09-JS Baking LLC Tax Abatement AmendmentItem No. 9
memorandum
TO: Mayor and City Council
John Godwin, City Manager
FROM: Stephanie H. Harris, City Attorney
SUBJECT: Addendum to Tax Abatement Agreement with JS Baking, LLC ( "Skinner ")
DATE: April 4, 2017
BACKGROUND: On April 22, 2013, Council approved a tax abatement agreement with JS
Baking, LLC ( "Skinner ") relating to its purchase of the former Sarah Lee plant on NE Loop 286.
The agreement was for a 100% abatement of taxes on the improvements set out in the agreement
for a period of 10 years. As consideration for the abatement, Skinner was to invest
$19,400,000.00 in the plant and to employ full time workers as follows: 100 by the end of 2013,
200 by the end of 2014, and 393 by the end of 2017. Due to setbacks at the plant related to the
loss of a large account, Skinner has requested that Council approve an addendum which reduces
their total required investment to $15,617,000.00 and reduces their required employment levels
as follows (such levels reflecting their actual employee count for the respective years to date):
117 employees by the end of 2013, 93 by the end of 2014, and 116 by the end of 2017. The
attached addendum to the 2013 agreement reflects those changes and corrects the name of the
company which had incorrectly been identified as "The James Skinner Co." in the original
agreement.
STATUS OF ISSUE: Pending City Council approval of tax abatement agreement addendum.
BUDGET: No additional budgetary impact than that related to the original abatement
agreement.
RECOMMENDATION: Motion to approve resolution approving "Addendum to Tax
Abatement" between the City of Paris and JS Baking, LLC.
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS,
APPROVING AN ADDENDUM TO TAX ABATEMENT AGREEMENT
BETWEEN THE CITY OF PARIS, TEXAS AND JS BAKING, LLC, MAKING
OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND
DECLARING AN EFFECTIVE DATE.
WHEREAS, on April 22, 2013, the City Council of the City of Paris, Texas by
Resolution 2013 -016, approved and authorized a Tax Abatement Agreement with JS
Baking, LLC,; and
WHEREAS, the effective date of the Tax Abatement Agreement is April 22, 2013
through December 31, 2023; and
WHEREAS, said Agreement relates to Property owned by JS Skinner within the City
of Paris, which Property is located within an Enterprise Zone as set forth in the Agreement;
and
WHEREAS, the Texas Local Government Code Sec. 312.208 and tax abatement
guidelines in effect in 2013 and on the date of the approval of this Resolution allow for
modifications of a tax abatement agreement during the term of said agreement; and
WHEREAS, due to unanticipated set -backs at Owner's plant in Paris, Lamar County,
Texas ( "the Property "), Owner has requested certain modifications to the Agreement in the
form of an Addendum to Tax Abatement (attached hereto as EXHIBIT "1" and incorporated
herein by reference) relating to the number of employees Owner is required to maintain at
the Property during the agreement and total dollar amount of capital improvements Owner
is required to make to the Property; and
WHEREAS, the City has agreed to said modifications of the Agreement because said
modifications are consistent with encouraging development of said Enterprise Zone in
accordance with the purposes for which it was created and are in compliance with the
CITY's policy on tax abatements and the ordinance creating such Enterprise Zone adopted
by the CITY and all applicable laws;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
PARIS, TEXAS:
Section 1. That the findings set out in the preamble of this resolution are hereby
in all things approved.
Section 2. That the terms and conditions of the Addendum to Tax Abatement
Agreement attached hereto as EXHIBIT "1" between the City and JS Baking, LLC, 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 3. That the Mayor is hereby authorized to execute the Agreement and all
other documents in connection therewith on behalf of the City of Paris.
Section 4. 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 5. That 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.
PASSED AND ADOPTED this 10th day of April, 2017.
A.J. Hashmi, M.D., Mayor
ATTEST:
Janice Ellis, City Clerk
APPROVED AS TO FORM:
Stephanie H. Harris, City Attorney
THE STATE OF TEXAS
'COUNTY OF LAMAR
ADDENDUM TO TAX ABATEMENT AGREEMENT
This Addendum ( "the ADDENDUM ") to a tax abatement agreement ( "the
AGREEMENT ") dated April 22, 2013 is entered into by and between the CITY OF PARIS,
PARIS, TEXAS, a municipal corporation, situated in Lamar County, Texas, acting by and
through its authorized officer whose signature appears below (hereinafter called "CITY "), and
JS BAKING, LLC, a Texas limited liability company (erroneously identified in the original
agreement as THE JAMES SKINNER CO., a Nebraska corporation), acting by and through its
authorized officer whose signature appears below (hereinafter referred to as "OWNER ").
WITNESSETH:
WHEREAS, heretofore, on April 22, 2013, the City and Owner entered into the Tax
Abatement Agreement attached hereto as Exhibit 1 and incorporated by reference as if fully set
forth herein; and
WHEREAS, the term of said AGREEMENT expires on December 31, 2023; and
WHEREAS, said AGREEMENT relates to PROPERTY owned by OWNER within the
City of Paris, which PROPERTY is located within an Enterprise Zone as set forth in the
AGREEMENT;
WHEREAS, the Texas Local Government Code Sec. 312.208 and tax abatement
guidelines in effect in 2013 and on the date of the execution of this ADDENDUM (a copy of
which tax abatement guidelines effective January 11, 2016 are attached hereto as Exhibit 2 and
incorporated herein by reference) allow for modifications of a tax abatement agreement during
the term of said agreement; and
WHEREAS, due to unanticipated set -backs at Owner's plant in Paris, Lamar County,
Texas ( "the Property "), Owner has requested certain modifications to the Agreement relating to
the number of employees Owner is required to maintain at the Property during the agreement and
total dollar amount of capital improvements Owner is required to make to the Property; and
WHEREAS, the City has agreed to said modifications of the Agreement because said
modifications are consistent with encouraging development of said Enterprise Zone in
accordance with the purposes for which it was created and are in compliance with the CITY's
policy on tax abatements and the ordinance creating such Enterprise Zone adopted by the CITY
and all applicable laws;
NOW, THEREFORE,
The Parties hereto do mutually contract and agree to modify the Agreement as follows:
A. Section I1I, "Improvements," is hereby amended to read in its entirety as follows:
III.
Improvements
3.1 The installation of the IMPROVEMENTS will require engineering, design and
construction work to prepare the site within OWNER'S building where the new equipment will
be located, and the procurement of equipment, infrastructure and utilities modifications and
electrical and mechanical installation. The IMPROVEMENTS are being made to enable the
OWNER to manufacture bakery products such as various pastries, Danish and coffee cake
categories at the PROPERTY. The IMPROVEMENTS to be constructed and otherwise added
and implemented at OWNER'S PROPERTY are described as follows:
A. To the real property and existing building of OWNER on the PROPERTY,
building modifications to support proper operation, sanitation and installation of
the new equipment and production lines to manufacture OWNER'S baking
products. These modifications include updated utilities, floor, wall, and ceiling
changes and finishes, as well as some structural improvements to the building to
support static, live and dynamic equipment loading.
B. Within the existing building of OWNER, it is planned by OWNER to establish a
sweet dough production line, a croissant production line, a fruit filling production
line, a frozen dough production line, a pound cake production line, a snack cake
production line, a clam shell production line, a muffin production line, and
ongoing capital improvements to the various production lines, equipment and
facilities in the building.
A total of $15,617,000.00 will be spent by OWNER in making these
IPROVEMENTS to the PROPERTY during the term of this tax abatement
agreement.
All such IMPROVEMENTS will be described in the CITY'S Certificate of Completion prepared
after the completion and installation of the above described building modifications and
improvements, personal property, machinery and equipment. The description shall be furnished
by OWNER to CITY in OWNER'S sworn report described in Section 11. 1, below and attached
to CITY'S Certificate of Completion, "Ihe 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. The IMPROVEMENTS will be at a
cost equal to or in excess of $15,617,000.00 for the capital cost and installation of the building
modifications, machinery, equipment and production lines. Site preparation shall occur during
April, 2013, immediately after this Agreement is executed and approved by the CITY;
installation shall commence in May, 2013; and production is expected to commence as soon as
possible thereafter during the year, 2013. OWNER contemplates that all such
IMPROVEMENTS shall be completed by the end of the year, 2017; provided, that OWNER
shall have such additional time to complete the IMPROVEMENTS as may be required in the
event of "force maieure" if OWNFR is rliNaantlu anti _r
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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 do 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 of
Paris, Texas, referred to above.
B. Section V, "Consideration (Jobs)" is hereby amended in its entirety to read as
follows:
V.
Consideration
(Jobs)
5.1 OWNER agrees that it will employ full -time employees to operate the new lines
of production described above to be conducted at the PROPERTY, provided, however, that the
number of employees projected below may vary one way or another by a few employees as this
PROJECT proceeds to be implemented. OWNER will employ a 117 total full -time employees to
work at the PROPERTY by the end of the year 2013; will employ 93 total full -time employees
to work at the PROPERTY by the end of the year 2014; and will employ 116 total full -time
employees by the end of the year 2015. The number of employees shall then increase to 171
full -time employees by the end of the year, 2017.
5.2 OWNER agrees maintain a minimum of 171 full -time employees at the
PROPERTY from the end of calendar year 2017 through the end of this Tax Abatement
Agreement (December 31, 2023) and thereafter to retain sufficient employment levels to
efficiently operate and support its plant operations going forward.
C. Section VII, "Real and Personal Property Tax Abatement," is hereby amended in its
entirety to read as follows:
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
as is stated in this Section. Said abatement shall be an amount equal to one hundred percent
(100 %) of the taxes assessed upon the completed value of the IMPROVEMENTS, as they are
completed from year to year during the term of this tax abatement, minus the value of the
PROPERTY appraised as of January 1, 2013 (which is the value for the year in which this
AGREEMENT is executed), but subject, however, to OWNER'S rights to protest such value
and cause it to be adjusted as is provided for under the applicable laws of the State of Texas.
The ad valorem taxes assessed against the IMPROVEMENTS described herein shall continue
to be abated at one hundred percent (100 %) of their assessed value for each year from 2014-
2017 (years 1 -7) of the abatement period in this AGREEMENT over and above the value of
the PROPERTY appraised as of January 1, 2013, as adjusted by the result of any protest
proceeding brought by OWNER. Thereafter, in 2021 -2023 (years 8 -10), the ad valorem taxes
assessed against the IMPROVEMENTS described herein shall be abated at ninety percent
(90 %) of their assessed value over and above the value of the PROPERTY appraised as of
January 1, 2013, as adjusted by the result of any protest proceeding brought by OWNER.
This tax abatement shall be implemented and enforced in accordance with all applicable state
and local laws and 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, Buildings
and tangible Personal Property, if any, as of January 1, 2013. The tax abatement which is
the subject of this AGREEMENT shall extend for a period of time beginning on January
1, 2014, and terminating on December 31, 2023
7.2 The abatement granted herein shall be subject to and governed by the POLICY
STATEMENT CRITERIA AND GUIDELINES for TAX ABATEMENT, 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.
D. Section 13.3 is hereby amended in its entirety to read as follows:
13.3 Any written notice required or permitted under the terms of this AGREEMENT
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:
JS BAKING, LLC
Attn: Shawn Bushouse, CFO
4651 F Street
Omaha, NE 68117
CITY:
CITY OF PARIS, TEXAS
Attn: City Manager
P. O. Box 9037
Paris, TX 75461 -9037
With a copy to:
City Clerk, City of Paris, Texas
(address same as above)
E. All other terms in the original AGREEMENT dated April 22, 2013 remain unaltered
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by this ADDENDUM, and remain in full force in effect as if fully set forth herein.
WITNESS our hands this _ day of , 2016.
ATTEST:
Janice Ellis, City Clerk
APPROVED AS TO FORM:
Stephanie H. Harris, City Attorney
THE CITY OF PARIS, TEXAS
LIM
A. J. Hashmi, M. D., Mayor
JS BAKING, LLC
A Tex Limited Liability Company
By.a�s +�� — /Cc
Audie Keaton, President and
Chief Executive Officer
LIST OF EXHIBITS TO TI3IS ADDENDUM:
Exhitib 1: Tax Abatement Agreement dated April 22, 2013
Exhibit 2: CITY'S Guidelines and Criteria for Tax Abatements
LIST OF EXHIBITS TO THIS ADDENDUM:
Exhitib X: Tax Abatement Agreement dated April 22, 2413
Exhibit 2: CITY'S Guidelines and Criteria for Tax Abatements
RESOLUTION NO. 2Q13 -016
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS
APPROVING AND AUTHORIZING A TAX ABATEMENT AGREEMENT WITH
JAMES SKINNER CO.; 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 James Skinner Co., providing for a
commercial and industrial tax abatement for certain improvements, a copy of which is attached
hereto as Exhibit "A ", and incorporated herein by reference hereinafter called "Agreement ";
and,
WHEREAS, a public hearing was held before the City Council on April 22, 2013, to allow
interested persons to speak about the proposed Tax Abatement 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 attached hereto as
Exhibit "A" 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. 2012 -072 passed on August 13, 2012.
Section 3. That the terms and conditions of the Tax Abatement Agreement between
the City and James Skinner Co. 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 "A ".
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 22nd day of April, 2013.
ATTEST:
nice Ellis, City Clerk
APPROVED AS TO FORM:
THE STATE OF TEXAS
COUNTY OF LAMAR
TAX ABATEMENT AGREEMENT
This agreement is entered into by and between the CITY OF PARIS, PARIS, TEXAS,
a municipal corporation, situated in Lamar County, Texas, acting by and through its authorized
officer whose signature appears below (hereinafter called "CITY "), and THE JAMES
SKINNER CO., a Nebraska corporation, acting by and through its authorized officer whose
signature appears below (hereinafter referred to as "OWNER ").
WITNESSETH:
WHEREAS, the City Council of the City of Paris, Texas, did heretofore, on the 13th day
of August, 2012, in Resolution No. 2012 -07, elect to be eligible to participate in tax abatement
agreements 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 Texas Enterprise Zone Act (Government Code Chapter 2303),
the designation of an area as an Enterprise Zone also constitutes designation of the area as a
reinvestment zone (the "Reinvestment Zone "); and pursuant to the 2010 Census, the
PROPERTY of the OWNER within City of Paris, Texas, is included within an ENTERPRISE
ZONE, as is shown in the print -out from the Office of the Governor of the State of Texas on its
website in Exhibit A, attached hereto and made a part hereof for all purposes; and
WHEREAS, the contemplated use of the IMPROVEMENTS, as hereinafter defined, in
the amount as set forth in this AGREEMENT upon and within the PROPERTY (herein called
the PROJECT), and the other terms hereof are consistent with encouraging development of said
Enterprise 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 Enterprise
Zone adopted by the CITY and all applicable laws; and
WHEREAS, the City Council of the City of Paris did heretofore, on the 13'b day of
August, 2012 in Resolution No. 2012 -072, pass and adopt appropriate guidelines and criteria
governing tax abatement agreements to be entered into by the CITY as required by the Property
Redevelopment and Tax Abatement Act, as amended;
NOW, THEREFORE,
The Parties hereto do mutually contract and agree as follows:
I.
Term
1.1 The effective date of this AGREEMENT is the 22 °6 day of April, 2013, with tax
abatement beginning on January 1, 2014, and expiring on December 31, 2023.
II.
Area to be Improved
2.1 The PROJECT consists of new building modifications to the real property of the
OWNER, and the addition and installation of equipment and personal property described in
Article III, below, all to be performed by OWNER within an existing building of the OWNER at
the OWNER'S plant in Paris, Lamar County, Texas. Collectively, all such improvements which
are the subject hereof shall be called the "IMPROVEMENTS ". The IMPROVEMENTS shall be
located upon and within the OWNER'S current facilities consisting of the OWNER'S land
described in Exhibit B, attached hereto and made a part hereof for all purposes (as are all
Exhibits which are mentioned herein), and within the building at the location shown within the
drawings also attached hereto as a part of Exhibit B. The land and building are herein together
called the "PROPERTY ".
III.
Improvements
3.1 The installation of the IMPROVEMENTS will require engineering, design and
construction work to prepare the site within OWNER'S building where the new equipment will
be located, and the procurement of equipment, infrastructure and utilities modifications and
electrical and mechanical installation. The IMPROVEMENTS are being made to enable the
OWNER to manufacture bakery products such as various pastries, Danish and coffee cake
categories at the PROPERTY. The IMPROVEMENTS to be constructed and otherwise added
and implemented at OWNER'S PROPERTY are described as follows:
A. To the real property and existing building of OWNER on the PROPERTY,
building modifications to support proper operation, sanitation and installation of
the new equipment and production lines to manufacture OWNER'S baking
products. These modifications include updated utilities, floor, wall, and ceiling
changes and finishes, as well as some structural improvements to the building to
support static, live and dynamic equipment loading.
B. Within the existing building of OWNER, it is planned by OWNER to establish a
sweet dough production line, a croissant production line, a fruit filling production
line, a frozen dough production line, a pound cake production line, a snack cake
production line, a clam shell production line, a muffin production line, and
ongoing capital improvements to the various production lines, equipment and
facilities in the building.
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A total of $19,400,000.00 will be spent by OWNER in making these
IMPROVEMENTS to the PROPERTY during the term of this tax abatement
agreement.
All such IMPROVEMENTS will be described in the CITY'S Certificate of Completion prepared
after the completion and installation of the above described building modifications and
improvements, personal property, machinery and equipment. The description shall be 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. The IMPROVEMENTS will be at a
cost equal to or in excess of $19,400,000.00 for the capital cost and installation of the building
modifications, machinery, equipment and production lines. Site preparation shall occur during
April, 2013, immediately after this Agreement is executed and approved by the CITY;
installation shall commence in May, 2013; and production is expected to commence as soon as
possible thereafter during the year, 2013. OWNER contemplates that all such
IMPROVEMENTS shall be completed by the end of the year, 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 of
Paris, Texas, referred to above.
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 specific units of new
machinery and equipment as identified herein, as a food production plant.
V.
Consideration
(Jobs)
5.1 OWNER agrees that it will employ full -time employees to operate the new lines
Of production described above to be conducted at the PROPERTY, provided, however, that the
number of employees projected below may vary one way or another by a few employees as this
PROJECT proceeds to be implemented. OWNER will employ 100 full -time employees to work
at the PROPERTY during the year, 2013; and will have 200 total full -time employees working at
the PROPERTY by the end of the year, 2014. The number of employees shall then increase to
393 full -time employees by the end of the year, 2017.
5.2 OWNER agrees to maintain a minimum of 393 full -time employees at the
PROPERTY from the end of calendar year 2017 through the end of this Tax Abatement
Agreement (December 31, 2023) and thereafter to retain sufficient employment levels to
efficiently operate and support its plant operations going forward.
W.
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 employ
the number of full -time employees at the PROPERTY by the end of the years 2013, 2014 and
2017, respectively, and throughout the term of this Agreement as stated in Sections 5.1 and 5.2
above; 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 materially breaches any of the other terms, provisions or
conditions of this AGREEMENT, then this AGREEMENT shall be in default. In the event the
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 paragraph 13.3. As liquidated
damages in the event of default, and in accordance with the requirements of Section 312.205
(a)(4) of the Property 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 Property 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.I 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
as is stated in this Section. Said abatement shall be an amount equal to one hundred percent
(100 %) of the taxes assessed upon the completed value of the IMPROVEMENTS, as they are
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completed from year to year during the term of this tax abatement, minus the value of the
PROPERTY appraised as of January 1, 2013 (which is the value for the year in which this
AGREEMENT is executed), but subject, however, to OWNER'S rights to protest such value
and cause it to be adjusted as is provided for under the applicable laws of the State of Texas.
The ad valorem taxes assessed against the PROPERTY described herein shall continue to be
abated at 100% of their assessed value for each year of the ten (10) year term of this
AGREEMENT over and above the value of the PROPERTY appraised as of January 1, 2013,
as adjusted by the result of any protest proceeding brought by OWNER, if any. This tax
abatement shall be implemented and enforced in accordance with all applicable state and local
laws and 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, Buildings and tangible
Personal Property, if any, as of January 1, 2013. The tax abatement which is the subject of
this AGREEMENT shall extend for a period of time beginning on January 1. 2014, and
terminating on December 31, 2023.
7.2 The abatement granted herein shall be subject to and governed by the POLICY
STATEMENT CRITERIA AND GUIDELINES for TAX ABATEMENT, 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 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 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 with an itemized list of assets placed into service from the date of
execution of this AGREEMENT to December 31, 2014, 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 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 are 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 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. Nothing herein shall be
construed as limiting the CITY'S ability to perform 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 shouring
the market value of the PROPERTY prior to the construction of the
IMPROVEMENTS;
(b) Detailed description of the IMPROVEMENTS;
6
(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
paragraph 3.1 hereof: and
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.
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.
XII.
Authority to Contract
12.1. This AGREEMENT was authorized by resolution of the City Council at its
regularly scheduled meeting on the 22 "d day of April, 2013, 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.
XrII.
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
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:
THE JAMES SKINNER CO.
Attn: Shawm Bushouse, CFO
4651 F Street
Omaha, NE 68117
CITY:
CITY OF PARIS, TEXAS
Attn: City Manager
P. O. Box 9037
Paris, TX 75461 -9037
With a copy 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 22ND day of April, 2013.
THE CITY OF PARIS, TEXAS
By:
A. I. Hashmi, M. M or
ATTEST:
ice Ellis, City Clerk
APPROVED FORM:
W. Kent McIl y Attorney
S 3a K!,a
kae�.
die Keaton, President and
Chief Executive Officer
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
EXHIBIT A
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Legal Description
Situated within the Corporate Limits of the City of Paris, County of Lamar, and State of
Texas, a part of the Reding Russell Survey, Abstract No. 786, and being a part of a tract of land
conveyed to 2020 Paris, LLC, by deed recorded as Lamar County Document Number 098870 -2012,
and being further described as follows:
Beginning at a concrete monument found at the intersection of the East Boundary Line of
19th Street Northwest (F.M. Highway 79) and the South Boundary Line of Loop Highway 286,
being the Northwest corner of said 2020 Paris tract,
Thence along the South Boundary Line of Loop Highway 286 as follows:
North 58 °05'51" East a distance of 340.95 feet to a concrete monument found fox corner;
North 67 °04'56" East a distance of 250.95 feet to a concrete monument found for corner,
North 60 °11'00" East a distance of 351.99 feet to a concrete monument found for corner;
North 68 °02'24" East a distance of 203.33 feet to an iron pin found for corner;
North 89 °13'00" East a distance of 104.00 feet to an iron pin found for corner;
North 01 °14'00" West a distance of 43.00 feet to an iron pin found for comer;
North 66 °51'00" East a distance of 191.20 feet to a nail found for cornet,
North 58 °19'00" East a distance of 101.10 feet to a concrete monument found for corner,
North 66 °53'56" East a distance of 400.41 feet to a concrete monument found for comer;
North 72 °30'43" East a distance of 147.66 feet to a nail found for corner;
North 66 °5356" East a distance of 35.40 feet to a point at the most Northerly Northeast
corner of said 2020 Paris tract, the Northwest comer of a tract of land conveyed to
James W. Smith and Edward Lee White by deed recorded in Volume 158, Page 20,
of the Lamar County Real Property Records, and the Northwest corner of a channel
easement recorded in Volume 610, Page 113, of the Lamar County Deed Records;
Thence South 03 °10'26" East with the East Boundary Line of said 2020 Paris tract and the
West Boundary Line of said Smith and White tract and of said channel easement a distance of
371.86 feet to a point for corner;
Thence South 04 °10'00" West, continuing with said common line, a distance of 783.00 feet
to a point at the Southwest corner of said Smith and White tract;
Thence South 80 °27'10" East with the North Boundary Line of said 2020 Paris tract and the
South Boundary Line of said Smith and White tract, at 114.39 feet passing; a passing a set 112.11 iron
pin (capped Chaney 4057), continuing in all a distance of 254.10 feet to a wood fence post found for
corner,
Thence Easterly along a barbed -wire fence, being the North Boundary Line of said 2020
Paris tract and the South Boundary Lane of said Smith and White tract as follows:
South 08 °11'41" East a distance of 41.84 feet to a wood fence post found for corner;
South 89 °19'06" East a distance of 223.24 feet to a wood fence post found for comer;
North 76 °45'51" East a distance of 409.67 feet to a wood fence post found for corner;
North 85 °10'34" East a distance of 185.59 feet to a wood fence post found for the most
Easterly Northeast comer of said 2020 Paris tract and the Southeast corner of said
Smith and White tract;
35432.2- Srca2l Warranty Deed — 2t)2U Faris to Skinner
Thence South 00 °39156" East with the East Boundary Line of said 2020 Paris tract and the
West Boundary Lane of a Cemetery a distance of 63.20 feet to a wood fence post found for corner;
Thence South 81 °03'00" West with the South Boundary Line of said 2020 Paris tract and the
North Boundary Line of said Cemetery a distance of 9.69 feet to a wood fence post found for
comer;
Thence South 00 °08'39" West with the East Boundary Line of said 2020 Paris tract and the
West Boundary Lane of said Cemetery, along this course passing the Southwest corner of the
Cemetery tract and the Northwest comer of a tract of land conveyed to Huhtamaki, Inc., by deed
recorded as Lamar County Document Number 090649 -2011, continuing in all a distance of 816.87
feet to an iron pin found at the Southeast corner of said 2020 Paris tract and the Southwest corner
of said Huhtamaki tract;
Thence North 86 °00'00" West with the South Boundary Line of said 2020 Paris tract and
the North Boundary Line of Center Street a distance of 296.00 feet to an iron pin found for corner;
'thence South 89 °20'58" West, continuing with said common line, a distance of 2654.63 feet
to an iron pin set in the East Boundary Line of 19th Street Northwest (F.M. Highway 79), being the
most Southerly Southwest corner of said 2020 Paris tract;
Thence North 45 °00'00" West with the West Boundary Line of said 2020 Paris tract and
sr d East Boundary Line a distance of 28.00 feet to a concrete monument found for corner;
Thence North with said common line (bearing per Doc. #098870 -2012) a distance of 800,66
feet to a concrete monument found for corner;
Thence North 06 °28'17" East, continuing with said common line, a distance of 284.43 feet
to the point of beginning, and containing 89.345 acres of land.
35432 2- Sluvial Warrant, Dccd — 2020 Paris to St umx�
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EXHIBIT C
CERTIFICATE OF COMPLETION
STATE OF TEXAS
COUNTY OF LAMAR
CITY OF PARIS
The City of Paris, Texas, has included the Property described in Exhibit A attached
hereto in a Reinvestment Zone, and has executed and delivered a Tax Abatement Agreement
with The James Skinner Co., a Nebraska corporation (the "Company "), for certain improvements
and other equipment (the "Improvements ") to be installed at the Company's baking goods
manufacturing plant located in Paris, Lamar County, Texas.
The James Skinner Co. has complied with all of the terms of the Tax Abatement
Agreement, and the City of Paris herein verifies 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, 2014, equal to 100% of the taxes
assessed upon the increased value of the real and personal property of the Company located on
Loop 286 in Paris, Texas, over the value at which the property was last appraised on January 11
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, 2014, and ending December 22, 2x23.
APPROVED this day of 20—.
Mayor
ATTEST:
Janice Ellis, City Clerk
APPROVED AS TO FORM:
City Attorney
EXHIBIT D
Paris, Texas Economic Development Corporation
POLICY STATEMENT
CRITERIA AND GUIDELINES FOR TAX ABATEMENT
I. General Purpose and Objectives.
The City of Paris, Texas (herein called the "City ") is committed to enhancing the competitiveness
and the expansion potential of the City's manufacturing industry; to attracting and encouraging
new manufacturing industry and investment; to improving the City and its infrastructure which
attracts and supports development; and, to expanding the tax base, employment opportunities, and
the overall quality of life for its citizenry. Therefore, the City will give consideration, on a case -
by -case basis, to providing tax abatement according to state law to the owners of real and
personal property for projects that stimulate economic growth and diversification in the City.
Tax abatement benefits may be made available to industrial, manufacturing, distribution, and
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 the City or locating in
the City, 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, 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 and the Paris Junior College Board of Regents have also
adopted this policy and will consider tax abatement request that qualify under these policies.
H. Definitions.
Definitions are provided as an Appendix A.
III. Designation of a Reinvestment Zone.
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)). For any area within the jurisdiction of the
City 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.
IV. Tax Abatement Authorized.
The City, through its elected City Council, 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 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.
Paris, Texas Economic Development Corporation
POLICY STATEMENT
CRITERIA AND GUIDELINES FOR TAX ABATEMENT
Tax abatement may only be granted for additional value of eligible property improvements made
subsequent to and specified in an abatement agreement between the City and the property owner
or lessee subject to such limitation as the City 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
jurisdiction of the City. 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 Paris Economic
Development Corporation (Paris EDC) in conjunction with the City Manager or designee to the
Tax Abatement Committee. In determining where and how tax abatement will be utilized, the
Tax Abatement 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 City, and (iii) broadening of the tax base, and expansion of the
economic base (e.g. capital investment).
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.
Ell9lbillty Criteria for Tax Abatement
Authorized
I. An authorized facility is used for manufacturing, research, regional distribution, regional
Facility
tourist entertainment, other basic industry, or any primary jobs creating industry. (See
Appendix A for detailed definitions.)
2. A new authorized facility must be created, or an existing authorized facility- must be
improved, modernized or expanded.
3. If a ]eased 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 a eement.
Eligible
1. The property involved must be a newly created or improvements to an existing authorized
Property
facility
2. EIigible 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. Inventog or supplies shall not be chizible for abatement.
Historic
I . if the property involved is a historic property in the City's Historic Districts there are certain
Property
commercial and residential tax exemptions allowed.
Located in
2. Exterior improvements in the historic districts are allowed at 100% for seven (7) years with a
Historic
minimum investment of S5,000 for residential property and S 10,000 for commercial property.
District
3. New residential construction requires a minimum investment of $100,000 to be considered for a
three (3) year 100% exemption.
4. New commercial construction requires a minimum investment of $200,000 for a 100% tax
exemption for three 3 ears.
Value and
1. The City will decide whether to grant tax abatement to an applicant, and the amount, if any, of
Term of
such abatement, on a case -by -case basis and in accordance with these Criteria and Guidelines.
Abatement
2. The term of abatement granted under any agreement may not exceed that permitted by
applica ble state law.
Paris, Texas Economic Development Corporation
POLICY STATEMENT
CRITERIA AND GUIDELINES FOR TAX ABATEMENT
3. The amount of the abatement shall be based upon a percentage (t) to 1 W /o) 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 City and
property owner and/or lessee, subject to such limitations as the City 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
Evaluation
limited to:
Criteria
1. The dollar amount of the increase in the tax roll.
2. The number of jobs created or retained by the employer involved.
3. The possible effect on attracting other taxable improvements into the City.
4. The nature of, and overall effect on the City.
5. The effect on the safety, health, and morals of the City's residents.
6. Any substantial long -term adverse effect on the provision of City services or its tax base.
7. Meeting all relevant zoning requirements.
8. Consistent with the comprehensive plan of the City or 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 City.
10. The types and values of public improvements to be furnished b y 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 City 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 City to another without demonstration ofincreased future
investment (dollars or j obs) 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 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 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
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.
Paris, Texas Economic Development Corporation
POLICY STATEMENT
CRITERIA AND GUIDELINES FOR TAX ABATEMENT
Capital. Investment, Pa II and Job Creation Criteria
A tax abatement may be made available to employers who are creating jobs and increasing new capital investment
with respect to an authorized facility located anywhere within the City or its extra territorial jurisdiction 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
$250,400 and at least ten (10) new jobs added to the employer's labor force. The chart below provides
uidelines that will be considered to cualifv for tax abatement.
Capital Investment
Minimum Annual
Payroll Created
Newly Created
Jobs
Possible Abatement
(1st 3 Years Only)
$250,0004350,000
$125,000
10 -25
200
$350,001-$500,000
$325,000
26-50
3001
$500,0014750,000
$635,00
51 -75
400/
$7501001 - $1,000,000
$945,0
76 -1
500/
$1,000,001 -$1 50 000
$1,260,00
101 -12
600/
$1,250,00141,500,000
$1,570,
126-15
700/
$1,500,001-$1,750,000
$1,880,00
151 -17
800/
$1,750,001-$2,000,000
$2,190,00
176-20
900/
$2.000,001-$3,000,000
$2 .500 ,000
201 -225
1000/
2. when an abatement percentage has been agreed upon it shall be granted based on the following schedule. This
chart does not imply that 100% of the valuation will be abated. It refers to the ratio of the agreed -to
abatement.
Timeframe
Percent of Abatement Agreed To
Year 1
100%
Year 2
100%
Year 3
100%
Year 4
80%
Yew 5
60%
Year 6
40%
Year 7
20%
Year 8
Valuation fully back on tax rolls 0%
3. Any project with a capital investment of more than ten million dollars (S 10,000,000), 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.
4. No abatement will be granted for more than specified in state law.
5. If a newly created business is located or will locate within an enterprise zone, an additional 10 to 20%
abatement may be available as individually negotiated, with total abatement not to exceed 100 %.
6. The City recognizes a significant difference in the valuation of real property and personal property. Because
of depreciation schedules, often the abatement of personal property is basically a tax exemption. For this
reason, the abatement schedule for personal property versus real property may be different.
7. if personal property should become obsolete and be replaced while under an abatement agreement, the
repi cement personal property is not eligible for abatement.
V1. Tax Abatement for Existing Employers Regarding Real or Personal Property.
The City recognizes the value of its existing employers to the wellbeing of the community. The
City desires to encourage existing employers to remain in the City and to improve their
respective businesses and industries, as well as their profitability.
Paris, Texas Economic Development Corporation
POLICY STATEMENT
CRITERIA AND GUIDELINES FOR TAX ABATEMENT
Accordingly, if an existing employer (as opposed to a newly created business or industry
moving into the City), 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 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 abatement for improvements to real
property and for new personal property at authorized facilities are identical to that set forth in
Article V above (except that no new jobs or newly created minimum annual payroll are
required). The City encourages existing employers to retain as many jobs and as much existing
annual payroll as is economically feasible for the existing employer, while remain competitive
in its industry.
VII. Application Process
Applicatiou Process
Eligibility
Any present or potential owner of taxable property in the City may request tax abatement by
filing a written request with the City Manager or County Judge, 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).
S. 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 economic development incentives requested.
8. Any other information about the proposed project as may be required by the City or as deemed
desirable by the City.
Review
1. The application will be reviewed by members of the Tax Abatement Committee.
2. The application will be distributed to the appropriate department heads and taxing entities for
review and comment.
3. No tax abatement application shall be considered for further processing by the governmental
entities unless first approved by the governing board of the Paris EDC.
4. Upon approval by the Paris EDC Board the application will processed through the approval
process of the governing bodies for their consideration.
Public
1. The City will comply with certain public notices and hearings required as mandated by state
Hearing
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 City 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 City must find that:
1. The terms of the proposed agreement comply with these Guidelines and Criteria.
2. There will be no substantial adverse affect on the provision of City services or tax base.
3. That the lanned use of the property will not constitute a hazard to nublic safety health nr
Paris, Texas Economic Development Corporation
POLICY STATEMENT
CRITERIA AND GUIDELINES FOR TAXABATEMENT
VIII. Abatement Agreement Terms and Conditions.
Appendix B provides many of the terms and conditions to be included in any formal abatement
agreement.
IX. Amendments to Guidelines and Criteria
These Guidelines and Criteria are effective for a two (2) year period from the date of their
adoption, unless amended or repealed by the affirmative vote of three- fourths (3/4) of the
members of the City Council.
For a tax abatement application or additional information contact:
Paris Economic Development Corporation
1125 Bonham Street
Paris, Texas 75460
903- 784 -6964
Fax 903- 784 -2503
www.p aTi stex asusa. com
Email: parisedc@paristexasusa.com
morals.
4. Incident to approval of any ordinance designating a reinvestment zone, the City 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 City after the expiration of the a reement.
Variances
Requests for variance from the provisions of these Guidelines and Criteria may be made in writing
to the City; 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 threc-fourths 314 of the members of the City Council.
Proposed
The adoption of these Guidelines and Criteria by the City does not limit the discretion of the City
Agreements
Council to decide whether to enter into a specific tax abatement agreement, or limit the discretion of
Decided on
the City Council to delegate to its employees the authority to determine whether or not the City
Individual
should consider a particular application or request for tax abatement, or create any property,
Basis
contract, or other legal right in any person or entity to have the City Council consider or grant a
specified ap2lication 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 abatement
agreement.
IX. Amendments to Guidelines and Criteria
These Guidelines and Criteria are effective for a two (2) year period from the date of their
adoption, unless amended or repealed by the affirmative vote of three- fourths (3/4) of the
members of the City Council.
For a tax abatement application or additional information contact:
Paris Economic Development Corporation
1125 Bonham Street
Paris, Texas 75460
903- 784 -6964
Fax 903- 784 -2503
www.p aTi stex asusa. com
Email: parisedc@paristexasusa.com
Paris, Texas Economic Development Corporation
POLICY STATEMENT
CRITERIA AND GUIDELINES FOR TAX ABATEMENT
APPENDIX A
Term
Defi'itioin
Abatement or Tax
The full or partial exemption from ad valorem taxes of certain real and tangible personal
Abatement
ro 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
A eements
the Ci of Paris, and also between 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 tourist entertainment, other basic industry, or any primary jobs
Industrial Facility
creating industry (all terms are defined below). All authorized facility definitions include
buildings and structures, including fixed machinery and equipment used in operating the
facility; AND /OR if the facility is a Historic Property defined in Section IV (b) within a City
of Paris Historical District.
Authorized
The City of Paris may also designate areas of the City where residential properties may be
Residential Facility
considered for abatement. The City of Paris will approve their residential abatement
policies, criteria and 8Midefines sEparate from these olicies. See Section IV
Manufacturing
The purpose of which is or will be the manufacture of tangible goods or materials or
Facility
the processing of such goods or materials by physical or chemical change.
Facilities primarily engaged in assembling component parts of manufactured products
are also considered manufacturing facilities.
Regional
Used primarily to receive, store, service, or distribute goods or materials where a
Distribution
majority of the goods or services are distributed to points at least 100 miles from its
Facility
location in the City of Paris.
Regional
Used in providing amusement/entertainment through the admission ofthe general public
Tourist
where the majority of users reside at least 100 miles from the City and where the
Entertainment
majority of users are likely to stay in the City for more than one day and will therefore
Facilitz
Uely utilize local restaurants and hotellmotel accommodations.
Research
Used primarily for research or experimentation to improve or develop new tangible
Facility
goods or materials or to improve or develop the 2roduction processes thereto.
Other Basic
Not elsewhere described, used for the production ofproducts or services which result in
Industry
the creation of new jobs and bring new wealth into the City.
Primary Jobs
Any industry creating "primary jobs" defined as a job that is available at a company for
Creating
which a majority of the products or services of that company are ultimately exported to
Industry
regional, statewide, national, or international markets infusing new dollars into the
local economy, and that meets any one of certain enumerated sector numbers ofthe
North American Industry Classification System (NAICS) found in the Development
Ca oration Act ofthe State of Texas.
Base Year
The assessed value of eligible property as of January 1, preceding the date of execution ofthe
Value
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 ofproperty, who is applying for tax abatement and who will provide
jobs and capital investment within the Reinvestment Zone or within the Enterprise Zone.
Reinvestment
An area where the City or County has decided to influence development patterns and
Zone
attract major investments that will contribute to the development ofthe area through the
use of tax abatement for specified improvements. These statues are found in Chapter
312 ofthe Texas Tax Code.
Enterprise Zone
An area of land designated as such under Chapter 2303 ofthe Texas Government Code.
Job or Jobs
A position of full -time employment for an individual to work 32 hours or more per
week for an employer, in which 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 service. "Jobs" also includes "Full -time
Equivalent Jobs" defined below.
Paris, Texas Economic Development Corporation
POLICY STATEMENT
CRITERIA AND GUIDELINES FOR TAX ABATEMENT
Full -time
A number of part -time jobs where the hours worked in each such job is less than 32 hours
Equivalent
per week, made available by one employer and added together. For example, sixteen
(M) Jobs
(16) part-time jobs made available by one employer where all such part-time jobs added
together require a total of 352 hours of work per week (but no such part -time job
requires 32 hours of work or more per week), will equal eleven (I 1) FTE jobs (352
hours divided by 32 hours per week equal 11). 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
Machinery, equipment, tools, shelving or materials eligible under applicable law for tax
Property
abatement, which can be removed from an authorized facility described in Section IV
s.
pro2wy
Real Property or Personal Pro 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 committee of persons designated from time to time by the Paris Economic
Committee
Development Corporation to study, review and recommend tax abatement to the
applicable taxing entities in the community. The Tax Abatement Committee will be
composed of one person from each of the City (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,
Paris, Texas Economic Development Corporation
POLICY STATEMENT
CRITERIA AND GUIDELINES FOR TAX ABATEMENT
APPENDIX B
Abatement Agreement Terms and Conditions
After approval, the City 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 I . 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 City 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 City 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 City 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 City Council.
13. That the City may cancel or modify the agreement if the property owner fails to comply with
the aereemem
Default If the City determines that the person or entity receiving an abatement is in default according to
the terns and conditions of its agreement, the City 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 City 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 unit in connection with an application or request for tax
of Proprietary abatement under these Guidelines and Criteria and that describes the specific processes or business
Information 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 City after the agreement is
executed is not confidential hereunder.
Inspections 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 agreement to inspect the authorized
Paris, Texas Economic Development Corporation
POLICY STATEMENT
CRITERIA AND GUIDELINES FOR TAX ABATEMENT
10
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 City shall annually evaluate each authorized facility
receiving abatement to ensure compliance with the agreement and report possible violations of the
agreement to the City Council.
Modifications
At any time before the expiration of an agreement made under these Guidelines and Criteria, the
of Agreement
agreement may be modified by the parties to the agreement to include other provisions that could
have been included in original agreement or to delete provisions that were contained in the
original agreement. The modification must be made by the some 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
beyond 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 City, 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 City's 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
ifthe assignor or the assignee is indebted to the City for ad valorem taxes or other obligations, or
if any event of default under the agreement remains uncured.
Administration,
1. The Pans EDC shall be primarily responsible for the administration, review, and monitoring
Contract
of tax abatement agreements authorized by the City under these Guidelines and Criteria.
Review,
These responsibilities shall include verifying that participants in tax abatement agreements
Monitoring and
are in full compliance with the terms of the agreement.
Reporting
2. The Paris EDC shall expeditiously advise the City in writing of any instances of contract
non - compliance by tax abatement participants. In addition, the Paris EDC 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 City Council.
3. The City shall retain the right to independently review and audit the activities of tax
abatement participants.
4. The City shall be responsible for enforcement of the terms of any tax abatement agreement
authorized hereunder.
10