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2005T25-Tax Abatement ORDINANCE NO. ~5 - T- c2S ORDINANCE BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS, AMENDING TAX ABATEMENT ORDINANCE NO. 05-1'-08 AND DECLARING AN EMERGENCY WHEREAS, by Ordinance No. 05"T-08 adopted on March I, 2005 (the "Original Ordinance"), the City Council authorized an abatement of ad valorem taxes payable by Verde Realty Master Limited Partnership I, a Texas limited partnership; and WHEREAS, the Original Ordinance and the Tax Abatement Agreement authorized therein should have named Verde Tri County, Ltd., a Texas limited partnership, as the benefited party; NOW, THEREFORE BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS: Section I. The Original Ordinance and Tax Abatement Agreement authorized therein are hereby amended to correctly name Verde Tri County, Ltd. as the benefited party, such amendment to be retroactive to the date of adoption of the Original Ordinance. Section 2. This Ordinance shall be effective from and after its final passage and any publication required by the City Charter. Section 3. By vote of not less than two-thirds of the members of the City Council present at the meeting at which this Ordinance was first considered, the City Council has determined that an emergency exists which requires immediate jlCtion, and this Ordinance is hereby adopted on a single reading. PASSED, APPROVED AND ADOPTED . ATTEST: ct:2~rtzl/~ (SEAL OF CITY) 20132199.1 "Exhibit 1" Tax Abatement Agreement Verde Tri-County, Ltd. RECEIVED JAN 0 ~ 2006 1. Parties. This agreement is made and entered into by and between the City of Schertz, Texas (hereinafter called the "City"), and Verde Tri-County, Ltd. (hereinafter called the "Company"). 2. Authorization and Findings. a. The agreement is entered into pursuant to: (1) Section 312 ofthe Texas Property Tax Code. (2) City of Schertz Ordinance, 03-1'-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, oS-" ~ 'S ' 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 Tri-County, Ltd. described as Lot 5, Block 3, Tri-County Business Industrial Park Unit 1; as recorded in Volume 6, Page 306 of the plat records for Guadalupe County and within a state enterprise zone as approved by the Texas Department of Commerce on 11 April, 1995 in Guadalupe County; 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 2005 base year value established by the Guadalupe County Appraisal District is $700,000. c. A general description of the improvements to be made by the Company is set out in the basic abatement application and attachments. d. Verde Tri-County. Ltd. Tax Abatement Agreement Page lof7 HODB0124573002.2 06-)a.-0613:54 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, Tri-County Business Park, and within GuadalupeCounty. 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 $6,292,800. 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 224,527 square feet in two buildings for Manufacture and Distribution of materials. The Company represents that the Improvements to the Property will cost approximately $6,292,800 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 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 abatement and for appraisal purposes. f. 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 Verde Tri-County, Ltd. Tax Abatement Agreement Page 20f7 HODB0124573002.2 06-)..-06 13:54 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 January 15th to the City of Schertz of each year during the Term of the Abatement and by January lSlh 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, 57.2% of the entire assessed value of the Capital Improvements 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 Seven (7) year period (the "Term of the Agreement") commencing on January 1,2005 (the "Commencement Date"), and expiring on December 31, 2011, the Seven (7) 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 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 amowi.t 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 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 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. Verde Tri-County, Ltd. Tax Abatement Agreement Page 3 of7 HODB0124573002.2 06-)..-06 13:54 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 Agreement. 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 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: To the Company: If mailed or personally delivered: Juan J. Gonzalez-Garza Verde Tri-County, Ltd. 201 East Main, 4th Floor El Paso, Texas 79901 With a copy to: Ronald M. Shoss Mayer, Brown, Rowe & Maw, LLP 700 Louisiana Street, Suite 3600 Houston, TX 77002 Verde Tri-CounIy, Ltd. Tax Abatement Agreement P.ge 40f7 HODB0124573002.2 06-)..-06 13:54 To the City: If mailed or personally delivered: City of Schertz Attn: City Manager P.O. Drawer I 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 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 Agreement, 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. Verde Tri-County, Ltd. Tax Abatement Agreement Poge 50f7 HODB0124573002.2 06-)0.-0613:54 This Agreement will be binding on and inure to the benefit of the parties hereto and there 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 (~I-\~ day of "'\,-,. '" < A r, _ 2006. - \ For Verde Tri-County Ltd., a Texas limited partnership: By: , a Texas limited liability Verde Tri-County GP company, its general County ofEl Paso This instrument was acknowledged before me on ~ r\/U)I"U In, 2006, by Juan J. Gonzalez-Garza, Vice President of Verde Tri-County GP LLC, ~general partner of Verde Tn- County, Ltd., a Texas limited partnership, on behalf 1:. ~~ited partner~hiP' (SEAl) !'''''''' --1 - (>. ^ , . /'~, PA1RICIA ACHIM .. ' l ^-f ./J.LLrl::l . r, Xi MY COMMISSION EXPIRES Notary Public III and for the State of Texas ,~!"... ,.' JanuaJy11,2lDl I -----,~ "."",Vl." --T \_ . . . My co (printed name of notary) [SIGNATURES CONTINUE ON FOLLOWING PAGEl Verde Tri-County, Ltd. Tax Abatement Agreemeot Page 6 on HODB0124573002.2 06-)00-06 13:54 PUBLISHER'S AFFIDAVIT ~~ ~ .\ ~ -< . ~ ~~ /1 "I' e'? 1If\..~ THE STATE OF TEXAS, County of Guadalupe Before me, the undersigned authority, on this date personally appeared Tommy Crow, known to me, who, being by me duly s'l/om, on his oath c:epose~ --.---.--. . t. cmrr.: k and says that he is the Publisher of The Seguin Gaze::e-Enterprise, a ~ ~ OF TftE CITY OF newspaper published in said county: that a copy of tr,e within and fore~oing 8CHER'I'z,' TEXAS AI I;' I.. 11''u 'TA)C / AMTIlMIlNr, ' 0ADt, notice was published in said newspaper, time{s) before the ret'~rn day ~T: named therein. such publications being on the followir~ dates: PASSeD. AP9AOVED. ~11nV- /? :JnO'\ 'i~ And a newspaper copy of which is hereto attached. -- ~/~ -=-- Swom to and subscribed before me this J7 day of ~~ . A.D., 2005 ~aJ'~ I! CJl~ Notary P~c, Guadalupe County, Texas "'." "".J',,, , , " , . 'j =(D MARllARET L CI.NlKSON : .. . 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