ORD 2007-21 - Weatherford International Tax Abatement 06-26-2007 ORDINANCE NO. 2007-21
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
HUNTSVILLE, TEXAS ADOPTING A TAX ABATEMENT AGREEMENT
WITH WEATHERFORD INTERNATIONAL, INC.
WHEREAS WEATHERFORD INTERNATIONAL, INC. has made an application for
tax abatement; and
WHEREAS the property of WEATHERFORD INTERNATIONAL, INC. that would
be subject to the tax abatement will be located in an area
designated as an Enterprise Zone and Reinvestment Zone; and
WHEREAS the City of Huntsville desires to enter into a Tax
Abatement agreement with WEATHERFORD INTERNATIONAL, INC. to
promote economic development within the City;
NOW THEREFORE,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF HUNTSVILLE, TEXAS, THAT:
SECTION 1 : The Tax Abatement agreement attached hereto as Exhibit
"A is approved and adopted. The City Manager and
City Secretary are authorized and directed to execute
the agreement.
SECTION 2 : This ordinance shall take effect immediately from and
after its adoption.
ADOPTED AND APPROVED this 26th day of June, 2007.
TQCITY V LLE, TEXAS
B
J. Turner, Mayor
1 of 2
ATTEST:
CITY SE ETARY
By
W:::
Welter, City Secretary
APPROVED:
By:
Thomas A. Leeper, City Attorney
2 of 2
Weatherford'
July 6, 2007
VIA E-MAIL
VIA FEDERAL EXPRESS
STANDARD OVERNIGHT
City of Huntsville
1212 Ave. M
Huntsville, Texas 77340
Attention: Mr. Glenn E. Isbell
Re: R&D Lab Building— 7587 Highway 75 South
Huntsville, Texas 77340
Dear Mr. Isbell,
Pursuant to your letter dated June 27, 2007, please find enclosed one (1) fully executed
Tax Abatement Agreement regarding the property referenced above.
Should you have any questions or concerns, feel free to contact me at 713-693-4509.
Sincerely,
Valerie M. Rodriguez
Senior Administrative Assistant
Real Estate and Property Management Services
Enclosures: (1)
Cc: Jo-Lynne Busic
Jack Setterberg w/attachments
Troy Delbasty of LB Walker& Associates w/attachments
Weatherford International Inc. 713/693-4000 Main www.weatherford.com
515 Post Oak Blvd.,Suite 600
Houston,Texas 77027
USA
a
TAX ABATEMENT AGREEMENT: HUNTSVILLE ENTERPRISE ZONE AND
REINVESTMENT ZONE
WEATHERFORD INTERNATIONAL, INC.
State of Texas
County of Walker
WHEREAS the City Council of the City of Huntsville, Texas, on October 29, 2002
established an Enterprise Zone and Reinvestment Zone for commercial-
industrial tax abatement, ("Zone") as authorized by Texas Tax Code
Chapter 312, as amended; and
WHEREAS WEATHERFORD INTERNATIONAL, INC. has submitted an application for tax
abatement proposing to install improvements and to employ 10-20 people
with an annual payroll of $400,000 TO $800,000 dollars; and
WHEREAS City and WEATHERFORD INTERNATIONAL, INC. desire to execute a tax
abatement agreement for taxable real property located in the
reinvestment zone; and
WHEREAS WEATHERFORD INTERNATIONAL, INC. is developing taxable real property
that is located in a reinvestment zone; and
WHEREAS this is the first agreement for tax abatement in the reinvestment zone;
and
WHEREAS No property which is subject of this Agreement is owned by a member of
the governing body of a planning board, or commission, or any official
of a local government in Walker County;
NOW THEREFORE,
KNOW ALL MEN BY THESE PRESENTS THAT:
This is an agreement by and among the City of Huntsville, Texas, and
WEATHERFORD INTERNATIONAL, INC., a Texas corporation, acting herein by and through
its duly authorized President.
The City, and WEATHERFORD INTERNATIONAL, INC. agree as follows:
1, WEATHERFORD INTERNATIONAL, INC. proposes to place upon a 20 acre tract of
property at 7587 Highway 75 South, Huntsville, Texas 77340 approximately $3.55
million in new buildings, manufacturing equipment, fixtures, machinery and
equipment. The City agrees to abate from ad valorem taxes the increase in the
ad valorem taxes resulting from the new construction and permanent improvement
attached to the buildings in accordance with the schedule in Section 8 of this
agreement.
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2. WEATHERFORD INTERNATIONAL, INC. has submitted a description of the proposed
improvements to City for its approval, which is incorporated herein for all
purposes. An official set of plans will be designated by it and kept on file
with the City. WEATHERFORD INTERNATIONAL, INC. agrees to place the
improvements in accordance with all applicable laws, ordinances, codes, rules,
requirements or regulations of the City of Huntsville, Walker County, the
State of Texas and the United States. Additionally, WEATHERFORD INTERNATIONAL,
INC. agrees to employ at least 10 people at its reinvestment zone site.
3. At all reasonable times during the improvement of the premises and following
its completion, the City, its respective designees, and other Taxing Units
may inspect ect the premises in order to assure that all construction
workmanship, materials and installations involved in or incident to the
project are performed in substantial compliance with plans approved by the
City and that the conditions and the applicable building permits and
governmental regulations are complied with.
4. The City and Taxing Units agree that, subject to the terms and conditions
contained herein, WEATHERFORD INTERNATIONAL, INC. shall be entitled to an
exemption from taxation as provided for in Section 8 of this agreement for a
period of seven (7) years, and that upon the expiration of such time this
agreement shall terminate. WEATHERFORD INTERNATIONAL, INC. acknowledges and
agrees that the purpose of County and other Taxing Units in entering into this
agreement is to encourage development and redevelopment of the property in the
Zone and, therefore, WEATHERFORD INTERNATIONAL, INC. agrees to limit the use
of the property to further that purpose.
S. WEATHERFORD INTERNATIONAL, INC. shall keep premises insured against loss or
damage by fire or any other casualty, if WEATHERFORD INTERNATIONAL, INC.
pursues diligent mitigation of such damages in order to repair, remodel or
renovate premises in accordance with the plans then the exemption from taxation
as provided for in this agreement shall cease during the time that the premises
are being repaired remodeled or renovated and when premises are restored to
their prior condition the exemption from taxation shall commence for the full
term of the exemption. Should WEATHERFORD INTERNATIONAL, INC. decide not to
repair, remodel or renovate the damaged premises, then the exemption from
taxation as provided for in this agreement shall cease and the premises will be
taxed at full market value pursuant to this agreement. In the event WEATHERFORD
INTERNATIONAL, INC. (i) does not maintain the premises in the restored
condition, (ii) fails to repair, remodel or renovate any damage or destruction
of the premises as provided for in above, (iii) fails to use the premises for
the purposes that are contemplated by this agreement and allows the premises to
become vacant, or (iv) fails to pay all nonabated taxes in the manner required
by Section 7 hereof, then the City shall give WEATHERFORD INTERNATIONAL, INC.
written notice of such deficiencies or failures and if WEATHERFORD
INTERNATIONAL, INC. has not complied within thirty (30) days of the written
notice, the City shall declare this agreement void as to all parties to this
agreement. In such event, the premises shall be deemed taxable and not entitled
to abatement as provided herein from and after the effective date of
termination.
6. The City, other Taxing Units and WEATHERFORD INTERNATIONAL, INC. further agree
that if owner does not diligently, faithfully and conscientiously pursue the
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completion of the contemplated construction and renovation of premises, in
accordance with the plans or revised plans, the City shall have the right to
terminate this agreement, and owner shall pay the City and Taxing Units the
taxes that would have been paid to the City and Taxing Units had not owner's
taxes been reduced under the terms of the agreement, plus interest at the rate
provided for delinquent taxes in accordance with V.T.C.A., Tax Code subsection
33.01 and that such payment of taxes and interest shall be due within thirty
(30) days of City of Huntsville's termination of this agreement and
notification to owner of the termination of this agreement and of the amount of
taxes and interest then due. The taxes and interest are due and become
delinquent and incur penalties and interest as provided by law for ad valorem
taxes imposed by the City and Taxing Units if not paid before February 1st of
the year following the year in which the termination of this agreement occurs.
7, WEATHERFORD INTERNATIONAL, INC. agrees to pay all ad valorem taxes and
assessments owed to the City and/or Taxing Units by it prior to such taxes
and/or assessments becoming delinquent; provided, that WEATHERFORD
INTERNATIONAL, INC. shall have the right to contest in good faith the validity
or application of any such tax or assessment and shall not be considered in
default hereunder so long as such contest is diligently pursued to completion.
In the event owner does contest any such tax or assessment, it shall
nevertheless, promptly pay the City and/or taxing units prior to its becoming
delinquent, all taxes and assessments which it is not so contesting. If owner
undertakes any such contest, it shall so notify the City and or taxing units
and keep the City and/or taxing units apprised of the status of such contest.
Should WEATHERFORD INTERNATIONAL, INC. be unsuccessful in such contest, it
shall promptly, pay the taxes, penalties, and/or interest, resulting therefrom.
This agreement shall not take effect until such time as owner has paid all such
taxes.
8. (a) WEATHERFORD INTERNATIONAL, INC. will submit to the City a
certificate that all improvements to the premises have been completed in
accordance with plans or revised plans. After receipt of this
certificate, the City shall make a final inspection of premises to
determine that premises have been constructed, renovated, or repaired in
compliance with this agreement and upon so finding City shall issue the
Certificate of Compliance authorizing the exemption from taxation. The
tax abatement provided for by this agreement shall begin with the tax
role for the calendar year 2008 and shall end with tax roll for the
calendar year 2015.
(b) Taxes on improvements, including fixed machinery and equipment,
used for commercial or industrial purposes placed in service on
the property prior to January 1, 2008, shall be abated as
follows:
January 1, Construction phase - 100% abatement
January 1, (Year 1) 100% abatement
January 1, (Year 2i 100% abatement
January 1, (Year 3), 100% abatement
January 1, (Year 4), 80% abatement
January 1, (Year 5; 60% abatement
January 1, (Year 6; 40% abatement
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i
January i, (Year 7) 20%abatement
January 1, (Year 8) no abatement.
(c) The construction phase ends upon the earliest to occur of the
following events:
(1) when commercial production of a product or a provision of a
service is achieved at the facility, or
(2) when the architect or engineer supervising construction issues a
certificate of substantial completion, or some similar document;
or
(3) one year after the date of this agreement.
The determination of the end of the construction phase shall be made by
the City, in its sole and absolute discretion, based upon the above
criteria and such other factors as the City may deem relevant. The
determination of the City shall be conclusive, and any judicial review of
such determination shall be governed by the substantial evidence rule.
(If the construction phase ends prior to January 1, 2008, then the
schedule provided for above shall be advanced one (1) year.)
(d) City also agrees to waive building and public improvement permit
fees in an amount not to exceed $10,000.
9. If any provision of this agreement is held to be illegal, invalid, or
unenforceable under the present or future laws effective while this agreement is
in effect, such provision shall be automatically deleted from this agreement,
and the legality, validity and enforceability of the remaining provisions of
this agreement shall not be affected thereby, and in lieu of such deleted
provision, there shall be added automatically as part of this agreement a
provision as may be possible and yet be legal, valid and enforceable.
10. This agreement shall be construed under and in accordance with the laws of the
State of Texas and all obligations of the parties created hereunder are
performable in Walker County, Texas.
11. No amendment, modification or alteration of the terms hereof shall be binding
unless the same shall be in writing, dated subsequent to the date hereof and
duly executed by the parties hereto.
12. This agreement may be assigned by owner upon giving written notice to City and
Taxing Units of such assignment and the parties thereto.
The parties hereto have executed or caused to be executed by its duly authorized
officials, this agreement in multiple counterparts, each of
equal dignity, on this the _ day of 2007.
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WEATHE OR INTERNAT NAL INC.
r
By:
Bur M. Mart ' Sr.
Vice Preside t and Secretary
THE CITY OF IUNTSVILLE, TEXAS
By:
KEVIN P. EVANS
CITY MANAGER
ATTEST
By:
Danna Welter, City Secretary
APPROVED;-
By: '
THOMAS A. E PE , City Attorney
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