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92-033 ORD AND RES DESIGNATING REINVESTMENT ZONE NUMBER THREE FOR PURPOSES OF TAX ABATEMENT AND AUTHORIZING TAX ABATEMENT AGREEMENT BETWEEN COP AND MERICO INC ORDINANCE N0. 92-033 AN ORDINANCE AND RESOLUTION DESIGNATING REINVESTMENT ZONE NUMBER THREE FUR PURPOSES OF TAX ABATEMENT AND AUTHORIZING THE EXECUTION, I7ELIVERY AND PERFORMANCE OF THAT CERTAIN TAX ABATEMENT AGREEMENT BETWEEN THE CITY OF PARIS, PARIS, TEXAS, AND MERICO, INC. PERTAINING TO CERTAIN PROPERTY OWNED BY MERICU, INC. IN THE PARIS ENTERPRISE ZONE AND REINVESTMENT ZONE N0. THREE, AND OTHER MATTERS RELATING THERETO; AND PROVIDING FOR AN EFFECTIVE DATE UF SEPTEMBER 14, 1992. WHEREAS, by Resolution duly adopted by the City Council of the City of Paris, on September 14, 1992, the City (i) elected to participate in tax abatement in accordance with the Property Redevelopment and Tax Abatement Act, V.T.C.A., Tax Code 9312.001 et.seq., hereinafter referred to as the Act; and (ii) adopted Guidelines and Criteria for Designation of Reinvestment Zones and Tax Abatement Agreements, hereinafter referred to as Guidelines; and, WHEREAS, the Texas Department of Commerce authorized and approved the creation and designation of the Paris Enterprise Zone, including among other property the real property described in Exhibit A attached hereto, pursuant to the Agreement for Designation of an Enterprise Zone, dated June 12, 1989, by and between the Texas Department of Commerce and the City of Paris; and, WHEREAS, Section 312.2011 of the Act provides that designation of an area as an enterprise zone under the Texas Enterprise Zone Act constitutes designation of the area as a reinvestment zone under the Act without further hearing or other procedural requirements or other designation; and, WHEREAS, by Resolution No. 89-068 duly adopted by the City Council of the City of Paris, Paris, Texas on June 12, 1989, the City established and designated Paris Enterprise Zone, encompassing the real property described in Exhibit A attached hereto for purposes of the Tax Increment Financing Act and the Act; acid, WHEREAS, Merico, Inc., hereinafter referred to as Owner, owns certain real property in the City of Paris located within Paris Enterprise Zone, on which Owner has constructed and is currently operating a prepared food manufacturing plant and related facilities; and, WHEREAS, Owner proposes to expand the existing facilities by the construction and installation of certain improvements to be used in the manufacturing of bakery products which Owner anticipates will increase the efficiency of the facilities, thereby facilitating the maintenance of current employment positions at the facilities, and creating approximately 40-50 additional permanent employment positions; and, WHEREAS, the Owner submitted an application for tax abatement to the City in accordance with the Guidelines; and, WHEREAS, in order to encourage the Owner to construct and install the proposed improvements and to continue to operate the facilities, the City Council of the City of Paris, has determined that it would be in the best interest of the City to (i) designate the property as a reinvestment zone for the purposes and and in accordance with Section 312.2011 of the Act, and (ii) enter into an agreement with the Owner pursuant to the Act and the Guidelines to exempt a portion of the value cf the property owned by Owner located EXHIBIT A Description of Reinvestment Zone Number Three Parts of the plant site area of Merico, Inc. as depicted as the shaded area upon page 2 of this Exhibit. Said plant site is lucated 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 LZeddin Russell Survey and being all of a 4.113 acre tract of land conveyed The Paris Industrial Foundation by deed recorded in Volume 430, Page 437, also being a part of an 87.56 acre tract of land conveyed T'he Paris Industrial Foundation by deed recorded in Volume 430, Page 337, of the Deed Records of said County and State. BCGINNING at a concrete marker for corner at the Northwest corner of said 87.56 acre tract of land; THENCC along the East Boundary Line of 19th Street Northwest as follows: South 71 West, a distance of 285 feet; South, a distance of 799 feet; South 451 East, a distance of 28 feet to a stake for corner; THENCE along the North Boundary Line of Center Street as follows: South 890 20' East, a distance of 2,653 feet; South 861 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 of land; TfiENCE 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 880 West, a distance of 185 feet to a stake for corner; THE:NCE South 78° 30' West a distance of 410 feet to a stake for corner; THENCE North, 870 30' West, a distance of 224 feet to a stake for corner; THENCE North 80 West, a distance of 43 feet to a stake f or corrier ; THENCE North 810 West, a distance of 255 feet to a stake for corner; THENCE North 40 10' East, a distance of 783 feet to a stake Lor corrier at the Southeast corner of said 4.113 acre tract of land; Tt{ENCE North 10 35' West, a distance of 374 feet to a stake for corner at the NortheasC corner of said 4.113 acre tract of land; THENCE along the 5outh Boundary Line of Loop Highway 286, as follows: South 681 West, a distance of 35.4 feet; South 72° West, a distance of 148 feet; South 67° West, a distance of 400 feet; South 590 West, a distance of 101 feet; South 670 West, a distance of 191 feet; South, a distance of 43 Leet; North 88° West, a distance of 104 feet; South 670 West, a distance of 538 feet; South 580 West, a distance of 611 feet to the PLACE OF BEGINNING dnd 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. A-1 ~ . ' ~ ~ ~ ( . 7I~ . I ' _ I r . . ~ at t ~ t f ~ . . , ~ V- ~ . ~ ~ i F ~ . , ` • l ~ . ~ • • i ~ 1 . ~ t . I ~ ~ ~ t ~ ~ . ~ - oooo ~ n . ; . ~ , . A-2 THE STATE OF TEXAS § COUNTY UF LAr1AR § TAX ABATEMENT AGREEMENT This agreement is entered into by and between the City of Paris, Paris, Texas, a municipal corporation of Lamar County, Texas duly acting herein by and through is Mayor, hereinafter referred to as CITY: and NIERICO, INC., duly acting by and through its President, hereinafter referred to as OWNER. WITNESSETH: WHEREAS, 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, tiJHEREAS, the CITY has previously adopted 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 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, WI'.EREAS, 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; NUW THEREFORE, the Parties hereto do mutually agree as follows: MERICO, INC. TAX ABATEMENT AGREEMENT - Page 1 EXHIBiTB Default §5. In the event that (a) the INIPROVEMENTS 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, then this AGREEMENT shall be in default. In the event that 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 ard cannot with due diligence be cured within a 90-day period owning to cause beyond the control of the OWNER, this AGREEN:ENT 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 Property Tax Code of the State 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 expiratior 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 acknowleage that actual damages in the event of default and termination would be speculative and difficult to determine. Notice §6. Ariy written notice required or permitted under the terms of this AGKEEMENT shall be given and be cieemed 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 rcllows: IF TO CITY: IF' TU OWNER: City Manager rlerico, Inc. City of Paris 2020 19th Street N.W. P. 0. 5ox 9037 Paris, TX 75460 Paris, TX 75461-9037 ATTN: Plant Manager MERICU, INC. TAX ABATEMENT AGREErIENT - Page 3 Appraisal F. It is understood and agreed among the parties that the PROPERTY, also knows as Tax Reinvestment Zone Number Three, sha11 be appraised at market value for the purposes of property tax assessment effective January l, 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 vf, this AGREEIAENT. Assignment §9. The terms and conditions oz the AGREEr1ENT are binding upon the successors and assigns of all parties hereto. However, this AGREEMENT cannct be assigned by OWNER other than to either the Parent Corporation or a wholly-owned subsidiary of CWNER 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 a;rees to indemnify and hold harmless the CITY therefrom; it is further understood and ag-reed among the parties that the CITY, in perforffiing 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 §11. The OWNER further agrees that the CITY, its agents and employees, shall have reasonable right of access to the property to inspect the IMPROVENIENTS 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 Ir1PROVEMENTS, the CITY shall have the continuing right to inspect the PROPEKTY to insure that it is thereafter maintained and operated in accordance with this agreement during the term of the AGREEI4ENT. MERICO, INC. TAX ABATEPIENT AGREEMENT - Page 4 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 begirir,ing from the first day of January of the year following completion of the improvements. Legal §13. (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) This AGREEMENT is performable in Lamar County, Texas. (5) This AGREEMENT i_s effective this- 14th day of September, 1992. WITNESS our hands this 14th day of September, 1992. APYROVED: George Fisher, Mayor, City of Paris MERICO, INC. TAY ABATEMENT AGREEMENT - Page 5 ATTEST: Mattie Cunningham, City Clerk APPROVED AS TO FORM: T. K. Haynes, City Attorney OWNER, MERICO, INC. ATTEST: By: , President ,Secretary MERICO, INC. TAX ABATEMENT AGREEMENT - Page 6 EXHIBIT A Description of Reinvestment Zone Number Three Parts of the plant site area of Merico, Inc. as depicted as the shaded area upon page 2 of this Exhibit. Said plant site is lucated upon the following described tract of land: Situated within the corporate limits of the CiCy of Yaris, County ui Lamar, and State of Texas, a part of the Keddin Russell Survey and being all of a 4.113 acre rract of land conveyed The Paris lndustrial Foundation by deed recorded in Volume 430, Page 437, also being a part of an 87.56 acre tract of land conveyed Z'he Paris Industrial Foundation by deed recorded in Volume 430, Page 337, of the Deed Kecords ut said County and State. BCGINNING at a concrete marker for. corner at the Northwese: corner of said 87.56 acre tract of land; THENCC along the Easr Boundary Line of 19th Street NorLhwest as follows: SouLh 71 West, a distance of 285 feet; South, a distance of 799 feel:; South 45° East, a distance of 28 feeC to a stake for corner; THENCE along the North Boundary Line of Center Street as follows: South 890 20' East, a distance of 2,653 feet; South 86° East, a distance of 296 feet to a stake for corner, said point being 25 teet north of the Southeast corner of said 87.56 acre tract of land; T1iENCE 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 sCake for corner; THENCE South 881 West, a distance of 185 feet to a stake for corner; THENCE South 781 30' West a distance of 410 feet to a stake for corner; THENCE North, 870 30' West, a distance of 224 feet to a stake for corner; THENCE North 8° West, a distance of 43 feet to a stake for corrier; TtICNCE North 81° West, a distance of 255 feet to a stake for corner; 1'tiL•'NCE North 40 10' East, a distance of 783 feet Lo a stake for corner at the Southeast cortier of said 4.113 acre tract of land; TtiLNCE North 10 35' West, a distance of 374 feet to a stake Ior corner at the Northeast corner of said 4.113 acre tract of land; TNENCE along the South Boundary Line of Loop Highway 286, as follows: South 680 West, n distance of 35.4 feet; South 720 West, a distance of 148 feet; South 670 West, a distance of 400 feet; South 59° West, a distance of 101 feet; South 671 West, a distance of 191 feet; South, a distance of 43 Ieet; North 88° West, a distance of 104 feet; South 670 West, a distance of 538 feet; South 58° West, a distance of 611 feet Co 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. A-1 r E ! IE_ . . l ~ ~ ' 1 RT- <,.k ~ i ~ c • l ~ ~ 6 ~ t ~ . j F. ~ 's • - t l I E a~ 1 ~ e ~ [ . ~ ~ 6< ~ . E ~ ~ . i CX~OO ,E 000 . T . . . ` ~ . . , . A-2 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.