2000-008-RES APPROVING AND AUTHORIZING A TAX ABATEMENT AGREEMENT WITH EARTHGRAINS
RESOLUTION NO. 2000-008
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS,
PARIS, TEXAS, APPROVING AND AUTHORIZING A TAX ABATEMENT
AGREEMENT WITH THEEARTHGRAINS COMPANY; MAKING OTHER
FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND
PROVIDING AN EFFECTIVE DATE.
WHEREAS, the City Council of the City of Paris has been presented a proposed
agreement by and between the City of Pa~is, Paris, Texas, and The Earthgrains Company,
providing for a commercial and industrial tax abatement for certain improvements, a copy of
which is attached hereto and incorporated herein by reference hereinafter called" AGREEMENT" ;
and,
WHEREAS, upon full 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 should be approved, and that the Mayor should be authorized to execute it on behalf of the
City of Paris; NOW THEREFORE,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PARIS, PARIS
TEXAS:
Section 1. That the findings set out in the preamble to this resolution are hereby in all
things approved.
Section 2. That the terms and conditions of the proposed AGREEMENT, having been
reviewed by the City Council of the City of Paris and found to be acceptable and in the best
interests ofthe 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 substantially according to
the terms and conditions set forth in the AGREEMENT.
Section 4. That the terms of the Tax Abatement Agreement and the property the subject
thereof meet the Guidelines and Criteria heretofore adopted by the City of Paris that govern
Reinvestment Zone No.8.
Section 5. That, by hereby granting the tax abatement, there will be no substantial adverse
effect on the provision of City services or on its tax base.
Section 6. 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 7. That this approval and execution of the AGREEMENT on behalf of the City
is not conditional upon approval and execution of any other tax abatement agreement by any other
taxing entity.
Section 8. That this resolution shall be effective from and after its date of passage.
PASSED AND ADOPTED this the 14th day of February, 2000.
t0Jltc71 !ML4;
Charles H. Neeley, MaYfr
ATTEST:
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Mattie Cunningham, City Clerk
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 Mayor,
Charles H. Neeley, duly authorized, hereinafter called CITY, and THE EARTHGRAINS
COMPANY, acting by and through its authorized officer whose signature appears below,
hereinafter referred to as OWNER.
WIT N E SSE T H:
WHEREAS, the City Council of the City of Paris did heretofore, on the 14th day of
February, 2000, pass Ordinance No. 2000-006, establishing Reinvestment Zone No.8 in the City
of Paris, hereinafter called CITY, for commercial and industrial tax abatement, hereinafter
referred to as ORDINANCE, 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 14th day of
February, 2000, in Resolution No. 2000-006, 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, the City Council of the City of Paris did heretofore, on the 14th day of
February, 2000, in Resolution No. 2000-007, pass and adopt a policy on tax abatement incentives;
and,
WHEREAS, the policy on tax abatement incentives constitutes 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; and,
WHEREAS, the contemplated use of the property, as hereinafter defined, the contemplated
improvements to the property in the amount as set forth in this AGREEMENT, and the other
terms hereof are consistent with encouraging development of said Reinvestment Zone No.8 in
accordance with the purposes for which it was created and are in compliance with the CITY's
policy on tax abatement incentives and the ordinance creating such reinvestment zone adopted by
the CITY and all applicable laws; NOW, THEREFORE,
TAX ABATEMENT AGREEMENT - Page 1
The Parties hereto do mutually contract and agree as follows:
I.
Term
1.1 The term of this AGREEMENT shall begin on the 14th day of February, 2000,
with, as hereinafter provided, the tax abatement granted herein beginning with the tax year of
January 1,2001, and expiring on December 31,2007.
II.
Area to be Improved
2.1 The property to be the subject of this AGREEMENT shall be that property
described by metes and bounds in Exhibit A, attached hereto, which is made a part hereof and
shall be hereinafter referred to as PROPERTY.
III.
Improvements
3.1 The OWNER shall make improvements to the PROPERTY as follows: Expansion
in production capacity in the Paris plant consisting of additional production lines and modifications
to the existing buildings and utilities. Such improvements will be made upon the PROPERTY
herein described and will consist of machinery, equipment, and utilities installed to manufacture
bakery products; and an approximately 33,000 square foot expansion to the existing bakery, all
of which will be particularly described in CITY'S Certificate of Completion prepared after the
completion and installation of the improvements and machinery herein described which shall be
furnished to and 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 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 $10,000,000, and shall
be substantially completed on or about March 28, 2001; 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 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.
TAX ABATEMENT AGREEMENT. Page 2
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 of 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 will procure a valid waiver thereof. In further consideration,
OWNER shall thereafter, from the date a Certificate of Occupancy is issued until the expiration
of this AGREEMENT, continuously operate and maintain the PROPERTY as a baked goods
manufacturing plant.
V.
Consideration
Jobs
5.1 Not later than June 20, 2001, OWNER will create at least twenty (20) 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. Such jobs to be filled with priority being given to promote among equally
qualified job applicants the hiring of employees first from within the Enterprise Zone, second from
within the corporate limits of the City of Paris, and third from 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.
5.2 OWNER agrees that, during that portion of the term of the AGREEMENT
occurring subsequent to January 1, 2008, it will not reduce below twenty (20) the number of such
new, permanent jobs so created.
VI.
Default
6.1 In the event that (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) the jobs required herein are
not created and maintained in accordance with this AGREEMENT; 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 and 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
TAX ABATEMENT AGREEMENT - Page 3
has not cured such default with 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 (c) 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.
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 ad valorem real property taxes
from the Property otherwise owed to the CITY shall be abated. Said abatement shall be an amount
equal to one hundred percent (100 %) of the taxes assessed upon the increased value of the
IMPROVEMENTS (including real and personal property, but excluding inventory and supplies)
over the value in the year in which this AGREEMENT is executed and in accordance with the
terms of this AGREEMENT and all applicable state and local regulations or valid waiver thereof;
provided that the OWNER shall have the right to protest or contest any assessment of the property
and said abatement shall be applied to the amount of taxes finally determined to be due as a result
of any such protest or contest. For the purposes of this AGREEMENT, the initial value of the
existing property (not subject to abatement) shall be deemed to be the value as shown on the tax
rolls of the Lamar County Appraisal District as of January 1 of the year in which the
AGREEMENT is executed, said amount being $13,440,820. Said abatement shall extend for a
period of seven (7) years beginning January 1, 2001.
7.2 The abatement granted herein shall be subject to and governed by the Guidelines
and Criteria for Tax Abatements, a copy of which is attached hereto as Exhibit C, and owner shall
comply with the requirements of Exhibit C in the performance of this AGREEMENT, save and
except that, in the event of a conflict between the requirements of Exhibit C and this
AGREEMENT, this AGREEMENT shall control.
VIII.
No Conflict of Interest
8.1 The OWNER represents and warrants that the PROPERTY does not include any
property that is owned or leased by a member of the Planning and Zoning Commission of the City
TAX ABATEMENT AGREEMENT - Page 4
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 the AGREEMENT are binding upon the successors and
assigns of all parties hereto.
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 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 March 28,2001. 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, and OWNER shall provide evidence as to the creation of the twenty
(20) new, permanent jobs described in this 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
TAX ABATEMENT AGREEMENT - Page 5
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 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 CITY with a sworn report, written on company letterhead and
signed by a designated representative of OWNER, which contains the following information:
(a) Copy of the printout from the Lamar County Appraisal District showing the market
value of the Property prior to the construction of the IMPROVEMENTS;
(b) Detailed description of IMPROVEMENTS;
(c) Detailed description of any miscellaneous items of office equipment and the actual
cost of such added office equipment;
(d) 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) Detailed list of and actual cost of added machinery and equipment;
(t) Actual cost of capital IMPROVEMENTS; and,
(g) Date of substantial completion of the IMPROVEMENTS as defined in paragraph
3.1 hereof.
11.2 The OWNER further agrees that it will provide CITY with an annual, sworn report
which contains the following information: (a) the name of original hiree in the newly created job,
date of hire, and place ofresidence of the hiree, and (b) statement as to whether or not the twenty
(20) new, permanent jobs are still inexistence and filled, and (c) the name of the current employee
in the newly created job, date of hire, and place of residence of the hiree. Additionally, OWNER
shall certify, in writing, that it is in compliance with each applicable term of this AGREEMENT.
Such annual report shall be furnished on the forms provided by the City and attached hereto as
Exhibit D.
TAX ABATEMENT AGREEMENT - Page 6
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 14th day of February, 2000, authorizing the Mayor to execute
the AGREEMENT on behalf of the CITY.
12.2 This AGREEMENT was entered into by The Earthgrains Company pursuant to the
authority granted to the authorized official whose signature appears below.
12.3 This AGREEMENT shall constitute a valid and binding AGREEMENT between
the CITY and OWNER when executed in accordance herewith, regardless of whether any other
taxing unit executes a similar agreement for tax abatement.
XIII.
Legal
13.1 No officer, official or agent of the CITY has the power to amend, modify or alter
this AGREEMENT or waive any of its conditions or to bind the CITY by making any promise or
representation not contained herein.
13.2 The terms and conditions of this AGREEMENT are binding upon the successors
and assigns of all parties hereto. However, 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, except that this AGREEMENT may be
assigned to either the Parent Corporation or a wholly-owned subsidiary of OWNER without prior
approval of CITY, provided that the facility remains in operation in the City of Paris.
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 (I) 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
Virgil Rehkemper, V.P. & Controller
The Earthgrains Company
8400 Maryland Avenue
CITY
City Manager
City of Paris
P. O. Box 9037
TAX ABATEMENT AGREEMENT - Page 7
St. Louis, MO 63105
Paris, Texas 75461-9037
With a copy to:
Mike Swanson, Plant Manager
The Earthgrains Company
P. O. Box 9019
Paris, TX 75461-9019
With a copy to:
City Clerk
City of Paris
P. O. Box 9037
Paris, Texas 75461-9037
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
said 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 14th day of February, 2000.
CITY OF PARIS, PARIS, TEXAS
By:
~;V Mf
Charles H. Neeley, M10r
ATTEST:
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TAX ABATEMENT AGREEMENT - Page 8
APPROVED AS TO FORM:
By:
ATTEST:
Secretary
THE EARTHGRAINS COMPANY
Name:
Title:
TAX ABATEMENT AGREEMENT - Page 9
DESCRIPTION OF REINVESTMENT ZONE NO.8
Parts of the plant site of The Earthgrains Company depicted as the shaded area on page 2
of this Exhibit. Said plant site is located upon the following described tract of land:
Situated within the corporate limits of the City of Paris, County of Lamar,
and State of Texas, a part of the Reddin Russell Survey, and being all of a 4.113
acre tract of land conveyed The Paris, Texas Industrial Foundation by deed
recorded in Volume 430, Page 437, Deed Records, Lamar County, Texas, also
being a part of an 87.56 acre tract of land conveyed The Paris, Texas Industrial
Foundation by deed recorded in Volume 430, Page 337, Deed Records, Lamar
County, Texas, and being more particularly described as follows:
BEGINNING at a concrete marker for corner at the Northwest corner of
said 87.56 acre tract of land;
THENCE along the East Boundary Line of 19th Street N.W. as follows:
South 7 Deg. West a distance of 285 feet; South a distance of 799 feet; South 45
Deg. East a distance of 28 feet to a stake for corner;
THENCE along the North Boundary Line of Center Street as follows: South
89 Deg. 20 Minutes East a distance of 2,653 feet; South 86 Deg. East a distance
of 296 feet to a stake for corner, said point being 25 feet north of the Southeast
corner of said 87.56 acre tract ofland;
THENCE North a distance of 818 feet to a stake for corner;
THENCE East a distance of 11 feet to a stake for corner;
THENCE North a distance of 65 feet to a stake for corner;
THENCE South 88 Deg. West a distance of 185 feet to a stake for corner;
THENCE South 78 Deg. 30 Minutes West a distance of 410 feet to a stake
for corner;
THENCE North 87 Deg. 30 Minutes West a distance of 224 feet to a stake
for corner;
THENCE North 8 Deg. West a distance of 43 feet to a stake for corner;
THENCE North 81 Deg. West a distance of255 feet to a stake for corner;
THENCE North 4 Deg. 10 Minutes East a distance of 783 feet to a stake
for corner at the Southeast corner of said 4.113 acre tract of land;
THENCE North I Deg. 35 Minutes West a distance of 374 feet to a stake
for corner at the Northeast corner of said 4.113 acre tract of land;
THENCE along the South Boundary Line of Loop Highway 286 as follows:
South 68 Deg. West a distance of 35.4 feet; South 72 Deg. West a distance of 148
feet; South 67 Deg. West a distance of 400 feet; South 59 Deg. West a distance of
101 feet; South 67 Deg. West a distance of 191 feet; South a distance of 43 feet;
North 88 Deg. West a distance of 104 feet; South 67 Deg. West a distance of 538
feet; South 58 Deg. West a distance of 611 feet to the PLACE OF BEGINNING
and containing 90.62 acres of land.
As determined by an actual survey made on the ground by W.R. Abbott,
Registered Public Surveyor of Texas, January 16, 1973.
EXHIBIT A
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CITY OF PARIS, PARIS, TEXAS
GUIDELINES AND CRITERIA FOR
TAX ABATEMENT AGREEMENTS
I. DEFINITIONS
a) "Abatement" means the full or partial exemption from ad valorem taxes of certain
real and tangible personal property in a Reinvestment Zone designated for
economic development purposes.
b) "Agreement" means the written agreement for tax Abatement between a property
owner and/or lessee and the City.
c) "Base Year Value" means the assessed value of eligible property as of January I
preceding the date of execution of the Agreement plus the agreed upon value of
eligible property improvements made after January I but before the execution of
the Agreement.
d) "Manufacturing Facility" means buildings and structures, including fixed
machinery and equipment, the primary purpose of which is or will be the
manufacture of tangible goods or materials or the processing of such goods or
materials by physical or chemical change. Facilities primarily engaged in
assembling component parts of manufactured products are also considered
manufacturing facilities.
e) "Modernization" means the replacement and upgrading of existing facilities which
increases the productive input or output, updates the technology, or substantially
lowers the unit cost of 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.
t) "Other Basic Industry" means buildings and structures, including fixed machinery
and equipment, not elsewhere described, used, or to be used for the production of
products or services which result in the creation of new, permanent, full-time jobs
and bring new wealth into the community.
g) "Regional Distribution Facility" means buildings and structures, including fixed
machinery and equipment, used or to be used primarily to receive, store, service,
or distribute goods or materials where a majority of the goods or services are
distributed to points at least 100 miles from its location in the City.
-1-
c:a-UBIT
,
v
h) "Regional Tourist Entertainment Facility" means buildings and structures,
including fixed machinery and equipment, used or to be used in providing
amusement/entertainment through the admission of the general public where the
majority of users reside at least 100 miles from the City and where the majority of
users are likely to stay in the City for more than one day and will therefore likely
utilize local restaurants and hotel/motel accommodations.
i) "Reinvestment Zone" is an area where the City or County has decided to influence
development patterns and attract major investments that will contribute to the
development of the area through the use of tax Abatement for specified
improvements.
j) "Research Facility" means buildings and structures, including fixed machinery and
equipment, used or to be used primarily for research or experimentation to improve
or develop new tangible goods or materials or to improve or develop the production
processes thereto.
II. DESIGNATION OF A REINVESTMENT ZONE.
The City 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)).
III. TAX ABATEMENT AUTHORIZED.
The City, through its City Council, may agree in writing with the owner and/or lessee of
taxable real 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 tangible 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 make 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 tangible personal property located on the
real property in each year covered by the Agreement other than tangible 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 tangible personal property.
A property owner and/or lessee shall be eligible for tax Abatement only upon the following
terms and conditions:
-2-
a) Authorized Facilities. A facility may be eligible for Abatement if it is a
Manufacturing Facility, Research Facility, Regional Distribution Facility, R,gional
Tourist Entertainment Facility, or Other Basic Industry.
b) Creation of New Value. Abatement may only be granted for the additional value
of eligible real and tangible personal property improvements, subject to such
limitations as the City may require.
c) New and Existing Facilities. Abatement may be granted for new facilities and
improvements to existing facilities for purposes of modernization or expansion.
d) Eligible Property. 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 facility; provided, however, that inventory or
supplies shall not be eligible for Abatement.
e) Leased Facilities. If a leased facility is granted Abatement, the Agreement may be
executed with the lessor and/or lessee, depending upon the particular circumstances
of the proposed project. If the Agreement is with the lessor, lessor shall
demonstrate binding contracts with the lessee to guarantee compliance with the
terms of the Agreement.
t) Value and Term of Abatement. The City will decide whether to grant tax
Abatement to an applicant, and the amount, if any, of such Abatement, on a case-
by-case basis. The term of Abatement granted under any Agreement may not
exceed that permitted by applicable state law. The amount of the Abatement shall
be based upon a percentage (0 to 100%) of all or a portion of the eligible property.
Abatement may only be granted for the additional value of eligible 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.
If a modernization project includes facility replacement, the value eligible for
Abatement shall be the value of the new unit(s), less the value of the replaced
unit(s). The criteria that will be used in evaluating a particular application for
Abatement will include, but not be limited to:
1) the dollar amount of the increase in the tax roll for the proposed project;
2) the number of jobs created by the proposed project;
3) the possible effect the proposed project will have on attracting other taxable
improvements into the City;
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4) the nature of the proposed project and its overall effect on the community;
5) the proposed project's effect on the safety, health, and morals of the City's
res idents;
6) whether the proposed project will have any substantial long-term adverse
effect on the provision of the City's services or its tax base;
7) whether the project meets all relevant zoning requirements;
8) whether the project is consistent with the comprehensive plan of the City
of Paris or County of Lamar; and
9) the types and cost of public improvements and services (water and sewer
main extensions, streets and alleys, etc.) required of the City and the types
and values of public improvements to be furnished by the applicant.
g) Economic Qualification. In order to be eligible to receive tax Abatement, the
planned improvements:
I) must be reasonably expected to increase the appraised value of the property;
AND
2) must be expected to prevent the loss of employment, retain, or create
employment on a permanent, full-time basis in the City during the term of
the Agreement; AND
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 of increased future investment (Dollars or jobs) or
unusual circumstances whereby without such a move employment is likely
to be reduced; AND
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.
h) Taxability. During the term of the Agreement, taxes shall be payable as follows:
I) the Base Year Value of eligible property as determined each year shall be
fully taxable; and
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2) the additional value of eligible property above the Base Year Value shall be
taxable in the manner described in the Agreement.
The Chief Appraiser of the City shall annually determine an assessment of the real
and personal property comprising the Reinvestment Zone. Each year, 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. Once such value has been established, the Chief Appraiser shall notify
the affected jurisdictions which levy taxes on such property.
IV. APPLICATION.
a) 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.
b) Form. The application shall consist of a completed application form accompanied
by (i) general description of the improvements to be undertaken together with the
projected new value to the property and the type of business operation proposed;
(ii) descriptive list of the improvements for which an Abatement is requested; (iii)
list of the kind, number, and location of all proposed improvements of the
property; (iv) the number and type of jobs created, including information pertaining
to anticipated job transfers; (v) metes and bounds description and plat of the
proposed Reinvestment Zone that shows all roadways within 200 feet of the site
and all existing zoning and land uses within 200 feet of the site; (vi) time schedule
for undertaking and completing the proposed improvements; (vii) the type and
value of any economic development incentives requested; and, (viii) any other
information about the proposed project as may be required by the City or as
deemed desirable.
c) Review. Once the Application has been received, the information submitted will
be reviewed by the City Manager for completeness and accuracy. The City
Manager will then distribute the Application to the appropriate department heads
for internal review and comments. Following staff review, copies of the complete
Application package and staff comments will be provided to the City Council and
to other taxing entities that may be willing to participate in offering tax abatement
incentives. Generally, the City Council, staff, and other taxing entities will discuss
the proposed Application at a work session prior to its formal consideration by the
City Council. Following the work session, the City Manager may be requested to
obtain other information prior to further consideration of the Application.
-5-
At a subsequent regular City Council meeting, the Application for any tax
Abatement incentive may be considered. Prior to final approval, all legal
documents to effect such Reinvestment Zone(s) and tax Abatement Agreement(s)
shall be drafted and approved by the City Attorney.
d) Public Hearing. The City will comply with certain public notices and hearings
required as mandated by state law under the Property Redevelopment and Tax
Abatement Act prior to the designation of a reinvestment zone and execution of a
tax abatement agreement.
e) Findings. In order to enter into an Agreement, the City Council must find that (i)
the terms of the proposed Agreement comply with these Guidelines and Criteria,
(ii) there will be no substantial adverse affect on the provision of the City's services
or tax base, and (iii) the planned use of the property will not constitute a hazard to
public safety, health, or morals.
f) Variances. Requests for variance from the provisions of these Guidelines may be
made in writing to the City Manager; provided, however, that in no event shall the
term of any Abatement exceed the period authorized by applicable state law. Such
request shall include a complete description of the circumstances requiring a
variance. Approval of a request for variance shall require the affirmative vote of
three-fourths (3/4) of the members of the City Council.
V. AGREEMENT. After approval, the City Council shall formally pass an order or
resolution and authorize the execution of an Agreement with the owner and/or lessee of the
facility which shall include, but not be limited to, the following terms:
a) the Base Year Value;
b) percent of increased value to be abated each year;
c) the commencement date and the termination date of Abatement;
d) amount of investment and average number of jobs involved during the term of the
Agreement;
e) the proposed use of the facility, nature of construction, time schedule, plat,
property description, and improvement list, as provided in the Application;
f) a listing of the kind, number, location, and costs of all proposed improvements of
the property;
g) a statement limiting the uses of the property consistent with the general purpose of
-6-
encouraging development or redevelopment of the zone during the period that
property tax exemptions are in effect;
h) that access to the project be provided to allow for the inspection by City inspectors
and officials in order to ensure that the improvemenll> or repairs are made
according to the specifications and conditions of the agreement;
i) a limit to the uses of the property consistent with the general purpose of
encouraging development or redevelopment of the zone during the period that
property tax exemptions are in effect;
j) 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;
k) each term agreed to by the owner of the property;
I) a requirement that the owner of the property shall certify annually to the City
Council that the owner is in compliance with each applicable term of the
agreement;
m) 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; and
n) that the City Council may cancel or modify the agreement if the property owner
fails to comply with the agreement.
VI. DEFAULT. If the City determines that the person or entity receiving an Abatement is in
default according to the terms 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 period of time specified in such notice ("Cure Period"),
then the Agreement may be modified or terminated without further notice.
In the event that the company or individual (i) allows its ad valorem taxes owed the City
to become delinquent and fails to timely and properly follow the legal procedures for their
protest and/or contest, or (ii) 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.
VII. CONFIDENTIALITY OF PROPRIETARY INFORMATION. Information that is
provided to a taxing unit in connection with an application or request for tax Abatement
-7-
under these Guidelines and that describes the specific processes or business activities to be
conducted or the equipment or other property to be located on the property for which tax
Abatement is sought is confidential and not subject to public disclosure until the Agreement
is executed. Such information in the custody of the City after the Agreement is executed
is not confidential under these Guidelines.
VIII. PROPOSED TAX ABATEMENT AGREEMENTS TO BE DECIDED ON AN
INDIVIDUAL BASIS. The adoption of these Guidelines by the City Council does not (i)
limit the discretion of the City Council to decide whether to enter into a specific tax
Abatement agreement, or (ii) limit the discretion of the City to delegate to its employees
the authority to determine whether or not the City Council should consider a particular
application or request for tax Abatement, or (iii) create any property, contract, or other
legal right in any person or entity to have the City Council consider or grant a specific
application or request for tax Abatement.
IX. 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 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 manner as to not
unreasonably interfere with the construction and/or operation of the 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 facility receiving
Abatement to ensure compliance with the Agreement and report possible violations of the
Agreement to the City Council.
X. MODIFICATIONS OF AGREEMENT. At any time before the expiration of an
Agreement made under these Guidelines, the Agreement may be modified by the parties
to the Agreement to include other provisions that could have been included in the original
Agreement or to delete provisions that were contained in the original Agreement. The
modification must be made by the same procedure by which the original Agreement was
approved and executed. The original Agreement, however, may not be modified to extend
the term of the Agreement or the term of the Abatement granted therein beyond the time
permitted by state law.
XI. ASSIGNMENT. An Agreement may be assigned to a new owner or lessee of the 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
-8-
improvements or repairs to the property, except to the extent such improvements or repairs
have been completed. No assignment shall be approved if the assignor or the assignee are
indebted to the City for ad valorem taxes or other obligations, or if any event of default
under the Agreement remains uncured.
XII. AMENDMENTS. These Guidelines are effective for two (2) a 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.
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INITIAL REPORTING REQUIREMENTS
The following information must be provided, in writing, to the City of Paris on company
letterhead, sworn to and signed by a designated representative of the company. Such letter must
be received by the City within thirty (30) days of the date of completion of the improvements
described in the Tax Abatement Agreement(s) but, under no circumstances, shall the deadline for
such report be extended to later than sixty (60) days after the required date of completion provided
in said Agreement(s).
(a) Copy of the printout from the Lamar County Appraisal District showing the market
value of the Property prior to the construction of the IMPROVEMENTS;
(b) Detailed description of IMPROVEMENTS;
(c) Detailed description of any miscellaneous items of office equipment and the actual
cost of such added office equipment;
(d) 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) Detailed (ist of and actual cost of added machinery and equipment;
(f) Actual cost of capital IMPROVEMENTS; and,
(g) Date of substantial completion of the IMPROVEMENTS as defined in paragraph
3.1 of the Agreement.
;::::-UBIT U i
AFFIDAVIT
I, the undersigned, duly authorized to make this Affidavit on behalf of
(Company). on my oath as an officer of said
(Company), hereby swear and affirm that the documents and information prepared
under my direction and attached hereto containing the names, dates of hire, and places of
residences of the hirees of those employees filling the (number) new, permanent jobs
created in accordance with the terms of the Tax Abatement Agreement(s) with the City of Paris,
Paris, Texas, dated , are, in all things, true and correct.
Witness my hand this _ day of
Name:
Title:
STATE OF TEXAS )
)
COUNTY OF LAMAR )
BEFORE ME, the undersigned authority, on this day personally appeared
, known to me to be the person whose name is subscribed to the
foregoing instrument and acknowledged to me that he/she executed the same for the purposes and
consideration therein expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this _ day of
Notary Public, State of Texas
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CERTIFICATION
I, the undersigned. hereby certify that the (number) new, permanent jobs
required by the Tax Abatement Agreements with the City of Paris, County of Lamar, and Paris
Junior College are still in existence and filled by permanent employees. I further certify that
(Company Name) is in compliance with each
applicable term of the aforementioned Tax Abatement Agreements.
Witness my hand this _ day of
Name:
Title:
STATE OF TEXAS )
)
COUNTY OF LAMAR )
BEFORE ME, the undersigned authority, on this day personally appeared
, known to me to be the person whose name is subscribed to the
foregoing instrument and acknowledged to me that he/she executed the same for the purposes and
consideration therein expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this _ day of
Notary Public, State of Texas