HomeMy WebLinkAboutResolution - 2016-R0396 - Notice Of Intent To Enter Tax Abatement Agreement With Monsanto Southern Co. - 10/27/2016Resolution No.2016-R0396
Item No.7.7
October 27,2016
RESOLUTION
WHEREAS,the City Council has determined to give notice of its intent to enter in to and
execute a Tax Abatement Agreement with Monsanto Southern Production Company,LLC;
and
WHEREAS,Texas Tax Code Section 312.2041 requires a notice of intent tobe given by the
City Council to the presiding officerof the governing body of each taxing unit in which the
property subject to the Tax Abatement Agreement is located; and NOW THEREFORE
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
THAT the City Secretaryof the City of Lubbock is hereby authorized and directed to give
notice of an intent to enter in to and execute a Tax Abatement Agreement with Monsanto
Southern Production Company, LLC, with said notice to be given to the presiding officers of
each taxing unit having jurisdiction in assessing taxes on the property located at 11613 North
Interstate 27, Lubbock. Lubbock County. Texas and more particularly described as the
150.00-acre tract of land located in Section 39.Block D.L&SV Railroad Company Survey,
Abstract 6, Lubbock County. Texas, being the East 150.00 acres of that same land described
as Tract 1 in deed recorded in County Clerk File Number 2007048830, Official Property
Records of Lubbock County,Texas. Said notice is attached hereto and incorporated in this
resolution as if fully set forth herein and shall be included in the minutes of the City Council.
Passed by the City Council on October 27.2016 .
DANIEL M.POPE,MAYOR
ATTEST:
eJUjU-*-
Rebecea Garza,City Secretary
APPROVED AS TO CONTENT:
Cheryl Brock,Executive Director of Budget
APPROVED AS TO FORM:
v A edictnnt Pitv AttJustinPruittlAssistantCityAttorney
Ccdocs/RES.Noticeof Intent - Tax Abatement Agreement - MonsantoSouthern Production Company.LLC
October 13.2016
'IDW-solution No. 2016-RO396
NOTICE OF INTENT
NOTICE OF INTENT OF THE CITY COUNCIL OF THE CITY OF LUBBOCK TO
ENTER INTO AND EXECUTE A TAX ABATEMENT AGREEMENT ON REAL
PROPERTY IMPROVEMENTS AND TANGIBLE PERSONAL PROPERTY LOCATED
IN SECTION 39, BLOCK D. L&SV RAILROAD COMPANY SURVEY, ABSTRACT 6,
LUBBOCK COUNTY, TEXAS, BEING THE EAST 150-00 ACRES OF THAT SAME
LAND DESCRIBED AS TRACT 1 IN DEED RECORDED IN COUNTY CLERK FILE
NUMBER 2007048830, OFFICIAL PROPERTY RECORDS OF LUBBOCK COUNTY,
TEXAS AND HAVING THE ADDRESS OF 11613 NORTH INTERSTATE 27, LUBBOCK,
LUBBOCK COUNTY, TEXAS.
Notice is hereby given that the City Council of the City of Lubbock intends to enter into and
execute a Tax Abatement Agreement with Monsanto Southern Production Company, LLC to abate
taxes on improvements to real property and tangible personal property located within the
reinvestment zone created by Ordinance No. 2016-0_0152__, with such reinvestment zone
covering all of the property being described and depicted in the attached "Exhibit L" A draft copy
of the proposed Tax Abatement Agreement between the City of Lubbock and Monsanto Southern
Production Company, LLC is attached to this notice as "Exhibit 2.1'
Notice is further given that the City Council of the City of Lubbock will consider this matter at its
meeting held in the City Council Chamber, City Hall, 1625 13 th Street, City of Lubbock, on the
17th day of November, at approximately 5:15 PM.
Notice of Intent - Tax Abatement Agreement - Monsanto Southern Production Company, LLC - 10.13.16
EXHIBIT 1: The Property — Legal Description & Map
METES AND BOUNDS DESCRIPTION of a 150.00-acre tract of land located in Section 39,
Block D, L&SV Railroad Company Survey, Abstract 6, Lubbock County, Texas, being the East
150.00 acres of that same land described as Tract I in deed recorded in County Clerk File Number
2007048830, Official Property Records of Lubbock County, Texas, being further described as
follows:
BEG1NMNG at a 1/2" iron rod and cap marked "HUGO REED ASSOC" set in the North line
of said Section 39 for the Northwest comer of this tract, which bears S. 88'28'45" E. a distance
of 1644.47 feet from a 1/2" iron rod found at the Northwest comer of said Section 39;
THENCE S. 8802845" E., along the North line of said Section 39, a distance of 2441.55 feet to
a railroad spike found in the West right-of-way line of Interstate Highway 27 at the Northeast
comer of this tract;
THENCE S. 0 1 022'14" E., along the West right-of-way line of said 1-27, at 50.14 feet pass a 1/2"
iron rod with cap marked "STEVENS RPLS 4339" found in reference, continuing for a total
distance of 998.02 feet to a 1/2" iron rod with cap marked "HUGO REED ASSOC" set for a
comer of this tract;
THENCE S. 0204729" W., continuing along said right-of-way line a distance of 651.95 feet to
a 1/2" iron rod with cap marked "HUGO REED ASSOC" set for a comer of this tract;
THENCE Southeasterly, continuing along said right-of-way line, along a curve to the left, said
curve having a radius of 3994.83 feet, a central angle of 13*30'18", a chord bearing of S.
03*57'38" E., a chord distance of 939.44 feet to a 1/2" iron rod with cap marked "STEVENS
RPLS 4339" found at a comer of this tract;
THENCE S. 1004314" E., continuing along said right-of-way line a distance of 47.32 feet to a
1/2" iron rod with cap marked "RL SMITH RPLS 3906" found in the South line of the North half
of said Section 39 at the Southeast comer of this tract;
THENCE N. 88036'34" W., along the South line of said North Half, a distance of 2568.08 feet
to a 1/2" iron rod with cap marked "HUGO REED & ASSOC" set for the Southwest comer of
this tract;
THENCE N. 01019'20" E. a distance of 2635.78 feet to the Point of Beginning.
Notice of Intent - Tax Abatement Agreement - Monsanto Southern Production Company, LLC - 10.13.16
-r
r
r
n
0
4
P
Lubbo ck
EXHIBIT 2: Draft Tax Abatement Agreement
Notice of Intent - Tax Abatement Agreement - Monsanto Southern Production Company, LLC-10.13.16
CITY OF LUBBOCK TAX ABATEMENT AGREEMENT
This Tax Abatement Agreement is by and between the City of Lubbock, a Texas home rule
municipal corporation, and the Monsanto Southern Production Company, LLC, a limited
liability company, for the abatement of certain taxes at the property located at 11613 North
Interstate 27, Lubbock, Lubbock County, Texas.
RECITALS
WHEREAS, on March 15, 2016, the City of Lubbock received an application for tax
abatement from the Monsanto Southern Production Company, LLC, concerning
improvements to real property and tangible personal property; and
WHEREAS, the Monsanto Southern Production Company, LLC's application for tax
abatement addresses, among other things, the construction of a new facility and the addition
of new equipment to the property located at 11613 North Interstate 27, Lubbock, Lubbock
County, Texas; and
WHEREAS, upon review of the Monsanto Southern Production Company, LLC's
application for tax abatement, the City Council of the City of Lubbock found that the property
located at 11613 North Interstate 27, Lubbock, Lubbock County, Texas is in the
Reinvestment Zone designated by the City of Lubbock in Ordinance No. 2016-0_; and
WHEREAS, the City Council of the City of Lubbock, through Resolution No. 2015-R0347,
adopted the Guidelines and Criteria Governing Tax Abatement for Industrial Projects in the
City of Lubbock; and
WHEREAS, the Texas Tax Code, Section 312.002, and Section IV of the Guidelines and
Criteria Governing Tax Abatement for Industrial Projects in the City of Lubbock, recognize
the construction of a new facility and the addition of personal property in the form of
equipment as being eligible for tax abatement; and
WHEREAS, the City Council of the City of Lubbock hereby finds that the Guidelines and
Criteria Governing Tax Abatement for Industrial Projects in the City of Lubbock have been,
or will be, met by the Monsanto Southern Production Company, LLC; and
WHEREAS, the City of Lubbock has complied with all the requirements set forth in the
Texas Tax Code, Section 312.201, and with all of the requirements set forth in the Guidelines
and Criteria Governing Tax Abatement for Industrial Projects in the City of Lubbock; and
NOW THEREFORE, in consideration of the promises, terms, covenants, and
conditions contained in this Tax Abatement Agreement, the City of Lubbock and the
Monsanto Southern Production Company, LLC agree as follows:
AGREEMENT
1. Definitions. The following terms shall have the meanings ascribed to them in this Section
for purposes of this Agreement:
"Agreement' means this Tax Abatement Agreement, including its Recitals and Exhibits.
City of Lubbock Tax Abatement Agreement — Monsanto Southern Production Company, LLC Page 1
"Application" means the Monsanto Southern Production Company, LLC's application for
municipal tax abatement submitted to the City, a copy of which is attached to this Agreement
as "Exhibit C."
"Cites" means the City of Lubbock.
"Company" means the Monsanto Southern Production Company, LLC.
"Guidelines" means the Guidelines and Criteria Governing Tax Abatement for Industrial
Projects in the City of Lubbock that were adopted by the City Council through Resolution
No. 2015-110347, a copy of which is attached to this Agreement as "Exhibit B."
"Improvement Proiect " means the improvements to real property and the tangible personal
property that are eligible for tax abatement and that are specified in the Monsanto Southern
Production Company, LLC's application for municipal tax abatement, a copy of which is
attached to this Agreement as "Exhibit C."
"Site " means the Monsanto Southern Production Company, LLC's property located at 11613
N. Interstate 27, Lubbock, Lubbock County, Texas, with a more particular description and
depiction attached to this Agreement as "Exhibit A."
"Term" means the period of time in which this Tax Abatement Agreement is effective as
provided in Section 3.
2. Recitals and Exhibits. The representations. covenants, and recitations which are set forth
in the foregoing Recitals, and which are included in the Exhibits attached hereto, are material
to this Agreement and are hereby incorporated into and made a part of this Agreement.
3. Term. This Agreement shall become effective upon the date of its execution by the
Parties, and unless this Agreement is terminated earlier according to any provision contained
herein, the Term of this Agreement shall be ten (10) years, with such Term commencing on
January I of the tax year after the Improvement Project is at least ninety percent (900/u)
complete.
4. Base Year and Assessed Value. The base year applicable to the real and personal
property, which is the subject of this Agreement, shall be 2016. The assessed value of the
real and personal property, which is the subject of this Agreement, shall be the assessed value
of such property for 2016.
5. Base Year Taxes. The Company shall pay the base year taxes upon the real and personal
property which is the subject of this Agreement according to the base year assessed value.
Therefore, the Company hereby acknowledges that the base year taxes levied upon the real
and personal property at the Site cannot be abated.
6. Abatement of Increase in Base Year Tax. In accordance with Texas Tax Code, Section
312.204, real property taxes applicable to the real property that is the subject of this
Agreement shall be abated only to the extent that the assessed value for any given year within
the Term exceeds the base year assessed value.
7. Property Ineligible for Tax Abatement. The property described and set forth in Section
IV (6) of the Guidelines is incorporated by reference herein as if fully set out in this
Agreement and fully describes the property ineligible for tax abatement.
City of Lubbock Tax Abatement Agreement — Monsanto Southern Production Company, LLC Page 2
8. Exemption from Tax for Improvement Project. The City covenants and agrees to
exempt from taxation, in accordance with the appropriate Sections above, the following:
a. All proposed new improvements to be placed upon the Site.
b. All eligible tangible personal property placed in or upon the Site. Any equipment or
personal property owned by the Company prior to the execution of this Agreement, or
already located in an existing facility, shall not be considered "eligible tangible
personal property" under this Agreement.
c. It is further understood that all items affixed to the new improvements placed upon the
real property identified above and in Exhibit "A", including machinery and equipment
shall be considered part of the real property improvement and taxes thereon shall be
abated in accordance with the provisions of subparagraph (a) of this Section.
9. Economic Oualifications. As set forth in Section IV(3)(a) of the Guidelines, the
Company agrees to expend funds necessary to qualify for the tax abatement provided by this
Agreement by constructing a new facility on the Site. A description of the kind, number, and
location of all proposed improvements is set forth in the Application attached hereto.
10. Value of Improvements. In accordance with Texas Tax Code, Section 312.204(a), the
Company will expend one hundred million dollars ($100,000,000) for the construction of a
new facility and the purchase of new equipment and machinery to be located at the Site
After the commencement of this Agreement, the Company agrees that if the initial tax
appraisal on the Site does not reflect an increase in value at the Site equal to or exceeding
one hundred million dollars ($100,000,000) for the real property improvements and tangible
personal property described in this Agreement, the Company will provide to the City invoices
and proof of payment for the construction of the new facility and the purchase of new
equipment and machinery located at the Site.
11. Job Creation. The Company agrees to create forty (40) newjobs at the Site by December
31, 2017, and retain thosejobs throughout the Term.
12. Portion of Tax Abated. Throughout the Term, the City agrees to abate taxes on the
Improvement Project according to the following schedule:
Year 1:
100%
Year 6:
100%
Year 2:
100%
Year 7:
100%
Year 3:
100%
Year 8:
100%
Year 4:
100%
Year 9:
100%
Year 5:
100%
Year 10:
100%
13. Type of Improvements. In its Application, the Company proposes to construct a facility
and purchase machinery and equipment for the Site. The Company acknowledges that the
construction of the new facility and the purchase of the new machinery and equipment
commenced on March 15, 2016, and the Company hereby guarantees that the construction
and purchase shall be completed by May 31, 2017. In the event that circumstances beyond
the control of the Company necessitate additional time for the completion of such
construction and purchasing, the Company may request an extension of the above date from
the City and such consent shall not unreasonably be withheld. Company shall provide proof
of completion within ten (10) days of completion of such construction and purchase.
City of Lubbock Tax Abatement Agreement— Monsanto Southern Production Company, LLC Page
14. Limitation on Use. Throughout the Term, the Company agrees to limit the use of the
Site to commercial and industrial uses, as those terms are defined in the zoning ordinances
of the City, and to limit the uses of the Site to those uses consistent with the general purpose
of encouraging development of the reinvestment zone.
15. Recapture. In the event of default of this Agreement by the Company, and after notice
of such default and an opportunity to cure such default have been provided to the Company
by the City, the Company agrees to be bound by and comply with all the terms and provisions
for the recapture of abated taxes under this Agreement, pursuant to law, and as set forth in
the Guidelines.
16. City Access to Property. Throughout the Term, the Company covenants and agrees that
the City shall have access to the Site and to the Improvement Project upon reasonable notice,
during normal business hours, and subject to the Company's reasonable security, safety, and
operational standards, and that the City shall be able to inspect the Site and the Improvement
Project and any documents necessary to insure the Company's compliance with the terms
and conditions of the Application and this Agreement.
17. Certification. The Company agrees to provide to the City annual, written certification
that the Company is in compliance with the terms of the Agreement.
18. Compliance. In accordance with Sections IX and X of the Guidelines, the City may
cancel or modify this Agreement if the Company is in default to any term of this Agreement.
The City shall provide written notice to the Company specifying the basis for any such
default, with said written notice providing a timeframe and procedure within which the
Company may cure any default.
19. Notices. Unless otherwise altered by either Party through written notice to the other
Party, any notice required to be given by this Agreement shall be in writing and sent by
certified mail, return receipt requested, to the following addresses:
CITY OF LUBBOCK MONSANTO COMPANY
City Manager David Penn, Cotton and Specialty Crops Lead
PO Box 2000 800 N. Lindbergh Blvd., GSEE
Lubbock, Texas 89457 Saint Louis, MO 63167
20. Assignment. This Agreement may not be assigned without the written the approval of
the City.
21. Representations. The City represents that:
a. the Site is within the Reinvestment Zone designated by Ordinance No. 2016-0
and
b. the City has complied with all of the requirements set forth in Texas Tax Code, Section
312.201 and with all the criteria and guidelines as set forth in the Guidelines.
City of Lubbock Tax Abatement Agreement — Monsanto Southern Production Company, LLC Page 4
22. Miscellaneous.
a. Severability. In the event any provision of this Agreement is held to be invalid or
unenforceable in any respect, such invalidity or unenforceability shall not affect any
other provisions of this Agreement.
b. Amendments. Any amendment to this Agreement shall be of no effect unless in writing
and signed by all parties hereto.
c. Counterparts. This Agreement may be executed in counterparts, each of which shall
constitute an original, but all of which together shall constitute one and the same
instrument. The signature page of any counterpart may be detached therefrom without
impairing the legal effect of the signature(s) thereon provided such signature page is
attached to any other counterpart identical thereto except having additional signature
pages executed by any other party.
d. Venue and Applicable Law. This Agreement is subject to all present and future valid
laws, orders, rules, ordinances, and regulations of the United States of America, the
State of Texas, the Parties, and any other regulatory body having jurisdiction. This
Agreement shall be construed and governed according to the laws of the State of Texas.
The sole venue for any action, controversy, dispute, or claim arising under this
Agreement shall be in a court of appropriate jurisdiction in Lubbock County, Texas
exclusively.
e. Rights and Remedies Reserved. The City reserves the right to exercise any right or
remedy available to it by law, contract, equity, or otherwise, including without
limitation, the right to seek any and all forms of relief in a court of competent
jurisdiction. Further, the City shall not be subject to any arbitration process prior to
exercising its unrestricted right to seek judicial remedy. The remedies set forth herein
are cumulative and not exclusive, and may be exercised concurrently. To the extent of
any conflict between this provision and another provision in, or related to, this
Agreement, the former shall control.
f. Public Information. This Agreement is public information. To the extent, if any, that
any provision of this Agreement is in conflict with Tex. Gov't. Code Ann. Chapter 552
et seq., as amended, the same shall be of no force and effect.
g. No Third -Party Beneficiaries. This Agreement is entered solely by and between, and
may be enforced only by and among the Parties. Except as set forth above, this
Agreement shall not be deemed to create any rights in or obligations to any third parties.
h. No Personal Liability. Nothing in this Agreement is construed as creating any personal
liability on the part of any employee, officer or agent of any public body that may be a
party to this Agreement.
i. No Joint Enterprise. This Agreement is not intended to, and shall not be construed to
create any joint enterprise between or among the parties.
j. No Indemnification by City. The parties expressly acknowledge that the City's authority
to indemnify and hold harmless any third party is governed by Article XI, Section 7 of
the Texas Constitution and any provision which purports to require indemnification by
the City is invalid.
City of LubbockTax Abatement Agreement— Monsanto Southern Production Company, LLC Page
k. Sovereirn Immunity Acknowledged and Retained. THE PARTIES EXPRESSLY
ACKNOWLEDGE AND AGREE THAT NO PROVISION OF THIS
AGREEMENT IS IN ANY WAY INTENDED TO CONSTITUTE A WAIVER
BY ANY PARTY OF ANY IMMUNITIES FROM SUIT OR LIABILITY THAT
A PARTY MAY HAVE BY OPERATION OF LAW. THE CITY RETAINS ALL
OF ITS GOVERNMENTAL IMMUNITY.
23. Effective Date. Notwithstanding anything contained herein to the contrary, this
Agreement shall not be effective until such time as it has been finally passed and approved
by the City Council of the City.
SIGNATURE
This Tax Abatement Agreement is hereby executed on , 2016.
CITY OF LUBBOCK
DANIEL M. POPE, MAYOR
ATTEST:
Rebecca Garza, City Secretary
3UTHERN
COMPANY, LLC
David W. Penn,
Cotton and Specialty Crops Lead
City of Lubbock Tax Abatement Agreement— Monsanto Southern Production Company, LLC Page 6
APPROVED AS TO CONTENT:
Cheryl Brock, Executive Director of Budget
APPROVED AS TO FORM:
Justin
City of Lubbock Tax Abatement Agreement— Monsanto Southern Production Company, LLC Page 7
EXHIBIT A: The Property — Legal Description & Map
METES AND BOUNDS DESCRIPTION of a 150.00-acre tract of land located in Section
39, Block D, L&SV Railroad Company Survey, Abstract 6, Lubbock County, Texas, being
the East 150.00 acres of that same land described as Tract I in deed recorded in County Clerk
File Number 2007048830, Official Property Records of Lubbock County, Texas, being
further described as follows:
BEGINNING at a 1/2" iron rod and cap marked "HUGO REED ASSOC" set in the North
line of said Section 39 for the Northwest comer of this tract, which bears S. 88028'45" E.
a distance of 1644.47 feet from a 1/2" iron rod found at the Northwest corner of said Section
39;
THENCE S. 88028'45" E., along the North line of said Section 39. a distance of 2441.55
feet to a railroad spike found in the West right-of-way line of Interstate Highway 27 at the
Northeast comer of this tract;
THENCE S. 01022' 14" E., along the West right-of-way line of said T-27, at 50.14 feet pass
a 1/2" iron rod with cap marked "STEVENS RPLS 4339" found in reference, continuing
for a total distance of 998.02 feet to a 1/2" iron rod with cap marked "HUGO REED
ASSOC" set for a comer of this tract;
THENCE S. 02047'29" W., continuing along said right-of-way line a distance of 651.95
feet to a 1/2" iron rod with cap marked "HUGO REED ASSOC" set for a corner of this
tract;
THENCE Southeasterly, continuing along said right-of-way line, along a curve to the left,
said curve having a radius of 3994.83 feet, a central angle of 13'30' 18", a chord bearing of
S. 03°57'38" E., a chord distance of 939.44 feet to a 1/2" iron rod with cap marked
"STEVENS RPLS 4339" found at a corner of this tract;
THENCE S.10°43'14" E.. continuing along said right-of-way line a distance of 47.32 feet
to a 1/2" iron rod with cap marked "RL SMITH RPLS 3906" found in the South line of the
North half of said Section 39 at the Southeast corner of this tract;
THENCE N. 8803634" W.. along the South line of said North Half, a distance of 2568.08
feet to a 1/2" iron rod with cap marked "HUGO REED & ASSOC" set for the Southwest
comer of this tract;
THENCE N. 01 n 19'20" E. a distance of 2635.78 feet to the Point of Beginning.
City of Lubbock Tax Abatement Agreement — Monsanto Southern Production Company, LLC Page 8
b
EXHIBIT B: Guidelines and Criteria Governing Tax Abatement
For Industrial Projects in the City of Lubbock
City of Lubbock Tax Abatement Agreement — Monsanto Southern Production Company, LLC Page 10
EXHIBIT C: Monsanto Southern Production Company, LLC's
Application for Tax Abatement
City of Lubbock Tax Abatement Agreement — Monsanto Southem Production Company, LLC Page I I