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HomeMy WebLinkAboutResolution - 2009-R0121 - Give Notice Of Intent To Enter Into Tax Abatement Agreement - Hurley Companies - 04/09/2009Resolution No. 2009-RO121 April 9, 2009 item No. 5.6 RESOLUTION WHEREAS, the City Council has determined to give notice of its intent to enter into a Tax Abatement Agreement with the Hurley Companies.; and WHEREAS, V.T.C.A. Tax Code Section 312.2041 requires notice of intent of the City Council to be given to the presiding officer of the governing body of each taxing unit in which the property to be subject to the Tax Abatement Agreement is located; NOW BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the City Secretary give notice as set forth in Exhibit "A" of the intention of the City Council to enter into a Tax Abatement Agreement with the Hurley Companies, said notice to be given to the presiding officers of each governing body of each taxing unit having jurisdiction in assessing taxes on the property at 2902 Municipal Drive which is further described as Lot 5, Lubbock Industrial Park Addition to the City of Lubbock, Lubbock County, Texas. Passed by the City Council this 9th day of April 2009. TOM MARTIN, MAYOR ATTEST: Reb ca Garza, City Secretary APPR9VED,AS TO CONTENT: Rob A 'son, 'stant City Manager Development Services APPROVED AS TO FORM: Linda L. Chamales Economic Development Attorney Resolution No. 2009-RO121 EXHIBIT "A" NOTICE OF INTENT OF THE CITY COUNCIL OF THE CITY OF LUBBOCK TO ENTER INTO AN AGREEMENT TO ABATE TAXES ON REAL PROPERTY IMPROVEMENTS LOCATED AT 2902 MUNICIPAL DRIVE WHICH IS FURTHER DESCRIBED AS LOT 5, LUBBOCK INDUSTRIAL PARK ADDITION TO 'THE CITY OF LUBBOCK Notice is hereby given that the City Council of the City of Lubbock intends to enter into an Agreement with the Hurley Companies to abate taxes on improvements to real property located within the Hurley Reinvestment Zone created by Ordinance No. 2009-00023 and covering all of the subject property. Notice is further given that the City Council of the City of Lubbock will consider authorizing the Mayor of the City to execute a contract between the City and the Hurley Companies for tax abatement, a draft copy of said Agreement is attached to this notice as Exhibit "A-1" and made a part hereof for all purposes. Notice is further given that the City Council will consider this matter at its meeting held in the City Council Chamber, City Hall, 1625 13'h Street, City of Lubbock, on the 27th day of April 2009, at approximately 9:30 o'clock a.m. Exhibit "A -l" Resolution No. 2 009-80 1 2 1 AGREEMENT STATE OF TEXAS § COUNTY OF LUBBOCK § This Agreement made this day of , 2009, by and between the City of Lubbock, Texas, a home rule municipality of the State of Texas (hereinafter called "City"), and with Thomas. Hurley, individually and the Hurley Companies dba Hurley Packaging, Essence Bottling, and E.B. Plastics (hereinafter called "Company"); WITNESSETH: WHEREAS, City received from Company on the 23`d day of January, 2009 an application for tax abatement for improvements to real property and tangible personal property at 2902 Municipal Drive, Lot 5, Lubbock Industrial Park Addition to the City of Lubbock, Lubbock County, Texas which is further described in Exhibit "A"; and WHEREAS, upon review of the above application it was determined that the facility and real property is located in the Reinvestment Zone designated by the City in Ordinance No. 2009-00023 covering the above described property; and WHEREAS, the Guidelines and Criteria Governing Tax Abatement For Industrial Projects in the City of Lubbock was adopted by Resolution No. 2007-RO514 of the City Council of the City of Lubbock. A copy of the Guidelines and Criteria Governing Tax Abatement for Industrial Projects in the City of Lubbock is attached as Exhibit "B" and incorporated herein as if fully set forth; and WHEREAS, the City complied with all the requirements set forth in V.T.C.A., Tax Code, Section 312.201; and WHEREAS, the City complied with all the criteria and guidelines as set forth in the Guidelines and Criteria Governing Tax Abatement for Industrial Projects in the City of Lubbock.; and WHEREAS, the City passed Ordinance No. 2009-00023 creating a reinvestment zone for commercial and industrial tax abatement, said zone including the area which is described in the attached Exhibit "A"; and AGREEMENT - THE HURLEY COMPANIES PAGE 1 WHEREAS, the application received by City from Company is an application for the expansion of an existing facility; and WHEREAS, V.A.T.C., Tax Code, Sec. 312.002 specifically states that such a purpose is to be included in the guidelines for tax abatement and to be eligible for such treatment; and WHEREAS, Section IV of the Guidelines and Criteria governing Tax Abatement for Industrial Projects in the City of Lubbock recognizes expansion of an existing facility as being eligible for tax abatement status; and WHEREAS, the City Council does hereby find that all of the Guidelines and Criteria Governing Tax Abatement, as adopted by Resolution No. 2007-RO514 have been, or will be, met by Company, and WHEREAS, the location of the facility and surrounding real property, which are to be the subject matter of this Agreement, are attached hereto as Exhibit "A" and made a part of this Agreement for all purposes; and NOW THEREFORE, for and in consideration of the premises and of the mutual terms, covenants and conditions herein contained the City and Company do hereby agree as follows: SECTION 1. Term. This Agreement shall commence January 1 of the tax year after the required improvements are substantially completed and shall expire and be of no further force and effect five (5) years after such date. SECTION 2. Base Year. The base year applicable to real property, which is the subject of this Agreement, shall be 2009, and the assessed value of the real property shall be the assessed value applicable to such property for said year. SECTION 3. Base Year Taxes. The taxes upon the real property shall be paid in accordance with the assessed value of such property for the base year. Base year taxes upon the real property are thus not abated. SECTION 4. Abatement of Increase in Base Year Tax. In accordance with V.A.T.C., Tax Code, Section 312.204 real property taxes applicable to the real property subject to this Agreement shall be abated only to the extent the value for any given year within the term of this Agreement exceeds the base year taxes. SECTION 5. Property Ineligible for Tax Abatement. The property described and set forth in Section IV(6) of the Guidelines and Criteria Governing Tax Abatement for Industrial Projects in the City of Lubbock (Exhibit "B") is incorporated by reference herein as if fully set out in this Agreement and fully describes the property ineligible for tax abatement. AGREEMENT - THE HURLEY COMPANIES PAGE 2 SECTION 6. Exemption from Tax. The City covenants and agrees to exempt from taxation, in accordance with Section 4 above, the following properties: (a) All proposed new improvements to be placed upon the property which is described in Exhibit "A". (b) All eligible tangible personal property, owned by Company, placed in or upon the property set forth in Exhibit "A", which does not include any equipment and personal property owned by Company and already located in the existing facility. Eligible property includes any new equipment bought for this project up to 90 days prior to the execution of this contract. (c) It is further understood that all items affixed to the new improvements placed upon the real property identified 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) above set forth. SECTION 7. Economic Qualifications. Company agrees to expend funds necessary to qualify for tax abatement by expanding and modernizing an existing facility, as set forth in Section IV(3)(b) of the Guidelines and Criteria Governing Tax Abatement for Industrial Projects in the City of Lubbock (Exhibit "B") on the property described in Exhibit "A". A description of the kind, number and location of all proposed improvements is attached in Company's application, Exhibit "C" and incorporated herein as if fully set forth. SECTION 8. Value of Improvements. In accordance with V.A.T.C., Tax Code, Section 312.204(x), which requires the Owner of the property to make specific improvements or repairs to the property in order to be eligible for tax abatement, Company will expend seven hundred thousand ($700,000) for the expansion of an existing facility and ten million one hundred thousand ($10,100,000) on new equipment to be located within the reinvestment zone created by Ordinance No. 2009-00023. SECTION 9. Product Distribution. Company will certify to City that 50% or more of their products are distributed outside of Lubbock County within 24 months of the start of operation of the new equipment, as required in Section IV 1(b) of the Guidelines and Criteria Governing Tax Abatement for Industrial Projects in the City of Lubbock. SECTION 10. City Access to Property. Company covenants and agrees that City shall have access to the property, which is the subject matter of this Agreement, upon reasonable notice and during normal business hours, and that municipal employees shall be able to inspect the property and documents necessary to insure compliance with the terms and conditions of Company's application for tax abatement, attached as Exhibit "C", and this Agreement. AGREEMENT - THE HURLEY COMPANIES PAGE 3 SECTION 11. Portion of Tax Abated. City agrees, during the term of this Agreement, to abate taxes on eligible property according to the following schedule. Year 1: 100% Year 2: 80% Year 3: 60% Year 4: 40% Year 5: 20% SECTION 12. Type of Improvements. Company proposes to expand an existing facility as described in Exhibit "C". Company further states that the proposed improvements to the property above mentioned shall commence on the I" day of March, 2009, and shall be completed August 30, 2009. Company may request an extension of the above date from City in the event circumstances beyond the control of Company necessitate additional time for completion of such improvements and such consent shall not unreasonably be withheld. Company shall provide a copy of the certificate of occupancy or other proof of completion within ten days of completion of improvements. SECTION 13. Limitation on Use. Company agrees to limit the use of the property set forth in Exhibit "A" to commercial and/or industrial uses as those terms are defined in the zoning ordinances of the City of Lubbock and to limit the uses of the property to uses consistent with the general purpose of encouraging development of the enterprise zone during the term of this agreement. SECTION 14. Recapture. Company agrees to be bound by and comply with all the terms and provisions for recapture of abated taxes in the event of default by Company pursuant to law and as set forth in Guidelines and Criteria for Tax Abatement in Exhibit "B." SECTION 15. Certification. Company agrees to certify annually in writing to the governing body of each taxing unit that the owner is in compliance with the terms of the Agreement. SECTION 16. Compliance. The City may cancel or modify this Agreement if Company fails to comply with the Agreement. SECTION 17. Notices. Notices required to be given by this Agreement shall be mailed, certified mail return receipt requested, to the following addresses: CITY OF LUBBOCK Assistant City Manager Development Services P.O. Box 2000 Lubbock, Texas 79457 THE HURLEY COMPANIES. Tom Hurley 2902 Municipal Drive Lubbock, TX 79403 Phone: 806.745.5440 AGREEMENT - THE HURLEY COMPANIES PAGE 4 Fax: 806.745.7180 SECTION 18. 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. EXECUTED this THE HURLEY COMPANIES TOM HURLEY, PRESIDENT Lc: cityatt/L.inda/ Tax Abatement Agnt — Hurley March 23, 2009 day of 2009. CITY OF LUBBOCK A Municipal Corporation TOM MARTIN, MAYOR ATTEST: Rebecca Garza City Secretary APPROVED AS TO CONTENT: Rob Allison, Assistant City Manager Development Services APPROVED AS TO FORM: Linda L. Chamales, Economic Development Attorney AGREEMENT - THE HURLEY COMPANIES PAGE 5 Exhibit A Resolution No. 2009-R0121