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2003-113-RES AUTHORIZE EXECUTION OF 1ST AMENDMENT OF TAX ABATEMENT AGREEMENT BETWEEN COP AND H&W COMMERCIAL WAREHOUSE RESOLUTION NO. 2003-113 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS, PARIS, TEXAS, AUTHORIZING THE EXECUTION OF THE FIRST AMENDMENT TO THE TAX ABATEMENT AGREEMENT BETWEEN THE CITY OF PARIS AND H-W COMMERCIAL WAREHOUSE, INC. DATED APRIL 13, 1998, ASSIGNED TO PARIS WAREHOUSE 107, INC. ON FEBRUARY 8, 1999; MAKING OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND DECLARING AN EFFECTIVE DATE. WHEREAS, the City Council of the City of Paris, Paris, Texas, did heretofore, on the 13th day of April, 1998, in Resolution No. 98-046, authorize the execution, delivery, and performance of an agreement with H - W Commercial Warehouse, Inc., pursuant to the Property Redevelopment and Tax Abatement Act, V.T.C.A., Tax Code Sec. 312.001, etseq. ("Act"), and the Guidelines and Criteria for Designation of Reinvestment Zones and Tax Abatement Agreements ("Guid elines"), to exempt a portion of the value of the property owned by H-W Commercial Warehouse, Inc. located in Reinvestment Zone No. Five from ad valorem taxation upon and subject to the terms, conditions, and provisions set forth in the Tax Abatement Agreement, dated effective as of January 1, 1999 ("Agreement"); and, WHEREAS, during the course of negotiations for financing, H-W Commercial Warehouse, Inc. transferred ownership of the property the subject of the abatement to Paris Warehouse 107, Inc., which companies have common ownership, and the City Council did heretofore, on the 8th day of February, 1999, in Resolution No. 99-018, authorize the execution of the Consent of Assignment of Tax Abatement Agreement from H-W Commercial Warehouse, Inc. to Paris Warehouse 107, Inc.; and, WHEREAS, Section VIII of said Tax Abatement Agreement provides an option for a two (2) year extension of the term of said Agreement, and Paris Warehouse 107, Inc. has certified that it is in compliance with the terms of said Agreement and has requested such extension; and, WHEREAS, the form of the First Amendment to Tax Abatement Agreement, attached hereto as Exhibit A, should, in all things be approved, and the Mayor should be authorized to execute the same; 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 City Council of the City of Paris, Paris, Texas, hereby fmds and determines that the terms of the First Amendment to Tax Abatement Agreement for Reinvestment Zone No. Five, the form of which is attached hereto as Exhibit A, meet the criteria for tax abatement as set forth in the Act and in the Guidelines adopted by the City of Paris. Section 3. That, pursuant to Section 312.208(a) of the Act, the City Council of the City of Paris hereby authorizes the execution, delivery, and performance by the City of the First Amendment to Tax Abatement Agreement with H-W Commercial Warehouse, Inc., assigned to Paris Warehouse 107, Inc., in the form attached hereto as Exhibit A. Section 3. That the Mayor be, and he is hereby, authorized and directed to execute, on behalf of the City of Paris, the First Amendment to Tax Abatement Agreement, under the terms and conditions and in the form shown in Exhibit A, attached hereto, and to do or cause to be done all things necessary to effect such Amendment. Section 3. That this resolution shall be effective from and after its date of passage. PASSED AND APPROVED this 14th day of July, 2003. ATTEST: ~ ~\.~~..~ Mattie Cunningham, City Clerk APPROVED AS TO FORM: FIRST AMENDMENT TO TAX ABATEMENT AGREEMENT BETWEEN THE CITY OF PARIS AND H-W COMMERCIAL WAREHOUSE, INC. DATED APRIL 13,1993, ASSIGNED TO PARIS WAREHOUSE 107, INC. ON FEBRUARY 8, 1999 COUNTY OF LAMAR ) ) ) KNOW ALL MEN BY THESE PRESENTS: STATE OF TEXAS That this First Amendment to Tax Abatement Agreement between the City of Paris and H-W Commercial Warehouse, Inc, dated May 17, 1993, assigned to Paris Warehouse 107, Inc. on February 8, 1999, is made this 14th day of July, 2003, by and between the CITY OF PARIS, PARIS, TEXAS, a municipal corporation, acting by and through its Mayor, Curtis Fendley, duly authorized, hereinafter called CITY, and PARIS WAREHOUSE 107, INC., acting by and through its authorized officer whose signature appears below, hereinafter called OWNER. WITNESSETH A. That OWNER, having fully complied with and met all conditions of the above- described Agreement, having exercised the option to extend said Agreement for two (2) years, does hereby mutually agree with CITY that Section VIII of said Agreement be deleted in its entirety and that Sections I, V, VI, VII, and XII be amended to read as follows: "I. "Term "I.I The term of this AGREEMENT shall begin on the 13th day of April, 1998, with, as hereinafter provided, tax abatement granted herein beginning with the tax year beginning January 1, 1999, and expiring on December 31,2005." "V. " Consideration "Jobs EXHIBIT A Page 1 of 5 "5.1. "5.2. OWNER agrees that, during that portion of the term of the AGREEMENT occurring subsequent to January 1, 2000, and extending through December 31, 2005, it will not reduce below twenty-two (22) 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 (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) OWNER breaches any of the terms and conditions of this AGREEMENT or any amendments or extensions thereto, then this AGREEMENT shall be in default. In the event the OWNER 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 90-day period due to cause beyond the control ofthe OWNER, this AGREEMENT may be modified or terminated by the CITY. Notice shall be in accordance with paragraph 14.3. As liquidated damages in the event of default, all taxes which ~therwise would have been paid to the CITY without the benefit of abatement, including those taxes abated under this AGREEMENT for that taxable year beginning January 1, 1999, and continuing through the period of this contract extension, 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 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 It is understood and agreed among the parties that the PROPERTY, also known as Tax Reinvestment Zone Number Five, shall be appraised at market Page 2 of 5 value prior to the construction and installation of the IMPROVEMENTS for the purposes of property tax assessment effective January 1, 1999, and continued at market value without said IMPROVEMENTS until the expiration of this AGREEMENT. The CITY, acting under and pursuant to the said Texas Property Redevelopment and Tax Abatement Act, hereby covenants and agrees to abate: (a) all CITY real property taxes that would otherwise be payable with respect to the IMPROVEMENTS, and (b) all CITY personal property taxes that would otherwise be payable with respect to all personal property, save and except inventory and supplies, that is brought onto the PROPERTY described in Exhibit' A' as a part of the improvement project herein described, for a period of seven (7) years, beginning January 1, 1999, and ending December 31, 2005." "XII. "Initial and Annual Reporting "12.1 The OWNER further agrees that it will, immediately upon completion of the IMPROVEMENTS, provide CITY with a sworn report which contains the following information: "(a) Copy of the appraisal showing the market value without the IMPROVEMENTS as required in paragraph 7.1; "(b) Detailed description of IMPROVEMENTS; "(c) Description of any miscellaneous items of office and plant equipment; "(d) Identification of plans and specifications of constructed improvements and the location of the same for inspection by City's certification team; "(e) 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 hereof. Page 3 of 5 "12.2 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 of residence of the hiree, and (b) statement as to whether or not the twenty-two (22) new, permanent jobs are still in existence and filled, and (c) the name of 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. "12.3 In addition to the annual report required under Section 12.2 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." B. This extension of a Tax Abatement Agreement as granted under this First Amendment shall be the sole and only extension granted to Paris Warehouse 107, Inc., and no further extension shall be granted, C. CITY and OWNER covenant and agree to in all things comply with the terms and provisions of the original Agreement not amended by this First Amendment, and that the terms and provisions of said original Agreement, unless amended as provided herein, shall remain in full force and effect. EXECUTED on this the 14th day of July, 2003. CITY OF PARIS, PARIS, TEXAS By: Curtis Fendley, Mayor ATTEST: Mattie Cunningham, City Clerk Page 4 of 5 APPROVED AS TO FORM: Larry W. Schenk, City Attorney PARIS WAREHOUSE 107, INC. By: Name: Title: ATTEST: Secretary Page 5 of 5