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1999-037-INCENTIVE AGREEMENT, PARIS WAREHOUSE 107, WE-PACK LOGISTICS RESOLUTION NO. 99-037 WHEREAS, the City Council of the City of Paris did heretofore, on the 13th day of April, 1998, pass Ordinance No. 98-018, establishing Reinvestment Zone No. Five in the City of Paris for commercial and industrial tax abatement as authorized by the Property Redevelopment and Tax Abatement Act, as amended, being V.T.C.A. Tax Code, Chapter 312; and, WHEREAS, the City Council of the City of Paris did heretofore, on the 13th day of April, 1998, in Resolution No. 98-046, authorize the execution of a Tax Abatement Agreement with H-W Commercial Warehouse, Inc., which Agreement was assigned to Paris Warehouse 107, Inc.; and, WHEREAS, the Tax Abatement Agreement provides for the abatement of real and personal property taxes for a period of seven (7) years in consideration of the creation of twenty- two (22) new, permanent jobs; and, WHEREAS, H-W Commercial Warehouse, Inc. has requested that ownership of that portion of 13th Street S.W. lying within the Southwest Industrial Park be transferred to it in consideration of the creation by We-Pack Logistics, Inc. of eight (8) additional new, permanent jobs, the retention by We-Pack Logistics, Inc. of one hundred (100) permanent jobs for a period of ten (10) years, and the retention by Paris Warehouse 107, Inc. of twenty-two (22) permanent jobs for an additional period of three (3) years after the expiration of the aforementioned Tax Abatement Agreement; and, WHEREAS, taking into consideration the following facts: (1) the owners of H-W Commercial Warehouse, Inc., Paris Warehouse 107, Inc., and We-Pack Logistics, Inc. originally built, at their own expense, 13th Street S.W. prior to the same being dedicated to the City of Paris; (2) the only property served by 13th Street S.W. is the Southwest Industrial Park, which is wholly owned by H-W Commercial Warehouse; (3) returning the street to private ownership will result in the City of Paris not being responsible for the maintenance thereof; and, (4) returning the street to private ownership will result in the same being placed on the tax rolls; it is deemed appropriate that such ownership be transferred for the consideration above-stated; and, WHEREAS, the form of the Incentive Agreement, attached hereto as Exhibit A, should, in all things be approved, and the Chairperson, Mary Ann Fisher, should be authorized the execute the same; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PARIS, that the form of the Incentive Agreement with Paris Warehouse 107, Inc., We-Pack Logistics, Inc., and other affiliates thereof, attached hereto as Exhibit A, be, and the same is hereby, approved; and, BE IT }'URTHER RESOLVED, that the Chairperson, Mary Ann Fisher, be, and be is hereby, authorized and directed to execute, on behalf of the City of Paris, the Incentive Agreement, under the terms and conditions and in the form shown in Exhibit A, attached hereto. PASSED AND ADOPTED this 12th day of April, 1999. ATTEST: Mattie Cunningham, City Clerk APPROVED: 5ur#1?--Y-'-7 => Scott P. Foster, City Attorney , m(l~ 11m 1~JV Mary An Fisher, Chairperson THE STATE OF TEXAS ) ) COUNTY OF LAMAR ) INCENTIVE 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 Chairperson, Mary Ann Fisher, duly authorized, hereinafter called CITY, and WE-PACK LOGISTICS, L.P., a Texas limited partnership, acting by and through its authorized officer whose signature appears below, hereinafter referred to as PARTNERSHIP. For and in consideration of the transfer of ownership by CITY to H-W Commercial Warehouse, Inc., an affiliate of the PARTNERSHIP, of that portion of 13th Street S.W. that is located within the Southwest Industrial Park, PARTNERSHIP agrees as follows: I. Creation of New, Pennanent Jobs A. Area to be Improved The property to be the subject of this section of the Agreement shall be that property known as the Southwest Industrial Park, described by metes and bounds in Ordinance No. 98-018, and shall be hereinafter referred to as PROPERTY. H- W Commercial Warehouse, Inc. owns a portion of the PROPERTY in fee, and PARTNERSHIP owns a leasehold estate in a portion of the PROPERTY. B. Improvements The PARTNERSHIP shall make improvements to the PROPERTY as follows: Construction of a traffic control facility for the Southwest Industrial Park, including gates and any fencing which may be necessary to achieve traffic control. Such improvements will be made upon the PROPERTY herein described and will consist of a traffic control building and a parking lot along the route of access to the PROPERTY, all of which will be particularly described in CITY'S Certificate of Completion prepared after the completion and installation of the improvements herein described. Said Certificate shall be duly executed by the Mayor or Mayor Pro Tern of the City of Paris and attached hereto as Exhibit B. The improvements described in this paragraph shall be hereinafter referred to as IMPROVEMENTS. The IMPROVEMENTS will be at a cost in excess of $50,000.00, and shall be substantially completed on or about June 30, 1999; provided, that PARTNERSHIP shall have such additional time to complete the IMPROVEMENTS as may be required in the event of "force majeure" if PARTNERSHIP is diligently and faithfully pursuing completion of the IMPROVEMENTS. For this purpose, "force majeure" shall mean any contingency or cause beyond the reasonable control of PARTNERSHIP including, without limitation, acts of God, or the public enemy, EXHIBIT A any natural disaster, war, riot, civil commotion, insurrection, governmental or de facto governmental action, unless caused by acts or omissions of PARTNERSHIP, fires, explosions, accidents, floods, and labor disputes or strikes. The date of completion of the IMPROVEMENTS shall be defined as the date a Certificate of Occupancy is issued by the City of Paris. C. Consideration - Improvements The PARTNERSHIP agrees and covenants that it will diligently and faithfully, in a good and workmanlike manner, pursue the completion of the IMPROVEMENTS as good and valuable consideration of this AGREEMENT, PARTNERSHIP 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 a valid waiver thereof. In further consideration, PARTNERSHIP shall thereafter, from the date a Certificate of Occupancy is issued until the expiration of this Section of the AGREEMENT, continuously operate and maintain the PROPERTY as a traffic control facility. D. Consideration - Jobs 1. Not later than December 31, 1999, PARTNERSHIP will create at least eight (8) new, permanent jobs at the Paris Plant for work to be performed substantially either (a) at the site of the Improvements, or (b) in support of operations performed by others at the site of the IMPROVEMENTS. In filling such jobs, priority will be given first to equally qualified job applicants residing within the Enterprise Zone, second to equally qualified job applicants residing within the corporate limits of the City of Paris, and third to equally qualified job applicants residing within the County of Lamar, State of Texas, subject to the laws and regulations of the United States of America and the State of Texas and subject to any labor contracts currently in effect and any successive contracts or past practices. 2. At least twenty-five percent (25 %) of PARTNERSHIP's new employees under this Section shall be residents of the City of Paris Enterprise Zone or shall be economically disadvantaged individuals. For the purposes of this Section, an economically disadvantaged individual is an individual who (a) was unemployed for at least three (3) months before obtaining employment with the PARTNERSHIP; (b) receives public assistance benefits, including welfare payments or food stamps, based on need and intended to alleviate poverty; (c) is an economically disadvantaged individual, as defined by Section 4(8), Job Training Partnership Act (29 V.S.C. Section 1503(8)); (d) is an individual with handicaps, as defined by 29 U.S.C. Section 706(8); (e) is an inmate, as defined by Section 498.001; (f) is entering the workplace after being confined in a facility operated by the institutional division of the Texas Department of Criminal Justice or under contract with the Texas Department of Criminal Justice; (g) has been released by the Texas Youth Commission and is on parole, if state law provides for such a person to be on parole; or (h) meets the current low income or moderate income limits developed under Section 8, United States Housing Act of 1937 (42 U.S.C. Section 1437f et seq.). 3. PARTNERSHIP agrees that, for a period of ten (10) years after December 31, 1999, it will not reduce below eight (8) the number of such new, permanent jobs so created. E. Compliance Provisions The PARTNERSmp 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, and PARTNERsmp shall provide evidence as to the creation of the eight (8) new, permanent jobs described in this Agreement. Representative of the CITY inspecting the property and improvements 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. Said representative shall also be required to observe any facility rule and regulation applicable to the property. F. Initial and Annual Reporting 1. The PARTNERSmp further agrees that it will, immediately upon completion of the IMPROVEMENTS, provide CITY with a sworn report which contains the following information: a. Detailed description of IMPROVEMENTS; b. Description of any miscellaneous items of office and plant equipment; c. Identification of plans and specifications of constructed improvements and the location of the same for inspection by CITY's certification team; d. Actual cost of added machinery and equipment; e. Actual cost of capital IMPROVEMENTS; and, f. Date of substantial completion of the IMPROVEMENTS as defined in paragraph LB. hereof. 2. The PARTNERSHIP further agrees that it will provide CITY with an annual, sworn report which contains the following information: (a) the name of each original hiree in the newly created job, date of hire, and place of residence of the hiree, and (b) statement as to whether or not the eight (8) new, permanent jobs are still in existence and filled, and (c) the name of each current employee in the newly created job, date of hire, and place of residence of the hiree. Additionally, PARTNERSHIP shall certify, in writing, that it is in compliance with each applicable term of this agreement. II. Retention of Jobs After Expiration of Tax Abatement A. Retention PARTNERSHIP agrees that, for a period of three (3) years from and after the expiration of the Tax Abatement Agreement between H-W Commercial Warehouse, Inc., assigned to Paris Warehouse 107, Inc., dated April 13, 1998, it will not reduce, nor will it permit Paris Warehouse 107, Inc. to reduce, if applicable, below twenty-two (22) the number of permanent jobs created in consideration of the tax abatement. B. Annual Reporting The PARTNERSHIP agrees that it will provide CITY with an annual, sworn report which contains the following information: (a) the name of current employee in the retained job, date of hire, and place of residence of the hiree, and (b) statement as to whether or not the twenty-two (22) retained jobs are still in existence and filled. Additionally, PARTNERSHIP shall certify, in writing, that it is in compliance with each applicable term of this Section. III. Retention of Jobs at Warehouse Facility A. Retention PARTNERSHIP agrees that, for a period of ten (10) years from the date of this Agreement, it will not reduce below one hundred (100) the number of permanent jobs at the Paris warehouse facility located at 2300 13th Street S.W., Paris, Texas, for work to be performed substantially either (a) at the site of the warehouse facility, or (b) in support of operations performed by others at the site of the warehouse facility. B. Initial and Annual Reporting 1. The PARTNERSHIP further agrees that it will, within ninety (90) days of the date of this agreement, provide CITY with a sworn report which contains the names of current employee in the retained jobs, dates of hire, and places of residence of the hiree. 2. The PARTNERSHIP further agrees that it will provide CITY with an annual, sworn report which contains the following information: (a) the name of current employee in the retained job, date of hire, and place of residence of the hiree, and (b) statement as to whether or not the one hundred (l00) retained jobs are still in existence and filled. Additionally, PARTNERSHIP shall certify, in writing, that it is in compliance with each applicable term of this Section. IV. Default In the event that (a) the IMPROVEMENTS described in Section I hereof are not completed in accordance with this AGREEMENT; or (b) ad valorem taxes owed the CITY become delinquent and failure to timely and properly follow the legal procedures for protest or contest of any such ad valorem taxes occurs; or (c) PARTNERSHIP breaches any of the terms and conditions of this AGREEMENT, then this AGREEMENT shall be in default. In the event the PARTNERSHIP defaults in its performance of either (a), or (b) or (c) above, then the CITY shall give the PARTNERSHIP written notice of such default and if the PARTNERSHIP has not cured such default with thirty (30) days of said written notice, or, if such default cannot be cured by the payment of money and cannot, with due diligence, be cured within a ninety (90) day period due to cause beyond the control of the PARTNERSHIP, this AGREEMENT may be modified or terminated by the CITY. Notice shall be in accordance with paragraph VII.C. As liquidated damages in the event of default, PARTNERSHIP agrees to pay to CITY the sum of $50,000.00 for the purchase of 13th Street S.W., and such amount 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 PARTNERSHIP may be entitled. V. No Conflict of Interest The CITY represents and warrants that the PROPERTY does not include any property that is owned by a member of the City Council approving, or having responsibility for the approval of, this AGREEMENT. VI. Conditions The terms and conditions of the AGREEMENT are binding upon the successors and assigns of all parties hereto. VII. Authority to Contract A. This AGREEMENT was authorized by resolution of the City Council at its regularly scheduled meeting on the 12th day of April, 1999, authorizing the Mayor Pro Tern to execute the AGREEMENT on behalf of the City. B. This AGREEMENT was entered into by WE-PACK LOGISTICS, L.P. pursuant to authority granted to Chip Harper, President. C. This AGREEMENT shall constitute a valid and binding AGREEMENT between the CITY and PARTNERSHIP when executed in accordance herewith, regardless of whether any other taxing unit executes a similar agreement for tax abatement. VIII. Legal A. 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. B. This AGREEMENT, except by operation of law, shall not be assigned or transferred by PARTNERSHIP, without the prior written consent of CITY, which consent shall be at the sole discretion of the CITY. C. 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: PARTNERSHIP Chip Harper, President H-W Commercial Warehouse, Inc. 2510 S. Church Street Paris, Texas 75460 CITY City Manager City of Paris P. O. Box 9037 Paris, Texas 75461-9037 With a copy to: We-Pack Logistics, Inc. 2510 S. Church Street Paris, Texas 75460 With a copy to: City Clerk City of Paris P. O. Box 9037 Paris, Texas 75461-9037 D. 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 said Agreement are declared to be severable. E. 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, PARTNERSHIP, and their respective successors, and permitted assigns, if any. Witness our hands this 12th day of April, 1999. CITY OF PARIS, PARIS, TEXAS By: mlll1fJ; {);a1YJ drsA.vtL~ Mary A n Fisher, Chairperson ATTEST: Mattie Cunningham, City Clerk APPROVED AS TO FORM: Scott P. Foster, City Attorney WE-PACK LOGISTICS, L.P. By: Chip Harper, President ATTEST: Susan Harper, Secretary