2007T28 Tax Phase In AgreementORDINANCE NO. O7-T-ZS
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 CORRIDOR HOTEL II, LTD., 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 Corridor Hotel II, Ltd. 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 Corridor Hotel II, Ltd., described as a 4.313,
acre tract of land on Corridor Loop Road adjacent to Hampton Inn & Suites, located in
the City of Schertz, Guadalupe 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 Corridor Hotel II, Ltd.,
is approved. The approved rate is 79 percent for 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 Corridor Hotel, Ltd.
Approved on first reading the ~ day of ~u-n1~ , 2007.
PASSED, APPROVED AND ADOPTED this the /day of ~uA1~ , 2007.
Hal Balclilvin, Mayor
ATTEST:
C.EGtJ _
J dy kar, City Secretary
"Exhibit 1"
Tax Phase-In Agreement
Corridor Hotel II, Ltd.
1. Parties.
This agreement is made and entered into by and between the City of Schertz, Texas (hereinafter
called the "City"), and Corridor Hotel II, Ltd. (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 Schertz Ordinance, 06-T-06 that establishes the City of Schertz
Guidelines and Criteria for Tax Phase-In and Reinveshnent Zones (hereinafter
referred to as the "Guidelines and Criteria").
(3) City of Schertz Ordinance, 07-T-28, 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 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 Corridor Hotel II, Ltd.
described as a 4.313 acre tract of land on Corridor Loop Road adjacent to Hampton hm
& Suites, Guadalupe County;
b. Phase-ins 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 2007
base year value established by the Guadalupe Courrty Appraisal District is $845,435.
c. The Project has recently been platted, but not recorded, so no tax account on the
Property has been established.
d. A general description of the improvements to be made by the Company is set out in the
basic phase-in application and attaclunents.
Tax Phase-In Agreement
Corridor Hotel n, Ltd.
Page l of 7
4. Company Representation and Estimates.
a. The Company represents they are the owners in fee simple of the Property. The
Property is located within the City of Schertz, and within Guadalupe County.
b. The company represents that the use of the Property is to be as follows: speculation
building for Hotel/Motel.
c. The Company estimates it will make capital improvements (hereinafter referred to as
"Improvements") to the Property, which will cost approximately $7,500,000.
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 Council, the Planning and Zoning Commission of the City, the Economic
Development Department, 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 the Company making the following Improvements to the
Property and fulfilling the following covenants:
a. Construction of approximately 74,000 square foot facility of Hotel/Motel. The
Company represents that the Improvements to the Property will cost approximately
$7,500,000 and will be completed during the term of the phase-in.
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 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 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 phase-in and for appraisal purposes.
f. The Company certifies that its operation within the City of Schertz does not and will not
knowingly employ an undocumented worker, as defined in Chapter 2264, Subchapter
A, Texas Government Code, as amended (the "Act");
Tax Phase-In Agreement
Corridor Hotel II, Ltd.
Page 2 of 7
g. Pursuant to the Act, if The Company is convicted of a violation under 8 U.S.C. Section
1324a(f), after receiving the tax abatement, The Company shall promptly give the EDC
written notice of such violation and shall repay the total amount of the taxes abated,
with interest at a rate of 6.75 percent per annum not later than the one hundred and
twentieth (120`h) day after The Company notifies the EDC of the violation.
h. The Company agrees to allow inspection of the Property by the 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 the operation of the Property.
i. The Company agrees annually to certify in writing its compliance with the terms of this
Agreement, which certification shall be filed by January 15`t' to the City of Schertz of
each year during the Term of the Phase-In and by January 15`h of the year following the
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, 80% abated for 1 year & 85% abated
for 7 years of the entire assessed value of the Capital Improvements located on the
Property shall be exempt from ad valorem taxation for a period of 8 years.
b. No phase-in of taxes shall be granted as to personal property of the Company installed
or maintained with the Property.
c. The phase-in shall be fora 8 year period (the "Term of the Agreement") commencing
on January 1, 2008 (the "Commencement Date"), and expiring on Decmber 31, 2015,
the 8 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 determined, as a
result of such protest or contest, to be due for such property.
7. DefaultBecapture.
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 Phase-In (or
this agreement) is false or misleading in any material respect and such refusal or default
Tax Phase-In Agreement
Coaidor Hotel II, Ltd.
Page 3 of 7
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.
d. If the city terminates this Agreement, taxes without phase-in will be due for the 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.
e. If during the Phase-in 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.
f. A total bill for any amounts due under Section 7a and Section 7b 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 within sixty (60) days after receipt
of the bill, unless arrangements satisfactory to the City and the Guadalupe County Tax
Assessor/ Collector has been made.
g. A total bill for any amounts due under Section 7c and 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 within sixty (60) days after receipt
of the bill, unless arrangements satisfactory to the City and the Guadalupe 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.
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. Unless otherwise provided in this Agreement, all
notices shall be delivered to the following address:
Tax Phase-Li Agreement
Corridor Hotel II, Ltd.
Page 4 of 7
To the Company:
If mailed or personally delivered:
David Skrehot
Corridor Hotel II, Ltd.
900 Isom Road, Suite 300
San Antonio, Texas 78216
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 the City exercise any of the rights so as to diminish
the effects 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 teens 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
Tax Phase-In Agreement
Cortidor Hotel If, Ltd.
Pagc S of 7
effect without default, if such is the case, the remaining term of this Agreement, the levels of
Tax Phase-In in effect, and such other matters reasonably requested by the party(ies) to receive
the certificate.
14. Applicable Law.
This Agreement shall be constmed 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.
This Agreement has been executed by the parties in multiple originals, each having full force
and effect on this the /,57~" day of _ g2~, , 2008.
For the Company:
By: ~i.~ ~
Title: ~~ /~~
County of Guadalupe
This instr~u~%ment ~w,as~acknowledged before me on ~ ~/ , 2008, by
~~/(D /`fj L L'~7v / , of Corridor Hotel II, Ltd., a Texas Limited Partnership, on behalf of said
partnership.
(SEAL)
My commission expires: g -1 a -U~7
~awwawwwwwwwwwwwwwwo,wwwwgws,
~ 204"'' ""Wr ERIN MATLOCK y
~ *®* Notary Public y
~ ~~ ~r*' State of Texes y
~~~y~~~~~~Comm(Exp.08-12-2008 y
Notary Public in and for the tate of Texas
C f : ,~ m~~ 1~ ~K
(printed name of notary)
For the City:
~_
By: Don Taylor
Title: City Manager
Tax Phase-In Agreement
Coaidor Hotel II, Ltd.
Page 6 of 7
y: Brenda Dennis
Title: City Secretary
The State of Texas
County of Guadalupe
This instrument was acknowledged before
City Manager of City of Schertz, Texas a m
St~f,~asr,~s~tpj>~bfpf~,v~idt>aa»y~jcipality.
~'Y °~e~ ERIN MATLOCK
me on ~ e ~ . ti , 2008, by Don Taylor,
unicipality and body politic formed under the laws of the
Notary Publlc y ~ I 1 ~t
S7$ * U~~cit
Stale of Texes
~~`~'g Comm. ~~. OB-72-2009 y Notary Public in and for the State of Texas
~e~e~e~e~c~e~e~c~~e~c~cw=e ~~v~eaa~eti~~~e~ee
Mycommissionexpires: `~-t~-~°t
~r: ~ ~~ ~~ \~ ~ IC
(printed name of notary)
Tax Phase-In Agreement
Corridor Hotel II, Ltd.
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