HomeMy WebLinkAboutO-2007-2991
ORDINANCE NO. 2007- rP...Cj'1 t
AN ORDINANCE APPROVING AND AUTHORIZING A FOREIGN TRADE
ZONE AGREEMENT FOR THE PAYMENT OF AD VALOREM TAXES
BETWEEN THE CITY OF LA PORTE, TEXAS AND UNDER BEAR, L.L.c.;
MAKING VARIOUS FINDINGS AND PROVISIONS RELATING TO THE
SUBJECT; FINDING COMPLIANCE WITH THE OPEN MEETINGS LAW;
AND PROVIDING AN EFFECTIVE DATE HEREOF.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LA PORTE:
Section 1. The City Council hereby approves and authorizes the contract,
agreement, or other undertaking described in the title of this ordinance, a copy of which
is on file in the office of the City Secretary. The Interim City Manager is hereby
authorized to execute such document and all related documents on behalf of the City of
La Porte. The City Secretary is hereby authorized to attest to all such signatures and to
affix the seal of the City to all such documents.
Section 2. The City Council officially finds, determines, recites, and declares that
a sufficient written notice of the date, hour, place and subject of this meeting of the City
Council was posted at a place convenient to the public at the City Hall of the City for the
time required by law preceding this meeting, as required by the Open Meetings Law,
Chapter 551, Texas Government Code; and that this meeting has been open to the public
as required by law at all times during which this ordinance and the subject matter thereof
has been discussed, considered and formally acted upon. The City Council further
ratifies, approves and confirms such written notice and the contents and posting thereof.
2
Section 3. This Ordinance shall be effective from and after its passage and
approval, and it is so ordered.
PASSED AND APPROVED, THI~ Jj/- DAY O~ 2007.
By:
CITY OF LA PORTE
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Alton E. Porter, Mayor
ATTEST: ,
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Martha Gillett, City Secretary
APP~~ED:/
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Clark T. Askins, Assist. City Attorney
FOREIGN TRADE ZONE AGREEMENT FOR THE PAYMENT OF AD
VALOREM TAXES BETWEEN THE CITY OF LA PORTE, TEXAS AND
UNDER BEAR, L.L.C., A DELAWARE LIMITED LIABILITY COMPANY
THIS AGREEMENT (this "Agreement") is entered into by and between Under Bear,
L.L.c., a Delaware Limited Liability Company ("Company"), and La Porte, Texas
("City").
A. Recitals
1. The Port of Houston Authority is grantee of Foreign Trade Zone No. 84;
. 2. The Company is the owner and operator of approximately 443,127 square feet of
warehouse and distribution facility within the Underwood Business Park, located
on Porter Road (the east side of Underwood Road with frontage along the
Highway 225 access road) in La Porte, Texas 77571, on a tract of land more
particularly described in Exhibit A hereto,
3. Company desires to participate in the foreign trade zones program, and that an
application be filed to the Foreign Trade Zone's Board to create an Expansion of
the Houston Foreign Trade Zone No. 84 to include the property encompassing the
Facility into the Zone;
4. A letter of non-objection from the City will aid in the efforts to obtain this
modification from the Foreign Trade Zone Board;
5. 19 U.S.c. ~ 810(e) provides a federal exemption from state and local ad valorem
taxes on tangible personal property imported from outside the United States, and
held in a foreign trade zone for the purpose of storage, sale, exhibition,
repackaging, assembly, distribution, sorting, grading, cleaning, mixing, display,
manufacturing or processing and tangible personal property produced in the
United States and held in a foreign trade zone for exportation, either in its original
form or as altered by any ofthe above processes;
6. Inventory qualifying under 19 U.S.c. ~ 810(e) and held at the Facility in foreign
trade zone space that is activated by U.S. Customs pursuant to 19 C.F.R. ~146 is
exempt from state and local ad valorem taxes; and
7. Company and the City desire that the foreign trade zone designation cause no
financial harm or net loss of revenue to the City Taxing Jurisdictions;
NOW, THEREFORE, in consideration of the mutual promIses expressed In this
Agreement, the parties agree as follows.
B. Definitions
When used herein, the listed words have the following meanings:
1. "City" means the City of La Porte, Texas, and does not include any other entities
that may levy taxes on the Complex including, but not limited to, cities, utility
districts and/or school districts.
2. "Complex" means the site described In Exhibit A attached hereto and all
improvements thereon.
3. "FTZ Inventory" means any inventory held in the Complex that would qualify for
the 19 U.S.C. 9810(e) federal exemption for certain foreign trade zone inventory
that would otherwise be taxable by the City Taxing Jurisdictions pursuant to
Chapter 11, TEX. PROPERTY TAX CODE.
4. "Pavment" means the amount equal to the property taxes on FTZ Inventory that a
User would owe the City Taxing Jurisdiction in accordance with the provisions of
Chapter31, TEX. PROPERTY TAX CODE, if the 19 U.S.C.9810(e) exemptions
is not applied.
C. Obligations
1. Company agrees to the following with respect to FTZ Inventory owned by
Company:
a) Company waives the federal exemption provided in 19 U.S.C. 9810(e) with
respect to ad valorem taxes payable to the City for FTZ Inventory owned by
Company and located at the Complex, to the extent of 75% of the City's ad
valorem tax rate, thereby claiming the Federal exemption at the rate of 25%,
and will actually pay to the City 75% of the otherwise total ad valorem tax
liability, on FTZ Inventory. Company further agrees not to not raise the
aforementioned exemption as a basis for protesting the appraisal of any FTZ
Inventory owned by Company.
b) On January 1st and September 1st of each year (the valuation date(s) for
taxation purposes pursuant to TEX. TAX CODE SECTIONS 23.01 and 23.12(f)),
Company will use reasonable efforts to identify and designate in a clearly
identifiable manner any FTZ Inventory owned by it and held in an activated
foreign trade zone space at the Complex.
c) If the Texas Legislature alters the valuation date(s) for taxation purposes in
the future, the inventory restriction outlined above will apply only to the new
valuation date(s) as established under Texas law.
d) Company will do the following:
1) Render information related to FTZ Inventory owned by it and located
at the Complex as required by the TEXAS PROPERTY TAX CODE to
Harris County Appraisal District ("HCAD"), without regard to and
without identifying FTZ Inventory as subject to or eligible for the
federal exemption in 19 U.S.C. s810(e), and provide a copy to the
City.
2) On or before December 1 sl of each year, during the term of this
Agreement (and/or August 1 sl in cases where Company has elected a
September 1 sl valuation date for taxation purposes pursuant to TEX.
TAX CODE SECTION 23.12(f), Company agrees to certify to the City
that it will claim the exemption in 19 D.S.C. s810(e) as it relates to the
FTZ Inventory owned by Company, if any, with respect to ad valorem
taxes payable to the City on such FTZ Inventory, only at the
percentage rate agreed to under Paragraph C of this agreement.
2. Immediately upon execution of this Agreement, the City shall issue a letter of
non-objection in substantially the form attached as Exhibit B, which is to be filed
as part of the Company's Application to Expand Foreign Trade Zone No. 84 to
encompass the Complex
3. Company agrees that this Agreement is necessary for the Expansion of the
Foreign Trade Zone No. 84 to include the Complex, and such expansion is in the
best interest of the community. Therefore, a violation by Company of this
Agreement or a determination of its invalidity would justify a reversal of such
expanSIOn.
D. Miscellaneous Provisions
1. Governing Law. This Agreement will be interpreted under the laws of the State
of Texas.
2. Binding Effect. This Agreement shall extend to and be binding upon and inure to
the benefit of the parties hereto, and their respective legal representatives,
successors and assigns. It is agreed that City Taxing Jurisdiction is a beneficiary
of this Agreement and shall be entitled to enforce its terms and seek damages for
its breach.
3. Entire Agreement. This Agreement supersedes any prior understanding or oral
agreements between the parties with respect to the subject matter hereof and
constitutes the entire understanding and agreement between the parties with
respect to the subject matter hereof, and there are no agreements, understandings,
restrictions, representations or warranties among the parties with respect to the
subject matter hereof other than those set forth herein or provided for herein.
4. Agreement Does Not Affect Other Rights, Obligations or Agreements. This
Agreement does not supersede, modify or affect any other agreement that has
been or may be entered into between Company and any other taxing jurisdiction
or any other person or entity.
5. Modification of Agreement. This Agreement may be modified only by written
consent of all parties.
6. Further Assurances. The parties covenant and agree that they will execute such
other and further documents as are or may become necessary or convenient to
effectuate and carry out the purpose of this Agreement, including specifically all
payment in lieu of tax agreements sought by Users.
7. Severability. To the extent permitted by law, a holding by any court that any part
or any provision in this Agreement is invalid, illegal or unenforceable in any
respect, shall not affect any other provision, and this Agreement shall be
construed as if the invalid, illegal or unenforceable provision had never been a
part of the Agreement.
8. Notices. Any notice permitted or required to be given must be in wntmg
delivered in person or by certified U.S. Mail, return receipt requested, to the
applicable party addressed as follows:
Under Bear, L.L.C.
c/o Mr. John Galiher
President, CEO
Preferred Freezer Services, LLC
360 Avenue P
Newark, New Jersey 07105
City of La Porte, Texas
604 W. Fairmont
La Porte, Texas 77571
Attention: City Manager
9. Term of Agreement. This Agreement shall terminate upon the revocation or
termination of the grant of foreign trade zone status by the Foreign Trade Zone
Board with regard to the Facility.
lO. Counterparts. This Agreement may be executed in multiple identical counterparts
and when taken together shall constitute one and the same instrument. A facsimile
or similar transmission of a counterpart signed by a party hereto or a copy of a
counterpart signed by a party hereto will be regarded as an original signed by such
party for purposes hereof.
EXECUTED on the dates set forth below, but effective as of the last date executed by all
the Parties.
By:
Mr. John Galih P ident, CEO
Preferred Freezer
Date:
S-B-or
CITY OF LA PORTE, TEXAS
APPROVED AS TO FORM
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By: W~ L/ I r t:n.--~
Alton E. Porter, Mayor
CITY ATTORNEY
By: ~7:~ ~/'
Knox Askins, City Attorney /
Date: 5 ;).( ~ (/)
Date: 5 ^'J-:J - 01
EXHIBIT A
Legal Description of Site
RESERVE "GZ"
METES AND BOUNDS DESCRIPTION
1&.113 ACRE TRACT LOCATED IN TIlE
ENOCH BRINSON SURVEY, A.5
HARJUS COUNTY, TEXAS
Bdng iii trlP:! mpar<<! (,(land (:ton!1l.inmg WJ73 ~<<t1.():f1am:l ot40.127 $OfUare feet, located in the Hooch
Hri(lJOO Survey, Ab$tt8Cl S, H;Uti$ COOIlt}', T~w, 'b(.oing 0Il1 of and 'plrt ()f tNl cl:l.1llin Zff1.049 acre mel
(ClllLed 206.900 _ lnlCt) of ~ in the _ of St. J~ ~ Compllll\yin HaJ:rir; C..ounly Clerk's f-iOO
(H.c:C.F.) Nutnber M032B56, IItdd207.049 Il.Ut! tf'aCl of tl!<<lro in u.en:oml! of C.2 ReI1l E.s-_ Holding:;, LTI)-
in Ht.C.r. No. Y4047:!}; Said 10.!;) acre tnM:.t being mote particulWy deoc.ribed "" fQ!4""'$ {all bam~ based
00 the .outhmy Rigbt .uf. Way lint of the Soulbmi Pacific Railroad '-ring Sooth ;0 Dq'?~$ 15 Mmtne\< (0
SocOl"Kk F1~l pn saki. dctrl):
BEGJNNINGat a bl';oo:n ronarlc llMIDUllleJlt g&d and foorul at the soothMst comet' of both du!. hcteln
dclic:ribcd tnIct and aforesaid 207,()49 a= met. for the noohwc5t romet of iii calkd 19.566 llCl-e w.cl of .lCColl\fd
in du! name ofHouswnLil!.htiing alid Power ~ in H.c.C.F. Nulnbel D41.,662,. and 00 the cut tin<:: of a
cdc:d 2.8:n Ilae trlP:l (If R'(:!:Ol:d in the name of Holl$tOll LigllIilIg andP_ Company in Votumc2355, p.
t 73 of the fA,ed Rec9I,;1$ <:>( llilrm C"l\m~. T 1:'_. ~ C(lrliet "'ing on du! ...~t Ti.ne of lI;foteJ4id E.tloch
.~ Survey lUId Ih" ..",.1 ~ of the Nld1oJII$ <"k.pfl'll'l' ~
'tHENCE. coJncidelll the ilOUth line of aforesaid 207'.lJ49 acle Iran ami the north line of afurtsaid 19'566 actt
lIllCt. Nmth 8<J Degrees 39 Minutes 06 S<<onds East, a Ws!lll1a: of 3,737.16 fcrt to II 5/1l inch iron rod wi:thC::l.p
set fur the soullr.!ltit com.er and POINT OF BBGINNING of the hm:in.ooscribed trnct;
THENCE, thtoogh and at:ro&& .fo_aid ~.(l49 acre lnIct !he foUov.,nt thltC (1) Counl~~
1, NorthO(l~20 Minutt'll S4S<<ood!. \~"a;t, a d1$!lll1a: of884.19Ittt toa 5/8 inch iroo
rod \\;t& a.p 1ICt for me tIDrtbwcII comt'! Qf tnI' !lemll d-nbcd lr.l(;t;
2, North 8'9 Dc:gl'e~ 39 Mimle$ 06 Scrond. &.$1. a ~nc" of 499.49 feet to a ~/8 irn:h Imn
rod...1ln t:lIp set fur the rnll1hea,t <<<nlet of the hemin de~ It1I<:l;
;3, South jJOD~!l .\l Minutca 54 St..."mda EM.. .. dis!lll1ce (>f 834.20 feet tOt S!ll ind; tr.m
roo with ~ $<:1 focr the aoulhc:w com",," of the ~ desaibet,l t~.;
THENCE. coind4ent the nouh q of a.f~ 19.5M acre: mlCt South 8') Degrees 39 MmuT.ea 06 Seconds
West, a distance o{S02JW f<<t to the POINT OF BEGINNING and containing 10,173 acres ,,(had,
Rcno&A~tf!ll
IRcanbt:t: 22, 2006
job No. ~..J{ESGZ
Exhibit B
,2007
Mr. Jack L. Beasley
Foreign Trade Zone Manager
Port of Houston Authority
P.O. Box 2562
Houston, TX 77252-2562
Re: Application by Under Bear, L.L.C. for an Expansion of Foreign Trade Zone No.
84 to include warehouse facilities located within Underwood Business Park at Porter
Road (the east side of Underwood Road with frontage along the Highway 225 access
road) in La Porte, Texas 77571.
Dear Mr. Beasley:
The City of La Porte, Texas has received notification from Under Bear, L.L.c.,
demonstrating their desire to create a Foreign Trade Zone ("FTZ") at their property
(estimated at 443,127 square feet) located within the Underwood Business Park, for Zone
designated warehouse and distribution activities. The proposed Zone site is located at
Porter Road (the east side of Underwood Road with frontage road along the highway 225
access road) in La Porte, Texas 77571 on a tract of land more particularly described in
Exhibit A-I hereto.
The City of La Porte, Texas has no objection to the expansion of the FTZ as described
above, as the City and applicant have reached a separate agreement regarding applicant's
local obligations for payment oftaxes on inventory.
If you have any questions or comments, please contact
, at L) _-_'
Sincerely,
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