HomeMy WebLinkAboutO-2007-2993
ORDINANCE NO. 2007- .A't'i3
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 PORTER ROAD
VENTURE, L.P.; MAKING V ARIOUS 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 ofthe 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.
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Section 3. This Ordinance shall be effective from and after its passage and
approval, and it is so ordered.
PASSED AND APPROVED, THIS &L DAY O~ 2007.
By:
CITY OF LA PORTE
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Alton E. Porter, Mayor
ATTEST:
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artha Gillett, City Secretary
APPROVED:
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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
PORTER ROAD VENTURE, L.P.
THIS AGREEMENT (this "Agreement") is entered into by and between Porter Road
Venture, L.P. ("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 962,034 square feet of
distribution and warehouse 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 of the 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 III 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 III 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. s810(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. "Payment" 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
Chapter 31, TEX. PROPERTY TAX CODE, if the 19 U.S.C.s810(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. s810(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 D.S.C. ~810(e), and provide a copy to the
City.
2) On or before December 1 st of each year, during the term of this
Agreement (and/or August 1 st in cases where Company has elected a
September 1 st valuation date for taxation purposes pursuant to TEX.
TAX CODE SECTION 23.l2(f)), Company agrees to certify to the City
that it will claim the exemption in 19 D.S.C. ~810(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. 84to 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:
Porter Road Venture, L.P.
c/o Mr. Robert Clay
Vice President
Clay Development & Construction Inc.
800 Gessner, Suite 850
Houston, Texas 77024
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.
10. 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.
PORTER ROAD VENTURE, L.P.
By:
Mr. Robert Clay, Vice President of Clay Development & Construction Inc.
Date:
CITY OF LA PORTE, TEXAS
APPROVED AS TO FORM
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By: )...A:L~~'" ,~-----.
Alton E. Porter, Mayor
CITY ATTORNEY
By:
Knox Askins, City Attorney
Date:
Date:
EXHIBIT A
Legal Description of Site
RESERVE "Il"
METES AND BOUNDS DESCRIPTION
n-&l85 ACRE TUcr I.ocATED IN THE
ENOCH BRINSON SllrJWEY, A.5
HAlUllS COUNTY, TEXAS
Being .. Ltltel ot ~ of 1-.1 CUf.woiog 22-08;' aCia f.r hind (~ 962,034 ~qune Ro.el, Lxa~ ill me Enoch
BmlSOfi ~, Absttact 5, Hams tJ.mllty. TC:U'S., I:lo!:illg OLJt of:wc l pact "f w! ~ 2fJ7.n49 llCR lJ::ild
{called ~lIi.9')!J acre ttacl} of ~ in !he nfiInC of St. .Joe Paper Company in l-brm C[>Utlty am'$; Fili:
{H,C,C.F,} Number M0321l5Q. l\tid 207,(149 acf'C t:rliIct of ~ in d~ name oH.>2 Real E6tale H~ un
in H.CC.F. No; Y404733; S:l.id 22,(18S "crt" TIllC! bOmg mot'!r panial.la.rly da.cnbcd l1$ f~"S (all ~ baBel!!
00 ~ oouthe.riy~t-o:f-WllY' fine of the SoIlthan PacifklWroad beaJ:ing South 70 ~ 15 M1tltlte5 OCt
S<<oncls ElIst per said Ottd);
COMMENCJNGM " .~ ""ocrell: mon""''''''t ClIlled "nd fou;lOd n the ~1.)..thW'e~t CQmct of both ~
h~ d=iOOd tpod ;md ilf(~ ~7.i)49 ~ Ir.oct. for u..:, 11r.:.rtfn..~t t:OJ:iW.!' of a (:alled 19.566 acre mtCt of
Itt<;",u in tht name (of H'1l1$1Ot< l.ighling md p,:t'lW:t C:,mlfW'Y in K,CC.P_ Number D4 t76152, and OD the a:<t
line (,f a <:died lM3 ~ tr.liCf nf ~ ir> th~ f'1~ of 11'''>:>100 Lighting ll.tJd PQU~ C(,mpany in VoJum~
2355, ~ 173 of the n-3 RL'L"W'd. of H:l!tt:U. COli"!)', TeXllil, .w.J Ca.tt'IB being un th<' _.t lir>~ of "fore,;lIid
Enod> BtiJ.><:Jn SuN")' IWd Ih~ eali[ liDe of me NIChola. ~ SW'V~';
THENCE. oeaincidro! ~ 'II.'C:5t line of jjrorCliud 2(F;,(;49 am:- rw:t, Norm 00 ~ 24 MmUtcS 09 SocOflds
\\:r~t {caned North 00 Degr= 18 M.in!J1l~ ~'C!it).ata Wtll11a of 150,00 fttt litld LO:!bot Idt ~. a I-mch Iron
rOO fuucd fQf !hoe ~s.t ~ of ~~ u:n ~cr>:' lm1 and Il:lo!:' sou~st t:QlDN of a caJkd 7,m ICR'
tmct ()f RCord in !he IlI1mt' of Ho<l.l!'too. f~Eing ami P= Comp.Iior ill Vo'->e 2355, Pagr: 173 of tilt' Deed
R=xds of Harria County. TexQ. '~4.CDJq. ~d conn""", for an O'\o-c:alil dia\T<ncc of 8&U9 feet to a 5/8 in,d,
imm rod llCl! rue the .mttbwesl mIner and POINT OF BEGJNN[NG of mr:- ~ d~ t:J:ll.Ct,
THENCE, ",,,.,rmuing cuiroddem L;'" '\!.'t.'S1 lltie of ..f~c! 2D7.(i49' ~ ItiIC1:, Nc.rd. 00 D"W"'" 24 !>Jinull!l.
(l!) S<<o...ds \'t'esl, a d2SWlCe of 4%,00 feet man ~)(,. eLJt fur tIl~ norm'\l.\CS1 c:oroer Ollhe bc::e.c &'liicribed tr:&Ct:,
10 !be celm::J:llf2c of i'Oft:et Rcoad (60 ftee 'II.,dc) ~s/ej.~i!!- ea&emL'nl of rCOOI'd If! ac.C]',. Nu. 1'"721318;
TIIENCE. through and 3ICro5. lIfor~1Ud 21:ii,1J49a= tract and crnncidcnt Ihe cnuedmc of aforesaid Po=
.!load, North g<) :~ 39l\.1mutrs i16 Slxond. East, 11 di5tancc of 1.%157 foet to an "'X" cut If! cnf1(l'cte far
tbt' non'hCilat comer of ~ hemin ~bed tract, ~ !he cent<<line intcrsectlOO v;ith Pike Cow-t (61) f~l
...oide) lflgfCli./~s OflllC':lIlOO[ of =ord in H.C.Cf. No, )"72131 S;
THENCE, roincident thr:-~terline ,,[Pikr:- Omrt. Smilb (~) ~. 20 ~finut"'. :54 s",O:JCKb F;.a;st, R distance
of 49(tOO feet to a 5/8 inch jm.. rod "'-l[h aop ~ f"r th,.e ,""ulhCll$t <.::om"r of the !.rmn ~I:>l'd tnl<:t;
THENCE, Ihrol.lgh Jmd .ct0'S3 :dt1k!aid Xi7.049 = tnet, Soulh 89 D"W"'" 39 ~{jpUIt..,. 06 Second. \1{'esl. ..
dls~ 0[1.96115 fo:;t to thlt POlNT OFBEG1NNtNG 111,.] amwnirl!;22.005 ..crt:_ of Iiznd.
Reno &: A~liOOltte!'
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Job No.. 3(;.{J40Ll9..cr",
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 Porter Road Venture, L.P. 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 a notification from Porter Road Venture, L.P. of
its desire to create a Foreign Trade Zone ("FTZ") at their property within the Underwood
Business Park (estimated at 962,034 square feet) for Zone designated warehouse and
distribution activities. The proposed Zone site is located at Porter Road (the east side of
Underwood Road with frontage along the Highway 225 access road) in La Porte, Texas
77571, on a tract ofland 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 of taxes on inventory.
If you have any questions or comments, please contact
,at~_-_.
Sincerely,
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Alton E. Porter
Mayor, City of La Porte