROVEMENTS shall be located upon and within the PROPERTY described in Exhibit B, attached hereto and made a part hereof for all purposes. The building being constructed as a portion of the IMPROVEMENTS are located as shown within the drawings also attached hereto as a part of Exhibit B. III. Improvements 3.1 The construction and installation of the IMPROVEMENTS will require engineering, design and construction work for the buildings where the new manufacturing equipment will be located, and the procurement and installation of the manufacturing equipment, utilities, electrical and mechanical facilities. The IMPROVEMENTS are being made to enable the OWNER to expand the production capacity of the low index glass production unit (previously installed in 2014 at OWNER'S Paris, Texas facility) by a minimum of 25% to meet anticipated demand. In addition to the construction of the new warehouse on the PROPERTY at a cost of $510,000.00, new machinery and equipment will be purchased and installed at PROPERTY, including a raw material silo, batch pit evacuation pump, furnace electric boost, four (4) bowl upgrades and two (2) new sifting lines, at an additional cost of $4,740,000.00. A total of approximately $5,250,000.00 will be spent by OWNER in making these IMPROVEMENTS to the PROPERTY. All such IMPROVEMENTS will be described in the CITY'S Certificate of Completion prepared after the completion and installation of such IMPROVEMENTS. The description shall be 2 furnished by OWNER to CITY in OWNER'S sworn report described in Section 11. 1, below and attached to CITY'S Certificate of Completion. The description shall also be filed with the Chief Appraiser of the Lamar County Appraisal District. Said Certificate shall be duly executed by the Mayor of the City of Paris in the form attached hereto as Exhibit C. OWNER agrees that the IMPROVEMENTS described herein shall be completed as follows: Construction of the warehouse and installation of the silo, batch pit evacuation pump and sifting tower referred to in Paragraphs 2.1 and 3.1 herein shall be completed by December 31, 2016; and Addition and installation of additional manufacturing equipment and personal property referred to in Paragraphs 2.1 and 3.1 will be completed by December 31, 2017; provided, that OWNER shall have such additional time to complete the IMPROVEMENTS as may be required in the event of "force majeure" if OWNER is diligently and faithfully pursuing completion of the installation of the IMPROVEMENTS. For this purpose, "force majeure" shall mean any contingency or cause beyond the reasonable control of OWNER including, without limitation, acts of God, or the public enemy, any natural disaster, war, riot, civil commotion, insurrection, governmental or de facto governmental action, unless caused by acts or omissions of OWNER, fires, explosions, accidents, floods, and labor disputes or strikes. The date of completion of the IMPROVEMENTS shall be reflected in the Certificate of Completion issued by the CITY, referred to above. In the event that OWNER completes the installation of additional manufacturing equipment and personal property referred to hereinabove and anticipated to be completed by the end of 2017 are in fact completed by the end of 2016, said improvements will also be subject to abatement beginning on January 1, 2017. IV. Consideration (Improvements) 4.1 The OWNER agrees and covenants that it will diligently and faithfully, in a good and workmanlike manner, pursue the completion of the IMPROVEMENTS. As a good and valuable consideration for this AGREEMENT, OWNER further covenants and agrees that all construction of the IMPROVEMENTS will be in accordance with all applicable state and local laws, codes and regulations or OWNER will procure a valid waiver thereof. In further consideration, OWNER shall thereafter, from the date a Certificate of Completion is issued, or that the IMPROVEMENTS are completed as agreed, until the expiration of this AGREEMENT, continuously operate and maintain the PROPERTY, including the IMPROVEMENTS, in the conduct of its normal course of business. V. Consideration (Jobs) 5.1 OWNER represents that it employs full -time employees to work at the PROPERTY. OWNER currently employs forty -one (41) full -time employees, and OWNER 3 agrees to retain at least forty (40) full -time equivalent employees for the duration of this Agreement. An FTE is: (1) an individual working 40 hours per week in a job defined above; (2) a number of part-time jobs where the hours worked in each such job is less than 40 hours per week, made available by one employer and added together to total 40 hours per week. For example, fourteen (14) part-time jobs made available by one employer where all such part-time jobs added together require a total of 380 hours of work per week (but no such part time job requires 40 hours of work or more per week) will equal nine and one -half (9.5) FTE jobs (380 hours divided by 40 hours per week equals 9.5). (3) FTE jobs do not require the employees to receive benefits from the employer. VI. Default 6.1 If (a) the IMPROVEMENTS for which an abatement has been granted are not completed in accordance with this AGREEMENT or the expenditure for the IMPROVEMENTS does not meet the amount required herein; or (b) OWNER fails to retain an average of at least forty (40) full -time equivalent employees for each year during the term of this AGREEMENT, said average to be calculated by adding the total number of employees for each month of the year as reported on the Texas Workforce Commission Employer's Quarterly Report and dividing that total by 12; or (c) OWNER allows its ad valorem taxes owed the CITY to become delinquent and fails to timely and properly follow the legal procedures for protest or contest of any such ad valorem taxes; or (d) OWNER breaches any of the other material terms, provisions or conditions of this AGREEMENT, then this AGREEMENT shall be in default. If OWNER defaults in its performance of either (a), (b),(c) or (d) above, then the CITY shall give the OWNER written notice of such default and if the OWNER has not cured such default within sixty (60) days of said written notice, this AGREEMENT may be modified or terminated by the CITY. Notice shall be in accordance with Section 13.3. As liquidated damages in the event of default, and in accordance with the requirements of Section 312.205 (a)(4) of the Tax Code of the State of Texas, all taxes which otherwise would have been paid to the CITY without the benefit of abatement, together with interest to be charged at the statutory rate for delinquent taxes as determined by Section 33.01 of the Property Tax Code of the State of Texas, with all penalties permitted by the Property Redevelopment and Tax Abatement Act and the Tax Code of the State of Texas, shall be recaptured and will become a debt to the CITY and shall be due, owing, and paid to the CITY within sixty (60) days of the expiration of the above - mentioned applicable cure period as the sole remedy of the CITY, subject to any and all lawful offsets, settlements, deductions, or credits to which OWNER may be entitled. The parties acknowledge that actual damages in the event of default and termination would be speculative and difficult to determine. VII. Real and Personal Property Tax Abatement 7.1 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 the ad valorem property taxes assessed upon the IMPROVEMENTS and otherwise owed to the CITY shall be abated during the Abatement Period set forth in this AGREEMENT. Said abatement shall be an amount equal to one hundred percent (100 %) of the taxes assessed upon the increased value of the 4 IMPROVEMENTS over the value in the year in which this AGREEMENT is executed, other than inventory and supplies, not previously located on the property in accordance with the terms of this AGREEMENT and all applicable state and local regulations or valid waiver thereof, provided that the OWNER shall have the right to protest or contest any assessment of the PROPERTY and said abatement shall be applied to the amount of taxes finally determined to be due as a result of any such protest or contest. For the purposes of this AGREEMENT, the initial value of the existing property of the OWNER that is not subject to tax abatement is the appraised value of the land, existing buildings and existing tangible personal property located upon the PROPERTY as of January 1, 2016, said amount being $4,660,850.00 (Base Year Value), the same consisting of $2,279,850.00 for Land and Buildings, and $2,381,000.00 for tangible personal property, with $17,700,000.00 of the existing tangible personal property consisting of property already abated through December 31, 2023 through a tax abatement agreement between CITY and OWNER dated June 24, 2013. The Abatement Period which is the subject of this AGREEMENT shall begin on January 1, 2017 and shall end on December 31, 2026 as set forth hereinabove in Section I. 7.2 The abatement granted herein shall be subject to and governed by the GUIDELINES, a copy of which is attached hereto as Exhibit D. OWNER shall comply with the requirements of Exhibit D in the performance of this AGREEMENT, save and except that, in the event of a conflict between the requirements of Exhibit D and this AGREEMENT, this AGREEMENT shall control. VIII. No Conflict of Interest 8.1 The OWNER represents and warrants that neither the PROPERTY nor the IMPROVEMENTS include any real or personal property that is owned or leased by a member of the Planning and Zoning Commission of the City of Paris, nor by a member of the City Council approving, or having responsibility for the approval of, this AGREEMENT. IX. Conditions 9.1 The terms and conditions of this AGREEMENT are binding upon the parties hereto and their successors and assigns. 9.2 It is understood and agreed between the parties that the OWNER, in performing its obligations hereunder, is acting independently, and the CITY assumes no responsibility or liability in connection therewith to third parties; and OWNER agrees to indemnify and hold harmless the CITY therefrom. It is further understood and agreed among the parties that the CITY, in performing its obligations hereunder, is acting independently, and the OWNER assumes no responsibility or liability in connection therewith to third parties and, to the extent permissible by law, the CITY agrees to indemnify and hold harmless the OWNER therefrom. X. Compliance Provisions 10.1 City's Right of Access to Records: The OWNER agrees that the CITY, its agents and employees, shall have the reasonable right of access to records concerning the OWNER'S investment in the IMPROVEMENTS for the purpose of conducting an audit of the project improvements and project costs. Any such audit shall be made only after giving the OWNER written notice at least fourteen (14) days in advance and will be conducted in such a manner as to not unreasonably interfere with the operation of the facility. Upon request, the OWNER will provide the CITY with a detailed Asset Report containing an itemized list of assets placed into service from the date of execution of this AGREEMENT to December 31, 2017, and annually thereafter. The Asset Report will provide the date on which the asset was capitalized, the acquisition amount, and the accumulated depreciation amount. At the CITY'S request, the OWNER will provide actual invoices to support the amounts shown on the Asset Report. 10.2 City Rights of Access to PROPERTY: The OWNER further agrees that the CITY, its agents and employees, shall have reasonable right of access to the PROPERTY to inspect the IMPROVEMENTS in order to insure that the construction of the IMPROVEMENTS is in accordance with this AGREEMENT and all applicable state and local laws and regulations or valid waiver thereof. After completion of the IMPROVEMENTS, the CITY shall have the continuing right to inspect the PROPERTY to insure that it is thereafter maintained and operated in accordance with this AGREEMENT during the term of the AGREEMENT. All inspections will be made only after giving the OWNER written notice at least seventy -two (72) hours in advance, and such inspections shall be conducted in such a manner so as not to interfere with the operation of the facility. Representatives of the CITY inspecting the PROPERTY and improvements shall be accompanied by one (1) or more representatives of the OWNER and shall sign an agreement promising to maintain the confidentiality of any information they obtain in connection therewith except for the purposes of assessing and collecting ad valorem taxes and verifying or enforcing compliance with this AGREEMENT. Said representative shall also be required to observe any facility rule and regulation applicable to the PROPERTY, including applicable safety and security rules. Nothing herein shall be construed as limiting the CITY'S ability to perform inspections including but not limited to health and safety inspections or to enter the PROPERTY which is the subject of this AGREEMENT. XI. Initial and Annual Reporting 11.1 The OWNER further agrees that it will, within thirty (30) days of completion of the IMPROVEMENTS, provide the CITY with a sworn report, written on OWNER'S letterhead and signed by a designated representative of OWNER, which contains the following information: (a) A copy of the printout from the Lamar County Appraisal District showing the market value of the PROPERTY prior to the construction of the IMPROVEMENTS; 6 (b) Detailed description of the IMPROVEMENTS; (c) A detailed description of any miscellaneous items of office equipment and the actual cost of such added office equipment; (d) A copy of or identification of plans and specifications of constructed improvements and the location of the same for inspection by CITY'S certification team; (e) A detailed list of and the actual cost of added machinery and equipment; (f) The actual cost of capital IMPROVEMENTS; and, (g) The date of substantial completion of the IMPROVEMENTS as defined in Section 3.1 hereof. 11.2 The OWNER further agrees that it will provide CITY with an annual, sworn report which shall certify, in writing, that it is in compliance with each applicable term of this AGREEMENT. Such annual report shall be furnished on the forms provided by the City and shall verify that OWNER has retained the minimum number of full -time equivalent employees at the facilities on the PROPERTY and that the IMPROVEMENTS the subject of this AGREEMENT remain on the PROPERTY and remain in operation. OWNER shall submit said annual reports by February 1St of each year during the term of this AGREEMENT. 11.3 In addition to the annual report required under Section 11.2 hereof, the OWNER further agrees that it will provide CITY a copy of its Texas Workforce Commission Employer's Quarterly Report within thirty (30) days of its filing of the same with the Texas Workforce Commission. 11.4 The reporting requirements and deadlines therefor set forth herein are an integral and material part of this AGREEMENT, and OWNER acknowledges that failure to timely submit any report or sworn statement required herein is a breach and default of this AGREEMENT as set forth hereinabove. OWNER further agrees to timely submit said reports and/or sworn statements without prompting by the CITY. 11.5 Owner shall submit the initial and annual compliance reports required to be made in this section via certified mail, return receipt requested, to: City of Paris c/o Office of the City Attorney P.O. Box 9037 Paris, Texas 75461 -9037 Alternatively, said reports may be made via hand delivery to the Office of the City Attorney at 125 S.E. 1 st St., Paris, Texas 75460. XII. Authority to Contract 12.1. This AGREEMENT was authorized by resolution of the City Council at its regularly scheduled meeting on the 25th day of July, 2016, authorizing the Mayor to execute the AGREEMENT on behalf of the CITY. 12.2 This AGREEMENT was entered into by OWNER pursuant to the authority granted to the authorized official whose signature appears below. 12.3. This AGREEMENT shall constitute a valid and binding AGREEMENT between the CITY and OWNER when executed in accordance herewith, regardless of whether any other taxing unit executes a similar agreement for tax abatement. XIII. Legal 13.1 No officer, official or agent of the CITY has the power to amend, modify or alter this AGREEMENT or waive any of its conditions or to bind the CITY by making any promise or representation not contained herein. 13.2 This AGREEMENT, except by operation of law, shall not be assigned or transferred by OWNER without the prior written consent of CITY, which consent shall be at the sole discretion of the CITY. 13.3 Any written notice required or permitted under the terms of this AGREEMENT (other than the reports required to be submitted under Section XI hereinabove) shall be given and be deemed to have been duly served if either (1) delivered in person, or (2) deposited certified mail, return receipt requested, postage prepaid in the United States mail, addressed to the designated representative of the respective parties which are designated as follows: OWNER: POTTERS INDUSTRIES, LLC c/o Allan Kressig, Plant Manager 1601 19th Street, NW Paris, TX 75460 CITY: CITY OF PARIS, TEXAS Attn: City Manager P. O. Box 9037 Paris, TX 75461 -9037 With a cony to: City Clerk, City of Paris, Texas (address same as above) 13.4 If any term or provision of this AGREEMENT shall be declared unconstitutional or void by any court of competent jurisdiction, the constitutionality and validity of the remainder of said AGREEMENT shall not be affected thereby, and to this end the terms and provisions of this AGREEMENT are declared to be severable. 13.5 This AGREEMENT sets forth the entire understanding between the parties, and any other understandings or agreements shall be canceled and superseded by this AGREEMENT upon the date of execution hereof. None of the terms of this AGREEMENT shall be waived, discharged, altered or modified in any respect, except by an Agreement in writing signed by both parties and specifically referring to this AGREEMENT. The captions in this AGREEMENT are included for convenience only and shall not be taken into consideration in any construction or interpretation of this AGREEMENT or any of its provisions. This AGREEMENT is performable in Lamar County, Texas, and shall be governed by, construed and enforced in accordance with the laws of the State of Texas. The provisions of this AGREEMENT shall apply to, bind and inure to the benefit of the CITY, OWNER, and their respective successors, and permitted assigns, if any. 13.6 Venue for any actions arising under this AGREEMENT shall lie exclusively in the courts of Lamar County, Texas, for any State Court action, and in the U.S. District Court for the Eastern District of Texas for any federal court action. WITNESS our hands this 25th day of July, 2016. ATTEST: Janice Ellis, City Clerk APPROVED AS TO FORM: Stephanie H. Harris, City Attorney THE CITY OF PARIS, TEXAS c_ By: Billie Sue Lanca4ter, Mayor Pro -Tem OWNER POTTERS INDUSTRIES, LLC. A Delaware limited liability company E (Name /Office) LIST OF EXHIBITS TO THIS AGREEMENT: A = 2010 Designation of Enterprise Zone which includes OWNER'S PROPERTY B = Legal Description of the PROPERTY and Drawings showing the building(s) and the location of the IMPROVEMENTS within them C = CITY'S Certificate of Completion D = CITY'S Guidelines and Criteria for Tax Abatements 10 O 0 N N V CL fifF A. 7 C) 'J CD mt > co co a 70 -5 x --o cr Zc min co 0 C) 0 0 U) w U) (1) C) a. T o- r- D b a -6 70 0 CD m co co j- co Pl Qa Ej o 7 7 t PP 0 Fu� County He 33-`� I;; rol P 1 41 st SI SlAf rr Wl 4" 0 Fu� County He 33-`� I;; rol P 1 U) Z, 5-0 ❑ 1 COUnty Ro ?4;'F' O EXH pC IT Ali rtl I'd O go cn J W W ''Mw Vl N 00'01'22• W 501.33' (CALLED S 00'00'00" E 501.50') o�N O � o Z o m U ym CD 6 CD A (�., O 1 qm 0 0 ;uD r-ggI .MR(q 00.0 S z Ot Co a f °o, qCA W Wes. 0, s c I y $ I I 1 m u r z d �PO � BUILDING 1 w �rl� opAbG s%MZ aao 00Z Y \ 'Fi 52 98 �P6 \ y I 1� - 9 p� mm gm 'A (A oo lcTr; N S \\ m — FARM TO MARKET ROAD NUMBER 79 -.— o ° N I'd O go cn J W W ''Mw Vl N 00'01'22• W 501.33' (CALLED S 00'00'00" E 501.50') o�N O � o Z o m U ym CD 6 CD A (�., O 1 —K �Z N 9 Of 9—. °o m �g - Q _rr 1 I � I+ w �I o I� I J c I $ J g H HH y Z� I Ny i J i7 qm 0 0 ;uD r-ggI o � z Ot Co a f °o, W Wes. 0, s c I —K �Z N 9 Of 9—. °o m �g - Q _rr 1 I � I+ w �I o I� I J c I $ J g H HH y Z� I Ny i J i7 qm 0 0 ;uD r-ggI o �go Ot Co a f °o, W Wes. 0, s c I I I 1 c I wm BUILDING 1 1 52 STATE HIGHWAY COMMISSION y I 1� - mnlc�� VOLUME DR LUME 272, PAGE 111 CALLED 1.188 ACRES y _ _ - ! 0 p � �' � m — FARM TO MARKET ROAD NUMBER 79 -.— _ - N j -- ° 100' RIGHT -OF -WAY WID1H I -- N — I \ rn e — w 3 EXHIBIT 8.247 Acres Lamar County, Texas John Herrington Survey A-436 July 2010 Being 8.247 acres of land situated within the corporate limits of the City of Paris, Lamar County, Texas, said 8.247 acres being part of the John Herrington Survey, Abstract Number 436, and a part of a called 8.496 acre tract of land conveyed from Flex- O -Lite Inc to Potters Industries Inc., on January 24, 2007 and recorded in volume 1851, page 172 of the Official Public Records of said county. The said 8.247 acres being more fully described by metes and bounds as follows: Beginning at a % inch capped iron rod set in the North line of Park Street and in the West right -of -way line of Farm To Market Road Number 79 (also known as 19th Street Northwest), from said rod a %s inch iron rod found at the Southeast corner of the aforementioned called 8.496 acre tract bears East 21.63 feet; Thence West (Reference Bearing), along the South boundary line of the aforementioned Potters Industries tract a distance of 693.49 feet (called 715.00 feet) to a % inch iron rod found at the Southwest comer of said Potters Industries tract, said rod also being the Southeast corner of a called 6.650 acre tract of land conveyed from Thomas E. and Frances L. Westbrooks to TBEI L.P. on October 5, 1998 and recorded in volume 819, page 210 of the Real Property Records of said county; Thence N 00 °01'22" W, along the West boundary line of the aforementioned Potters Industries tract and the East boundary line of the aforementioned TBEI L.P. tract a distance of 501.33 feet (called S 00 000' 00" E 501.50 feet) to a'' /z inch capped iron rod found; Thence N 67 °56'31" E, a distance of 54.40 feet (called S 68 100100" W 54.10 feet) to a %z inch capped iron rod set at the most northern Northwest comer of the aforementioned Potters Industries tract, said rod also being in the occupied South line of a railroad spur (no right of way, nor deed information found on railroad spur); Thence S 89 115'00" E, a distance of 647.78 feet (called N 89 115'00" W 668.00 feet) to a % inch capped iron rod set in the West right of way line of Farm To Market Road Number 79, from said rod a 2 inch diameter iron pipe found at the Northeast comer of the aforementioned called 8.496 acre tract bears S 89 015100" E a distance of 20.22 feet; Thence S 00 °48'21" W along the West right of way line of Farm To Market Road Number 79 a distance of 148.10 feet to a %: inch capped iron rod set at the beginning of a curve to the Left having a Central Angle of 01 049'05" and a Radius of 11,509.16 feet; Thence along said curve to the Left a distance of 365.23 feet, (chord bearing and distance of S 00'22'13 " W, 365.21 feet) to the Point of Beginning and containing 8.247 acres of land. I, KEVIN K- WHITLEY, REGISTERED PROFESSIONAL LAND SURVEYOR, #5892, STATE OF TEXAS, HEREBY CERTIFY THE ABOVE IS TAKEN FROM MEASUREMENTS MADE UPON THE GROUND, CONDUCTED BY ME AND COMPLETED ON JULY 14, 2010. o'i 51z' 10 NOTICE OF CONFRDENTIALTTY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OR ALL OF THE FOLLOWING INFORMATION FROM ANY INSTRUMENT THAT TRANSFERS AN INTEREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN TBE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER. WARRANTY DEED THE STATE OF TEXAS ) "OW ALL MEN BY THESE PRESENTS: COUNTY OF LAMAR THAT R, RONNY BOLTON and wife,, JODANN} BOLTON (herein called "grantors'), of the County of Lamar, State of Texas, for and in consideration of the sum of Ten ($10.00) and more Dollars cash to us in hand paid by POTTERS INDUSTRIES, LLC, A Delaware Limited Liability, receipt of which in &U is hereby acknowledged; have Granted, Sold and Conveyed, and by these presents do Grant, Sell and Convey unto POTTERS INDUSTRIES, LLC, A Delaware Limited Liability (herein calved "grantee"), of the County of Chester, State of Pennsylvania, when its mailing address is 300 Lindenwood Drive, Malvern, Pennsylvania 19355 -1740, in and to all those certain tracts or parcels of land in Lamar County, Texas described as follows: Being 5.52 acres of land located within the corporate limits of the City of Paris, County of Lamar, State of Texas, being a part of the John Herrington Survey, Abstract No. 436, and being a part of a called 8 acre tract of land conveyed from Bonnie Powers Talley to Ronny Bolton and wife, Joanna Bolton on October 26, 1994 and recorded as Tract 1 in Vol. 482, Page 332 of the Real Property Records of said County and State, and containing 5.52 acres of land; being more fully described in Exhibit "A" attached hereto and made a part hereof for all necessary purposes. The conveyance evidenced by this deed is made subject to the following, to the extent each affects the within described property or any part thereof: I. Any visible and apparent easements or roadways over or across subject property, the existence of which may not be of record. 2. Right of Way from Conrad Reisbach to State of Texas, dated March 22, 1947, of record in Volume 290, Page 577, Lamar County Deed Records. 3. Right of Way from Conrad Reibach et al. to Lone Star Gas Company, dated October 4, 1928, of record in Volume 226, Page 74, Lamar County Deed Records. 4. Right of Way from Bess Hall Dunlap et. al. to Lone Star Gas Company, dated September 28, 1929, of record in Volume 226, Page 261, Lamar County Deed Records. 5. Gas line, fence not on line, pond that protrudes on the adjacent lot, and all other matters as appcar on the survey by Kevin K Whitley RPLS No. 5892. 128725 -2015 Pages: 4 WD 12/18/2015 83r34:39 PM Byr cfarlag Lamar County, TX Russ Towers - Count Clark 129725 -2015 12/15/2015 03:34:39 PM Page 2 of 4 61 Reservation of mineral interest as set out in deed dated March 1, 1946, from C.H. Hall et ux to GJ. Rosser, recorded in Book 288, Page 152, Lamar County Deed Records. TO HAVE AND TO HOLD the within described premises, together with all and singular the rights and appurtenances thereto in anywise belonging unto POTTERS INDUSTRIES, LLC, A Delaware Limited Liability, its successors or assigns forever, and grantors bereby bind themselves, their executors, administrators, personal representatives , successors and assigns, to Warrant and Forever Defend, all and singular the said premises unto POTTERS INDUSTRIES, LLC, A Delaware Limited Liability, its successors and assigns, against every person whomsoever lawfully claiming or to claim the same, or any part thereof. WITNESS this 1--A-'day of 2015. RONNY B LTON JO; OLTON THE STATE OF TEXAS ) ACKNOWLEGEMENT COUNTY OF LAMAR ) THIS instrument was acknowledged before me on the day of -'�cen-3pr . 2015, by Ronny Bolton and wife, 7oAnn Bolton. AFTER RECORDING RETURN TO: Potters Industries, LLC 300 Lindenwood Drive Malvern, Pennsylvania 79355 -1740 0 i N WA H 11170._ 2 PREPARED IN THE LAW OFKCE OF- A.W. Clem, Attorney do The Moore Law Firm, L.L.P. 100 N. Main, Paris, TX 75460.4222 gl alovearnva C1n I awtmi7OAA �I ttcwl'EO rn m ,mnv�aana�xa� ( eua�xwrvwsm $8 I S 4 1` 4 129725 -2015 12/15/2015 03:34:39 PM Page 3 of 4 T m� U Z X- � o x �¢ w W N O U 0 I 92 din. 14 1 > Y I y I �C1 p diY W1H I 1 I i O *Oma� I ItV) ---------------- I a t d � I aR Fib m !;Ig 3 p, Via b yi p Vies C z8 nG < a p N 129725 -2015 12/15/2015 03:34:39 PM Page 4 of 4 1. Metes and Bounds Description 5.52 Acres Lamar County, Texas September 2015 Being 5.52 acres of l and located within the corporate limits of the City of Paris, County ofL,amar, State of Texas, being a part of the John Herrington Survey, Abstract Number 436, and being a part of a called 8 arse tract of land conveyed from Bonnie Powers Talley to Ronny Bolton and wife Joamr Bolton on October 26, 1994 and recorded as Tract 1 in volume 482, page 332 of the Real Property Records of said county. The said 5.52 acre tract fully described by metes and bounds as follows: Beginning at a % inch iron rod found at the Northwest comer of the aforementioned called 8 acre Bolton tract, and also at the Northeast corner of a called 5.739 acre tract of band conveyed from Paris Economic Development Corporation to Mark Cunningham on January 13, 2010 and recorded in Lamar County Clerk's Document Number 075598 -2010, and said rod being located in the South right of way line of Paris Street (no right of way dedication found); Thence N 88° 11'00" E, along the North line of the aforementioned called 8 acre Bolton hart and the South right of way line of Paris Street a distance of 669.75 feet (called 257 varas or 713.89 feet) to a %" capped iron rod set for comer at the most Northern Northeast comer of said called 8 acre Bolton tract, said rod also being the Northwest 000-mw of a tract of land conveyed from Paul Larldn and Linda Larkin to Joy Alridge Larkin and Boyd W. Larkin on August 29, 20M and recorded in volume 1005, page 52 of the Real Property Records, and from said rod an odd fence comer post found at the Northeast corner of said Larkin tract bears N 88'11'00° E, a distance of 100.71 feet; Thence S 04°20'07" E, along the common boundary liae of the aforencrttionel Larkin tract and the aforementioned called 8 acre Bolton tract, at a distance of 108.76 fed passing a bent 1 inch diameter iron pipe found at the Southwest corner of said Larkin tract, and continuing on for a total distance of 357.42 fed to a Y inch capped imn rod set in the South boundary line of said called 8 acre Bolton tract and in the North boundary line of a called 6.97 acre net of land conveyed from Rex Adams to Shirley F. Adams McMillan on July 29, 1995 and recorded in volume 543, page 106 of the Real Property Records, and from said rod a fence corner post found at the most Northern Northeast corner of said called 6.97 acre McMillan tract been N 886'49" E, a distance of 71.88 feet; Thence S 88°26'49" W, along common boundary line of the aforementioned called 8 acre Bolton tract and the aforementioned called 6.97 acre McMillan tract, a distance of 683.46 feet to a % inch iron rod found at the Southwest corner of said called 8 acre Bolton tract and at the Northwest comer of said called 6.97 acre McMillan tract, said rod also being in the Fast boundary line of the aforementioned tailed 5.739 acre Cunningham tract; Thence N 02°08'32" W, along the common boundary line of the aforementioned called 8 acre Bolton tract and the aforementioned called 5.739 acre Cunningham tract, a distance of 353.93 feet to the place of beginning and containing 5.52 acre of land. The Reference Bearing for the tract of land described hereon in NAD 1983 Texas State Plane Coordinate System Zone 4202, and a one page legal sized plat accompanies this metes and bounds description_ 1, KEVIN IC WI-IlTI.EY, REGISTERED PROFESSIONAL LAND SURVEYOR, #5892, STATE OF TEXAS, HEREBY CERTIFY TBE ABOVE IS TAKEN FROM MEASUREMENTS MADE UPON THE GROUND AND WAS COMPLETED ON SEPTEMBER 01, 2015. KEVIN K. WHIT LEY, RPI,.9, DA CERTIFICATE OF COMPLETION STATE OF TEXAS } COUNTY OF LAMAR } CITY OF PARIS } The City of Paris has included the property described in Exhibit A attached hereto into a Reinvestment Zone, and has executed a Tax Abatement Agreement with POTTERS INDUSTRIES, LLC, a Delaware limited liability company (the "company "), for certain improvements and other equipment (the "improvements ") to be installed at the Company's bead manufacturing operation located in Paris, Lamar County, Texas. Based on information provided by Company, City believes that the Company has complied with the terms of the Tax Abatement Agreement through the date of this Certificate. The City also believes, based on information provided by the Company, that the Improvements agreed to be built, installed and used have in fact been completed as provided for in the Tax Abatement Agreement. NOW, THEREFORE, the City of Paris authorizes that the property described in Exhibit A attached hereto shall receive a tax abatement during each year of the Tax Abatement Agreement, with tax abatement commencing in the year, , equal to 100% of the taxes assessed upon the increased value of the real and personal property of the Company located in Paris, Texas, over the value at which the property was last appraised on January 1St, 2013, which is the year in which the Tax Abatement Agreement was executed, as recited in the Tax Abatement Agreement. The tax abatement will extend for a duration of ten (10) years, with the tax abatement beginning January 1, , and ending December 31, 2026. APPROVED this day of A.J. Hashmi, M.D., Mayor ATTEST: Janice Ellis, City Clerk APPROVED AS TO FORM: Stephanie H. Harris, City Attorney EXHIBIT �-- (Updated 1- 11 -16) POLICY STATEMENT CRITERIA AND GUIDELINES FOR TAX ABATEMENT I. General Purpose and Objectives. The City of Paris (City), Lamar County Government (County) and Paris Junior College (PJC) (collectively, herein called the "Taxing Jurisdictions ") are committed to enhancing the competitiveness and the expansion potential of the local industry; to attracting and encouraging new manufacturing industry and investment; to improving the City of Paris, Lamar County and its infrastructure, which attracts and supports development; and, to expanding the tax base, employment opportunities, and the overall quality of life for its citizens. Therefore, the governing bodies of the Taxing Jurisdictions will give consideration, on a case -by -case basis, to providing tax abatements to the owners of real and personal property for projects that stimulate economic growth and diversification in the geographic areas served by the Taxing Jurisdictions, according to state law and consistent with these policies, criteria and guidelines. Tax abatements may be made available to industrial, manufacturing, distribution, service facilities, or any "primary jobs" creating industry as defined by the Economic Development Act of the State of Texas. The facility must be currently in, or locating in the areas served by the Taxing Jurisdictions, and located in a designated Enterprise Zone or Reinvestment Zone. New facilities and structures as well as the expansion and modernization of existing facilities and structures, will be considered. Evaluation of a tax abatement request will be based on the information provided in the tax abatement application. However, the City of Paris, Lamar County and Paris Junior College are under no obligation to provide tax abatement to any applicant. The Paris City Council acts as the lead entity for projects located in the City limits. The Lamar County Board of Commissioners acts as the lead entity for projects in Lamar County, which are located outside of the City limits. All governing bodies of the three Taxing Jurisdictions have adopted this policy, criteria and guidelines and will consider tax abatement requests that qualify hereunder. IL Definitions. Definitions are provided as an Appendix A. III. Designation of a Reinvestment Zone. For any facility located within the area served by the Taxing Jurisdictions to be eligible for tax abatement it must meet the criteria for designation as a tax abatement reinvestment zone as set forth in the Property Redevelopment and Tax Abatement Act, Texas Tax Code Chapter 312.The City or County may designate an area as a reinvestment zone in accordance with the criteria and procedural requirements set forth in the Property Redevelopment & Tax Abatement Act, as amended (Texas Tax Code Sec. 312.401 (b)). IV. Tax Abatement Authorized. The Taxing Jurisdictions, through their elected governing bodies, may agree in writing with the owner and /or lessee of taxable real and/or personal property that is located in a reinvestment zone, but that is not in an improvement project financed by tax increment bonds, to exempt from taxation a portion of the value of the real property, or of personal property located on the real property, or both. The period of the abatement granted under the agreement shall not exceed the term authorized by law. Such agreement will be based on the condition that the owner or EXHIBIT (Updated 1- 11 -16) POLICY STATEMENT CRITERIA AND GUIDELINES FOR TAX ABATEMENT lessee of the property makes specific improvements or repairs to the property. An agreement may provide for the exemption of the real property in each year covered by the agreement only to the extent its value for that year exceeds the base year value. An agreement may provide for the exemption of personal property located on the real property in each year covered by the agreement other than personal property that was located on the real property at any time before the period covered by the agreement. Inventory or supplies cannot be abated as personal property. Tax abatements may only be granted for additional value of eligible property improvements made subsequent to and specified in an abatement agreement between the Taxing Jurisdictions and the property owner or lessee subject to such limitation as the Taxing Jurisdictions may require. The additional value must exceed any reduction in the fair market value of other property of the owner already on the tax roll within the area served by the Taxing Jurisdictions. Change in appraised value does not qualify for abatement except in an instance where a previously vacant authorized facility is utilized. Value added to the tax rolls must come from actual capital expenditures. The negotiation of tax abatement agreements will be conducted by the Tax Abatement Advisory Committee, and facilitated by the Paris Economic Development Corporation. In determining where and how tax abatements will be utilized, the Tax Abatement Advisory Committee will examine the potential return on the public's investment. Return on public investment will be measured in terms of (i) jobs created, (ii) jobs retained in cases of existing employers within the Taxing Jurisdictions, and (iii) broadening of the tax base, and expansion of the economic base (e.g. capital investment, payroll, local spending, etc.) V. Eligibility Criteria for Tax Abatement for Real and Personal Property A property owner and /or lessee shall be eligible for tax abatement only upon the following criteria. Eligibility Criteria for Tax Abatement Authorized 1. An authorized facility is used for manufacturing, research, regional distribution, regional services, regional Facility tourist entertainment, other basic industry, or any primary jobs creating industry. (See Appendix A for definitions.) 2. A new authorized facility must be created, or an existing authorized facility must be improved, modernized or expanded. 3. If a leased authorized facility is granted abatement, the agreement may be executed with the lessor and/or lessee, depending upon the particular circumstances of the proposed project. If the agreement is with the lessor, lessor shall demonstrate binding contracts with the lessee to guarantee compliance with the terms of the agreement. Eligible 1. The property involved must be a newly created or improvements to an existing authorized facility. Property 2. Eligible property for which abatement may be granted includes nonresidential real property and/or tangible personal property not located on the real property at any time before the abatement agreement becomes effective. 3. Abatement may be extended to the value of buildings, structures, fixed machinery and equipment, site improvements, tangible personal property, and that office space and related fixed improvements necessary to the operation and administration of the authorized facility. 4. Inventory or supplies shall not be eligible for abatement. Historic For historic property located in the City of Paris Historic District, see Chapter 30, Article IV of the City of Property Paris Code of Ordinances — Tax Exemption for Historically Significant Sites. Contact the City of Paris, City 2 (Updated 1- 11 -16) POLICY STATEMENT CRITERIA AND GUIDELINES FOR TAX ABATEMENT Capital Investment, Payroll and Job Creation Criteria Manager's Office for additional information on these and other programs offered by the City of Paris. Value and 1. The governing bodies of the local Taxing Jurisdictions will decide whether to grant a tax abatement to an Term of applicant, and the amount, if any, of such abatement, on a case -by -case basis and in accordance with these Abatement Policies, Criteria and Guidelines. 2. The term of abatements granted under any agreement may not exceed that permitted by applicable state law. 3. The amount of the abatement shall be based upon a percentage (0 to 100 %) of all or a portion of the eligible property within the authorized facility. 4. Abatements may only be granted for the additional value of eligible real and personal property improvements made pursuant to and listed in the agreement between the Taxing Jurisdictions and property owner and/or lessee, subject to such limitations as the Taxing Jurisdictions may require. 5. Real property tax abatement may be granted only to the extent that its value for each year of the agreement exceeds its value for the year in which the agreement is executed. 6. If a modernization project includes the replacement of improvements within an authorized facility, the value eligible for abatement shall be the value of the new unit(s), less the value of the replaced unit(s). Abatement The criteria used to evaluate a proposed project application for abatement includes, but is not limited to: Evaluation 1. The dollar amount of the increase in the tax roll. Criteria 2. The number of jobs created or retained by the employer involved. 3. The possible effect on attracting other taxable improvements into the Taxing Jurisdictions. 4. The nature of and overall effect on the Taxing Jurisdictions. 5. The effect on the safety, health, and morals of the Taxing Jurisdictions' residents. 6. Any substantial long -term adverse effect on the provision of the Taxing Jurisdictions' services or tax base. 7. Meeting all relevant zoning requirements. 8. Consistent with the comprehensive plan of the City of Paris and County of Lamar. 9. The types and cost of public improvements and services (water and sewer main extensions, streets and roads, etc.) required of the Taxing Jurisdictions. 10. The types and values of public improvements to be furnished by the applicant. Economic To be eligible to receive tax abatement, the planned improvements: Qualification 1. Must be reasonably expected to increase the appraised value of the property. 2. Must be expected to prevent the loss of employment, or assist in the retention or creation of jobs in the Taxing Jurisdictions during the term of the agreement. 3. Should not be expected to solely or primarily have the effect of merely transferring existing employment from one part of the Taxing Jurisdictions to another without demonstration of increased future investment (dollars or jobs) or unusual circumstances whereby without such a move employment is likely to be reduced. 4. Must be necessary because capacity cannot be provided efficiently utilizing existing improved property when reasonable allowance is made for necessary improvements or relevant governmental actions. Taxability During the term of the agreement, taxes shall be payable as follows: 1. The base year of eligible property as determined each year by the Lamar County Appraisal District, shall be fully taxable. 2. The additional value of eligible property above the base year value shall be taxable in the manner described in the agreement. 3. The Chief Appraiser of the Lamar County Appraisal District shall annually determine an assessment of the real and personal property comprising the reinvestment zone. 4. Each year, the employer, the company or individual receiving an abatement pursuant to an agreement shall furnish the assessor with such information as may be necessary to determine the amount of any abatement. 5. Once such value has been established, the Chief Appraiser shall notify the affected Taxing Jurisdictions, which levy taxes on such property and also notify the Paris EDC. 6. The employer, owner or lessee of eligible property requesting tax abatement within a reinvestment zone shall, prior to the commencement of eligible property improvements, agree to expend a designated sum of money and to create or retain a certain number of jobs, or annual payroll as further defined below. Capital Investment, Payroll and Job Creation Criteria (Updated 1- 11 -16) POLICY STATEMENT CRITERIA AND GUIDELINES FOR TAX ABATEMENT A tax abatement may be made available to employers who are increasing new capital investment and creating jobs with respect to an authorized facility located anywhere within the area served by the Taxing Jurisdictions based on the following criteria. 1. To be eligible for any tax abatement, there must be a minimum capital investment in the authorized facility of $1,000,000 and at least ten (10) new jobs added to the new employer's labor force. 2. Any project with a capital investment of more than twenty-five million dollars ($25,000,000), AND accompanied by a newly created minimum annual payroll of two and one -half million dollars ($2,500,000), OR creating more than two hundred twenty-five (225) jobs will be individually negotiated. 3. As specified in state law, no abatement will be granted for more than 10 years and the total abatement shall not exceed 100 %. 4. A newly created business must be (or will be) located within an enterprise zone or a designated reinvestment zone. 5. The taxing jurisdictions recognize a significant difference in the valuation of real property versus personal property. Because of depreciation schedules, the abatement of personal property could result in a tax exemption. For this reason, the abatement schedule for personal property versus real property may be different. Each industrial account is looked at and valued on an individual basis by the Lamar County Appraisal District (LCAD). The typical depreciation used for industrial accounts by LCAD is as follows: a. Computers — 3 year life b. Furniture & Fixtures— 10 year life c. Vehicles — 7 to 10 year life (depending on type) d. Machinery & Equipment — 15 year life (maybe longer or shorter depending on the type) 6. For each abatement request the Abatement Committee will evaluate the equipment (personal property) investment and useful life separate from the real estate (real property) investment to determine the length of the abatement for each. 7. If personal property should become obsolete and be replaced while under an abatement agreement, the replacement personal property is not eligible for abatement. 8. The charts below provide capital investment guidelines to qualify for tax abatement and the related schedule and percentage of abatement. For Capital Investment ($1M minimum investment AND 10 jobs for new employers.) Amount of Investment Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 $1,000,000 to $5,000,000 70% 60% 50% 40% 30% 20% 10% $5,000,001 to $20,000,000 80% 70% 60% 50% 40% 30% 20% $20,000,001 to $25,000,000 90% 80% 70% 60% 50% 40% 30% $25,000,001 and Above For projects with capital investment above S25MAND $2.5M in new annual payroll OR creating more than 225 new jobs, the term and percentage ojthe abatement are both negotiable, but cannot exceed 10 ears or 100%. 9. An additional 20% abatement for new job creation is available based on the following requirements: a. A project that creates a minimum of 10 new jobs. b. The new job wages are equal to or greater than the current County average wage for all private sector jobs excluding retail trade and accommodation and food services ($41,158 annually for 2013. Source: Texas Workforce Commission (Updated 1- 11 -16) POLICY STATEMENT CRITERIA AND GUIDELINES FOR TAX ABATEMENT via ti�v) A .tracerZ.coir;. (Note: This represents 547 companies, 10,470 jobs and 56% of all private sector employment in Lamar County.) c. The taxing jurisdictions and the company must agree to include measuring, tracking and annual reporting of the net job increases (existing jobs plus new jobs) for the entire term of the abatement agreement. For Net New .Yobs (New Job Creation and Retention of Existing Jobs) Net New Jobs Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 1. 10 new jobs minimum. *20% 20% 20% 20% 20% 20% 20% 2. New job wages = or > average annual wages for private sector jobs in Lamar County. (Excluding retail, accommodations, food service. See Item 9.b. above.) 3. Agree to maintain existing base and new jobs during the entire term of agreement. 4. *Year l cannot exceed 100 %. VI. Tax Abatement for Existing Employers Regarding Real or Personal Property. The Taxing Jurisdictions recognize the value of its existing employers to the wellbeing of the City and County. The Taxing Jurisdictions desire to encourage existing employers to remain in the Taxing Jurisdictions and to improve their respective businesses and industries, as well as their profitability. Accordingly, if an existing employer (as opposed to a newly created business or industry moving into the Taxing Jurisdictions), owns or leases an authorized facility and has plans to improve such property by constructing new improvements on its real property and/or adding new personal property to its authorized facility which qualify for tax abatement under these Policies, Criteria and Guidelines, such employer may be eligible for tax abatement with respect to such improvements to its real property or its new personal property under the provisions of Article V above, even if no new jobs or newly created minimum annual payroll are created. In projects involving existing employers, the criteria for tax abatements for improvements to real property and for new personal property at authorized facilities set forth in Article V above shall be (Updated 1- 11 -16) POLICY STATEMENT CRITERIA AND GUIDELINES FOR TAX ABATEMENT waived. The local taxing jurisdictions encourage existing employers to retain as many jobs and as much existing annual payroll as is economically feasible for the existing employer, while remaining competitive in its industry. VII. Greenfield projects In order to encourage the development of greenfield properties and also to be able to expedite certain new projects, the criteria for tax abatements for improvements to real property and for new personal property at authorized facilities set forth in Article V above shall be waived for projects exclusively involving greenfield properties. VIII. Application Process Application Process Eligibility Any present or potential owner of taxable property in the Taxing Jurisdictions may request tax abatement by filing a written request with the City Manager, County Judge, or PJC President, with a copy of the application forwarded by the applicant to the Executive Director of the Paris EDC. Form The application shall consist of a completed application form accompanied by the following: 1. A general description of the improvements to be undertaken together with the projected new value to the property and the type of business operation proposed. 2. A detailed descriptive list of the improvements for which abatement is requested. 3. A list of the kind, number, and location of all proposed improvements of the property. 4. A list of the number and type of jobs created, including information pertaining to anticipated job transfers (if any). 5. A metes and bounds description and plat of the proposed reinvestment zone that shows all roadways within 200 feet of the reinvestment zone and all existing zoning and land uses within 200 feet of the reinvestment zone. 6. A time schedule for undertaking and completing the proposed improvements. 7. The type and value of any additional economic development incentives requested. 8. Any other information about the proposed project as may be required by the Taxing Jurisdictions or as deemed desirable by the Taxing Jurisdictions. Review 1. All applications will be initially reviewed by members of the Tax Abatement Advisory Process Committee. 2. An initial project briefing meeting will be conducted between the company's representatives and the Tax Abatement Advisory Committee. 3. The Committee will evaluate the request for tax abatement in accordance with these criteria and guidelines and will make its recommendation to the Paris City Council, Lamar County Commissioners Court and Paris Junior College Board for their review and approval. 4. After the Paris City Council has been briefed on the proposed tax abatement offer and they have directed the Committee to move forward, the Paris City Attorney will draft the initial tax abatement agreement for review by the Tax Abatement Committee, the PEDC Board and representatives of each Taxing Jurisdiction. 5. Electronic versions of the City's abatement agreement will be provided to the County and PJC so all agreements have consistent language, terms and conditions. 6. Following Tax Abatement Committee review of the draft agreement, it will be sent to the applicant's legal counsel for review and comment. Any changes requested by the tax abatement applicant will be reviewed and considered by the Committee and City Attorney. 7. Once the Agreement is finalized, it will be placed on the PEDC Agenda for review and action by the PEDC Board. 8. Once the Tax Abatement Agreement has been formally approved by the PEDC Board, the Agreement shall be forwarded to the Paris City Council, Lamar County Commissioner's Court and Paris Junior College Board of Regents for final consideration and action. Public Hearin 1. The Taxing Jurisdictions will comply with certain public notices and hearin s required as (Updated 1- 11 -16) POLICY STATEMENT CRITERIA AND GUIDELINES FOR TAX ABATEMENT VIII. Abatement Agreement Terms and Conditions. Appendix B provides many of the terms and conditions to be included in any formal tax abatement legal agreement. IX. Amendments to Policies, Criteria and Guidelines These Policies, Criteria and Guidelines are effective for a two (2) year period from the date of their adoption, unless amended earlier by the affirmative vote of three- fourths (3/4) of the members of each governing body (City, County, PJC). For a tax abatement application or additional information contact: Paris Economic Development Corporation 1125 Bonham Street Paris, Texas 75460 Phone: 903 - 784-6964 Fax: 903-784-2503 Website: w,,NAN. )aristcxasusa.cotn Email:arisedc'cLstexasusa.cotra 7 mandated by state law under the Property Redevelopment and Tax Abatement Act prior to the designation of a reinvestment zone and execution of a tax abatement agreement. 2. The lead Taxing Jurisdiction (typically the City of Paris) may adopt an ordinance designating a tax abatement reinvestment zone only after notice of a public hearing has been published at least seven (7) days before the date of the hearing, and all other procedural requirements of Chapter 312 of the Texas Tax Code have been satisfied. Findings In order to enter into an agreement, the Taxing Jurisdictions must fmd that: 1. The terms of the proposed agreement comply with these Policies, Criteria and Guidelines. 2. There will be no substantial adverse effect on the provision of Taxing Jurisdictions' services or tax base. 3. That the planned use of the property will not constitute a hazard to public safety, health or morals. 4. Incident to approval of any ordinance designating a reinvestment zone, the Taxing Jurisdictions shall find that the improvements sought are feasible and practical and would be a benefit to the land to be included in the reinvestment zone and to the Taxing Jurisdictions after the expiration of the agreement. Variances Requests for variance from the provisions of these Policies, Criteria and Guidelines may be made in writing to the Taxing Jurisdictions; provided, however, that in no event shall the term of any abatement exceed the period authorized by applicable state law. Such request shall include a complete description of the circumstances requiring a variance. Approval of a request for variance shall require the affirmative vote of three- fourths (3/4) of the members of each of the Taxing Jurisdictions' governing body. Proposed The adoption of these Policies, Criteria and Guidelines by the Taxing Jurisdictions does not limit Agreements the discretion of the Taxing Jurisdictions' governing bodies to decide whether to enter into a Decided on specific tax abatement agreement. Nor does it limit their discretion to delegate to their employees Individual the authority to determine whether or not the Taxing Jurisdiction should consider a particular Basis application or request for tax abatement, or create any property, contract, or other legal right in any person or entity to have the Taxing Jurisdiction consider or grant a specified application or request for tax abatement. VIII. Abatement Agreement Terms and Conditions. Appendix B provides many of the terms and conditions to be included in any formal tax abatement legal agreement. IX. Amendments to Policies, Criteria and Guidelines These Policies, Criteria and Guidelines are effective for a two (2) year period from the date of their adoption, unless amended earlier by the affirmative vote of three- fourths (3/4) of the members of each governing body (City, County, PJC). For a tax abatement application or additional information contact: Paris Economic Development Corporation 1125 Bonham Street Paris, Texas 75460 Phone: 903 - 784-6964 Fax: 903-784-2503 Website: w,,NAN. )aristcxasusa.cotn Email:arisedc'cLstexasusa.cotra 7 (Updated 1- 11 -16) POLICY STATEMENT CRITERIA AND GUIDELINES FOR TAX ABATEMENT APPENDIX A e ± Abatement or Tax The full or partial exemption from ad valorem taxes of certain real and tangible personal Abatement property in a Reinvestment Zone designated for economic development purposes. Agreement or The written legal agreement for tax abatement between a property owner and/or lessee and Agreements the City of Paris, Lamar County and Paris Junior College. Authorized A facility may be eligible for abatement if it is a facility used for manufacturing, research, Commercial or regional distribution, regional services, regional tourist entertainment, other basic industry, or Industrial Facility any primary jobs creating industry (see definitions below). All authorized facility definitions include buildings and structures, including fixed machinery and equipment used in operating the facility. Authorized The City Council of the City of Paris may also designate areas of the City where residential Residential Facility properties may be considered for abatement of City taxes only. The City of Paris will approve their residential abatement policies, criteria and guidelines separate from these policies. Manufacturing The purpose of which is or will be the manufacture of tangible goods or materials or the Facility processing of such goods or materials by physical or chemical change. Facilities Full -time Equivalent primarily engaged in assembling component parts of manufactured products are also (FTE) Jobs considered manufacturing facilities. Regional Used primarily to receive, store, service, or distribute goods or materials where a majority of Distribution Facility the goods or services are distributed to points at least 100 miles from its location in the Taxing Jurisdictions of Paris and Lamar County. Regional Tourist Used in providing amusement /entertainment through the admission of the general public Entertainment where the majority of users reside at least 100 miles from the Taxing Jurisdictions and where Facility the majority of users are likely to stay in the Taxing Jurisdictions for more than one day and will therefore likely utilize local restaurants and hotel/motel accommodations. Research Facility Used primarily for research or experimentation to improve or develop new tangible goods or materials or to improve or develop the production processes thereto. Other Basic or Not elsewhere described, used for the production of products or services which result in the Service Industry creation of new jobs and bring new wealth into the Taxing Jurisdictions (e.g. healthcare - related industries). Primary Jobs Any industry creating "primary jobs" defined as a job that is available at a company for Creating Industry which a majority of the products or services of that company are ultimately exported to regional, statewide, national, or international markets infusing new dollars into the local Base Year Value The assessed value of eligible property as of January 1, preceding the date of execution of the agreement plus the agreed upon value of eligible property improvements made after January 1, but before the execution of the agreement. The Base Year Value may be adjusted either up or down from year to year as per renditions by the Lamar County Appraisal District. Employer The owner or lessee of property, who is applying for tax abatement and who will provide jobs and capital investment within the Reinvestment Zone or within the Enterprise Zone. Reinvestment Zone An area where the Taxing Jurisdictions have decided to influence development patterns and attract major investments that will contribute to the development of the area through the use of tax abatement for specified improvements. These statues are Found in Chapter 312 of the Texas Tax Code. Enterprise Zone An area of land designated as such under Chapter 2303 of the Texas Government Code. Job or Jobs A "job" is when an individual works 40 hours per week for an employer, and in the position the individual is provided the benefits normally offered by the employer, such as health insurance, vacation and some form of retirement benefit. A job is not a position filled for the employer as a worker or employee of an employment agency or employment service. "Jobs" also includes "Full -time Equivalent Jobs" defined below. Full -time Equivalent The intention of the governing bodies is to provide a company the maximum flexibility in (FTE) Jobs running their business and making business decisions, especially related to staffing. The following definition of FTE will be reflected in all incentive agreements. An FTE is: (Updated 1- 11 -16) POLICY STATEMENT CRITERIA AND GUIDELINES FOR TAX ABATEMENT 1. An individual working 40 hours per week in a job defined above. 2. A number of part-time jobs where the hours worked in each such job is less than 40 hours per week, made available by one employer and added together to total 40 hours per week. For example, fourteen (14) part-time jobs made available by one employer where all such part-time jobs added together require a total of 380 hours of work per week (but no such part-time job requires 40 hours of work or more per week), will equal nine and one -half (9.5) FTE jobs (3 80 hours divided by 40 hours per week equals 9.5). 3. FTE jobs do not require the employee to receive benefits from the employer. Modernization The replacement and upgrading of existing facilities, which increases the productive input or output, updates the technology, or substantially lowers the unit cost of operation. Modernization may result from the construction, alteration or installation of buildings, structures, fixed machinery or equipment, but shall not be for the purpose of reconditioning, refurbishing, repairing, or deferred maintenance. Personal Property Machinery, equipment, tools, shelving or materials eligible under applicable law for tax abatement, which can be removed from an authorized facility. Property Real Property or Personal Property defined herein that is eligible for tax abatement. Real Property The land within an Enterprise Zone or a Reinvestment Zone, together with all improvements and fixtures constructed or otherwise situated thereon. Tax Abatement The Tax Abatement Advisory Committee will be convened from time to time by the Paris Advisory Committee Economic Development Corporation to study, review and recommend tax abatements to the applicable Taxing Jurisdictions in the City of Paris and Lamar County, Texas. The Tax Abatement Advisory Committee will be composed of one person from each of the Taxing Jurisdictions: the City of Paris (the City Manager or designee), the County of Lamar (the County Judge or designee), Paris Junior College (the President or designee), the Chief Appraiser of the Lamar County Appraisal District, and the Executive Director of the Paris Economic Development Corporation. Recommendations from the Tax Abatement Advisory Committee shall be decided by majority vote of the representatives from the three taxing entities referenced above. (Updated 1- 11 -16) POLICY STATEMENT CRITERIA AND GUIDELINES FOR TAX ABATEMENT APPENDIX B Abatement Agreement Terms and Conditions After approval, the Taxing Jurisdictions shall formally pass an order or resolution and authorize the execution of an agreement with the owner and /or lessee of the authorized facility, which shall include, but not be limited to the following terms and conditions: Contract Terms & Conditions Project The following project specifics will be included: Description 1. The base year value. 2. Percent of increased value to be abated each year. 3. The commencement date and the termination date of abatement. 4. Amount of investment and average number of jobs involved during the term of the agreement. 5. The proposed use of the authorized facility, nature of construction, time schedule, plat, property description, and improvement list, as provided in the application. 6. A listing of the kind, number, location, and costs of all proposed improvements of the property. 7. A statement limiting the uses of the property consistent with the general purpose of encouraging development or redevelopment of the reinvestment zone during the period that property tax abatement is in effect. 8. That access to the project is provided to allow for the inspection by Taxing Jurisdictions' inspectors and officials in order to ensure that the improvements or repairs are made according to the specifications and conditions of the agreement. 9. That property tax revenue lost as a result of the tax abatement agreement will be recaptured by the Taxing Jurisdictions if the owner of the property fails to make the improvements or repairs as provided by the agreement. 10. Each term agreed to by the owner of the property. 11. A requirement that the owner of the property shall certify annually to the Taxing Jurisdictions that the owner is in compliance with each applicable term of the agreement. 12. Contractual obligations in the event of default, violation of terms or conditions, delinquent taxes, recapture, administration and assignment, or other provisions that may be required by state law, or in the discretion of the Taxing Jurisdictions' governing body. 13. That the Taxing Jurisdictions may cancel or modify the agreement if the property owner fails to comply with the agreement. Default If the Taxing Jurisdictions determine that the person or entity receiving an abatement is in default according to the terms and conditions of its agreement, the Taxing Jurisdictions shall notify the company or individual in writing at the address stated in the agreement, and if such default is not cured within a reasonable time specified in such notice ( "cure period "), then the agreement may be modified or terminated without further notice. In the event the company or individual allows its ad valorem taxes owed to the Taxing Jurisdictions to become delinquent and fails to timely and properly follow the legal procedures for their protest and/or contest, or violates any of the terms and conditions of the agreement and fails to cure during the cure period, the agreement then may be modified or terminated without further notice, and the agreement may provide a formula for recapture of all or part of the taxes abated. At any time before the expiration, any tax abatement agreement may be terminated by mutual consent of all parties involved in the same manner that the agreement was executed. Confidentiality Information that is provided to a Taxing Jurisdiction in connection with an application or request of Proprietary for tax abatement under these Policies, Criteria and Guidelines, and that describes the specific Information processes or business activities to be conducted or the equipment or other property to be located on the property for which tax abatement is sought is confidential and not subject to public disclosure until the agreement is executed. Such information in the custody of the Taxing Jurisdictions after the agreement is executed is not confidential hereunder. Inspections The agreement shall stipulate that employees and/ or desi ated re resentatives of the Taxing 10 (Updated 1- 11 -16) POLICY STATEMENT CRITERIA AND GUIDELINES FOR TAX ABATEMENT Jurisdictions will have access to the reinvestment zone during the term of the agreement to inspect the authorized facility to determine if the terms and conditions of the agreement are being met. All inspections will be made only after the giving of at least twenty-four (24) hours' prior notice and will only be conducted in such a manner as to not unreasonably interfere with the construction and/or operation of the authorized facility. All inspections will be made with one or more representatives of the company or individual and in accordance with its safety standards. Upon completion of construction, the Taxing Jurisdictions shall annually evaluate each authorized facility receiving abatement to ensure compliance with the agreement and report possible violations of the agreement to the Taxing Jurisdictions governing bodies. Modifications At any time before the expiration of an agreement made under these Policies, Criteria and of Agreement Guidelines, the agreement may be modified by the parties to the agreement to include other provisions that could have been included in the original agreement or to delete provisions that were contained in the original agreement. The modification must be made by the same procedure by which the original agreement was approved and executed. The original agreement, however, may not be modified to extend the term of the agreement or the term of the abatement granted therein be and the time permitted by State law. Assignment An agreement may be assigned to a new owner or lessee of the authorized facility only with the prior written consent of the Taxing Jurisdictions. Any assignment shall provide that the assignee shall irrevocably and unconditionally assume all the duties and obligations of the assignor upon the same terms and conditions as set out in the agreement, and the Taxing Jurisdictions' approval shall be subject to the determination of the financial capability of such assignee. Any assignment of an agreement shall be to an entity that contemplates the same improvements or repairs to the property, except to the extent such improvements or repairs have been completed. No assignment shall be approved if the assignor or the assignee is indebted to the Taxing Jurisdictions for ad valorem taxes or other obligations, or if any event of default under the agreement remains uncured. Administration, l . Each Taxing Jurisdiction shall be responsible for the administration, review, and monitoring of Contract tax abatement agreements authorized by them Taxing Jurisdictions under these Policies, Review, Criteria and Guidelines. These responsibilities shall include annually verifying participants in Monitoring and tax abatement agreements are in full compliance with the terms of the agreement, including Reporting completion and submission of all required documents in a timely manner. 2. The Paris City Attorney shall expeditiously advise the Taxing Jurisdictions in writing of any instances of contract non - compliance by tax abatement participants. In addition, the Paris City Attorney shall, on an annual basis, conduct a performance review of the activities of each tax abatement participant and report the findings of such review to the leadership and governing bodies of each taxing entity. 3. The Taxing Jurisdictions' governing bodies shall retain the right to independently review and audit the activities of tax abatement participants, and shall be responsible for enforcement of the terms of any tax abatement agreement authorized hereunder. 4. Annually the Paris City Attorney shall report to each of the governing bodies on its monitoring and compliance activities and the status of all existing abatement agreements.