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2006S31-Tax Phase-In ORDINANCE NO. 06-T-31 BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS, APPROVING A TAX PHASE-IN AND TAX PHASE-IN AGREEMENT BY THE CITY COUNCIL FOR AND WITH CLOSNER EQUIPMENT CO. INC., A PROPERTY OWNER IN THE CITY OF SCHERTZ. WHEREAS, Section 312 of the Texas Property Tax Code allows municipalities to abate ad valorem taxes under specific Guidelines and Criteria, and the City of Schertz has adopted specific Guidelines and Criteria under these provisions; and WHEREAS, the City Council finds that the application for tax phase-in of ad valorem taxes by Closner Equipment Co. Inc. meets those Guidelines and Criteria, and further finds the terms of the Tax Phase-In Agreement listed at Exhibit 1 are acceptable; and WHEREAS, the property owned by Closner Equipment Co. Inc., described as 7.981:1: acre tract Block 1, Lot of the Closner-FM 2252 Subdivision, located on FM 2252 just north of FM 482, in the City of Schertz, Comal County, Texas; and, WHEREAS, the terms of the Tax Phase-In Agreement will cause no substantial long term adverse effect on the provision of the City's services or tax base, and the planned use of the property will not constitute a hazard to public safety, health or morals; NOW THEREFORE BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS: THAT, the request for tax phase-in of ad valorem taxes by Closner Equipment Co. Inc., is approved. The approved rate is 90% for nine (9) years, and 35% for one (1) year. Taxes shall be abated on capital improvements only. THAT, the City Manager is authorized to enter into an agreement, shown as Exhibit 1, with Closner Equipment Co. Inc. Approved on first reading the d,o-tIJ. day of :fwJe: , 2006. tI~ PASSED, APPROVED AND ADOPTED this the l~day of ::JULY 2006. ATTEST: ~ ar, City Secretary Q Hal Baldwi "Exhibit I" Tax Phase-In Agreement Closner Equipment Co. Inc. 1. Parties. This agreement is made and entered into by and between the City of Schertz, Texas (hereinafter called the "City"), and Closner Equipment Co. Inc. (hereinafter called the "Company"). 2. Authorization and Findings. a. The agreement is entered into pursuant to: (1) Section 312 of the Texas Property Tax Code. (2) City of Scheliz Ordinance, 06-T-09 that establishes the City of Schertz Guidelines and Criteria for Tax Phase-In and Reinvestment Zones (hereinafter referred to as the "Guidelines and Criteria"). (3) City of Schertz Ordinance, which approves this Tax Phase-In and agreement and authorizes the execution there of. b. The City, by approval of this agreement, hereby finds the tenn.s of this agreement and the property subject to it, to meet the "Guidelines and Criteria" as adopted, and further finds there will be: (1) No substantial long-term adverse affeet on the provision of the City services or tax base; and, (2) No hazard to public safety, health, or morals as the result of the planned use of the property. 3. Property. a. The property, (hereinafter called the "Property") is owned by Closner Equipment Co. Inc. deseribed as 7.98H acre tract Block 1, Lot 1 ofthe Closner-FM 2252 Subdivision, located on FM 2252 just north of FM 482, Schertz, Comal County, Texas; b. Phase-ius approved will be based on the value of improvements set out on the real property roll of the Comal County Appraisal District for the Property. The 2006 base year value established by the Comal County Appraisal District is 100,000. c. The Project has recently been platted, so a tax account on fue Property has been established. Tax Phase-In Agreement Closner Equipment Company, Inc. Page I of7 d. A general description of the improvements to be made by the Company is set out in the basic phase-in application and attachments. 4. Company Representation and Estimates. a. The Company represents they are fue owners in fee simple of the Property. The Property is located within the City of Schertz, Closner FM 2252 Subdivision, and within Comal County. b. The company represents that the use of the Property is to be as follows: speculation building for Office/Warehouse/Service facility. c. The Company estimates it will make capital improvements (hereinafter referred to as "Improvements") to the Property, which will cost approximately 750,000. d. The Company represents that no interest in the Property is presently held by or leased by and covenants that it shall not sell or lease any interest in the Property to, a member of the City Couneil, the Planning and Zoning Commission of the City, the Economic Development Depmiment, or any other City officer or employee as long as this agreement is in effect. 5. Terms of the Agreement. This Agreement is conditioned on fue Company making the following Improvements to the Property and fulfilling the following covenants: a. Construction of approximately 15,000 square foot facility of Office/Warehouse/Service facility. The Company represents that the Improvements to the Property will cost approximately 750,000 and will be completed during the tenn ofthe phase-in. b. The location of the Improvements is more particularly described in a site plan pending approval by the City of Schertz Plmming and Zoning Commission. c. The Company eovenants and agrees that all Improvements shall at all times eomply with all applicable City building codes and ordinances, including, but no limited to, flood, subdivision, building, electrical, plumbing, fire and life safety codes and ordinances, as amended. Further, the company covenants to maintain the Improvements in compliance with all such building codes and ordinances, and in a neat attractive condition with the landscaped area described in the site plan approved by the Planning and Zoning Commission of the City. d. The CompmlY agrees to pay all ad valorem taxes on the Property and on personal property in a timely manner, whether assessed by the City or any other tax jurisdiction. e. The company agrees to furnish the Chief Tax Appraiser of Comal County with information outlined in Chapter 22, V.A.T.S. Tax Code, as amended, as may be necessary for tax phase-in and for appraisal purposes. Tax Phase-In Agreement Closner Equipment Company, Inc. Page 2 of7 f. The Company agrees to allow inspection of the Property by fue Interim City Manager, or a designee. Such inspection shall be to determine if the terms and conditions of the Agreement are being met and for the purpose of assuring compliance with applicable City codes and ordinances. Inspections will be made only after giving a minimum of twenty-four (24) hours notice and will be conducted in such a manner as to not unreasonably interfere with fue operation of the Property. g. The Company agrees annually to certify in writing its compliance with the terms of this Agreement, which certification shall be filed by January 15th to the City of Schertz of each year during the Term ofthe Phase-In and by January 15th ofthe year following fue Term of the Phase-In. 6. Terms for the Tax Phase-In a. Provide that the Company complies with its obligation under Section 5 of the Agreement throughout the period of the phase-in, 90% for nine (9) years, and 35% for one (1) year of the entire assessed value of the Capital Improvements located on the Property shall be exempt from ad valorem taxation for a period often (10) years. b. No phase-in oftaxes shall be granted as to personal property of the Company installed or maintained with the Property. c. The phase-in shall be for a ten (10) year period (the "Tenn of the Agreement") commencing on January I, 2007 (the "Commencement Date"), and expiring on December 31, 2016, the ten (10) year anniversary of the Commencement Date. Additionally, during the Term of this Agreement, the City agrees not to impose any other taxes or assessments that are intended to be in lieu of ad valorem taxes on the Company, the Property, or the Improvements. d. The Company shall pay all ad valorem taxes due on the assessed value of the Property prior to the beginning of the Tax Phase-In. e. The Company shall have the right to protest and contest any or all appraisals or reassessments of the Property, or the Improvements, and the Tax Phase-In provided for herein for such property shall be applied to the amount of taxes finally detennined, as a result of such protest or contest, to be due for such property. 7. Default/Recapture. a. If the Company refuses or neglects to comply wifu any of the terms of this agreement or, if any representation made by the Company in the Application for Tax Phase-In (or this agreement) is false or misleading in any material respect and such refusal or default is not cured within sixty (60) days after notice, this Agreement may be tenninated by the City. b. In the event the Company allows ad valorem taxes on the Property to become delinquent and fails to timely and properly follow the legal procedures for their protest a11d/or contest, this agreement may be terminated by the City. Tax Phase-In Agreement Closner Equipment Company, Inc. Page 3 on c. In the event the City detennines the Company to be in default of the Agreement, the City will notify the Company in writing at the address stated in Section 8 of the Agreement, and if the defaults specified with reasonable particularity in such notice are not cured within sixty (60) days from the date of such notice, then this Agreement may be terminated upon written notice to the Company. If the city tenninates this Agreement, taxes without phase-in will be due for fue year in which termination occurred and shall accrue without phase-in for all tax years thereafter. However, there shall be no recapture of prior years' taxes abated by virtue of this Agreement. d. If during the Phase-in Period the Company should discontinue all operations in Schertz, Texas, then the City shall by Ordinance adopted by fue City Council have the right to: (1) Recapture one hundred percent (100%) of the taxes abated in prior years a11d the year in which such discontinuance occurs; and, (2) Tenninate this Agreement. e. A total bill tor any atnounts due under Section 7c or Section 7d hereof will be sent to the COmpa11Y and the Company agrees to pay the total atnount within sixty (60) days after receipt. Penalty a11d interest will not begin to accrue until the Company has failed to pay any of the amount placed back on the tax roll with sixty (60) days after receipt of the bill, unless arrangements satisfactory to fue City and the Comal County Tax Assessor/ Collector has been made. 8. Notice. All notices shall be in writing, addressed to the Company or the City at the following addresses. Ifmailed, any notice or communication shall be deemed to be received three (3) days after the date of deposit in the United States Mail, certified mail, return receipt requested, postage prepaid and properly packaged for delivery. Unless otherwise provided in fuis Agreement, all notices shall be delivered to the following address: To the Company: Ifmailed or personally delivered: G. Bennett Closner Closner Equipment Co. Inc. 1415 W. Poplar St. San Antonio, Texas 78207 With copy to: Tax Phase-In Agreement Closner Equipment Company, Inc. Page 4 on To the City: If mailed or personally delivered: City of Schertz Attn: City Manager 1400 Schertz Parkway Schertz, Texas 78154 9. Agreement Approved by City Council. The City represents that this Agreement has been approved by affirmative vote of a majority of the members of the Schertz City Council at a regularly scheduled meeting. 10. Assignment. This Agreement may be assignable to a new owner only with prior City Council approval as reflected in a duly adopted City Ordinance. 11. General Provisions. This Agreement is entered into subject to the rights of the holders of outstanding bonds of the City. If the holders of outstanding bonds of tlle City exercise any of the rights so as to diminish the effeets or benefits of this Agreement, the City agrees to work with the Company toward establishing an alternative agreement with terms similar to this Agreement and considering any bondholders' rights. 12. Severability. In the event any section, subsection, paragraph, subparagraph, sentence, phrase or word herein is held invalid, illegal, or unenforceable, the balance of the Agreement shall stand, shall be enforceable and shall be read as if the parties intended at all times to delete said invalid section, subsection, paragraph, subparagraph, sentence, phrase or word. In such event there shall be substituted for such deleted provision a provision as similar in terms and in effect to such deleted provision as my be valid, legal and enforceable. 13. Estoppel Certificate. Either party hereto may request an estoppel certificate from another party hereto so long as the certificate is requested in connection with a bona fide business purpose. The certificate, which if requested, will be addressed to a subsequent purchaser or assignee of tlle Company, shall include, but not necessarily be limited to, statements fuat this Agreement is in full force and effect without default, if such is the case, fue remaining tenn of this Agreement, the levels of Tax Phase-In in effect, and such other matters reasonably requested by fue party(ies) to receive the certificate. Tax Phase-In Agreement Closner Equipment Company, Inc. Page 5 of7 14. Applicable Law. This Agreement shall be construed under laws of the State of Texas and is performable in Comal County, Texas. 15. Binding on Successors and Assigns. This Af,'feement will be binding on and inure to fue benefit of the parties hereto and their respective successors and pelmitted assigns. 16. Date. This Agreement has been executed by the parties in multiple originals, each having full force and effect on this the _____ day 2006. For the Company: By: Title: County of Comal This instrument was acknowledged before me on , of Closner Equipment Co. Inc., a corporation, on behalf of said corporation. __' 2006, by (SEAL) Notary Public in and for the State of Texas My commission expires: (printed name For the City: By: Don Title: City Manager ATTEST: By: Judy Tokar Title: City Secretary Tax Phase-In Agreement Closner Equipment Company, Inc. Page 6 of7 The State of Texas Connty of Guadalupe This instrument was acknowledged before me on City Manager of City of Schertz, Texas a municipality and body politic State of Texas, on behalf of said municipality. 2006, by Don Taylor, under the laws of the (SEAL) Notary Public in and for the State of Texas My commission expires: (printed name of notary) Tax Phase-In Agreement Closner Equipment Company, Inc. Page 7 on