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1993-036-RES WHEREAS, the City Council of the City of Paris did heretofore in Resolution No. 92-073 establish the RESOLUTION NO. 93- 036 WHEREAS, the City Council of the City of Paris did heretofore in Resolution No. 92-073 establish the Guidelines and Criteria for Reinvestment Zone No, Three and in Ordinance No, 92-033 designate Reinvestment Zone No, Three and authorize Tax Abatement Agreement between Merico, Inc, and the City of Paris; and, WHEREAS, the established in the upon Merico, Inc., Agreement; and, requirements for hiring practices Guidelines and Criteria which are binding were not included within the Tax Abatement WHEREAS, it is deemed to be appropriate to avoid confusion in the future to include such hiring practice requirement in said Tax Abatement Agreement in the form of Exhibit A attached hereto; NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PARIS, that the Mayor of the City of Paris, George Fisher, be, and he is hereby authorized and directed on behalf of the City of Paris to execute the First Amended Tax Abatement Agreement for Reinvestment Zone No. Three, with Merico, Inc., attached hereto as Exhibit A. Passed and adopted this 15th day of March, 1993. ~st.~ ATTEST: Mattie Cunningham, APPROVED A THE STATE OF TEXAS COUNTY OF LAMAR ~ ~ FIRST ANENDED TAX ABATEMENT AGREEMENT This agreement is entered into by and bet\veen the City of Paris, Paris, Texas, a municipal corporation of Lamar County, Texas, acting by and through its Mayor, George Fisher, duly authorized, hereinafter referred to as CITY, and MERICO, INC" acting by and through its President, hereinafter referred to as OWNER. WITNESSETH: \iHEREAS, on the 14th day of September, 1992, the City Council of the City of Paris, Paris, Texas, passed an Ordinance establishing Reinvestment Zone No. Three in the City of Paris for commercial and industrial tax abatement, hereinafter referred to as ORDINANCE, as authorized by the Property Redevelopment and Tax Abatement Act, as amended; and, WHEREAS, the CITY has previously adopted a policy on tax abatement incentives; and, WHEREAS, the pol icy on tax constitutes appropriate guidelines and abatement agreements to be entered required by the Property Redevelopment as amended; and, abatement incentives criteria governing tax into by the CITY as and Tax Abatement Act, WHEREAS, the CITY has adopted a resolution stating that it elects to be eligible to participate in offering tax abatement agreements; and, WHEREAS, in order to maintain or enhance the commercial and industrial economic and employment base of the Paris area for the long term interest and benefit of the CITY: 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. Three in accordance with the purposes for its creation 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, the Parties hereto do mutually agree as follows: MERICO, INC, TAX ABATEMENT AGREEMENT - Page 1 EXHIBIT A Property ~l, The property to be the subject of the AGREEMENT shall be that property described by metes and bounds and map attached hereto as EXHIBIT A and made a part hereof and shall be hereinafter referred to as PROPERTY, Improvements ~2. The OWNER shall make improvements to the property as specifically described in Exhibits A and B, hereinafter referred to as IMPROVEMENTS, with a total improvement cost of at least $4,000,000.00 and substantially complete the same on or about December 31, 1993; 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, war, riot, civil commotion, insurrection, governmental or de facto governmental action (unless caused by ac ts or omiss ions of OWNER), fires, explos ions, floods, and 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, Jobs n, (1) Not later than December 31, 1993, OWNER wi 11 create at least forty (40) 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 per formed by other s 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. (2) OWNER agrees that, during that portion of the term of this AGREEMENT occurring subsequent to December 31, 1993, it will not reduce below forty (40) the number of such new, permanent jobs so created. Use of Property ~4, The OWNER agrees and covenants that it will diligently and faithfully, in a good and workmanlike manner, pursue the MERICO, INC. TAX ABATEMENT AGREEMENT - Page 2 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 prepared food manufacturing plant and related facilities, Default ~5. In the event that (a) the IMPROVENENTS for which an abatement has been granted are not completed in accordance with this AGREEMENT or (b) 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 (c) OI'lNER breaches any of the terms and conditions of this AGREEMENT, then this AGREEMENT shall be in default. In the event that the O~NER defaults in its performance of either (a), or (b) or (c) above, then the CITY shall give the OWNER written notice of such default and if the OWNER 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 gO-day period owning to cause beyond the control of the OWNER, this AGREEMENT may be terminated by the CITY. Notice shall be in writing and shall be delivered by personal delivery or certified mail to the OWNER at the address of as shown in this section. As liquidated damages in the event of default, all taxes which otherwise would have been paid to the CITY without the benefit of abatement (interest will be charged at the statutory rate for delinquent taxes as determined by Section 33.01 of the Proper ty Tax Code of the S ta te of Texas, but without the addition of a penalty) 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. Notice ~6. 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 (a) delivered in person, or (b) 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: MERIca, INC, TAX ABATEMENT AGREEMENT - Page 3 IF TO CITY: IF TO OWNER: City Manager City of Paris p, 0, Box 9037 Paris, TX 75461-9037 Merico, Inc, 2020 19th Street N.W. Paris, TX 75460 ATTN: Plant Manager Appraisal P. It is understood and agreed among the parties that the PROPERTY, also knows as Tax Reinvestment Zone Number Three, shall be appraised at market value for the purposes of property tax assessment effective January 1, 1992, and continued at market value until the expiration of this AGREEMENT, Conflict of Interest ~8. 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. Assignment ~9. The terms and cond it ions of the AGREEMENT are bind ing upon the successors and assigns of all parties hereto. However, this AGREEMENT cannot be ass igned by OWNER other than to either the Parent Corporation or a wholly-owned subsidiary of OWNER unless written permission is first granted by the CITY, which permission shall be at the sole discretion of the CITY. Indemnification ~10. 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 obligations hereunder, 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. Inspection HI. The OWNER further agrees that the CITY, employees, shall have reasonable right of its agents and access to the MERICa, INC. TAX ABATEMENT AGREEMENT - Page 4 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 that the same have been validly waived. 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. Abatement ~12, 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 100% of the taxes assessed upon the increased value of the IMPROVEMENTS (including real and personal property) 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. Said abatement shall extend for a period of seven (7) years beginning from the first day of January of the year following completion of the improvements. Legal H3. (1) This AGREEMENT was authorized by resolution of the City Council at its regularly scheduled meeting on the 14th day of September, 1992, authorizing the Mayor to execute the AGREEMENT on behalf of the City. (2) This AGREEMENT shall constitute a valid and binding AGREEMENT between the CITY and OWNER pursuant to authority granted by its Board of Directors on the 14th day of September, 1992. (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. (4) Texas, This AGREEMENT is performable in Lamar County, (5) This AGREEMENT is effective this 14th day of September, 1992, MERICO, INC. TAX ABATEMENT AGREEMENT - Page 5 WITNESS our hands this 15th day of March, 1993. APPROVED: George Fisher, Mayor, City of Paris ATTEST: Mattie Cunningham, City Clerk APPROVED AS TO FORM: T, K, Haynes, City Attorney OWNER, MERICa, INC. ATTEST: By: Michael P. Swanson, Vice President & General Manager Rick Shannon, Controller MERICa, INC. TAX ABATEMENT AGREEMENT - Page 6 EXHIBIT B Description of Improvements Merico, Inc., Earth Grains Division, agrees to build a 13,200 square foot addition to its plant located at 2020 19th Street N,W" in Paris, Texas. This addition will be equipped with machinery and equipment used in the manufacturing of bakery products, The cost of this project is estimated to be between 4 and 8 million dollars. This construction will require 60-75 employees, and there will be 40-50 permanent employees added to the work force because of this addition,