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HomeMy WebLinkAboutResolution - 2975 - Agreement - Port Of Corpus Christi - Foreign Trade Zone - 12/15/1988DGV:da RESOLUTION Resolution #2975 December 15, 1988 Item # 5 WHEREAS, Section 2-421 of the Code of Ordinances of the City of Lubbock requires approval of Board of City Development contracts by the City Council of the City of Lubbock; and WHEREAS, the Board of City Development desires to enter into a Subzone Affiliation Agreement with the Port of Corpus Christi Author- ity of Nueces County to enable Lubbock businesses to apply for and receive establishment as foreign trade subzones under the Foreign Trade Zone Act of 1934, as amended; and WHEREAS, the City Council of the City of Lubbock finds that such agreement is within the authority and the objectives of the Board of City Development; and WHEREAS, the City Council of the City of Lubbock approves of such agreement; NOW THEREFORE: 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 the approval of the City of Lubbock of the Subzone Affiliation Agreement by and between the Board of City Development and the Port of Corpus Christi Authority of Nueces County, a copy of which agreement is attached herewith, which shall be spread upon the minutes of the Council and as spread upon the minutes of this Council shall constitute and be a part of this Resolution as if fully copied herein in detail. Passed by the City Council this 15th day of December , 1988. C. e R_.C. McM NN, MAYOR (ATTEST: n APPROVED AS TO CONTENT: �2�C Bob Cass, Deputy City Manager APPROVED AS TO FORM: mnala u. vanaiver, firs Assistant City Attorney SUBZONE AFFILIATION AGREEMENT Resolution#2975 THIS AGREEMENT is made and entered in triplicate originals this 15th day of December , 1988, by and between the Lubbock Board of City Development, a Board of the City of Lubbock, Texas ("BCD"), the Port of Corpus Christi Authority of Nueces County, Texas ("Port"), and approved by the City of Lubbock, Texas ("City"); WITNESSETH: WHEREAS, the Port has previously applied for and been awarded a Foreign -Trade Zone under the provisions of the Foreign -Trade Zone Act of 1934 as amended [Public Law 98-573, 19 U.S.C.A., Sec. 81(c) et seq.] (the "Act"), the said Foreign Trade Zone now being designated as Port of Corpus Christi Foreign Trade Zone No. 122 (the "Port's Zone"); and WHEREAS, one of the purposes of the Port's Zone under the Act is to create jobs; and WHEREAS, the BCD was created by Chapter 3, Article I of the Charter of the City; and WHEREAS, the ordinance creating the BCD, the BCD's Mission Statement for Economic Development, its Rules and Philosophy require the BCD, as one of its primary purposes, to foster an economic strategy to permanently bolster the business climate throughout the City for the purpose of creating new jobs, increasing business activity and the economic climate in the City; and WHEREAS, under 15 CFR 5 400.304 a foreign trade subzone may be established in an area separate from an existing foreign trade zone for one or more of the specialized purposes of storing, manipulating, manufacturing, or exhibiting goods if the U.S. For- eign Trade Zone Board finds that existing or authorized zones will not serve adequately the convenience of commerce with respect to the proposed purposes of the subzone; and WHEREAS, the BCD has determined that it is in its best interest to request the Port to assist in providing Foreign Trade Subzones under the Port's Zone to those businesses located within the Lubbock area desiring same; and WHEREAS, the Port has determined that it is in its best interest to assist in providing Foreign Trade Subzones under the Port's Zone to those businesses located in the Lubbock area desiring to apply for the same because such Foreign Trade Subzones can reasonably be expected to generate revenue and good- will for the Port. NOW, THEREFORE, for and in consideration of the premises and the hereinafter set out covenants, conditions and obligations, the parties hereto agree as follows: -2- ARTICLE I. The Port agrees: (a) To assist the BCD by offering a Foreign Trade Subzone under the Port's Zone to any Interested Company on the same basis as companies in the Corpus Christi area. For purposes of this agreement the term "Interested Company" means any business located in the Lubbock area interested in obtaining a Foreign Trade Subzone under the Port's Zone which is recommended to the Port by the BCD pursuant to Article III(a) hereof, and which, in the Port's opinion, is qualified to obtain such subzone status. (b) To participate in an analysis of the economic benefits of Foreign Trade Subzone status based on data provided to the Port by any Interested Company. (c) To supervise in the preparation of an application pack- age for a Foreign Trade Subzone under the Port's Zone for any Interested Company, it being understood that the Port cannot assure any company that its application will be granted and that the processing of such application normally requires one year or more. (d) To file an application for a Foreign Trade Subzone under the Port's Zone with the U.S. Foreign Trade Zone Board with regard to the Interested Company. -3- (e) To furnish information to any Interested Company regarding the benefits and requirements of being a subzone. (f) To provide each Interested Company which acquires a Foreign Trade Subzone under the Port's Zone with a copy of its customized operations manual. (g) To supervise in the preparation of activation documents for each Interested Company which has been granted a Foreign Trade Subzone and which desires to activate same. (h) To assist each Interested Company in beginning partici- pation in its Foreign Trade Subzone as soon as the activation for same is approved by the U.S. Customs Service. (i) To enter into a Subzone Operator Agreement substan- tially in the form attached hereto as Exhibit B with any Inter- ested Company granted a Foreign Trade Subzone under the Port's Zone. ARTICLE II. (a) The BCD agrees to protect, indemnify, defend and hold the Port harmless from any and all claims, liability, cost, expense, damage or loss of whatever nature, directly or indi- rectly resulting from, arising out of, in connection with, or related to a reduction of any local tax revenue, including but -4- not limited to, tax revenue payable to Lubbock County, any Inde- pendent School District in which a subzone may be located or the City, resulting from the establishment of a Foreign Trade Subzone under the Port's Zone in the Lubbock area. (b) All promotions of Foreign Trade Subzones in the Lubbock area shall be at the initiative and cost of the BCD. ARTICLE III. (a) BCD understands that a Foreign Trade Subzone under the Port's Zone shall only be available to companies located in the greater Lubbock area. The BCD shall submit a written request signed by its President and the President of the Interested Com- pany addressed to the Port requesting that the Port enter into negotiations with such company for consideration of Foreign Trade Subzone status, which written request shall authorize, and BCD and the Interested Company shall agree to pay for, the expendi- ture of funds for travel to the City by a member of the Port's Foreign Trade Zone staff. Such written authorization for the expenditure of funds may contain such limitations as the BCD deems appropriate. It is understood that the Port reserves the right to discontinue negotiations with any Interested Company when in the opinion of the Port such company is not a viable can- didate for subzone status. -5- (b) All travel expenses incurred by the Port in the devel- opment of each Foreign Trade Subzone in the Lubbock area shall be borne by the Interested Company responsible for such subzone and such expenses, to the extent such expenses are authorized in the written request described in paragraph (a), above, or any other written instrument delivered to the Port by the BCD, are hereby guaranteed by the BCD. (c) Except as provided in this agreement or as otherwise specifically requested in a writing delivered to the Port by the BCD, no costs in the establishment of a Foreign Trade Subzone under the Port's Zone in the Lubbock area shall be at any cost or expense to the BCD. (d) It is understood that whenever any Interested Company becomes a Foreign Trade Subzone it will come under the supervi- sion of the U.S. Customs. (e) All parties agree to comply with all applicable provi- sion of the Act and the rules and regulations of the U.S. Foreign Trade Zone Board, the Secretary and the Treasurer of the United States, and the U.S. Customs Service and all state, local and federal directives applicable to Foreign Trade Zones as they affect any of the parties hereto. (f) This agreement may be terminated by either party giving thirty (30) days written notice of termination to the other -6- party, with the understanding that neither the Port nor the BCD shall have.any further obligations hereunder after the date of such termination; provided, however that termination of this agreement shall not affect any Subzone Operator Agreements which have theretofore been entered into pursuant to this agreement. (g) It is understood that each Interested Company will pay in advance to the Port the application fee shown on the Port's Zone Fee Schedule in effect at the time such application is made and thereafter will pay to the Port the other fees shown on said fee schedule, as in effect from time to time, it being expressly understood that said fee schedule is amended by the Port from time to time. A copy of said fee schedule as in effect on the date hereof is attached hereto as Exhibit A for reference pur- poses only. The.actual fees due and payable shall be those fees shown on the Port's Zone Fee Schedule at the time the fees are due. (h) It is understood that each Interested Company granted a Foreign Trade Subzone under the Port's Zone will be required to deliver a bond payable to the U.S. Customs solely at the cost of such Company, and at no expense to the Port or BCD, in an amount designated by the District Director of Customs and to enter into a Subzone Operator Agreement substantially in the form attached hereto as Exhibit B, and made a part hereof by reference. -7- (i) It is understood that no services requested by BCD or any Interested Company shall be an expense of the Port. (j) It is understood that the Port is not acting as BCD's agent when performing its obligations hereunder and that the BCD is not acting as the Port's agent when performing its obligations hereunder. ARTICLE IV Ordinance 8859 as modified in Article XVI, Chapter 2, of the Code of Ordinances of the City of Lubbock, Texas provides that the BCD may, with the approval of the City Council, contract with any qualified and appropriate person, association, corporation or governmental entity to perform and discharge designated tasks which will do or assist the BCD in the performance of its duties, however, no such contract should ever be approved or entered into which seeks or attempts to divest the BCD of its discretion and policy making functions and discharging the duties set forth in Ordinance 8859. Both the BCD and the City specifically find that the Port is the only entity with which this contract should or could be entered into for purposes and scope of services hereinabove set out. By its approval of this contract the City Council further acknowledges that the payment of any sums required under this contract constitutes direct economic develop- ment activities and are approved as appropriate and proper duties 515 of the BCD under Ordinance 8859. The City, by authority of for- mal action of the City Council, specifically approves this con- tract and the execution hereof by the BCD and causes the duly authorized officers of the City to execute this contract in order to evidence such approval. WITNESS the signature of the parties this the 15thday of December , 1988. LUBBOCK BOARD OF CITY DEVELOPMENT By: 14[(;�AW AlanlWhite, Chairman. PORT OF CORPUS CHRISTI AUTHORITY OF �5k APPRO` NUECES COUNTY, TEXAS By: HarryPloma ty, Execulk0e D tlor By: Thomas S. Moore, Manage-f-,- Foreign anage—f - Foreign Trade Zone No. 122 THE CITY OF LUBBOCK, TEXAS C By: �./. � . M � B.C. "Peck" McMinn, Mayor Ranett Boyd, City Secretary -9- APPROVED AS TO FORM: �IvwtC.w1 O. Murray McNeer, Attorney for BCD LZO Jamefi Welder, Jr., Attorney for Port �Donal�dG�.Van�divero, First Assistant City Attorney, City of Lubbock SSAA -10- EXHIBIT A FOREIGN TRADE ZONE #122 FEE SCHEDULE DATED: Foreign Trade Zone #122 has adopted the following fee sched- ule for Foreign Trade Subzones of Foreign Trade Zone #122. Fees for potential Subzones that do not fit into one of the listed categories will be negotiated between the Subzone Operator and the FTZ #122 Manager. Fees by category are: 1. Manufacturing Subzones: The following is a schedule of Manufacturing Subzone fees: Application Fee $15,000 Activation Fee $ 3,000 Alteration/Relocation Fee $ 1,500 Annual Fee $25,000 Travel Expenses See 3, below 2. Refinery Subzones: the following is a schedule of Refinery Subzone fees: Application Fee Activation Fee Alteration/Relocation Fee Annual Fee Travel Expenses $15,000 $ 3,000 $ 1,500 $.60 multiplied by the daily per barrel design capacity of the refinery* See 3, below. *Example: 100,000 bbls. x $.60 = $60,000 Annual fee. 3. Travel Expenses: the Subzone Operator shall reimburse the Port for travel expenses incurred by the Port's FTZ representatives (i) at the request of the Subzone Oper- ator, and (ii) in making two unscheduled visits per year to the Subzone Operator's subzone for the purpose of insuring compliance with U.S. Customs regulations. 4. Any extended legal costs or unusually high expenses involved with unforeseen, complex issues will be pro- portionally shared by the Subzone Operators involved in the issue. The application fee is due on or before mailing of the Subzone Operator's application for a foreign trade subzone to the U.S. Foreign Trade Zone Board. The activation fee is due on or before mailing of the Subzone Operator's activation documents to the U.S. Customs Service. The annual fee is due on or before the Effective Date of the Subzone Operator's Subzone Operator Agreement and each anniversary date thereof. All of the foregoing fees shall be deemed to have been earned when paid and, as such, are nonrefundable. The foregoing fees are subject to change from time to time by the Foreign Trade Zone #122 in its sole discretion and without notice to any Subzone Operator. 8FEE -2- FOR NEW SUBZONES EXHIBIT B PORT OF CORPUS CHRISTI AUTHORITY FOREIGN TRADE ZONE NO. 122 SUBZONE OPERATOR AGREEMENT - SUBZONE NO. .WHEREAS, T , hereinafter referred to as "Subzone Operator", desires to have its land, described on Schedule One attached hereto, and the facilities located thereon (such land and facilities being hereinafter referred to as the "Premises"), included in the Port of Corpus Christi Foreign Trade Zone No. 122, hereinafter referred to as "Zone" or "FTZ"; NOW, THEREFORE, this agreement is entered into this day of , 19 , but shall be effective commenc- ing on the day of , 19 , hereinafter referred to as the "Effective Date", by and between Port of Cor- pus Christi Authority of Nueces County, Texas, hereinafter referred to as "Grantee", and Subzone Operator; and WITNESSETH: Grantee hereby grants to Subzone Operator the privilege of including the Premises in the Zone under the following terms and conditions: (1) This agreement shall be for a term of one (1) year beginning on the Effective Date and ending on the day of , but shall continue thereafter on a year-to-year basis subject to cancellation by Grantee as provided in Article B, below, or by Subzone Operator as provided in Article E, below. (2) The Subzone Operator has previously paid to Grantee the sum of Dollars ($ ) as a non-refundable application fee for the privilege of being included in the Zone. Subzone Operator also agrees to pay to Grantee the activation fee, the alteration/relocation fee, the annual fee, travel expenses of the Port's FTZ representatives, and all other fees which are shown on FTZ's Fee Schedule as in effect.from time to time, it being expressly understood that said fee schedule may be amended by the Grantee from time to time. All such fees shall be deemed to have been earned when paid and, as such, are non-refundable. (3) On each anniversary date of the Effective Date during the term of this Agreement, the Subzone Operator shall pay to the Grantee the annual fee shown on the FTZ's Fee Schedule in effect on such anniversary date. (4) It is expressly agreed that the Premises shall be used by the Subzone Operator only for the following purposes: (5) In consideration of the foregoing agreements, Grantee and Subzone Operator each also agree to the following: -2- ARTICLE A. Subzone Operator agrees to comply with all applicable provi- sions of the Foreign -Trade Zone Act (19 USC 81a, et seq.) and the rules and regulations of the Foreign -Trade Zones Board, the Sec- retary of the Treasury and the U.S. Customs Service; as well as all state, local and Federal directives applicable to Foreign -Trade Zone Operations; all of which are hereinafter col- lectively referred to as "Law, Rules and Regulations". It is expressly understood between the parties hereto that the term "Laws, Rules and Regulations" does not include the FTZ's Refinery and Chemical Plant Inventory Control and Recordkeeping Procedures Manual and that this manual is prepared in cooperation with the operators of the FTZ's refinery and chemical plant subzones for use at their own discretion and risk. ARTICLE B. (1) Grantee and/or its authorized representatives, have the right, but not the responsibility, at all reasonable times to ingress and egress to the Premises to assure itself of compliance with the terms and provisions hereof and with all Laws, Rules and Regulations; and have the right to issue notice to Subzone Opera- tor of any non-compliance therewith. Pursuant to said notice, Subzone Operator shall act with all due dispatch to correct such non-compliance within a seven day period after notice thereof, or if not curable within such time period, present to Grantee a -3- time -table for correction acceptable to Grantee and thereafter pursue correction in a diligent manner according to such time -table. In the event Subzone Operator fails or refuses after notice to correct any non-compliance within the period provided or if after beginning corrective action fails or refuses to dili- gently pursue such to completion, Grantee shall have (in addition to, but not in limitation of all of its remedies in law and in equity), the right to cancel this agreement and terminate the privilege granted hereby. (2) Upon nonpayment by Subzone Operator of any fee due and payable to Grantee pursuant to the FTZ's Fee Schedule within a seven day period after notice to Subzone Operator of such nonpay- ment, Grantee shall have the right to cancel this agreement and terminate the privilege granted hereby. (3) At any time during the term of this agreement Grantee may propose an amendment to this agreement, hereinafter referred to as the "Proposed Amendment", to be effective as of the anni- versary date of the. Effective Date next following the date of such proposal; provided, however, that the Proposed Amendment must be submitted to the Subzone Operartor not less than thirty (30) days prior to said anniversary date. If Subzone Operator will not agree to amend this agreement by giving effect to the Proposed Amendment on said anniversary date, Grantee shall have the right to cancel this agreement on or after said anniversary, date and terminate the privilege granted hereby. -4- (4) Grantee shall notify Subzone Operator of any cancella- tion and termination of this agreement pursuant to this Article B and the effective date thereof, by written notice to Subzone Operator by certified mail, return receipt requested, addressed to Subzone Operator at: Attn: Subzone Operator immediately upon receipt of such notice shall stop admitting merchandise in Zone status. Within thirty (30) days of receipt of such notice, Subzone Operator will enter and pay duty to the U.S. Customs Service on all foreign status mer- chandise and inventory on the Premises. ARTICLE C. Subzone Operator shall not remove, or permit removal of, any merchandise located on the Premises without the proper Customs Permit and the payment of all applicable Customs duties and fees. Subzone Operator agrees to furnish to Grantee within five days of receipt or preparation, copies of all Foreign -Trade Zone related correspondence, memoranda, documents, permits and forms. For any such information contained therein which may be proprietary or confidential in nature, Grantee shall not disclose to others or make any use for Grantee's benefit such information obtained from Subzone Operator, whether written, oral or observed. Subzone -5- Operator shall notify Grantee in writing not less than five days in advance of any meeting with personnel of the U.S. Customs Service or of the Department of Commerce regarding Subzone Opera - for or its operations, so that Grantee may be in attendance and participate therein. When so notifying Grantee, Subzone Operator shall furnish Grantee with a summary of matters proposed to be discussed at such meeting. ARTICLE D. Subzone Operator agrees to protect, indemnify, defend and hold harmless the Grantee, its Commissioners, employees and agents, from any and all liability, cost, expense, damage or loss of whatever nature (including, but not limited to, (i) damages for injury to persons or property, (ii) any and all damages, duties, penalties, taxes, charges, fines, or liquidated damages paid by Grantee to the U.S. Customs Service pursuant to any rule, regulation or statute, (iii) interest, attorney fees, costs of investigation, and other costs of litigation, and (iv) amounts paid in settlement, and amounts paid to discharge judgments), directly or indirectly resulting from, arising out of, in connec- tion with, or related to, Subzone Operator's operations or activ- ities at the Premises or pursuant to this agreement. Subzone Operator shall cause Grantee to be named as an additional assured on its liability insurance policies and to have the indemnities in this Article covered by such policies, with copies thereof being delivered to Grantee on or before ten (10) days following -6- its execution of this agreement. Subzone Operator shall purchase and deliver to the U.S. Customs Service, a Bond in accordance with 19 C.F.R. 113.73, from a good and reputable bonding company in an amount set by the U.S. Customs Service. This Bond shall be effective beginning on the Effective Date of this agreement, shall be a "Continuous Bond", and shall remain in effect during the entire term of this agreement. ARTICLE E. In the event that Subzone Operator decides to discontinue its FTZ status hereunder, notice of such decision shall be con- veyed in writing to the Grantee not less than ninety (90) days prior to the effective date of the discontinuance of its FTZ status. ARTICLE F. Upon Grantee's cancellation and termination of this agree- ment pursuant to Article B hereof, or in the event Subzone Opera- tor gives notice of its intent to discontinue its FTZ status as provided in Article E hereof, Grantee shall then request that the Premises be de -zoned, notice of which shall be conveyed by Grantee to the Subzone Operator in writing upon receipt of noti- fication of de -zoning from the Foreign -Trade Zones Board in Wash- ington, D. C. It is expressly agreed among the parties hereto that neither the Grantee nor the Subzone Operator shall have any liability to the other party solely as a result of exercising -7- w rr its right to cancel this agreement and de -zoning the Premises as provided for herein. ARTICLE G. Subzone Operator shall not rent, lease or sublet any part of the activated Premises nor assign this.agreement or any interest herein without the prior written approval of the Grantee. T ARTICLE H. If the City of Lubbock, Lubbock County or any other taxing authority ever makes any claim against the Grantee because of a reduction of any local tax revenue, including but not limited to taxes of Lubbock County, the independent School district in which the Premises is located, and the City of Lubbock, resulting from the establishment of this Subzone in the Lubbock area, Subzone Operator agrees to defend, indemnify and hold Grantee harmless from all such claims. SIGNED this day of , 19 By: (Title) PORT OF CORPUS CHRISTI AUTHORITY OF NUECES COUNTY, TEXAS By: Harry G. Plomarity Executive Director IM By: Thomas S. Moore, Manager Foreign Trade Zone No. 122 8FTZN -9-