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Resolution - 2008-R0087 - Tax Abatement Agreement - Ozark Automotive Distributors Inc. - 03/13/2008
Resolution No. 2008-R0087 March 13, 2008 Item No. 4.6 RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to execute for and on behalf of the City of Lubbock a Tax Abatement Agreement with Ozark Automotive Distributors, Inc. and all related documents. Said Agreement is attached hereto and incorporated in this Resolution as if fully set forth herein and shall be included in the minutes of the Council. Passed by the City Council this 13th day of March , 2008. DAVID A. MILLER, MAYOR ATTEST: Rebec Garza, City Secretary ,VF-D,,AS TO) 'ONTENT: Jr b Alhst i Manager velonment Services APPROVED AS TO FORM: Linda L. Chamales, Senior Attorney Office Practice Section LC: cityatt / Linda / Res -Tax Abatement- Ozark Automotive February 21, 2008 AGREEMENT STATE OF TEXAS § COUNTY OF LUB13OCK § Resolution No. 2008-R0087 This Agreement made this 13th day of March , 2008, by and between the City of Lubbock, Texas, a home rule municipality of the State of Texas (hereinafter called "City"), and Ozark Automotive Distributors, Inc. (hereinafter called "Company"); WITNESSETH: WHEREAS, City received an application for tax abatement from Company on the 26`n day of November, 2007, for improvements to real property and tangible personal property at 408 E. Yucca Lane, Lots 5 and 6, Lubbock Business Park Addition to the City of Lubbock, and further described in Exhibit "A," which is attached hereto and incorporated herein as if fully set forth; and WHEREAS, upon review of the above application it was determined that the facility and real property is located in the Lubbock 2000 North Enterprise Zone designated by the City for commercial and industrial tax abatement in Ordinance No. 2000-00032 covering the above described property; and WHEREAS, the Guidelines and Criteria Governing Tax Abatement For Industrial Projects in the City of Lubbock were adopted November 8, 2007 by Resolution No. 2007- R0514 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 property described in Exhibit A is located in the Lubbock North Enterprise Zone and V.A.T.C., Tax Code, Sec. 312.2011 provides that designation as an enterprise zone constitutes designation as a reinvestment zone without further action; and AGREEMENT - OZARK AUTOMOTIVE DISTRIBUTORS, INC. PAGE I WHEREAS, the Company's application is for the construction of a new facility; and WHEREAS, V.A.T.C. Tax Code Sec. 312.002 and Section IV of the Guidelines and Criteria governing Tax Abatement for Industrial Projects in the City of Lubbock recognize construction of a new facility as being eligible for tax abatement status; and WHEREAS, the City Council hereby finds that all of the Guidelines and Criteria Governing Tax Abatement, as adopted by Resolution No. 2007-R4514 have been 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 ten (10) years after said date. SECTION 2. Base Year. The base year applicable to real property, which is the subject of this Agreement, shall be 2008, 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 said value for any given year within the term of this Agreement exceeds the base year taxes hereinabove set forth. SECTION 5. Property Ineligible for Tax Abatement. The property described and set forth in Section N(6) of the Guidelines and Criteria Governing Tax Abatement for Industrial Projects in the City of Lubbock is incorporated by reference herein as if fully set out in this Agreement and fully describes the property ineligible for tax abatement. SECTION 6. Exemption from Tax. The City covenants and agrees to exempt from taxation, in accordance with Section 4 above, the following properties: AGREEMENT - OZARK AUTOMOTIVE DISTRIBUTORS, INC. PAGE 2 (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. (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 constructing a new facility, as set forth in Section N(3)(a) 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 twelve million nine hundred thousand dollars ($12,900,000.00) for the construction of a new facility and seven million five hundred thousand dollars ($7,500,000.00) on new equipment to be located within the enterprise zone created by Ordinance No. 2000-00032. SECTION 9. Job Creation. Company agrees to create 225 new jobs by June 2010 and retain those jobs for the term of the tax abatement. 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 or their agents shall be able to inspect the property to insure compliance with the terms and conditions of Company's application for tax abatement, attached as Exhibit "C", and this Agreement. 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: 90% Year 3: 80% AGREEMENT - OZARK AUTOMOTIVE DISTRIBUTORS, INC PAGE31 Year 4: 70% Year 5: 60% Year 6: 50% Year 7: 40% Year 8: 30% Year 9: 20% Year 10: 10% SECTION 12. Type of Improvements. Company proposes to construct a new facility as described in Exhibit "C". Company further states that the proposed improvements to the property above mentioned commenced on the 1 '` day of Jana , 2008, and shall be completed within approximately ten (10) months from said date. Company may request an extension of the above date from City in the event circumstances beyond the control of Company necessitates 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 adopted by Resolution No. 2007-RO514 of the City Council of the City of Lubbock. 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 OZARK AUTOMOTIVE DISTRIBUTORS, INC. Ed Randall 233 S. Patterson Springfield, MO 65802 AGREEMENT - OZARK AUTOMOTIVE DISTRIBUTORS, INC. PAGE 4 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. EXECUTED this 13th OZARK AUTOMOTIVE DISTRIBUTORS, INC. day of March , 2008. CITY OF LUBBOCK A Municipal Corporation ATTEST: DAVID A. MILLER, MAYOR ATTEST: Re b cca Garza City Secretary APPRO ED S TO CONTENT: Rob Allmon; Assis � Manager Development Services APPROVED AS TO FORM: Linda L. Chamales, Senior Attorney Office Practice Section LC: cityatt%Linda/Tw, Abatement Agmt-Ozark February 8, 2008 AGREEMENT- OZARK AUTOMOTIVE DISTRIBUTORS, INC. PAGE 5 4 I www 'IrTZ1—r T7 rTTTTTT Ti rTTTTT' 1 1 1 I1 1 I I r,j L1 —11J L1 r -9r- 1 u 1 1 1 1 ["Ja 10150.13.4 �IIAlO11A0A IR LUBBOCK BUSINESS PARK A. Aoa«msxrvl. �� .u.aanmum. n13Ar Ti rTTTT 11911 L! L1 l r— � Resolution No. 2008-R0087 .raw, .mi�.o3.lwllnear nau.oa.aur�� ma.l a'.1 mm 11 Tl rTTTTTT T1 rTT TTT TI rTTTTTT TI rTTT TT Tl 1111111 Alli 111111— --Intl— --s1 1J L11J L1 — 111 Ll 11J L 11J —1 r— r 7 r— l r l 1 1 1 1 e l 1 1 1 I SITE PLAN SC-WX, r • acro^ 2 i --- Resolution No. 2008-ROO87 �:D C7::::= Exhibit B Resolution No. 2008-80087 Guidelines and Criteria Governing Tax Abatement For Industrial Projects In The City of Lubbock SECTION I. General Purpose: The City of Lubbock is committed to the promotion of high quality development in all parts of the City of Lubbock, Texas; and to an ongoing improvement in the quality of life for the citizens residing within the Affected Jurisdiction. The Affected Jurisdiction recognize that these objectives are generally served by enhancement and expansion of the local economy. The Affected Jurisdiction will, on a case by case basis, give consideration to providing tax abatement, as authorized by V.T.C.A., Tax Code, Chapter 312, as stimulation for economic development within the Affected Jurisdiction. It is the policy of the Affected Jurisdiction that said consideration will be provided in accordance with the guidelines and criteria herein set forth and in conformity with the Tax Code. Nothing contained herein shall imply, suggest or be understood to mean THAT the Affected Jurisdiction is under any obligation to provide tax abatement to any applicant and attention is called to V.T.C.A., Tax Code, Section 312.002(d). With the above rights reserved all applications for tax abatement will be considered on a case by case basis. SECTION It. Definitions: As used within these guidelines and criteria, the following words or phrases shall have the following meaning; 1. Abatement of Taxes: To exempt from ad valorem taxation all or part of the value of certain Improvements placed on land located in a reinvestment zone designated for economic development purposes as of the date specified in the Tax Abatement Agreement for a period of time not to exceed ten (10) years. 2. Affected Jurisdiction: City of Lubbock. 3. Abatement Agreement: (1) A contract between a property owner and an Affected Jurisdiction for the abatement of taxes on qualified property located within a reinvestment zone; or, (2) a contract for the abatement of taxes between an Affected Jurisdiction and a certified air carrier who owns or leases Real Property located within the reinvestment zone or Personal Property or both as authorized by V.T.C.A., Tax Code, Section 312.204(e) 4. Advanced Technologies: advanced manufacturing which requires higher skills and results in higher wages and investment. 5. Base Year Value: The assessed value of property eligible for tax abatement as of January 1 preceding the execution of an Abatement Agreement as herein defined. 6. Distribution Center Facility: A building or structure including Tangible Personal Property used or to be used primarily to receive, store, service or distribute goods or materials. 7. Expansion of Existing Facilities or Structures: The addition of buildings, structures, machinery or equipment to a Facility. 8. Existing Facility or Structure: A facility as of the date of execution of the Tax Abatement Agreement, located in or on Real Property eligible for tax abatement. Exhibit B 2007 Industrial Tax Abatement Guidelines November 8, 2007 9. Facility: The improvements made to Real Property eligible for tax abatement and including the building or structure erected on such Real Property and/or any Tangible Personal Property to be located in or on such property. 10. Information and Data Center: Facility used to house computer systems and associated components, such as telecommunications and storage systems. The main purpose of the facility is running applications that handle the core business and operational data of organizations, off-site backups and other informational operations. 11. Improvements to Real Property or Improvements: Shall mean the construction, addition to, structural upgrading of, replacement of, or completion of any facility located upon, or to be located upon, Real Property, as herein defined, or any Tangible Personal Property placed in or on said Real Property. 12. Manufacturing Facility: A Facility which is or will be used for the primary purpose of the production of goods or materials or the processing or change of goods or materials to a finished product. 13. Medical Services: Facilities such as hospitals, specialty hospitals and other like facilities that are classified under North American Industrial Classification System Code 622. 14. Modernization/Renovation of Existing Facilities: The replacement or upgrading of existing facilities. 15. New Facility: The construction of a Facility on previously undeveloped real property eligible for tax abatement. 16. New Permanent Job: A new employment position created by a business that has provided employment to an employee of at least 1,820 hours annually and intended to be an employment position that exists during the life of the abatement. 17. Other Basic Industry: A Facility other than a distribution center facility, a research facility, a regional service facility or a manufacturing facility which produces goods or services or which creates new or expanded job opportunities and services a market of which 50% of revenues come from outside of Lubbock County, Texas. 18, Owner: The record title owner of Real Property or the legal owner of Tangible Personal Property. In the case of land leased from an Affected Jurisdiction or buildings leased from a private party or tax exempt property, the lessee shall be deemed the owner of such leased property together with all improvements and Tangible Personal Property located thereon. 19. Productive Life: The number of years a Facility is expected to be in service. 20. Real Property: Land on which Improvements are to be made or fixtures placed. 21. Regional Services Facility: A Facility, the primary purpose of which is to service or repair goods or materials and which creates job opportunities within the Affected Jurisdictions. 22. Reinvestment Zone: Real Property designated as a Reinvestment Zone under the provisions of V.T.C.A., Tax Code, Section 312.202. Exhibit B 2007 Industrial Tax Abatement Guidelines November 8, 2007 23. Research Facility: A Facility used or to be used primarily for research or experimentation to improve or develop new goods and/or services or to improve or develop the production process for such goods and/or services. 24. Tangible Personal Property: Any Personal Property, not otherwise defined herein and which is necessary for the proper operation of any type of Facility. SECTION III. Intent of Criteria and Guidelines:. The Intent of the criteria and guidelines, as herein set forth, is to establish the minimum standards which an applicant for tax abatement must meet in order to be considered for such status by the Affected Jurisdiction. SECTION IV. Criteria and Guidelines for Tax. Abatement: Any type of Facility will be eligible for tax abatement consideration provided such Facility meets the following guidelines and criteria: 1. To qualify for Tax Abatement, the company must meet both of the following criteria: a) The modernization or expansion of an existing facility of any type as herein defined or construction of a new facility of any type as herein defined. b) Producer, manufacturer or distributor of goods and services of which 50 percent or more are distributed outside of Lubbock County. 2. In addition to the aforementioned, the taxing jurisdiction will consider abatement only if the company meets one of the following criteria: a) One of the following target industries: i) Advanced Technologies and Manufacturing ii) Value-added Agricultural Production including Food Processing and Machinery iii) Research and Development iv) Medical Services (as defined in Section II Definitions) v) Warchouse/Distribution vi) Corporate Headquarters of a Regional/National Service Center vii) Information and Data Centers b) The project is not included as a target industry, but has the potential of generating additional significant economic development opportunities to Lubbock 3. The company must meet one of the following criteria: 3 Exhibit B 20071ndustrial Tax Abatement Guidelines November 8, 2007 a) The project will add at least $1 million in real property improvements, or $2 million in new personal property , or 25 new permanent jobs if the facility is a new company to Lubbock. b) The project will add at least $500,000 in real property improvements, or $1 million in new personal property, or 15 new permanent jobs if the facility is an existing company. 4. New or existing facilities,of any type herein defined, located in a reinvestment zone or upon Real Property eligible for such status will be eligible for consideration for tax abatement status provided that all other criteria and guidelines are satisfied 5. Improvements to Real Property are eligible for tax abatement status. 6. The following types of Property shall be ineligible for tax abatement status and shall be fully taxed. a) Real Property; b) inventories or supplies; C) too Is; d) furnishings and other forms of movable personal property; e) vehicles; f) aircraft; g) housing; h) boats; i) hotel accommodations; j) motel accommodations; k) retail businesses; 1) property owned by the State of Texas or any State agency; and, m) property owned or leased by a member of the affected Jurisdiction that did not have an active tax abatement in place before they became a member of the governing body or commission. 7. In order for a Facility to qualify for abatement, the following conditions must apply: a) The owner or leaseholder of real property must make eligible improvements to the real property; and, b) In the case of lessees, the leaseholder must have a lease commitment of at least five (5) years. 4 Exhibit B 2007 Industrial Tax Abatement Guidelines November 8, 2007 c) It is recommended that facilities located within the certificated territory of the City's municipally owned electric utility, Lubbock Power and Light (LP&L) utilize LP&L for electrical services during the term of the abatement. 8. In reinvestment zones, the amount and term of abatement shall be determined on a case by case basis, however, in no event shall taxes be abated for a term in excess of ten (10) years. The amount of the taxable value of Improvements to be abated and the term of the abatement shall be determined by the municipality in all cases where the property for which tax abatement is applied for is within the City limits of the City or by the County of Lubbock in all cases where the property for which tax abatement is applied for is outside of the City limits of a municipality, but within the County of Lubbock, except that a reinvestment zone that is a state enterprise zone is designated for the same period as a state enterprise zone as provided by Chapter 2303, Government Code. The authority of all other taxing units shall be as set forth in V.T.C.A., Tax Code, Section 312.206. In enterprise zones, the governing body of each taxing jurisdiction may execute a written agreement with the owner of the property. The agreement may, but is not required to, contain terms that are identical to those contained in the agreement with the municipality, county, or both, whichever applies, and the only terms for the agreement that may vary are the portion of the property that is to be exempt from taxation under the agreement and the duration of the agreement. 9. No property shall be eligible for tax abatement unless such property is located in a reinvestment zone in accordance with V.T.C.A., Tax Code, Section 312.202 and the tax abatement application is filed with the taxing jurisdiction before construction begins. 10. Notwithstanding any of the requirements set forth in Section N Subsection 3, the governing body of an Affected Jurisdiction upon the affirmative vote of a three-fourths (3/4) of its members may vary any of the above requirements when variation is demonstrated by the applicant for Tax Abatement that variation is in the best interest of the Affected Jurisdiction to do so and will enhance the economic development of the Affected Jurisdiction. By way of example only and not by limitation the governing body of an Affected Jurisdiction may consider the following or similar terms in determining whether a variance shall be granted: a) That the increase in productivity of the Facility will be substantial and hence directly benefit the economy. b) That the increase of goods or services produced by the Facility will be substantial and directly benefit the economy. c) That the employment maintained at the Facility will be increased. d) That the waiver of the requirement will contribute and provide for the retention of existing jobs within the Affected Jurisdiction, e) Any other evidence tending to show a direct economic benefit to the Affected Jurisdiction. It. Taxability: a) The portion of the value of Improvements to be abated shall be abated in accordance with the terms and provisions of a Tax Abatement Agreement executed between the Affected Jurisdiction and the owner of the Real Property and/or Tangible Personal Property, Exhibit 13 2007 Industrial Tax Abatement Guidelines November B, 2007 (which agreement shall be) in accord with the provisions of V.T.C.A., Tax Code, Section 312.205. b) All ineligible property, if otherwise taxable as herein described, shall be fully taxed. 12. The governing body of each Affected Jurisdiction shall have total discretion as to whether tax abatement is to be granted. Such discretion, as herein retained, shall be exercised on a case by case basis. The adoption of these guidelines and criteria by the governing body of an Affected Jurisdiction does not: a) Limit the discretion of the governing body to decide whether to enter into a specific tax abatement agreement; b) Limit the discretion of the governing body to delegate to its employees the authority to determine whether or not the governing body should consider a particular application or request for tax abatement; or, c) Create any property, contract, or other legal right in any person to have the governing body consider or grant a specific application or request for tax abatement. 13. The burden to demonstrate that an application for tax abatement should be granted shall be upon the applicant. Each Affected Jurisdiction to which the application has been directed shall have full authority to request any additional information from the applicant that the governing body of such Affected Jurisdiction deems necessary to assist it in considering such application. SECTION V. Criteria and Guidelines for Creation of Reinvestment Zone. 1. No Property shall be eligible for tax abatement unless such property is located in a reinvestment zone designated as such in accordance with V.T.C.A., Tax Code, Section 312.202. To be designated as a reinvestment zone an area must meet one of the following: a) Substantially arrest or impair the sound growth of the municipality or county creating the zone, retard the provision of housing accommodations, or constitute an economic or social liability and be a menace to the public health, safety, morals, or welfare in its present condition and use because of the presence of: I. a substantial number of substandard, slum, deteriorated, or deteriorating structures; 2, the predominance of defective or inadequate sidewalks or streets; 3. faulty size, adequacy, accessibility or usefulness of lots; 4. unsanitary or unsafe conditions; 5. the deterioration of site or other improvements; 6. tax or special assessment delinquency exceeding the fair value of the land; 7. defective or unusual conditions of title; 8. conditions that endanger life or property by fire or other cause; or. Exhibit B 2007 Industrial Tax Abatement Guidelines November 8, 2007 9. any combination of these factors; a) Be predominantly open and, because of obsolete platting, deterioration of structures or site improvements, or other factors, substantially impair or arrest the sound growth of the municipality; b) Be in a federally assisted new community located in a home rule municipality or in an area immediately adjacent to a federally assisted new community located in a home rule municipality; c) Be located entirely in an area that meets the requirements for federal assistance under Section 119 of the Housing and Community Development Act of 1974 (42 U.S.C. Section 5318); d) Encompass signs, billboards, or other outdoor advertising structures designated by the governing body of the municipality for relocation, reconstruction, or removal for the purpose of enhancing the physical environment of the municipality, which the legislature declares to be a public purpose; or, e) Be reasonably likely as a result of the designation to contribute to the retention or expansion of primary employment or to attract major investment in the zone that would be a benefit to the property and that would contribute to the economic development of the municipality. 2. For purposes of this Section, federally assisted new community is a federally assisted area: a) That has received or will receive assistance in the form of loan guarantees under Title X of the National Housing Act (12 U.S.C., Section 1749aa et seq); and, b) A portion of which has received grants under Section 107 (a)(1) of the Housing and Community Development Act of 1974, as amended. 3. The governing body of a municipality, as required by Section 312.201, or a county, as required by V.T.C.A., Tax Code, Section 312.401, shall hold a public hearing on the designation of an area within its jurisdiction as a reinvestment zone. The burden shall be on the owner of the property sought to be included in the zone or applicant for the creation of the reinvestment zone to establish the following: a) That the requirements of Subsection 1 of this Section have been met. b) That the improvements sought are feasible and practical. 4. No later than the seventh day before the date set for the above public hearing notice of such hearing shall be: a) Published in a newspaper having general circulation in the Affected Jurisdiction. b) Delivered in writing to the presiding officer of the governing body of each taxing unit that includes in its boundaries Real Property that is to be included in the reinvestment zone. Exhibit B 2007 Industrial Tax Abatement Guidelines November 8, 2007 5. At the public hearing above described in Subsection 3 above, any interested person is entitled to speak and present evidence for or against the designation of such reinvestment zone. 6. At the conclusion of the hearing described in Subparagraph 3 above, the governing body shall enter its findings as follows: a) That the applicant or owner has or has not met his burden as hereinabove set forth, and/or, b) That the improvements sought are or are not feasible and practical. c) That the proposed improvements sought will or will not be a benefit to the land to be included in the reinvestment zone and to the Affected Jurisdiction after the expiration of an agreement entered into under V.T.C.A., Tax Code, Section 312.204. 7. An application for the creation of a reinvestment zone shall not be granted unless the Affected Jurisdiction considering such application enters affirmative findings to Subparagraphs a, b, and c of Subsection 6 above set forth. 8. At the conclusion of the public hearing herein required and upon the affirmative finding of the governing body as required by Subsection 7 above set forth, the governing body may designate a reinvestment zone in accordance with the provisions of V.T.C.A., Tax Code, Sections 312.201 or 312.401, whichever Section shall be applicable under the premises. 9. The designation of a reinvestment zone expires five years after the date of the designation and may be renewed for periods not to exceed five years, except that a reinvestment zone that is a state enterprise zone is designated for the same period as a state enterprise zone as provided by Chapter 2303, Government Code. The expiration of the designation does not affect an existing tax abatement agreement made in accordance with V.T.C.A., Tax Code, Section 312.201 through Section 312.209. 10. Designation of an area as an enterprise zone under the Texas Enterprise Zone Act, Chapter 2303, Subchapter C, Texas Government Code, constitutes designation of the area as a reinvestment zone under Subchapter B of the Property Redevelopment and Tax Abatement Act without further hearing or other procedural requirements other than those provided by the Texas Enterprise Zone Act, Chapter 2303, Subchapter C, Texas Government Code. SECTION VI, Tax Abatement A:lreement: 1. After the creation of a reinvestment zone as hereinabove authorized a Tax Abatement Agreement may be executed between the owner and any Affected Jurisdiction. A Tax Abatement Agreement shall: a) Establish and set forth the Base Year assessed value of the property for which tax abatement is sought. b) Provide that the taxes paid on the base year assessed value shall not be abated as a result of the execution of said Tax Abatement Agreement. c) Provide that ineligible property as subscribed in Section IV, Subsection 6, hereinabove shall be fully taxed. 8 Exhibit B 2007 Industrial Tax Abatement Guidelines November S, 2007 d) Provide for the exemption of Improvements in each year covered by the agreement only to the extent the value of such Improvements for each such year exceeds the value for the year in which the agreement is executed. e) Fully describe and list the kind, number and location of all of the improvements to be made in or on the Real Property. f) Set forth the estimated value of all improvements to be made in or on the Real Property. g) Clearly provide that tax abatement shall be granted only to the extent: 1. The Improvements to Real Property increase the value of the Real Property for the year in which the Tax Abatement Agreement is executed; and, 2. That the Tangible Personal Property improvements to Real Property were not located on the Real Property prior to the execution of the Tax Abatement Agreement. h) Provide for the portion of the value of the improvements to Real Property of improvements to be abated. This determination is to be made consistent with the provisions of Section IV, Subsection 6, of these guidelines and criteria as hereinabove set forth. i) Provide for the commencement date and the termination date. In no event shall said dates exceed a period of ten years. j) Describe the type and proposed use of the improvements to Real Property or improvements including: 1. The type of facility. 2. Whether the improvements are for a new facility, modernization of a facility, or expansion of a facility. 3. The nature of the construction, proposed time table of completion, a map or drawings of the improvements above mentioned. 4. The amount of investment and the commitment for the creation of new jobs. 5. A list containing the kind, number and location of all proposed Improvements. 6. Any other information required by the Affected Jurisdiction. k) Provide a legal description of the Real Property upon which improvements are to be made. 1) Provide access to and authorize inspection of the Real Property or improvements by employees of the Affected Jurisdiction, who have executed a Tax Abatement Agreement with owner to insure improvements are made according to the specifications and conditions of the Tax Abatement Agreement. 9 Exhibit B 2007 Industrial Tax Abatement Guidelines November 8, 2007 m) Provide for the limitation of the uses of the Real Property or improvements consistent with the general purpose of encouraging development or redevelopment of the zone during the period covered by the Tax Abatement Agreement. n) Provide the contractual obligations in the event of default by owner, violation of the terms or conditions by owner, recapturing property tax revenue in the event owner defaults or otherwise fails to make improvements as provided in said Tax Abatement Agreement, and any other provision as may be required or authorized by State Law. o) Contain each term agreed to by the owner of the property. p) Require the owner of the property to certify annually to the governing body of each taxing unit that the owner is in compliance with each applicable term of the agreement. q) Provide that the governing body of the municipality may cancel or modify the agreement if the property owner fails to comply with the agreement. 2. Not later than the seventh day before a municipality or the County of Lubbock(as required by V.T.C.A., Tax Code, Section 312.2041 or Section 312.402) enters into an agreement for tax abatement under V.T.C.A., Tax Code, Section 312.204, the governing body of a municipality or a designated officer or employee thereof or the governing body of the county of Lubbock or a designated officer or employee thereof shall deliver to the presiding officer of the governing body of each of the taxing units in which the property to be subject to the agreement is located, a written notice that the municipality or the County of Lubbock as the case may be, intends to enter into the agreement. The notice must include a copy of the proposed Tax Abatement Agreement. 3. A notice, as above described in Subparagraph 2, is presumed delivered when placed in the mail, postage paid and properly addressed to the appropriate presiding officer. A notice properly addressed and sent by registered or certified mail for which a return receipt is received by the sender is considered to have been delivered to the addressee. 4. Failure to deliver the notice does not affect the validity of the agreement. SECTION VII. Anulication: 1. Any present owner of taxable property located within an Affected Jurisdiction may apply for tax abatement by fling an application with the county of Lubbock, when the Real Property or Tangible Personal Property for which abatement is sought is located within the County of Lubbock but outside of the City limits of any City or with the appropriate City when the Real Property or Tangible Personal Property for which abatement is sought is located within the City limits of a municipality located wholly or partially within Lubbock County. 2. The application shall consist of a completed application form accompanied by: a) A general description of the improvements to be undertaken. b) A descriptive list of the improvements for which tax abatement is requested. c) A list of the kind, number and location of all proposed improvements of the Real Property Facility or Existing Facility. 10 Exhibit B 2007 Industrial Tax Abatement Guidelines November 8, 2007 d) A map indicating the approximate location of improvements on the Real Property Facility or Existing Facility together with the location of any or all Existing Facilities located on the Real Property or Facility. e) A list of any and all Tangible Personal Property presently existing on the Real Property or located in an existing facility. f) A proposed time schedule for undertaking and completing the proposed improvements. g) A general description stating whether the proposed improvements are in connection with: 1, the modernization of a facility (of any type herein defined); or, 2. construction of a new facility (of any type herein defined); or, 3. expansion of a facility (of any type herein defined); or, 4. any combination of the above. h) A statement of the additional value to the Real Property or Facility as a result of the proposed improvements. i) A statement of the assessed value of the Real Property, Facility or Existing Facility for the Base Year. j) Information concerning the number of new jobs that will be created or information concerning the number of existing jobs to be retained as result of the improvements undertaken. k) Any other information which the Affected Jurisdiction, to which the application has been directed, deems appropriate for evaluating the financial capacity of the applicant and compatibility of the proposed improvements with these guidelines and criteria. l) Information that is provided to an Affected Jurisdiction in connection with an application or request for tax abatement and which describes the specific processes or business activity 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 Tax Abatement Agreement is executed. Information in the custody of an Affected Jurisdiction after the agreement is executed is not confidential. (V.T.C.A., Tax Code, Section 312.403). m) The Affected Jurisdiction to whom the application for tax abatement has been directed shall, determine if the property described in said application is within a designated reinvestment zone. If the Affected Jurisdiction determines that the property described is not within a current reinvestment zone then they shall so notify the applicant and said application shall then be considered both as an application for the creation of a reinvestment zone and a request for tax abatement to he effective after the zone is created. SECTION VIII. Default Options Exhibit S 2007 Industrial Tax Abatement Guidelines November 8, 2007 In the event that the applicant, owner or lessee has entered into a tax abatement agreement to make improvements as defined in Section IV.2 above, but fails to undertake or complete such improvements; fails to create all or a portion of the new jobs provided by the Tax Abatement Agreement; or is in default of any of the terms or conditions contained in the Tax Abatement Agreement; then in such event the Affected Jurisdiction to whom the application for tax abatements was directed shall give the applicant or owner sixty (60) days notice of such failure. The applicant or owner shall demonstrate to the satisfaction of the Affected Jurisdiction above mentioned that the applicant or owner has commenced to cure such failure within the sixty (60) days above mentioned. In the event the applicant owner, or lessee fails to demonstrate that he is taking affirmative action to cure his failure, the Affected Jurisdiction shall have three options: (a) The Affected Jurisdiction may renegotiate the Agreement with the applicant, owner or lessee, in which case the current Guidelines and Criteria Governing Tax Abatement for Industrial Projects in the City of Lubbock shall apply to the new Agreement; or (b) The Affected Jurisdiction may determine that good cause exists to cancel the Agreement and all abatement of taxes shall terminate immediately; or (c) The Affected Jurisdiction may terminate the Agreement and recapture taxes abated under Section VIII. Recapture. In any of the three options in subparagraph 1 above, the Affected Jurisdiction to which the application for tax abatement was directed shall determine whether default has occurred by the applicant, owner or lessee in the terms and conditions of the Tax Abatement Agreement and shall so notify all other Affected Jurisdictions. Cancellation or termination of the Tax Abatement Agreement by the Affected Jurisdiction to which the application for tax abatement was directed shall constitute simultaneous action to all Tax Abatement Agreements of all other Affected Jurisdictions. SECTION IX. Reeanture 1. In the event that any type of facility, (as defined in Section II, Subparagraphs 5, 6, 7, 8, 10, 11, 12, 14, 18, 20) is completed and begins producing goods or services, but subsequently discontinues producing goods or services for any reason, excepting fire, explosion or other casualty or accident or natural disaster or other event beyond the reasonable control of applicant or owner for a period of 180 days during the term of a tax abatement agreement, then in such even the Tax Abatement Agreement shall terminate and all abatement of taxes shall likewise terminate. Taxes abated during the calendar year in which tennination takes place shall be payable to each Affected Jurisdiction by no later than January 31st of the following year. Taxes abated in years prior to the year of termination shall be payable to each Affected Jurisdiction within sixty (60) days of the date of termination. The burden shall be upon the applicant or owner to prove to the satisfaction of the Affected Jurisdiction to who the application for tax abatement was directed that the discontinuance of producing goods or services was as a result of fire, explosion, or other casualty or accident of natural disaster or other event beyond the control of applicant or owner. In the event that applicant or owner meets this burden and the Affected Jurisdiction is satisfied that the discontinuance of the production of goods or services was the result of vents beyond the control of the applicant or owner, then such applicant or owner shall have a period of one year in which to resume the production of goods and services. In the event that the applicant or owner fails to resume the production of goods or services within one year, then the Tax Abatement Agreement shall 12 Exhibit B 2007 Industrial Tax Abatement Guidelines November 8, 2007 terminate and the Abatement of all taxes shall likewise terminate. Taxes abated during the calendar year in which termination takes place shall be payable to each Affected Jurisdiction by no later than January 31 st of the following year. Taxes abated in years prior to the year of termination shall be payable to each Affected Jurisdiction within sixty (60) days of the date of termination. The one year time period, hereinabove mentioned, shall commence upon written notification from the Affected Jurisdiction to the applicant or owner. 2. In the event that the applicant or owner has entered into a tax abatement agreement to make improvements to a facility of any type described in Section 1 above, but fails to undertake or complete such improvements or fails to create all or a portion of the number of new jobs provided by the Tax Abatement Agreement, then in such event the Affected Jurisdiction to whom the application for tax abatement was directed shall give the applicant or owner sixty (60) days notice of such failure. The applicant or owner shall demonstrate to the satisfaction of the Affected Jurisdiction, above mentioned, that the applicant or owner has commenced to cure such failure within the sixty (60) days above mentioned. In the event that the applicant or owner fails to demonstrate that he is taking affirmative action to cure his failure, then in such event the Tax Abatement Agreement shall terminate and all abatement of taxes shall likewise terminate. Taxes abated during the calendar year in which termination takes place shall be payable to each Affected Jurisdiction by no later than January 31 st of the following year. Taxes abated in years prior to the year of termination shall be payable to each Affected Jurisdiction within sixty (60) days of the date of termination. 3. In the event that the Affected Jurisdiction to whom application for tax abatement was directed determines that the applicant or owner is in default of any of the terms or conditions contained in the Tax Abatement Agreement, then in such even the Affected Jurisdiction, shall give the applicant or owner sixty (60) days written notice to cure such default. in the event such default is not cured to the satisfaction of the Affected Jurisdiction within the sixty (60) days notice period, then the Tax Abatement Agreement shall terminate and all abatement of taxes shall likewise terminate. Taxes abated during the calendar year in which termination takes place shall be payable to each Affected Jurisdiction by no later than January 31st of the following year. Taxes abated in years prior to the year of termination shall be payable to each Affected Jurisdiction within sixty (60) days of the date of termination. 4. In the event that the applicant or owner allows ad valorem taxes on property ineligible for tax abatement owed to any Affected Jurisdiction, to become delinquent and fails to timely and properly follow the legal procedures for their protest or contest, then in such even the Tax Abatement Agreement shall terminate and all abatement of taxes shall likewise terminate. Taxes abated during the calendar year in which termination, under this subparagraph, takes place shall be payable to each Affected Jurisdiction by no later than January 31st of the following year. Taxes abated in years prior to the year of termination shall be payable to each Affected Jurisdiction within sixty (60) days of the date of termination. In the even that the applicant or owner, who has executed a tax abatement agreement with any Affected Jurisdiction, relocates the business for which tax abatement has been granted, to a location outside of the designated reinvestment zone, then in such event, the Tax Abatement Agreement shall terminate after sixty (60) days written notice by the Affected Jurisdiction to the Owner/Applicant. Taxes abated during the calendar year in which termination, under this subparagraph takes place shall be payable to each Affected Jurisdiction by no later than January 31st of the following year. Taxes abated in years prior to the year of termination shall be payable to each Affected Jurisdiction within sixty (60) days of the date of termination. 13 Exhibit 8 2007 Industrial Tax Abatement Guidelines November 8, 2007 The date of termination as that terns is used in this Subsection VIII shall, in every instance, be the 60th day after the day the Affected Jurisdiction sends notice of default, in the mail to the address shown in the Tax Abatement Agreement to the Applicant or Owner. Should the default be cured by the owner or Applicant within the sixty (60) day notice period, the Owner/Applicant shall be responsible for so advising the Affected Jurisdiction and obtaining a release from the notice of default from the Affected Jurisdiction, failing in which, the abatement remains terminated and the abated taxes must be paid. In every case of termination set forth in Subparagraphs 1, 2, 3, 4 and 5 above, the Affected Jurisdiction to which the application for tax abatement was directed shall determine whether default has occurred by Owner (Applicant) in the terms and conditions of the Tax Abatement Agreement and shall so notify all other Affected Jurisdictions. Termination of the Tax Abatement Agreement by the Affected Jurisdiction to which the application for tax abatement was directed shall constitute simultaneous termination of all Tax Abatement Agreements of all other Affected Jurisdictions. 8. In the event that a tax abatement agreement is terminated for any reason what so ever and taxes are not paid within the time period herein specified, then in such event, the provisions of V.T.C.A., Tax Code, Section 33.01 will apply. SECTPON X. Miscellaneous: 1. Any notice required to be given by these criteria or guidelines shall be given in the following manner: a) To the owner or applicant: written notice shall be sent to the address appearing on the Tax Abatement Agreement. b) To an Affected Jurisdiction: written notice shall be sent to the address appearing on the Tax Abatement Agreement. 2. The Chief Appraiser of the Lubbock Central Appraisal District shall annually assess the Real and Personal Property comprising the reinvestment zone. Each year, the applicant or owner receiving tax abatement shall furnish the chief Appraiser with such information as may be necessary for the abatement. Once value has been established, the Chief Appraiser shall notify the Affected Jurisdictions which levy taxes of the amount of assessment. 3. Upon the completion of improvements made to any type of Facility as set forth in Section VIII, Subparagraph 1 of these criteria and guidelines a designated employee or employees of any Affected Jurisdiction having executed a tax abatement agreement with applicant or owner shall have access to the Facility to insure compliance with the Tax Abatement Agreement. 4. A tax abatement agreement may be assigned to a new owner but only after written consent has been obtained from all Affected Jurisdictions which have executed such an agreement with the applicant or owner. 5. These guidelines and criteria are effective upon the date of their adoption by an Affected Jurisdiction and shall remain in force for two years. At the end of the two year period these guidelines and criteria may be readopted, modified, amended or rewritten as the conditions may warrant. 14 Exhibit B 2007 Industrial Tax Abatement Guidelines November 8, 2007 6. Each Affected Jurisdiction shall determine whether or not said Affected Jurisdiction elects to become eligible to participate in tax abatement. In the even the Affected Jurisdiction elects by resolution to become eligible to participate in tax abatement, then such Affected Jurisdiction shall adapt these guidelines and criteria by separate resolution forwarding a copy of both resolutions to all other Affected Jurisdictions. 7. In the event of a conflict between these guidelines and criteria and V.T.C.A., Tax Code, Chapter 312, then in such event the Tax Code shall prevail and these guidelines and criteria interpreted accordingly. 8. The guidelines and criteria once adopted by an Affected Jurisdiction may be amended or repealed by a vote of three-fourths of the members of the governing body of an Affected Jurisdiction during the two year term in which these guidelines and criteria are effective. 15 Exhibit C Resolution No. 2008—R0087 APPLICATION FOR INDUSTRIAL TAX ABATEMENT IN LUBBOCK COUNTY PILING INSTRUCTIONS: This a2RIication must be submitted to the appropriate taxing Jurisdiction before anV construction begins to be eligiblefor tax abatement. This filing acknowledges familiarity and assumed conformance with "GUIDELINES ANQ CRITI=RIA GOVERNING TAX ABATEMENT FOR SELECTED TAXING UNITS CONTAINED WITHIN LUBBOCK COUNTY" (Copy attached). This application will become a part of any later agreement or contract, and knowingly false representations thereon will be grounds for the voiding of any later agreement or contract. ORIGINAL COPY OF THIS APPLICATION AND ATTACHMENTS SHOULD BE SUBMITTED TO: City of Lubbock Business Development Department P.O. Box 2040 1628 13"' Street, Suite 105 Lubbock, TX 79457 (806) 775-2019 5ecti n I— Date of Application: 11/19/07 Applicant Name: Ozark Automotive Distributors, Inc. Company Name: same Address: 233 S. Patterson, Springfield, MO 65802 Phone: 417-862-2674 Fax: 417-874-7124 Applicants Representative on this project: Name: Ed Randall, Director of Property Management Address: same Phone: 417-874-7138 Type of Ownership: [X] Corporation [ ] Partnership (] Proprietorship Total Current Number Employees: 23,465 Corporate Annual Sales Per Year $3 Billion Annual Report Submitted? [X] Yes [ ] No Lubbock Tax Abate App Nov07 Exhibit C Industria! Tax Abatement Application REVISED JANUARY 23, 2008 — REVISIONS IN BOLD Page 2 Section If - FACILITY INFt RmATIDN Place a check mark in the box on those statements which are applicable to your company: (a) This application is for a: [X] New Facility I 1 Expansion [ I Modernization (b) Is the company a producer, manufacturer or distributor of goods and services of which 50 percent or more are distributed outside of Lubbock ?(If yes, provide documentation as Attachment 1) See Attachment 1 — (b) [X] Yes [ ] No (c) Check the following target industry which is applicable to your company [ ] Manufacturing Facility: Electronics/Electrical/Assembly, Semiconductor Fabrication [ ] Value-added Agricultural Production including Food Processing and Machinery I ] Med Tech Research/Manufacturing/Assembly [ ] Aviation/Avionics Production/Rehab [XI Warehouse/Distribution [ ] Corporate Headquarters of a Region a]/Nation ai Service Center [ ] The project is not included in the above target industries, but has the potential of generating additional significant economic development opportunities in Lubbock. (Provide documentation) (d) { j The existing facility to be modernized or expanded or the property where the new facility is to be built is located in a designated Enterprise Zone. (e) [) New Company to Lubbock [X] Existing Company (f) If New Company checked, which of the following statements apply to the project: [ ] The project will add at least $1 million in real estate assessed valuation [ ] The project will add at least $2 million of personal property assessed valuation [ ] The project will add at least 25 new permanent jobs (g) If Existing Company checked, which of the following statements apply to the project: [X] The project will add at least $500,000 in real estate assessed valuation [XI The project will add at least $1 million of personal property assessed valuation IX[ The project will add at least 20 new permanent jobs (h) Address of proposed facility: 408 East Yucca Lane Lubbock TX 79403 (i) Legal description of proposed facility: See attached Attachment 1 (j) The proposed facility is located in: School District: Lubbock Independent School District City: Lubbock (k) Describe product or service to be provided: New facility to be constructed will serve as our distribution center for automotive aftermarket parts and accessories to our retail stores. Exhibit C Industrial Tax Abatement Application REVISED JANUARY 23, 2008 -REVISIONS IN SOLD Page 3 Section III - FACILITY DESCRIPTION Please attach the following: Attachment 2 (a) A general description of the improvements to be undertaken (example: modernization of manufacturing facility located at 4501 Peach Street and purchase of new manufacturing equipment). (b) A descriptive list of the improvements for which tax abatement is requested, including: (1) description of construction and location of all proposed improvements of the Real Property or Existing Facility, and; (2) list of new equipment and cost of the equipment. At this point a detailed list cannot be provided, since all of the equipment has not been purchased. (c) A list of any and all Tangible Personal Property presently existing on the Real Property or located in an existing facility. (d) A proposed time schedule for undertaking and completing the proposed improvements. Attachment 3 (a) A site map indicating the approximate location of improvements on the Real Property Facility or Existing Facility together with the location of any or all Existing Facilities located on the Real Property or Facility. Attachment 4 (a) A statement of the additional value to the Real Property or Facility as a result of the proposed improvements. (b) A statement of the assessed value of the Real Property, Facility or Existing Facility for the base year (attach tax assessment for property from the Lubbock Central Appraisal District), Section 111 - EC4NOif IC IMPACT INFORMATION' Part A - Current Investment in Existing Improvements: NIA Part B - Permanent Employment Estimates: (1) If existing facility, what is the current plant employment_ NIA (2) Estimated number of new jobs to be created and time frame for creation of jobs: New Jobs: 225 Time Frame: by June 2fl1U The number of jobs is dependent upon the number of new stores and finding possible sites for stores has caused us to reduce this number. (3) Opening of improvements: (Month) November of (Year) 20 08. Part C - Permanent Payroll Estimates: Exhibit C Industrial Tax Abatement Application REVISED JANUARY 23, 2008 - REVISIONS IN BOLD Page 4 (1) if existing facility, what is the current plant payroll: (2) Estimated amount of new payroll : see attached Attachment 5 - Revised January 23 2008 Part D - Construction and Employment Estimates (1) Construction start: Month January Year 20 08. (2) Number of construction jobs: At Start Peak f=inish Expect to have 75 to 100 jobs during construction with all the trades involved in the project. (3) Number of man-years: Part E - School District Impact Estimates: Give Estimated number of: Families transferred to area 2 or 3 Children added to ISD's uncertain Part F - City Impact Estimates: (1) Volume of treated water required from City 450 to 500 gallons per day. (2) Volume of effluent to be treated by City 400 to 450 gallons per day. The volumes for items 1 and 2 are based upon another DC of a similar size. (3) Please provide a statement on planned water and sewer treatment methods, and disposal of effluent if the facility is to be located outside City systems. (4) Has permitting been started? X Yes No Part G -- Estimated Appraised Value on Site: LAND PERSONAL IMPROVEMENTS PROPERTY Value of Existing Facility Before New Construction (From Central Appraisal District) $871,000.00 0 0 Value of New Improvements NA $7.500,000.00 $12,900,000.00 Estimated Total Value After Improvements $871,000.00 $7,500.000.00 $12,900,000,00 Part H - Variance: (a) Is a variance being sought under Section IV 9(d) of the "Guidelines"? (b) If "Yes", attach any supplementary information required. I [ Yes [X ] No Exhibit C Industrial Tax Abatement Application Page 5 (a) Has applicant made application for abatement of this facility by other taxing jurisdictions or counties? [ ] Yes [ ] No (b) If 'Yes", please provide: (1) Dates of Application: April 11. 2007 (2) Hearing Dates: June 18. 2007 (3) Name of Jurisdiction(s): VEDA (4) Name of Contact(s): Marc Farmer (4) Attach any letters of intent to abate. See Attachment 6 To the best of my knowledge, the above information is an accurate description of project details. Company Official Signature Ed Randall Printed Name of Company Official Director of Property Management Title of Company Official Exhibit C SECTION II - FACILITY INFORMATION ATTACHMENT 1 LOTS 5 AND 6, LUBBOCK BUSINESS PAW AN ADDITION TO THE CITY OF LUBBOCK, LUBBOCK COUNTY, TEXAS METES AND BOUNDS DESCRIPTION OF A 25.100 ACRE TRACT OF LAND IN SECTION 7, BLOCK A, LU1390CK COUNTY, TEXAS BEING A PORTION OF THAT TRACT DESCRIBED IN INSTRUMENT 4 2006037689 OF THE LUBBOCK COUNTY CLERIC'S RECORDS AND BEING LOTS 5 AND 6, LUBBOCK BUSINESS PARK. AN ADDITION TO THE CITY OF LUBBOCK, LUBBOCK COUNTY, TEXAS AND FURTHER DESCRIBED AS FOLLOWS: BEGINNING AT A'/2" IRON ROD WITH CAP SET FOR THE SOUTHEAST CORNER OF LOT 6 AND THIS TRACT FROM WHENCE A RAILROAD SPIKE FOUND AT THE SOUTHEAST CORNER OF SAID SECTION 7 BEARS S 0°19'20" E A DISTANCE OF 1122.00 FEET AND N 89°40'40" E A DISTANCE OF 4139.30 FEET; THENCE S 69'40'40" W A DISTANCE OF 732.75 FEET TO A ''/2" IRON ROD WITH CAP SET FOR THE MOST SOUTHERLY SOUTHWEST CORNER OF LOT 6 AND THIS TRACT; THENCE N 0°19'20" W A DISTANCE OF 130.76 I=- TO A''/i" IRON ROD WITH CAP SET FOR AN ELL CORNER OF LOT 6 AND THIS TRACT; THENCE S 89°40'40" W A DISTANCE OF 256.51 FEET TO A %" IRON ROD WITH CAP SET FOR THE MOST WESTERLY SOUTHWEST CORNER OF LOT 6 AND THIS TRACT IN THE EAST RIGHT OF WAY LINE OF NORTH INTERSTATE HIGHWAY 27; THENCE NORTHEASTERLY, ALONG SAID RIGHT OF WAY LINE, A CURVE TO THE LEFT HAVING A RADIUS OF 1910.08 FEET AND A CHORD BEARING OF N 12°41'33" E, A CHORD DISTANCE OF 248.31 FEET TO A !4" IRON ROD WITH CAP SET FOR A CORNER OF THIS TRACT: THENCE N 9°38'33" E, ALONG SAID RIGHT OF WAY LINE, AT A DISTANCE OF 286.45 FEET PASS A CROSS ON CONCRETE SET FOR THE WEST COMMON CORNER OF SAID LOTS 5 AND 6, IN ALL A DISTANCE OF 737,34 FEET TO A 12" IRON ROD WITH CAP SET FOR A CORNER OF LOT 5 AND THIS TRACT; THENCE S 80°21'27" E, ALONG THE SOUTH RIGHT OF WAY LINE OF EAST YUCCA LANE, A DISTANCE OF 50.00 FEET TO A %2" IRON ROD WITH CAP SET FOR A CORNIER OF LOT 5 AND THIS TRACT. THENCE N 9°36'33" E, ALONG THE SOUTH RIGHT OF WAY LIVE OF EAST YUCCA LANE., A DISTANCE OF 141.99 FEET TO A '_" IRON ROD WITH CAP SET FOR A CORNER OF LOT 5 AND THIS TRACT; THENCE N 49°33'37" E, ALONG THE SOUTH RIGHT OF WAY LINE OF EAST YUCCA LANE, A DISTANCE OF 45.95 FEET TO A Vii" IRON ROD WITH CAP SET FOR A CORNER OF LOT 5 AND THIS TRACT; THENCE N 69°40'40" E, ALONG THE SOUTH RIGHT OF WAY LINE OF EAST YUCCA LANE, A DISTANCE OF 341,44 FEET TO A `/," IRON ROD WITH CAP SET FOR A CORNER OF LOT 5 AND THIS TRACT; THENCE N 0"19'20 W, ALONG THE SOUTH RIGHT OF WAY LINE OF EAST YUCCA LANE, A DISTANCE OF 50.00 FEET TO A IRON ROD WITH CAP SET FOR A CORNER OF LOT 5 AND THIS TRACT; THENCE N 89"40'40" E, ALONG THE SOUTH RIGHT OF WAY LINE OF EAST' YUCCA LANE, A DISTANCE OF 239.51 FEET TOA /2 IRON ROD WITH CAP SET FOR A CORaNTR OF LOT 5 AND THIS TRACT; THENCE S 66°30'29" E. ALONG THE SOUTH RIGHT OF WAY LINE OF EAST YUCCA LANE, A DISTANCE OF 59.85 FEET TO A IRON ROD WITH CAP SET FOR A CORNER OF LOT 5 AND THIS TRACT; THENCE S 45°19'20" E, ALONG THE SOUTH RIGHT OF WAY LINE OF FAST YUCCA LANE, A DISTANCE OF 73.66 FEET TO A'/2" IRON ROD WITH CAP SET FOR A CORNER OF LOT 5 AND THIS TRACT; THENCE S 4°08' I 1 E, ALONG THE WEST RIGHT OF WAY LINE OF NORTH ELM AVENUE, A DISTANCE OF 59.85 FEET TO A I/T IRON ROD WITH CAP SET FOR A CORNIER OF LOT 5 AND THIS TRACT; "THENCE S 0° 19'20" E, ALONG THE WEST RIGHT OF WAY LINE OF NORTH ELM AVENUE, AT A DISTANCE OF 539.05 FEET PASS A !h" IRON ROD WITH CAP SET AT THE FAST COMMON CORNER OF SAID LOTS 5 AND 6, IN ALL A DISTANCE OF 1193.68 FEET TO THE PLACE OF BEGINNING. Exhibit C SECTION II -- FACILITY INFORMATION ATTACHMENT I -- (b) January 23, 2008 Our company's distribution facilities provide an important role in our growth and sales opportunities. The facility and it's Team Members are responsible for supplying our retail stores with the appropriate inventory. Each facility has a region it will serve based upon the number of retail stores within a geographic area. The facility in Lubbock will service a little over 100 retail stores with the potential to expand this amount. At this point it is expected that a total of 8 retail stores will be opened in the City of Lubbock and Lubbock County. Based upon these projections about 8 percent of the merchandise will remain in Lubbock, or 92 percent will be shipped out of Lubbock County. Exhibit C SECTION III -- FACILITY DESCRIPTION ATTACHMENT 2 (a) Construction of a new building to be utilized as our distribution center, located at 408 East Yucca Lane, Lubbock, Texas. (b) List of Improvements: (1) Construction of a 200,000 square foot building for our distribution facility including a small retail store area. This project will include all of the necessary parking spaces for our Team Members, truck and trailer parking, and a future building addition of 100,000 square feet. Attached is a preliminary site plan showing the tentative layout. (2) Based upon our business model and how our distribution facility operates it is a high tech materials handling system. There will be pick modules where inventory is stocked onto gravity feed shelving to a center pick module, so the specific merchandise can be picked and placed on the conveyor in totes. The pick module will be three stories tall. Everything is computer operated and controlled through out the conveyor system. Once the totes arrive at the shipping point they are run through sort lanes for their final destination to be loaded onto the trucks. In addition to the conveyors, there will be racking, fork lifts, and several other pertinent items to operate the facility. Approximate cost for the initial materials handling equipment will be $5,250,000 and additional equipment for the future building addition would cost $2,250,000. In addition to the materials handling equipment we will be placing an estimated $"5,500,000 worth of inventory in the building. We project that by June of 2009 this amount will increase to $11,000,000 and when the future addition is complete we would add over $6,600,000. This would place our total inventory value at $17,600,000 upon full build out of the distribution facility. Since we have to replenish our stores daily, this number will remain fairly constant. Our operation is not like a cross dock, where the inventory level could change dramatically on a daily basis. ©urs trust remain fairly constant to supply our stores, so it is coming in almost as fast as it gets distributed. (c) This project is being constructed on raw land, so there is not any Tangible Personal Property existing. (d) Currently we want to start construction in December 2007 and have the facility open by August or September 2008. Exhibit C SECTION III -FACILITY DESCRIPTION ATTACHMENT 3 Since there are not any improvements on the property the drawing below- is a copy of the survey of the property. .--------------..--...-----.------------------- WPitl6ilo.: iC'i�1!N ---------------------------_-- ------Y-------..--�'- I I I I I k I I IL _ 1 m I F Sv' AYMM� f 2LN,L'�ykiN' 1(i.y�U �eE -------------� NI JI r r � (r--- f 1 II s'SAS.4Y ii3B° SE3�Yl ..4 .+°�� IIi Exhibit C EXHIBIT TO SECTION III - FACILITY DESCRIPTION ATTACHMENT 2 - (b) - (1) ---------- Exhibit C SECTION III — FACILITY DESCRIPTION ATTACHMENT 4 (a) Based upon the initial construction for all of the improvements we will be making to the property including the building, parking, sidewalks and other items, we expect to spend approximately $8,400,000 on the 200,000 square foot building. When we construct the future addition it is projected that we would spend another $4,500,000 for the 100,000 square foot addition. (b) Currently the property we are purchasing is a portion of the Lubbock Business Park. We do not have any assessed value from the Lubbock Central Appraisal District. Since we are acquiring the property from LEDA, we have utilized the values they established for future valuations and the incentive they have provided. We are acquiring the property for ten and NO/100 ($10.00) Dollars, however, the value that was provided to us is $871,600. Exhibit C Resolution No. 2008-ROO87 SECTION IV- ECONOMIC IMPACT INFORMATION ATTACHMENT 5 REVISED JANtiARY 23, 2008 February 2008 4 Supervisors $ 16.82 $ 22.70 $ 34,986 $ 47,216 $ 139,942 $ 188,864 Februa 2008 1 HR Staff $ 18.00 $ 24.30 $ 37,440 $ 50,544 $ 37,440 $ 50,544 February 2008 0 Stockers $ - $ - $ - S $ - $ - Februa 2008 $ $ $ $ $ $ 161,408 $ 2009 9 Returns S 11.50 $ Februa 2008 23,920 $ $ $ $ $ $ June $ 15.52 February 2008 32,282 $ $ $ $ $ - $ - TOTALS 32,282 5 287,040 $ 387,379 June $ 177,382 $ 239,408 TOTALS Ub .� c,wao,usy v moi.. 3'..� � '✓ 1�' aT •r" 7 � �a � :3+., T9� y �x- W June 2008 6 Supervisors $ 16.82 $ 22.70 $ 34,986 $ 47,215 $ 209,914 $ 283,296 June 20p9 10 Stockers $ 11.50 $ 15.52 $ 23,920 $ 32,282 $ 239,200 $ 322,816 June 2009 11 Receiving $ 11.50 $ 15.52 $ 23,920 $ 32,282 $ 263,120 $ 355,098 June 2009 5 Inv. Cont. $ 11.50 5 15.52 $ 23,920 S 32,282 $ 119,600 $ 161,408 June 2009 9 Returns S 11.50 $ 15.52 $ 23,920 $ 32.282 $ 215,280 $ 290,534 June 2009 22 Pickers $ 11.50 $ 15.52 $ 23,920 $ 32,282 $ 526,240 $ 710,195 June 2009 12 Shippnq $ 11.50 $ 15.52 $ 23,920 S 32,282 $ 287,040 $ 387,379 June 2009 14 Drivers $ 15.50 $ 20.92 $ 32,240 $ 43,514 $ 451,360 $ 609,190 June 2009 3 Clerical $ 10.00 S 13.50 $ 20,800 $ 28,080 $ 62,400 S 84,240 June 2009 3 Maintenance $ 13.50 $ 18.25 $ 28,080 $ 37,960 $ 84,240 $ 113,880 TOTALS Ub .� c,wao,usy v TOTALS 125 S 31'4`Jo, l oo 0 Yam ��� �t-ti _' � "` i^� • 3,1 i' -"u �� ,t '__ASF i' yi k'Y y' FC`F Y,G",.. i"p� idly Wr}y' � �'�-�i„}j� .,; � db � Gc- �, �. \�' •x' y -�`. �",� ._.may. p- r` � '¢..Y �y �u,,. - g '�1.- �r� � 'R. -c. p i ���Y✓.I��� �5�- , FC2 2YSu=;r _ r .`� r - ..�r.. . _ - - June 2010 22 Supervisors S 17.50 8 23 60 $ 36,400 5 49,088 $.. 800,800 S 1,079,936 June 2010 11 Stockers 5 12.10 S 16-35 S 25,168 S 37008 $ 276,848 $ 374,088 June 2010 12 Receiving 5 12.10 S 16,35 $ 25 168 $ 34,008 $ 302,016 $ 408,096 June 2010 4: Inv. Cont. S 1.2.10 $ 16.35 $ 25,168 S 34,008 $ 100,672 $ 136,032 June 2010 10 Returns S 12.10 S 16,35 S 25.168 $ 34,008 5 251,680 S 340,080 June 2010 24 Pickers $ 12-10 S 18.35 5 25,168 S 34,008 $ 604,032 1 $ 816,192 June 2010 13 Shi pn $ 12.10 S 16.35 $ 25,168 S 34,008 S 327,164 S 442,104 June 2010 15 Drivers $ 16.30 $ 22.00 $ 33,904 S 45,760 S 508,560 $ 686,400 June 2010 12 C€ericai S 10.75 $ 14.51 $ 22,360 S 30,181 S 268,320 S 362,170 June 2010 2 Maintenance $ 14.10 S 19.03 S 29.328 S 39,582 S 58,656 $ 79,165 TOTALS 125 S 31'4`Jo, l oo 0