14-H Sesaco Assn Sesame SolDRAFT
F:\Attorney\Lisa\Resolutions\CiJRRENT\Sesaco - Assignment Res.wpd
February 3, 2004
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS,
PARIS, TEXAS, AUTHORIZING THE EXECUTION OF A CONSENT OF
ASSIGNMENT OF THE TAX ABATEMENT AGREEMENT FROM SESACO
CORPORATION TO SESAME SOLUTIONS, LLC; MAKING OTHER
FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND
DECLARING AN EFFECTIVE DATE.
WHEREAS, the City Council of the City of Paris did heretofore, on the 12th day of March,
2001, authorize the execution, delivery, and performance of an agreement with Sesaco Corporation,
pursuant to the Property Redevelopment and Tax Abatement Act, V. T. C.A., Tax Code Sec. 312.001,
et seq. ("Act"), and the Guidelines and Criteria for Designation of Reinvestment Zones and Tax
Abatement Agreements ("Guidelines"), to exempt a portion of the value of the property owned by
Sesaco Corporation located in Reinvestment Zone No. 9 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, 2002 ("Agreement"); and,
WHEREAS, the City Council of the City of Paris did heretofore, on the l lth day of June,
2001, in Resolution No. 2001-084, authorize the execution of Amendment No. One to Tax
Abatement Agreement Between the City ofParis, Paris, Texas, and Sesaco Corporation Dated March
12, 2001, revising the terms of said Agreement; and,
WHEREAS, during the course of the formation of a joint venture with T. J. Harkins
Commodities, Sesaco Corporationtransferred ownership ofthe property the subject ofthe abatement
to Sesame Solution, LLC, and it is deemed appropriate that the City of Paris consent to the
assignment of the abatement agreement; and,
WHEREAS, the form of the Consent of Assignment of Tax Abatement Agreement from
Sesaco Corporation to Sesame Solutions, LLC, 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 form of the Consent of Assignment of Tax Abatement Agreement from
Sesaco Corporation to Sesame Solutions LLC, attached hereto as Exhibit A, be, and the same is
hereby, approved.
Section 3. That the Mayor be, and he is hereby, authorized and directed to execute, on behalf
of the City of Paris, the Consent of Assignment of Tax Abatement Agreement, under the terms and
conditions and in the form shown in Exhibit A, attached hereto.
Section 4. That this resolution shall be effective from and after its date of passage.
PASSED AND APPROVED this 9th day of February, 2004.
Curtis Fendley, Mayor
ATTEST:
Mattie Cunningham, City Clerk
APPROVED AS TO FORM:
Larry W. Schenk, City Attorney
CONSENT OF ASSIGNMENT
OF TAX ABATEMENT AGREEMENT
STATE OF TEXAS §
§ KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF LAMAR §
That SESACO CORPORATION did heretofore form a j oint venture with T. J. Harkins
Commodities and transfer ownership of the property the subject of the Tax Abatement
Agreement dated March 12, 2001, a copy of which is attached hereto as Exhibit A, and
Amendment No. One to Tax Abatement Agreement, attached hereto as Exhibit B, to SESAME
SOLUTIONS, LLC, and the CITY OF PARIS, PARIS, TEXAS, does hereby consent to the
assignment of the rights and obligations under said Agreement to the said SESAME
SOLUTIONS, LLC.
In consideration of this Consent, SESAME SOLUTIONS, LLC agrees to assume all
rights, obligations, and responsibilities under said Tax Abatement Agreement and Amendment
No. One.
EXECUTED this 9th day of February, 2004.
CITY OF PARIS, PARIS, TEXAS
Curtis Fendley, Mayor
ATTEST:
Mattie Cunningham, City Clerk
EXHIBIT A
APPROVED AS TO FORM:
Larry W. Schenk, City Attorney
SESAME SOLUTIONS, LLP
Dan Collins, President
ATTEST:
Tina Langham-Smith, Secretary
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 CoLinty, Texas, acting by and through its authorized officer
whose signature appears below, hereinafter called CITY, and SESACO CORPORATION, actina
by and through its authorized officer whose signature appears below, hereinafter referred to as
OWNER.
WITNESSETH:
WHEREAS, the City Council of the City of Paris did heretofore, on the 12th day of March,
2001, in Resolution No. 2001-018, 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 12th day of March,
2001, in Resolution No. 2001-019, 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 City Council of the City of Paris did heretofore, on the 12th day of March,
2001, pass Ordinance No. 2001-012, establishing Reinvestment Zone No. 9 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 contempiated 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. 9 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,
The Parties hereto do mutually contract and agree as follows:
TAX ABATEM1IENT ACREEM1IF.NT - Page 1
EXHIBIT A
I.
Term
1.1 The term of this AGREEMENT shall begin on the 12th day of March, 2001, with,
as hereinafter provided, tax abatement granted herein beginning with the tax year beginning January
1, 2002, and expiring on December 31, 2007.
H.
Area to be Improved
2.1 The property to be the subject of this agreement shall be that propeRy described by
metes and bounds as the First Tract 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: Demolish and
rebuild the existing 9,180 square foot facility which is a part of the main building located in Paris,
Texas, and install new equipment consisting of a seed receiver system, a dry cleaning system, and
a wet processing system, all of which said equipment are listed on Exhibit B, attached hereto. Such
improvements will be made upon the PROPERTY herein described and will consist of machinery,
equipment, and utilities installed to process sesame seeds in the existing main building, 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 C. The improvements
described in this paragraph shall be hereinafter referred to as IMPROVEMENTS. The
IMPROVEMENTS will be at a cost equal to or in excess of $820,400.00, and shall be substantially
completed on or about July 10, 2001; provided, that OWNER shail 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, civii 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. The date of completion
of the IMPROVEMENTS shall be defined as the date a Certificate of Occupancy is issued by the
City of Paris.
TAX ABATEMENT AGREEhIENT - 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 IIVIPROVEMENTS 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 sesame seed processing plant.
V.
Consideration
Jobs
5.1 Not later than July 10, 2001, OWNER will retain at least sixteen (16) 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 and/or retain 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 cunently 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 March 12, 2001, it will not reduce below sixteen (16) the number of such jobs so
retained.
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
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 CTTY shall
give the OWNER written notice of such default and if the OWNER 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
TAX ABATEAIENT AGRF.EMEN'f - Page 3
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
$660,240.00 (Base Year Value), not including inventory and supplies. Said abatement shall extend
for a period of seven (7) years beginning January 1, 2002.
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 D, and owner shall
comply with the requirements of Exhibit D in the performance of this Agreement, save and except
that, in the event of a conflict between the requirements of Exhibit D 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
of Paris, nor by a member of the City Council approving, or having responsibility for the approval
of, this AGREEMENT.
TAX ABATEb1ENT AGREEb1ENT - Page 4
IX.
Conditions
9.1 The terms and conditions of the AGREENIENT 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, to the extent permissible by law, the CITY
agrees to indemnify and hold harmless the OWNER therefrom.
X.
Compliance Provisions
10.1 The OWNER agrees that the CIT'Y, 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
shali 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 July 10, 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 retention of the sixteen (16) 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 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
TAX ABATEMENT AGREEMENT - Page 5
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;
(fl 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 retained job, date of
hire, and place of residence of the hiree, and (b) statement as to whether or not the sixteen (16)
retained jobs are still in existence and filled, and (c) the name of the current employee in the retained
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 E.
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 filina of the same with the Texas Workforce
Commission.
TAX ABATEhIENT AGREF.DIENT • Pagc 6
XII.
Authority to Contract
12.1. This AGREEMENT was authorized by resolution of the City Council at its regularly
scheduled meeting on the 12th day of March, 2001, authorizing the Mayor Pro Tem to execute the
AGREEMENT on behalf of the CITY.
12.2 This AGREEMENT was entered into by Sesaco Corporation 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 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 CTTY.
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 (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:
OWNER CITY
Glenn C. Smith City Manager
Sesaco Corporation City of Paris
700 W. Center Street P. 0. Box 9037
Paris, Texas 75460 Paris, Texas 75461-9037
With a copy to:
With a copy to:
Tina Langham-Smith
City Clerk
Sesaco Corporation
City of Paris
700 W. Center Street
P. 0. Box 9037
Paris, Texas 75640
Paris, Texas 75461-9037
TA!C AAATEMENT AGRF.EhIENT - Page 7
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 12th day of March, 2001.
CITY OF PARIS, PARIS, TEXAS
By:
Richard Manning, Mayor Pro Tem
ATTEST:
.
Mattie Cunningham, City Clerk
APPROVEQ AS TO FORM:
WjSchenk;(City A
TAX ABATEMENT AGREEb1ENT • Page 8
SESACO CORPORATION
By• Q~- C k,_'M
Glenn C. Smith, President
ATTEST:
)61 l
Secretary
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~~F-
CERTIFICATE OF COMPLETION
STATE OF TEXAS
COUNTY OF LAMAR
CITY OF PARIS
The City of Paris has included the property described in Exhibit A attached hereto into
Reinvestment Zone No. 9 and executed a tax abatement agreement with Sesaco Corporation for
certain improvements or repairs.
Sesaco Cotporation has complied with all terms of the tax abatement agreement and the City
of Paris herein verifies that the improvements agreed to be built or used were in fact completed, as
provided.
NOW, THEREFORE, the City of Paris authorizes that the property described herein shall
receive a tax abatement of 100% of the taxes assessed upon the increased value of the improvements
over the value in the year in which the tax abatement aareement was executed for a duration of seven
(7) years, beginning January 1, 2002.
APPROVED this day of I
Mayor
ATTEST:
Mattie Cunningham, City Clerk
APPROVED AS TO FORM:
Lacry W. Schenk, City Attorney
EXHIB'T
n
CITY OF PARIS, PARIS, TEXAS
GUIDELINES AND CRITERIA FOR
TAX ABATEMENT AGREEMENTS
1. 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 1
preceding the date of execution of the Agreement plus the agreed upon value of
eligible property improvements made after January 1 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.
fl "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-
EXH1BIT 0
h) "Regional Tourist Entertainment Facility" means buildings and structures, including
fixed machinery and equipment, used or to be used in providing
amusemenVentertainment 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
processesthereto.
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 (Chapter 312, Texas Tax Code).
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 propeRy.
-2-
A property owner and/or lessee shall be eligible for tax Abatement only upon the following
terms and conditions:
a) Authorized Facilities. A facility may be eligible for Abatement if it is a
Manufacturing Facility, Research Facility, Regional Distribution Facility, Regional
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.
f) 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°l0) 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-
3) the possible effect the proposed project will have on attracting other taxable
improvements into the City; ,
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
residents;
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 zonin~ 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:
1) 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 inerely
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, even when reasonable allowance is made for
necessary improvements or relevant governmental actions.
-4-
h) Taxability. During the term of the Agreement, taxes shall be payable as follows:
1) the Base Year Value of eligible propeRy as determined each year shall be
fully taxable; and
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.
fl 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;
fl a listing of the kind, number, location, and costs of all proposed improvements of the
property;
-6-
VII. CONFIDENTIALITY OF PROPRIETARY INFORMATION. Information that is
provided to a taxing unit in connection with an application or request for tax Abatement
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 paRicular
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 andlor 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 Aareement 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
-8-
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
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.
-9-
INITIAL REPORTING REQUIREMENTS
The following information must be provided, in writing, to the City of Paris, the County of
Lamar, and Paris Junior College on company letterhead, sworn to and signed by a designated
representative of the company. Such letter rnust be received by the taxing entities 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 Aareement(s).
(a) Copy of the printaut 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 taxing entities' certification teams;
(e) Detailed list of and actual cost of added machinery and equipment;
(f) Actual cost of capital IMPROVENIENTS; and,
(g) Date of substantial completion of the IMPROVEMENTS as defined in paragraph 3
of the Agreement. .
L}CHI8IT E 4
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, the County
of Lamar, and Paris Junior College 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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: 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 acknowledDed 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
AMENDMENT NO. ONE TO TAX ABATEMENT AGREEMENT
BETWEEN THE CITY OF PARIS, PARIS, TEXAS,
AND SESACO CORPORATION DATED MARCH 12, 2001
STATE OF TEXAS
COUNTY OF LAMAR
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, the City Council of the City of Paris did heretofore, on the 12th day of March,
2001, in Resolution No. 2001-018, 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 12th day of March,
2001, in Resolution No. 2001-019, pass and adopt a policy on tax abatement incentives; and,
WHEREAS, the City Council of the City of Paris did heretofore, on the 12th day of March,
2001, pass Ordinance No. 2001-012, establishin~ Reinvestment Zone No. 9 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 12th day of March,
2001, in Resolution No. 2001-020, authorize the execution of a Tax Abatement Agreement with
Sesaco Corporation; and,
WHEREAS, the terms of said Agreement are in need of revision; NOW, THEREFORE,
WITNESSETH
That Section 3.1 of the Tax Abatement Agreement between the City of Paris, Paris, Texas,
and Sesaco Corporation dated March 12, 2001, be amended to read as follows:
"III.
"Improvements
"3.1 The OWNER shall make improvements to the PROPERTY as
follows: Demolish and rebuild the existing 9,180 square foot facility which is a part
of the main building located in Paris, Texas, and install new equipment consisting of
a seed receiver system, a dry cleaning system, and a wet processing system, all of
which said equipment are listed on Exhibit B, attached hereto. Such improvements
will be made upon the PROPERTY herein described and will consist of machinery,
equipment, and utilities installed to process sesame seeds in the existing main
Page 1 of 3
EXHIBITIL
building, 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 C. The
improvements described in this paragaph shall be hereinafter referred to as
IMPROVEMENTS. The IMPROVEMENTS will be at a cost equal to or in excess
of $820,400.00, and shall be substantially completed on or about October 1, 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, insunection, governmental or de
facto governmental action, unless caused by acts or omissions of OWNER, 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."
EXECUTED on this the 11 th day of June, 2001.
CITY OF PARIS, PARIS, TEXAS
~
By:
Michael J. Pfie er, Mayor
ATTEST:
.
Mattie Cunningharn, City Clerk
APPROV AS TO FORM:
Larry W chenk, City Attorney
Page 2 of 3
SESACO CORPORATION
By:
Gle . Smith, President
ATTEST:
.~,Tina Langha Smith, Administrator
Page 3 of 3