HomeMy WebLinkAbout2006-05-22 Regular Meeting and Workshop Meeting
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MINUTES OF REGULAR MEETING AND WORKSHOP MEETING
OF THE LA PORTE CITY COUNCIL
May 22, 2006
1. CALL TO ORDER
The meeting was called to order by Mayor Alton Porter at 6:04 p.m.
Members of City Council Present: Mayor Alton Porter, Councilmembers Chuck Engelken,
Tommy Moser, Mike Clausen, Barry Beasley and Howard Ebow
Members of Council Absent: Peter Griffiths, Mike Mosteit, and Louis Rigby,
Members of City Executive Staff and City Emplovees Present: Assistant City Manager John
Joerns, Assistant City Attorney Clark Askins, Police Chief Richard Reff, Assistant City
Secretary Sharon Harris, Building Official Debbie Wilmore, Administrative Secretary Susan
Felty, Records Technician Bonnie Garrison and Presiding Judge Denise Mitrano.
Others Present: Sue Gale Mock Kooken, Barbara Norwine, Trey Boring, Kelly Rote, Trent
Wise, Earl Garrison, Russell Plank, John Handy of Houston Chronicle and other citizens and
students.
2. Mayor Porter delivered the invocation.
3. Mayor Porter led the Pledge of Allegiance.
4. PRESENTATIONS / PROCLAMATIONS
There were no presentations or proclamations presented.
5. Council to consider approval or other action regarding an ordinance declaring the results of
the City of La Porte Special Election held on May 13,2006.
Assistant City Attorney Clark Askins presented summary and recommendation and
answered Council's questions.
Assistant City Attorney read: ORDINANCE 2886 - AN ORDINANCE DECLARING THE
RESUL TS OF A SPECIAL ELECTION HELD IN THE CITY OF LA PORTE ON MAY
13,2006, TO PERMIT VOTING FOR OR AGAINST THE PROPOSITION: "THE
ADOPTION OF A LOCAL SALES AND USE TAX IN THE CITY OF LA PORTE AT
THE RATE OF ONE-FOURTH OF ONE PERCENT TO PROVIDE REVENUE FOR
MAINTENANCE AND REPAIR OF MUNICIPAL STREETS"; FINDING COMPLIANCE
WITH THE OPEN MEETINGS LAW; AND PROVIDING AN EFFECTIVE DATE
HEREOF.
Motion was made bv Councilmember Engelken to approve Ordinance 2886 as presented by
Mr.Askins. Second by Councilmember Beasley. The motion carried.
Ayes: Moser, Ebow, Engelken, Beasley, Clausen and Porter
Nays: None
Abstain: None
City Council Regular and Workshop Meeting - May 22, 2006
Page 2
6. Council to consider approval or other action regarding an ordinance declaring the results of
the City of La Porte Election held on May 13,2006.
Assistant City Attorney Clark Askins presented summary and recommendation and
answered Council's questions.
Assistant City Attorney read: ORDINANCE 2887 -AN ORDINANCE DECLARING THE
RESULTS OF THE ELECTION HELD IN THE CITY OF LA PORTE ON MAY 13,2006,
FOR THE ELECTION OF A MAYOR; COUNCILPERSON DISTRICT 2; AND
COUNCILPERSON DISTRICT 3; FINDING COMPLIANCE WITH THE OPEN
MEETINGS LAW; AND PROVIDING AN EFFECTIVE DATE HEREOF.
Motion was made bv Councilmember Engelken to approve Ordinance 2887 as presented by
Mr. Askins. Second by Councilmember Ebow. The motion carried.
Ayes: Moser, Ebow, Engelken, Beasley, Clausen and Porter
Nays: None
Abstain: None
7. Presiding Judge Denise Mitrano administered Oaths of Office to the newly appointed Mayor,
Councilmember District 2 and Councilmember District 3 as presented.
8. Council to consider approval or other action regarding an ordinance appointing a Mayor Pro-
Tern of the City of La Porte, for the term expiring May 31, 2007.
Assistant City Attorney Clark Askins read: ORDINANCE 2005-2888 AN ORDINANCE
APPOINTING A MEMBER OF THE CITY COUNCIL TO SERVE AS MAYOR PRO-
TEM OF THE CITY OF LA PORTE; FOR THE TERM COMMENCING JUNE 1,2006,
AND EXPIRING MAY 31, 2006; FINDING COMPLIANCE WITH THE OPEN
MEETINGS LAW; PROVIDING AN EFFECTIVE DATE HEREOF.
Motion was made by Councilmember Ebow to approve Ordinance 2005-2888 as presented
by Mayor Porter and appointing Councilmember Moser as Mayor Pro-Tern. Second by
Councilmember Beasley. The motion carried.
Ayes: Ebow, Engelken, Beasley, Clausen, Moser, and Porter
Nays: None
Abstain: None
9. CONSENT AGENDA
A. Consider approving Minutes of the Regular Meeting, Public Hearing and Workshop
Meeting held on May 8, 2006.
B. Council to consider approval or other action regarding an ordinance ratifying and
confirming the City Attorney's Selection of Clark Askins as Assistant City Attorney
and Prosecutor in Municipal Court.
Motion was made by Councilmember Clausen to accept consent agenda as presented.
Second by Councilmember Moser. The motion carried unanimously.
City Council Regular and Workshop Meeting - May 22, 2006
Page 3
Ayes: Engelken, Ebow, Clausen, Moser, Beasley and Mayor Porter.
Nays: None
Abstain: None
10. PETITIONS, REMONSTRANCES, COMMUNICATIONS, AND CITIZENS AND TAX
P AYERS WISHING TO ADDRESS COUNCIL ON ANY ITEM POSTED ON THE
AGENDA
Citizen's addressing Council:
Barbara Norwine - 202 South Lobit La Porte, Texas 77571 - addressed Council with
concerns of not having a Little League Ball Park in La Porte after a Bond Election had been
held. She also spoke regarding concerns of paying for heavy trash in her utility bills for
rental property and also having to rent a container for trash while remodeling at the property.
Ms. Norwine spoke regarding concerns of 18 wheeler traffic destined for the Barbous Cut
exit, she also informed Council she was not against angle parking on Main Street but had
concerns if the angle parking would result into only two-lane on Main Street.
11. Council to consider approval of Ordinance 2003-2665A- to clarify intent and add waived
fees.
Building Official Debbie Wilmore presented summary and recommendation and answered
Council's questions.
Assistant City Attorney Clark Askins read: ORDINANCE 2003-2665-A- AN
ORDINANCE AMENDING ORDINANCE NO. 2003-2665 REGARDING WAIVER OF
CONSTRUCTION FEES IMPOSED BY THE CITY OF LA PORTE ON
IMPROVEMENTS TO REAL PROPERTY, BY INCLUDING WAIVER OF
ADDITIONAL PERMIT, INSPECTION, AND PARKLAND DEVELOPMENT FEES FOR
HOUSING FOR LOW INCOME FAMILIES BY CERTAIN NON-PROFIT
CORPORATIONS AND/OR CITY OF LA PORTE OR OTHER GOVERNMENTAL
AGENCY INITIAED PROGRAMS; FINDING COMPLIANCE WITH THE OPEN
MEETINGS LAW; CONTAINING A SEVERABILITY CLAUSE; CONTAINING A
REPEALING CLAUSE; AND PROVIDING AN EFFECTIVE DATE HEREOF.
Motion was made by Council member Clausen to table Ordinance 2003-2665 A as presented
by Ms. Wilmore. Second by Council member Engelken. The motion carried
Ayes: Moser, Ebow, Engelken, Beasley, Clausen and Mayor Porter
Nays: None
Abstain: None
12. Close Regular Meeting and Open Workshop at 6:31 p.m.
A. Mayor Porter briefly discussed Boards & Commissions Appointments. He advised
council to consider nominations for the various positions for replacements or
renewals.
Mayor nominated George Van Dyke to the vacant position on the Chapter 172 and
City Council Regular and Workshop Meeting - May 22,2006
Page 4
Jamey Davis as alternate to the Chapter 172.
Assistant City Attorney Clark Askins advised Council he would draft an
ordinance amending the appointment ordinance section on the Zoning Board
of Adjustment to clarify council's desire to designate the chairperson of the
board.
B. Assistant City Manager John Joerns provided council with an overview of a
proposed development agreement by and between the Reinvestment Zone Number
One, City of La Porte, Texas and La Porte Redevelopment Authority and the City of
La Porte, Texas for the design and construction of the Southeast Sanitary Sewer
Trunk Main and Lift Station Facilities.
C. Assistant City Manager John Joerns provided council with an overview of a
proposed utility extension agreement by and between the Reinvestment Zone
Number One City of La Porte, Texas and La Porte Redevelopment Authority and the
City of La Porte, Texas, and 65 La Porte, LTD., A Texas Limited Liability
Partnership.
D. Assistant City Manager John Joerns and Trey Boring, Sr. Vice President ofIMS
Worldwide Inc. provided a presentation on Foreign Trade Zone. Russell Plank of
National Property Holdings also had comments on Foreign Trade Zone.
13. Closed Workshop and reconvened Regular Meeting at 7:21 p.m.
14. Administrative Reports
Assistant City Manager John Joerns reminded Council of the City of the Commissioner
Sylvia Garcia Town Hall Meeting, Tuesday, May 23,2006 at 6:00 p.m. at the Harris County
Activity Center, City Offices closed, Monday, May 29,2006 for observance of Memorial
Day, and Annual Juneteenth Parade and Celebration, Saturday, June 17,2006 at 10:00 a.m.
at North 8th and Main Street.
15. Council Comments
Engelken, Clausen, Beasley, Moser, Ebow and Porter had comments.
16. EXECUTIVE SESSION - PURSUANT TO PROVISION OF THE OPEN MEETINGS
LAW, CHAPTER 551.071 THROUGH 551.076, 551-087, TEXAS GOVERNMENT
CODE (CONSULTATION WITH ATTORNEY, DELIBERATION REGARDING
REAL PROPERTY, DELIBERATION REGARDING PROSPECTIVE GIFT OR
DONATION, PERSONNEL MATTERS, DELIBERATION REGARDING
SECURITY DEVICES, OR EXCLUDING A WITNESS DURING EXAMINATION
OF ANOTHER
WITNESS IN AN INVESTIGATION, DELIBERATION REGARDING ECONOMIC
DEVELOPMENT NEGOTIATIONS)
551.071 (PENDING OR CONTEMPLATED LITIGATION) - DISCUSS CODE
ENFORCEMENT ISSUE WITH CITY ATTORNEY AND CITY MANAGER.
City Council Regular and Workshop Meeting - May 22, 2006
Page 5
Council retired to Executive Session at 7:24 p.m. and returned to the Regular Meeting and
reconvened at 7:43 p.m.
17. There was no action taken during Executive Session.
18. There being no further business to come before Council, the Regular Meeting and Workshop
was duly adjourned at 7:46 p.m.
Respectfully submitted,
--rnafZ)tL c:4ffb/
Martha GIllett, TRMC, CMC
City Secretary
P~i~~" day ofJone 2006
Mayor Alton E. Porter
REQUE rr FOR CITY COUNCIL AGENDA ITEM
Department:
6
Appropriation
Agenda Date Requested: Ju e
Requested By:
Source of Funds:
Account Number:
Report:
Resolution:
Ordinance:
Amount Budgeted:
Exhibits: Foreign Trade Zone Request Outlinp
Amount Requested:
Exhibits: Tax Impact Analysis for Clay Development
(Prepared by Consultant for Clay Development)
Budgeted Item: YES
NO
Exhibits: Tax Impact Analysis for Port Crossing
(Prepared by Consultant for Port Crossing)
Exhibits: F.mail from Trpy Boring rpgardingForeign Trade Zone
and question regarding Tax Abatements
Exhibits: Houston Chronicle Articles:
o City of Pasadena Presented with Trade Zone Proposal
o City of La Porte Approached about Foreign Trade Pact
SUMMARY & RECOMMENDATION
A consultant representing Clay Development has asked to speak to Council regarding the possibility of establishing
a Foreign Trade Zone.
We have provided some general information for Council regarding Foreign Trade Zones.
Note that the City has, in the past, issued a letter of support regarding foreign trade zones in our ETJ. They were
issued based on the premise that there was no affect on local ad-valorem taxes and on our Industrial District
Agreement.
If Council wishes to consider establishing Foreign Trade Zones we would need to understand the effect of such
declaration on other Economic Development Incentives, i.e.
o The Industrial District Agreements
o The Tax Abatement Guidelines
o The Tax Increment Reinvestment Zone
Included in that review Council may wish to consider the level oflocal participation (from 0-100%) which I
understand can be set by a separate agreement. This would still allow companies to benefit from exemption or
deferral from Federal duty.
Action Required by Council:
Receive direction from Council regarding letter of no objection and/or local participation in inventory exemption.
5 - ,31)-0 Lp
Date
Foreign Trade Zone (FTZ) Request
by IMS Worldwide on behalf of
Underwood Business Park 200+/- Ac and
Port Crossing (formally Texas Import/Export) 300+/- Ac
Note to City Council:
These notes are meant to supplement previous information supplied on FTZ's. They can serve as
an outline for discussion and questions during the May 22nd Workshop.
Back2round
Council has been provided information in previous workshops regarding a request to establish a
General Purpose FTZ for Underwood Business Park. Since then, Port Crossing has also
requested a FTZ.
o There are two types ofFTZ's - we will be discussing a General Purpose Zone
o General Purpose Zone covers a specified area
o Sub Zone - by contract with a specific company/dies when company leaves
o If a company qualifies, remember there are several "Federal level" benefits
The basic decision is to determine the following:
o Does the City of La Porte wish to offer no objection to the creation of a FTZ?
o Does the City of La Porte wish to participate in the local (qualified) exemptions offered
in Foreign Trade Zones? If so, at what level_%
Once a decision is made it is essentially final (unless the zone is abandoned at the Federal level
for other reasons). Plus, there is the issue of future requests from other groups that suggests La
Porte should adopt one policy for equity purposes.
La Porte Internal Concerns/Relationships
o Industrial District Agreements
o Inventory assessed at 53%
(remember negotiations coming up - and this is subject to change)
o From a relationship perspective we have existing Foreign Trade Zones in the Industrial
District and have offered no objection to creation based on fact that "no effect" on the
IDA's. Therefore, there is no further local inventory exemption
City is currently offering Tax Abatements
o Current published guidelines in place (expire every two years)
o Taxes on structures, land equipment, etc. are abated (above base value) by
declining %-age over 10 years
o Inventory is not abated
o If City decision is to offer no objection and participate in FTZ by offering local
exemptions
o Then we could have a situation where there is both tax abatement (for 10 years)
and the inventory in the FTZ being abated by L %)
o Give incentives to attract what we want
Last, the TIRZ area:
o Collection of Taxes (Increment above base value) within the TIRZ is 'lIhat fuels the TIRZ
o 1 later confirmed with David Hawes that taxes on inventory are not a part ofTIRZ
revenue. Any exemptions on inventory would, however, affect City revenues.
o Mr. Boring has indicated that he now represents the developer of Port Crossing and he
will forward information on projected revenues for Port Crossing (similar to what we
received on Clay Development).
Area approaches on FTZ's
o The closest area cities that may be competing for Economic Development opportunities
have reported the following:
(No formal action to date by Deer Park or La Porte ISD)
o Deer Park - no objections/no local inventory exemptions
o Deer Park ISD no objections/no local inventory exemptions
o Pasadena - encourages the industrial district as location for FTZ requests
o Pasadena ISD (unknown)
o LPISD already offers
. Freeport Exemption and anticipates participating in the FTZ by offering
75% FTZ abatement increment.
o Miscellaneous
o Harris County - no objections/no local inventory exemptions
o Chambers County (Cedar Crossing)
· 65/205 Ac in FTZ - 100% participation (does not include Wal-Mart)
o Goose Creek ISD (unknown)
Timing Concerns (need confirmation)
o June 12 - Regular City Council Meeting
o Also, deadline for submission of items to the Port of Houston Authority Agenda
o June 19 - Port of Houston Commission Meeting Date
o Last date to consider approval of application by the Port of Houston to the
Federal Government
o July (?) - Applications due to the Federal Government
If these schedules are not met, then it could be 6 months to 1 year before next submittal.
(
c
Tax Impact Analysis for
Clay Development & Consulting, Inc.
Underwood Business Park, Phase III (UBP) in
Eastern Harris County
The attached tax impact analysis is based upon job growth and real property investment generated by the
location of the Clay Development & Consulting, Inc., (Clay Development) Underwood Business Park, Phase
ill (UBP) in the site located in Eastern Harris County. The inventory numbers and total investment are
estimates based upon current plans for the facilities if the current companies interested in the project can be
attracted to the project.
The first assumption used in the analysis is that the project decision is made and construction begins by early
2006. The second assumption is that the taxing authority is in agreement on the Foreign-Trade Zone (FTZ or
Zone) issue with Clay Development.
The City of La Porte Park (the City) will see significant benefit with this project. It will increase the value of
the land and will put a significant amount of investment into the land in terms of real property enhancement,
buildings and equipment that will add to the tax roles of the City. The Federal exemptions on inventory tax
collection at the facility will not negatively impact the City, since the inventory is not currently on the City's
tax roles. Furthermore, an estimated 60% of the inventory is currently estimated to qualify for the exemption.
Clay Development is seeking a letter of support or a letter of "no contest" from the City in conjunction with the
FTz Expansion Application that will be required to establish the Zone Site for the facility. The overall net
benefit to the City is anticipated to be an annual tax revenue stream of no less than $700,000 after the FTZ
exemption is granted.
Clay Development has identified that Zone status is a key factor for the marketing of these sites. If the letter of
suPport is garnered from the City, then the development will locate in Eastern Harris County. A failure to
realize a satisfactory FTZ status in Deer Park will make the marketing of the sites to companies versus
neighboring Counties more difficult. This analysis does not include any of the indirect economic benefits of
having this project, and the estimated 275 jobs it would create.
I:\PROJlClay DevelopmentlClay tax namtive City of La Porte.doc
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Tax Analysis
Direct Effects of Underwood Business Park - No FTZ Exemption
La Porte ISO and City of La Porte
2005 2006 2007 2008 2009 2010
Taxable Total Inventory $0 $7,500,000 $20,000,00,0 $20,000,000 $20,000,000 $20,000,000
Total Investment in Building and Equipment $0 $120,000,000 $120,000,000 $120,000,000 $120,000,000 $120,000,000
Total Value of Property - F1 (Real Com.) $2,042,700 $2,042,700 $2,042,700 $2,042,700 $2,042,700 $2,042,700
Real Property Tax Rate - City of La Porte 0.710%
Total Impact on City of La Porte $14,503 $919,753 $1,006,503 $1,008,503 $1,008,503 $1,008,503
l:proYClay OavalopmanVTax Impact (2)
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Tax Analysis
Direct Effects of Underwood Business Park. With FTZ Exemption
La Porte 150 and City of La Porte
2005 2006 2007 2008 2009 2010
Taxable Domestic Inventory $0 $3,000,000 $4,500,000 $4,500,000 $4,500,000 $4,500,000
Total Investment in Building and Equipment $0 $120,000,000 $120,000,000 $120,000,000 $120,000,000 $120,000,000
Total Value of Property - F1 $2,042,700 $2,042,700 $2,042,700 $2,042,700 $2,042,700 $2,042,700
Real Property Tax Rate - City of La Porte 0.710%
Total Impact on City of La Porte $14,503 $887,803 $898,453 $898,453 $898,453 $898,453
l:proYClay DavalopmanllTax Impact (2)
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City of La Porte
Interoffice Memorandum
From:
John Joerns, Assistant City
To:
Mayor and Council
Debra Feazelle, City Manager.
Date:
May 31, 2006
Subject:
Port Crossing/Underwood Business Park
Request for Foreign Trade Zone
Attached is a tax impact spreadsheet for Port Crossing prepared by the consultants (IMS
Worldwide).
A few reminders:
o Although the line item estimates the total revenue to the City (based on certain
assumptions).
o The City will not realize the (increased) revenue component for property, buildings and
equipment.
o This component is revenue for the TIRZ until December 31, 2029 (unless dissolved
sooner).
o It is programmed for public infrastructure improvements with approximately $11 million
already pledged for reimbursement.
o The inventory component would be revenue to the City.
Secondly:
o The Underwood Business Park is also the site for Packwell, which has requested a Tax
Abatement agreement (declining percentage for 10 years).
o Council may want to weigh this if local exemption for qualified inventory is considered
for the entire 200 Ac Park.
11lml
c: Cynthia Alexander, Assistant City Manager
Tax Analysis
Direct Effects of Port Crossing - With FTZ Exemption
City of La Porte
Taxable Domestic Inventory
Total Investment in Building and Equipment
Total Value of Property - F1
Real Property Tax Rate - City of La Porte
Inventory Percent Qualifying for FTZ
Inventory Percent not Qualifying for FTZ
Exemption Given for FTZ
Total Revenue to the City of La Porte
Total FTZ Exemption
2006
$1,000,000
$12,000,000
$25,600,000
$272,058
$2,002
2007
$7,500,000
$52,000,000
$25,600,000
$589,194
$15,017
2008
$20,000,000
$92,000,000
$25,600,000
$936,916
$40,044
2009
$25,000,000
$171,000,000
$25,600,000
$1,523,305
$50,055
2010
$25,000,000
$171,000,000
$25,600,000
$1,523,305
$50,055
2011
$25,000,000
$171,000,000
$25,600,000
0.710%
60.000%
40.000%
53.000%
$1,523,305
$50,055
Joerns. John
From:
Sent:
To:
Cc:
Subject:
Trey W. Boring [trey.boring@imsw.com]
Thursday, May 25, 2006 3:31 PM
Joerns, John
Feazelle, Debra
RE: Johnson Development - Proposed FTZ Site Location
A.
You can set your policy any way you want to set it regarding abatements.
If you are giving abatements and you want the exemption benefit waived you can do that as
a taxing entity. What it does is set you up to manage multiple policies as opposed to one
uniform policy. I only mention that to say that you can set up what you want, but then
you will need to manage each of the scenarios.
I believe that if you do that you will need to include that in a policy statement for the
city so that it does not become a situational exemption. If you deal with it as a policy,
you don't have to deal with one company complaining about unfair treatment because company
A got something they didn't. We find that case anytime there is no policy and an entity
deals with this on a situation by situation basis.
Trey W. Boring
Sr. Vice President
IMS Worldwide, Inc.
Ph. (281) 554-9099
Fx. (281) 554-9506
Cell. (832) 385-8524
trey.boring@imsw.com
www.imsw.com
-----Original Message-----
From: Joerns, John [mailto:JoernsJ@ci.la-porte.tx.us]
Sent: Thursday, May 25, 2006 3:07 PM
To: Trey W. Boring
Cc: Feazelle, Debra
Subject: RE: Johnson Development - proposed FTZ Site Location
Trey--switch topics back to the Foreign Trade Zone Consideration
City Council will have a meeting on June 7th (6:30pm) to discuss FTZ- I think the no
objection is a lock--remains to be seen how they approach the local (inventory) exemption.
You furnished a spreadsheet earlier for impact on the Clay Development site based on
certain assumptions. Do you have a similar one for Port Crossing-if so, please send.
~.
Next question-if local exemption is considered for Underwood Business Park-can companies
that get tax abatements (within that development) be excluded from the inventory
exemption? In other words within an FTZ can it be a case by case basis where they get
either the tax abatement or the local FTZ exemption? If not there is a sort of double
whammy!
Thanks--e-mail-call-whatever.
JJ
-----Original Message-----
From: Trey W. Boring [mailto:trey.boring@imsw.com]
Sent: Tuesday, April 18, 2006 3:26 PM
To: Joerns, John; Christina Ousman; Feazelle, Debra
Cc: Admin Email Group; Curtis D. Spencer
Subject: RE: Johnson Development - Proposed FTZ Site Location
Thanks John,
you have cleared up what HCAD and no one else could.
1
HoustonChronicle.com - Pasadena presented with trade zone proposal
Page 1 of2
HoustonChronicle.com -- http://www.HoustonChronicle.comISection: Pasadena/Baytown news
May 24,2006, 1:54PM
Pasadena presented with trade zone proposal
By CAROL CHRISTIAN
As many as 1,500 new entry-level jobs and annual tax revenue of at least $250,000 could await
Pasadena if the City Council approves the city's first Foreign Trade Zone, officials say.
An agreement between the city and LIT Industrial
Limited Texas Partnership was approved on first
reading at Tuesday's council meeting. The
agreement specifies that the company will not be
exempt from any city taxes if the zone is
established.
The agreement must also be approved on second
reading, which is expected at 7:30 p.m. May 30 at
City Hall, 1211 E. Southmore Ave.
LIT owns 84 acres at Texas 225 and South Street
where it plans to build an industrial park, said Trey
W. Boring, senior vice president of the consulting
firm IMS Worldwide Inc.
ADVERTISEMENT
I GRADUATED IN
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LIT intends to build and rent out six "cross-dock facilities" - warehouses where shipments are
transferred from one mode of transportation to another or are repackaged, Boring said.
The agreement that City Council approved Tuesday states that LIT's tenant companies will not ask for
tax breaks on their inventory if the zone is established in Pasadena. Although the federal statute that set
up the Foreign Trade Zone program allows companies to seek exemptions from inventory taxes, LIT's
agreement with Pasadena states that it will waive that right.
The LIT site will not be a new zone but will be an expansion of Foreign Trade Zone 84, which is
administered by the Port of Houston Authority. Zone 84 includes all Foreign Trade Zone sites in Harris
County.
Established in 1983, Zone 84 has been expanded 34 times since then, according to the Web site of the
U.S. Foreign Trade Zones Board. Altogether, Zone 84 includes 1,758 acres, port officials said.
http://www.chron.com!cs/CD Alprintstory .mpl/nb/pasadena/news/3 885869
5/25/2006
HoustonChronicle.com - Pasadena presented with trade zone proposal
Page 2 of2
If the Pasadena City Council approves the agreement with LIT on second reading, it could take eight
months to a year before the zone gets final approval from the Foreign Trade Zones Board in
Washington, Boring said.
The process includes submitting a request to the Port of Houston for review by port staff members. If the
review is favorable, the staff members recommend that port commissioners pass a resolution to submit
the expansion application to the board in Washington, said port spokeswoman Argentina James.
Houston Port officials typically dispense with their part of the process quickly, Boring said.
In addition to the LIT site in Pasadena, Boring said he is representing owners of four other potential
Foreign Trade Zone expansion sites in Harris County. He said he will present all five to the port at the
same time, after agreements are approved by the city councils involved.
One of the other sites consists of two adjacent properties in Pasadena's industrial district near the
Bayport Container Terminal.
Two more sites involve a single owner, Clay Development, which has land at Texas 225 and
Underwood Street. Part of the land is in La Porte and part is in Deer Park, so it is considered to be two
expansion sites, Boring said.
The fifth proposed expansion site is in La Porte, near Texas 146 and McCabe Road.
While waiting for federal approval, LIT can go ahead with construction and other preparations, Boring
said.
LIT's inclusion in Foreign Trade Zone 84 will be good for Pasadena, Boring said, because the zone will
help diversify the city's business base and will bring back entry-level jobs paying $12 to $18 an hour.
"These are the jobs where you can go to work with just a high school education," he said.
By contrast, automation at the petrochemical plants has raised the education bar for new employees to a
minimum of two years of college, he said.
caro/. christian@chron.com
HoustonChronicle.com -- http://www.HoustonChronicle.comISection:PasadenalBaytown news
This article. is: httIl:/ /www.cbron.comldisp/story.mpllnb/pasadena/news/388S869 .html
http://www.chron.com!cs/CD A/printstory .mpl/nb/pasadena/news/3 885869
5/25/2006
HoustonChronicle.com - La Porte approached about free trade pact
Page 1 of2
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HoustonChronicle.com -- http://www.HoustonChronicle.comISection: PasadenalBaytown news
May 23, 2006, 6:04PM
La Porte approached about foreign trade pact
Webster firm says city, schools crucial to plan
By JOHN HANDY
Chronicle Correspondent
A representative ofIMS Worldwide Inc. Monday night requested La Porte City Council consider
creating a Foreign Trade Zone at two separate sites.
Trey W. Boring, consultant and senior vice
president of the Webster-base company told council
the projects have the possibility of creating 3,000
jobs.
Boring said one site is at the Underwood Industrial
Park and Texas 225 and the other is located at the
Port Crossing area off Texas 146.
An foreign trade zone is an area inside the United
States that is designated as being outside customs
territory, where items brought into the zone are duty
free.
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When the items brought into the zone leave the
designated area, a duty is paid to the government.
The taxing entities can access inventory tax on all business, which is done currently.
A trade zone can be exempted from a portion of the inventory tax by an agreement with a taxing entity
on imported merchandise or domestic bound products for export.
Boring's presentation covered a variety of issues, but his main points included tax issues and tax
waIvers.
After the meeting, Boring said he felt the City Council was responsive and would be "fair and equitable"
in their judgment whether to grant a foreign trade zone to his company.
http://www.chron.com!cs/CD Nprintstory .mpllnb/pasadenalnews/3 881300
5/25/2006
,HoustonChronicle.com - La Porte approached about free trade pact
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City open to discussion
La Porte Mayor Alton Porter asked several questions but was non-committal.
The council took no action but did discuss bringing representatives from Boring's company back next
week during a special meeting.
Boring, who was hired as a consultant by Robert Clay and Russell Plank, told council that in order for
the project to move forward with the Port of Houston, La Porte must give its approval for the plan.
La Porte Independent School District and Harris County also must approve the plan.
"We've met with La Porte ISD and they are favorable but we must pay them a partial payment in lieu of
taxes," Boring said.
"As for Harris County, they'll sign an exemption waiver for 100 percent payment on their taxes," Boring
said, but added that without La Porte taxing entities signing off on it, the port will not process the
application.
IMC officials say the final approval of the agreements must be made by mid-June.
HQustonChroniGle.com -- http://www.HoustonChronicle.cQm I Section:PasadenalBaytown neWs
This article is: http://www.chron.com!disp/story.mpllnb/pasadenalnews/3881300.html
http://www.chron.com!cs/CDNprintstory .mpllnb/pasadenalnews/3 881300
5/2512006
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Houston Industrial Development
Growth (2003-2006)
· Clay Development - 4.26M+/- sq. ft.
(Deer Park, La Porte, Pasadena Industrial District)
· lNG/LIT - 1.15M+/- sq. ft.
(Pasadena)
· Johnson Development - 2.68M+/- sq. ft.
(Pasadena Industrial District)
· Port Crossing - 3.5M+/- sq. ft.
(La Porte)
Over 11.59M+/- sq. ft.
currently in development
Foreign-Trade Zone
Proposal
· Develop a Foreign-Trade Zone agreement that
provides an exemption that matches the incentives
within the Industrial District agreement.
· Create a provision within the Foreign-Trade Zone
agreement that allows the exemption to remain
consistent with the I ndustrial District.
Indirect Benefits to
the City of La Porte
Estimated New Jobs Created
Estimated New Indirect Jobs Supported by Direct Jobs
Estimated Total New Jobs Created
Estimated Percent of New Workers Living in the City
Estimated Average Income Per New Job Created*
Estimated Total Income Created with New
Development
Estimated Total Income Created with New
Development for Employees in the City
*Assumes Average pay of $12.00/per hour (Source: TEDC)
Year 1 Year 2 Year 3 Year 4 Year 5
200 400 650 900 1,500
300 600 975 1,350 2,250
500 1 000 1 625 2,250 3,750
40.00% 40.00% 40.00% 40.00% 40.00%
$24,960 $24,960 $24,960 $24,960 $24,960
$12,480,000
$24,960,000 $40,560,000 $56,160,000 $93,600,000
$4,992,000
$9,984,000 $16,224,000 $22,464,000 $37,440,000
Tax Analysis for the City of
La Porte - 470/0 Exemption
2006 2007 2008 2009 2010 2011
Estimated Taxable Domestic Inventory $4,000,000 $12,000,000 $24,500,000 $29,500,000 $29,500,000 $29,500,000
Estimated Total Investment in Building &
Eauipment $132,000,000 $172,000,000 $212,000,000 $291,000,000 $291,000,000 $291,000,000
Estimated Total Value of Propertv $27,642,700 $27,642,700 $27,642,700 $27,642,700 $27,642,700 $27,642,700
Real Property Tax Rate. City of La Porte
I nventory Percent Qualifying for FTZ
Inventory Percent not Qualifying for FTZ
Exemption Payment to the City
0.71%
60.00%
40.00%
53.00%
Estimated Total Revenue to the
City of La Porte $1,153,854 $1,478,637 $1,826,359 $2,412,748 $2,412,748 $2,412,748
Estimated Total FTZ Exemption
$8,009
$24,026
$49,054
$59,065
$59,065
$59,065
Closing
· The benefits that a Foreign-Trade Zone
incentive will provide to the City of La Porte
include:
- High quality industrial park tenants
- New employment opportunities
- Additional local economic development
. The overall revenue difference to the City of La
Porte is a difference of only $59,000 per year.