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2005T09-Tax Abatement ORDINANCE NO. &5- T- IJ q BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS, REPEALING TAX ABATEMENT 03-T-13 AND TAX ABATEMENT AGREEMENT FOR AND WITH TADCOjTRI-COUNTY, LTD., AND ESTABLISH A NEW A TAX ABATEMENT AND A TAX ABATEMENT AGREEMENT BY THE CITY COUNCIL FOR AND WITH VERDE REALTY MASTER LIMITED PARTNERSHIP II, 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 abatement of ad valorem taxes by Verde Realty Master Limited Partnership II meets those Guidelines and Criteria, and further finds the terms of the tax abatement agreement listed at Exhibit 1 are acceptable; and WHEREAS, the property owned by Verde Realty Master Limited Partnership II, described as Lot 28, Block 5 of the Tri-County Business and Industrial Park, Unit 1, located in Guadalupe County, within a reinvestment zone approved by Texas Department of Commerce on April 11, 1995; and, WHEREAS, the terms of the tax abatement 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 abatement of ad valorem taxes by Verde Realty Master Limited Partnership II, is approved. The approved rate is 53.3 percent for ten (10) years. Taxes shall be abated on capital improvements only. THAT, the City Manager is authorized to enter into an agreement, shown as Exhibit 1, with Verde Realty Master Limited Partnership II. Approved on first reading the 15th day of Februarv ,2005. PASSED, APPROVED AND ADOPTED this the ~ay of WJ~ , 2005. ATTEST: ~:(::!:::-~sL" Q . "- Mayor, City of Schertz, Texas (SEAL OF CITY) " "Exhibit 1>> Tax Abatement Agreement Verde Realty Master Limited Partnership II 1. Parties. This agreement is made and entered into by and between the City of Schertz, Texas (hereinafter called the "City"), and Verde Realty Master Limited Partnership II (hereinafter called the "Company"). 2. Authorization and Findings. a. The agreement is entered into pursuant to: (I) Section 312 of the Texas Property Tax Code. (2) City of Schertz Ordinance, 03-T-02 that establishes the City of Schertz Guidelines and Criteria for Tax Abatement and Reinvestment Zones (hereinafter referred to as the "Guidelines and Criteria"). (3) City of Schertz Ordinance, . which approves this tax abatement and agreement and authorizes the execution there of. b. The City, by approval of this agreement, hereby finds the terms 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 affect 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 Verde Realty Master Limited Partnership described as 14.07 acres in Guadalupe and Comal recorded as Lot 28, Block 5, Tri-County Business Industrial Park Unit 3; and within the T ADCO II Re-investment zone as approved by the Schertz City Council on 15 April ,2003; b. Abatements approved will be based on the value of improvements set out on the real property roll of the Guadalupe County Appraisal District for the Property. The 2003 base year value established by the Guadalupe County Appraisal District is $245,103.89. c. A general description of the improvements to be made by the Company is set out in the basic abatement application and attachments. . Tax Abatement Agreement Page I of6 . . 4. Company Representation and Estiniates. a. The Company represents they are the owners in fee simple of the Property. The Property is located within the City of Schertz, Tri-County Business Park, and within Guadalupe and Comal County. b. The company represents that the use of the Property is to be as follows: speculation building for Manufacture and Distribution of materials. c. The Company estimates it will make capital improvements (hereinafter referred to as "Improvements") to the Property, which will cost approximately $6,388,733. 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 Council, the Planning and Zoning Commission of the City, the Economic Development Department, or any other City officer or employee as long as this aC"....=ent is in effect. 5. Terms of the Agreement. This Agreement is conditioned on the Company making the following Improvements to the Property and fulfilling the following covenants: a. Construction of approximately 264,300 square feet in two buildings including office spaces for Manufacture and Distribution of materials. The Company represents that the Improvements to the Property will cost approximately $6,388,733 and will be completed during the term of the abatement. b. The location of the Improvements is more particularly described in a site plan approved by the City of Schertz Planning and Zoning Commission. c. The Company covenants and agrees that all Improvements shall at all times comply 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 L..):'." /ements 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 Company 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 Guadalupe County with information outlined in Chapter 22, V.A.T.S. Tax Code, as amended, as may be necessary for tax abatement and for appraisal purposes. f. The Company agrees to allow inspection of the Property by the 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 Tax Abatement Agreement Page 2 of6 " (24) hours notice and will be conducted in such a manner as to not unreasonably interfere with . the 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 Janu~ 15th to the City of Schertz of each year during the Term of the Abatement and by January 15 of the year following the Term of the Abatement. 6. Terms for the Tax Abatement a Provide that the Company complies with its obligation under Section 5 of the Agreement throughout the period of the abatement, 53.3% of the entire assessed value of the Capital Iu,.t',v/ements located on the Property shall be exempt from ad valorem taxation for a period of Seven (7) years. b. No abatement of taxes shall be granted as to personal property of the Company installed or maintained with the Property. c. The abatement shall be for a ten (10) year period (the "Term of the Agreement") commencing on January 1,2005 (the "Commencement Date"), and expiring on December 31, 2014, the tenth (10) anniversary of the Commencement Date. Additionally, during the Term of this Agreement, the City agrees not to im1?ose 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 abatement. 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 abatement provided for herein for such property shall be applied to the amount of taxes finally determined, as a result of such protest or contest, to be due for such property. 7. DefaultJRecapture. a If the Company refuses or neglects to comply with any of the terms of this agreement. or, if any representation made by the Company in the Application for Tax Abatement (or this a5'""...ent) 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 terminated 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 and/or contest, this agreement may be terminated by the City. c. In the event the City determines 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. Tax Abatement Agreement Page 3 of6 " If the city terminates this Agreement, taxes without abatement will be due for the year in which termination occurred and shall accrue without abatement for all tax years thereafter. However, there shall be no recapture of prior years' taxes abated by virtue of this AC".....~ent. d. If during the Abatement Period the Company should discontinue all operations in Schertz, Texas, then the City shall by Ordinance adopted by the City Council have the right to: (1) Recapture one hundred percent (100%) of the taxes abated in prior years and the year in which such discontinuance occurs; and, (2) Terminate this Agreement. e. A total bill for any amounts due under Section 7c or Section 7d hereof will be sent to the Company and the Company agrees to pay the total amount within sixty (60) days after receipt. Penalty and 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 the City and the Guadalupe County Tax Assessor/ Collector bas been made. 8. Notice. AIl notices shall be in writing, addressed to the Company or the City at the following addresses. If mailed, 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. Uuless otherwise provided in this Agreement, all notices shall be delivered to the following address: To the Company: If mailed or personally delivered: Juan J. Gonzalez-Garza Verde Realty Master Limited Partnership 201 East Main, 4th Floor El Paso, Texas 79901 With copy to: To the City: Ifmailed or personally delivered: City of Schertz . Attn: Interim City Manager P.O. Drawer I Schertz, Texas 78154 Tax Abatement Agreement Page 4 of6 .. 9. AgreemeDt Approved by City Council. The City represents that this Agreement has been ......__ .'ed 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 .......",ral 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 the City exercise any of the rights so as to diminish the effects or benefits of this A&....~ent, the City agrees to work with the Company tvrl...J 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 the Company, shall include, but not necessarily be limited to, statements that this Agreement is in full force and effect without default, if such is the case, the remaining term of this A&....~ent, the levels of tax abatement in effect, and such other matters reasonably requested by the party(ies) to receive the certificate. 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 Agreement will be binding on and inure to the benefit of the parties hereto and their respective successors and permitted assigns. 16. Date. Tax Abatement Agreement PageSof6 , ". . < ' . This Agreement has been executed by the parties in multiple originals, each having full force and effect on this the day of 2005. For the Company: By: Title: County of Guadalupe This instrument was acknowledged before me on of Verde Realty Master Limited corporation, on behalf of said corporation. . 2005, by Partnership II, a (SEAL) Notary Public in and for the State of Texas My commission expires: (printed name of notary) ATTEST: /J /J " .4 ~~ By: 'Norma Althouse Title: City Secretary The State of Texas County of Guadalupe This instrument was acknowledged before me on ~ --::>"-0 c::.., , 2005, by John Bierschwale, Interim City Manager of City of Schertz, Texas a municipalitY and body politic formed und ;s, on behalf of said municipality. . _11_ i ~. r;--x'n, -1- f 1.-. ....l..lOG. :. Notary Public in and for the State- of Texas My'~~~~i's~ion expir~~: 'i'~ \~-o5 'C~r; ~ ~~\\,.,.....k (printed name of notary) Tax Abatement Agreement Pase6of6 PUBLISHER'S AFFIDAVIT ^.L '\ ( ~',{ltkq ~ THE STATE OF TEXAS, I County of Guadalupe Before me, the undersigned authority, on this date personally appeared Jamie Mobley, known to me, who, being by me duly swom, on his oath sw';bd "b" Deposes and says that he is the Managing Editor of The Seguin Gazette- . ' ~1I'l/' )1llMI. ....... . Enterprise a, a newspaper published in said county: that a copy of the within i . . AN ORDINANCE BY / THE Crrv COUNCIL Foregoing notice was published in said newspaper time(s) before theOF THE CITY OF SCHERTZ. TEXAS RE- PEALING TAX ABATE- Return day named therein, such publications being on the following dates: ~~3 ,~~ Ih 0/1(1 j, h( dOOS- (' tJd. 110. 0.5-;- 01'\ :irE:" ~G~ J. TADCOfTR1-COUNTY LTD. AND 'ESTAB. LISHING A NEW TAX AGREEMEHT 0FlD1- NANCE AND TAX ABATEMENT AGREE- MENT WITH VERDE REALTY MASTER UM- ape copy of which is hereto attached. ITED PARTNl!RSHIP II, PASSED. APPROVED AND ADOPTED the 1st ~,.\~'r.,~. MIIy'IIIMII ' fore me this /'-1 day of 'y-yJ~~ . A.D" 2005 't.e,,,,,,..,,,,.,,,,,,,.. ,a.. ~ . , * IIAIlllARET L. Cl.VIIlION . . . * fIlayNlll:,.....,-. " . III., ,,~1III2I.2OOll_ r '''''.''l.~",. '" ....J ',1. Ii , ". 0, '. '.. ...,".>> W/l~<zru~ ;( ('~A~ o . Notary Public, Guadalupe County, Texas