HomeMy WebLinkAbout033531 ORD - 12/03/2024One -reading Ordinance 1) Rejecting the requested assignment from Air Products
to HEP Javelina SMR of the current Chapter 380 Incentive Agreement; 2) Declaring
that the current Chapter 380 Incentive Agreement terminates on Dec. 31, 2024
pursuant to Article VI, Section 6.01 of the 380 Incentive Agreement; and 3)
Authorizing the execution of a new Chapter 380 Incentive Agreement with the
existing owner and/or new owner, HEP Javelina SMR LLC, to provide a rebate of
25.5 % of the ad valorem taxes payable to the City on the Hydrogen Steam Methane
Reformer Facility to match the amount payable on improvements under the new
Industrial District Agreement of the City.
Whereas, on December 15, 2009, the City Council authorized Resolution No. 028452
which authorized the City Manager to execute a Chapter 380 Incentive Agreement with
Air Products, LLC for the development and operation of a steam methane reformer that
produces hydrogen, to be known as the "Corpus Christi Hydrogen SMR Facility", that
offers benefits similar to those afforded to industries in the City's Industrial Districts;
Whereas, on Dec. 15, 2009, the parties entered into the agreement titled "Chapter 380
Incentive Agreement by and between City of Corpus Christi, Texas and Air Products LLC",
(the "380 Agreement), under which Air Products LLC agreed to: complete construction
of the Corpus Christi Hydrogen SMR Facility (the "CC HSMR Facility") by Dec. 31, 2010;
operate the CC HSMR Facility for its useful life of at least 15 years; create at least 4 new
full-time jobs at average salary of $60,000 annually; and maintain the CC HSMR Facility
for entire period during which the City Commitment is paid out;
Whereas, the 380 Agreement currently provides for in lieu of tax payments of 60% of the
amount of ad valorem taxes that would otherwise be payable to City by Air Products on
the CC HSMR Facility;
Whereas, Section 8.05 Assignment Clause of the 380 Agreement provides:
"8.05 Successors and Assigns.
A. Except as provided in Article IV, no Party has the right to assign its rights
under this Agreement or any interest in this Agreement, without the prior
written consent of the other Party, except Air Products may assign its rights
and responsibilities under this Agreement to any related, affiliated, or
subsidiary entity to which substantially all of its assets, liabilities, and its rights
to proceed with development of the Project are transferred without the
consent of the City. The written consent may not be unreasonably withheld.
B. If Air Products is seeking City consent to assign, City Council shall consider
the consent to assign within 30 days of the written notification. If the decision
is not received by the Party seeking consent within 60 days of their request
for consent, the assignment is deemed approved."
Whereas, by notice dated November 5, 2024, Air Products LLC notified the City that
effective September 25, 2024, Air Products LLC ("Air Products") and HEP Javelina SMR,
LLC ("HEP") entered into an Asset Purchase Agreement for the sale of the CC HSMR
Facility which is located at 5401 Up River Road, Corpus Christi, Texas and requested City
consent to assignment of 380 Agreement to HEP; and
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Whereas, the City Council finds that any outstanding 380 agreements with a termination
that is tied to the expiration of the industrial districts will terminate on December 31, 2024;
Now therefore, be it ordained by the City Council of the City of Corpus Christi,
Texas that:
Section 1. The requested assignment of the 380 Agreement from Air Products to HEP
is hereby rejected.
Section 2. The 380 Agreement terminates on December 31, 2024.
Section 3. The City Manager or Assistant City Manager is authorized to execute a new
Chapter 380 Incentive Agreement with the existing owner and/or new owner, HEP
Javelina SMR LLC, of the CC HSMR Facility to provide a rebate of 25.5% of the ad
valorem taxes payable to the City on the CC HSMR Facility improvements in order to
match the amount payable to the City under the new Industrial District Agreement which
was authorized by City Council on September 3, 2024, with an expiration date that mirrors
the new IDAs.
Section 4. If for any reason any section, paragraph, subdivision, clause, phrase, word,
or provision of this ordinance shall be held invalid or unconstitutional by final judgment of
a court of competent jurisdiction, it shall not affect any other section, paragraph,
subdivision, clause, phrase, word or provision of this ordinance, for it is the definite intent
of this City Council that every section, paragraph, subdivision, clause, phrase, word or
provision hereof be given full force and effect for its purpose.
Section 5. Upon written request of the Mayor or five City Council members, copy
attached, the City Council: (1) finds and declares an emergency due to the need for
immediate action necessary for the efficient and effective administration of City's affairs
and (2) suspends the Charter rule that requires consideration of and voting upon
ordinances at two regular meetings so that this ordinance is passed and takes effect upon
first reading as an emergency measure on this 3rd day of December, 2024.
Corpus Christi, Texas
(1\ day of bRCQv\, 2024
TO THE MEMBERS OF THE CITY COUNCIL
Corpus Christi, Texas
For the reasons set forth in the emergency clause of the foregoing ordinance, an
emergency exists requiring suspension of the Charter rule as to consideration and voting
upon ordinances at two regular meetings. I/we, therefore, request that you suspend said
Charter rule and pass this ordinance finally on the date it is introduced or at the present
meeting of the City Council.
Respectfu Ily,
Council Members
Paulette Gua
Mayor
PASSED and APPROVED on the 'ICE day of }AI1L.{M, ( , 2024.
Paulette Guajardo,
ATTES
Reb'6ca Huerta, City Secretary
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