HomeMy WebLinkAbout028452 RES - 12/15/2009RESOLUTION
AUTHORIZING THE CITY MANAGER TO EXECUTE A CHAPTER 380
INCENTIVE AGREEMENT WITH AIR PRODUCTS LLC, FOR THE
DEVELOPMENT AND OPERATION OF A STEAM METHANE
REFORMER, 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, Chapter 380, Texas Local Government Code, authorizes the City Council
to establish and provide for the administration of one or more programs, including
programs for making loans and grants of public money and providing personnel and
services of the municipality, to promote state or local economic development and to
stimulate business and commercial activity in the municipality;
WHEREAS, the City Council has established the City of Corpus Christi Chapter 380
Economic Development Program Policies and Procedures;
WHEREAS, an application for assistance under the Chapter 380 Economic
Development Program has been filed with the City by Air Products LLC for the
construction of improvements to facilities in the City; and
WHEREAS, the property to be covered by the proposed Chapter 380 Incentive
Agreement is located in the city limits of the City of Corpus Christi;
WHEREAS, Air Products LLC is seeking treatment similar to that afforded to industries
in the City's industrial districts for the development and operation of a steam methane
reformer, to be known as the Corpus Christi Hydrogen SMR Facility; and
WHEREAS, the project is not located on property that is owned or leased by a person
who is a member of the city council;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
CORPUS CHRISTI, TEXAS:
SECTION 1. The City Council finds and determines that the terms of the proposed
Chapter 380 Incentive Agreement with Air Products LLC that provides tax treatment
similar to that afforded to industries within the City's industrial districts should be
provided to encourage a total investment of over $60,000,000 in the Corpus Christi
Hydrogen SMR Facility. The City Council finds that the proposed agreement meets and
complies with the City's Chapter 380 Economic Development Program Policies and
Procedures, The City Council further determines that the proposed project is feasible
and the proposed temporary abatement of taxes will inure to the long term benefit of the
City.
SECTION 2. The Chapter 380 Incentive Agreement with Air Products LLC attached in
substantial form as Exhibit A, is approved, and the City Manager is authorized to
execute the agreement.
Air Products 380 Agreement Resolution -- 12092009.doc
Adopted at a regular meeting of the City Council on the 15th day of December, 2009.
ATTEST:
THE CITY OF CORPUS CHRISTI
City Secretary Mayor
APPROVED: 9th day of December, 2009.
R. J ining
First Assistant City Attorney
For City Attorney
Air Products 380 Agreement Resolution -- 12092009
m
Armando Chapa Joe A e
2
2
Corpus Christi, Texas
1
of , 2009
The above resolution was passed by the following vote:
Joe Adame
Chris N. Adler
Brent Chesney
Larry R. Elizondo, Sr.
Kevin Kieschnick
Priscilla Leal ,9
John E. Marez
Nelda Martinez/411/4--
Mark Scott A -1T
Air Products 380 Agreement Resolution -- 12092009
28452
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3
CHAPTER 380
INCENTIVE AGREEMENT
By and Between
CITY OF CORPUS CHRISTI, TEXAS
And
AIR PRODUCTS LLC
Air Products 380 Industrial District Agreement 12112009
CHAPTER 380 INCENTIVE AGREEMENT
This agreement ("Agreement") is made and entered into as of , 2009 ("Effective
Date"), by and between the City of Corpus Christi, Texas, a home -rule municipal
corporation ("City"), and Air Products LLC, a Delaware limited liability company ("Air
Products").
RECITALS
WHEREAS, Air Products desires to develop and operate a steam methane reformer
that produces hydrogen, commonly known as the Corpus Christi Hydrogen SMR Facility
("CC HSMR Facility"), located at 5401 Up River Road, within the city limits of Corpus
Christi, Texas ("Project");
WHEREAS, the City has established a program under Article III, Section 52-a, Texas
Constitution and Chapter 380, Texas Local Government Code ("Chapter 380") under
which the City has the authority to make loans or grants of public funds for the purposes
of promoting local economic development and stimulating business and commercial
activity within the City;
WHEREAS, the City has concluded and finds that this Agreement promotes economic
development in the City of Corpus Christi and meets the requirements under Chapter
380 and the City's established economic development program;
WHEREAS, the City finds that this Agreement is in the best interests of the City and Air
Products;
WHEREAS, the City recognizes the positive economic impact that the investment of at
least $60,000,000 in the Project will bring to the City through development and
diversification of the economy, reduction of unemployment and underemployment
through the retention of existing jobs and the production of new jobs, and the attraction
of new businesses;
WHEREAS, Air Products will directly finance, design, and construct the Project, as
described in this Agreement;
WHEREAS, in consideration of the acquisition, development, and operation of the
Project, and additional jobs located at the Project, the City agrees to use its funds in
order to pay to Air Products the amount of the City Commitment (as defined in this
Agreement) directly in the amount described in Article IV of this Agreement;
WHEREAS, consistent with Article III, Section 52-a, Texas Constitution; Chapter 380;
and other laws, the City and Air Products, as contemplated in this Agreement, agree to
work together to cause the public purposes of developing and diversifying the economy
of the City, reducing unemployment or underemployment in the City, and developing or
expanding transportation or commerce in the City;
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Air Products 380 Industrial District Agreement 12112009
WHEREAS, to ensure that the benefits the City provides under this Agreement are
utilized in a manner consistent with Article III, Section 52-a, Texas Constitution; Chapter
380; and other laws, Air Products has agreed to comply with certain conditions for
receiving those benefits, including performance measures relating to job creation,
Project operations, and the hiring of local and disadvantaged businesses for the
construction of the Project; and
WHEREAS, the City and Air Products desire to enter into this Agreement for their
mutual benefit;
NOW, THEREFORE:
AGREEMENT
For and in consideration of the foregoing recitals and of the mutual promises,
obligations, covenants, and benefits contained in this Agreement, City and Air Products
contract and agree as follows:
ARTICLE I
GENERAL TERMS
Section 1.01. Incorporation of Recitals. The recitals to this Agreement are
incorporated for all purposes.
Section 1.02. Definitions and terms. The terms "Agreement," "Chapter 380," "City,"
"Air Products," "Effective Date," and "Project" have the meanings described in the
Recitals, and the following terms have the following meanings:
"City Commitment" is defined in Article IV.
"Completion" means the date, on or before December 31, 2010, that Air Products
has i) completed construction of the CC HSMR Facility with a minimum
investment of private equity and/or financing of not less than $60,000,000
(including the purchase price for the CC HSMR Facility) and ii) has met its
obligations in the hydrogen supply agreement with its hydrogen consuming
customer, triggering payment obligations in the hydrogen supply agreement.
"Fiscal Year" means the twelve consecutive month period designated by the City
as its fiscal year. As of the date of this Agreement, the City's fiscal year
commences on August 1 and ends on the next succeeding July 31.
"Parties" or "Party" means the City and Air Products, the parties to this
Agreement.
"Property" means the improvements and personal property as described in this
Agreement and as constructed by Air Products upon Completion.
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Air Products 380 Industrial District Agreement 12112009
"Land" means the land on which the Project will be built, as described in Exhibit
B, which is attached and incorporated into this Agreement.
"Reimbursement Account" means the special fund created by the City as
described in Section 4.01.A of this Agreement.
"Useful Life" means the period of time during which the CC HSMR Facility will
operate for its intended purpose, not less than 15 years.
Section 1.03. Singular and Plural. Words used in this Agreement in the singular,
where the context so permits, also include the plural and vice versa. The definitions of
words in the singular in this Agreement also apply to the words when used in the plural
where the context so permits and vice versa.
ARTICLE II
REPRESENTATIONS
Section 2.01. Representations of the City. The City represents to Air Products that
as of the date of this Agreement:
A. The City is a duly created and existing municipal corporation and home rule
municipality of the State of Texas, and is duly qualified and authorized to carry on the
governmental functions and operations as contemplated by this Agreement.
B. The City has the power, authority, and legal right under the laws of the State of
Texas and the City Charter to enter into and perform this Agreement and the execution,
delivery, and performance of this Agreement (i) will not, to the best of its knowledge,
violate any applicable judgment, order, law, or regulation, and (ii) do not constitute a
default under any agreement or instrument to which the City is a party or by which the
City or its assets may be bound or affected.
C. This Agreement has been duly authorized, executed, and delivered by the City, and
constitutes a legal, valid, and binding obligation of the City, enforceable under its terms,
except to the extent that (i) the enforceability of the instruments may be limited by
bankruptcy, reorganization, insolvency, moratorium, or other similar laws of general
application in effect from time to time relating to or affecting the enforcement of
creditors' rights and (ii) certain equitable remedies, including specific performance, may
be unavailable.
D. The execution, delivery, and performance of this Agreement by the City do not
require the consent or approval of any person that has not been obtained.
Section 2.02. Representations of Air Products. Air Products represents to the City
that as of the date of this Agreement:
A. Air Products is duly authorized, existing, and in good standing under the laws of the
State of Texas, and is qualified to do business in the State of Texas.
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Air Products 380 Industrial District Agreement 12112009
B. Air Products has the power, authority, and legal right to enter into and perform its
obligations set forth in this Agreement, and the execution, delivery, and performance of
this Agreement (i) have been duly authorized, and will not, to the best of its knowledge,
violate any judgment, order, law or regulation applicable to Air Products, and (ii) do not
constitute a default under any agreement or instrument to which Air Products is a party
or by which Air Products or its assets may be bound or affected.
C. This Agreement has been duly authorized, executed, and delivered and constitutes
a legal, valid, and binding obligation of Air Products, enforceable under its terms except
to the extent that (i) the enforceability of the instruments may be limited by bankruptcy,
reorganization, insolvency, moratorium or other similar laws of general application in
effect from time to time relating to or affecting the enforcement of creditors' rights, and
(ii) certain equitable remedies including specific performance may be unavailable.
ARTICLE III
AIR PRODUCTS PERFORMANCE REQUIREMENTS
Section 3.01. Project.
A. Air Products agrees:
1. To achieve Completion no later than December 31, 2010.
2. Subject to Section 7.01.C., after Completion, to operate the CC HSMR Facility for
the Useful Life of the CC HSMR Facility.
B. Air Products shall pay all engineering, planning, accounting, architectural, legal fees
and expenses; survey, testing, and laboratory costs; license fees; advertising and other
bidding costs; amounts due under construction contracts; costs of labor and material,
insurance premiums, and other costs and expenses incurred in connection with the
acquisition and construction of the property which costs as set forth in Exhibit A, which
is attached to and incorporated into this Agreement, and which are at least
$60,000,000. Air Products shall provide evidence, satisfactory to the City, of
expenditures of private equity and/or financing for the improvements to the Project in
the amounts required for completion. The City shall not be responsible for any of the
costs out of its current revenues or other sources, except under the reimbursement to
Air Products for the costs of the improvements through the City Commitment as
provided in this Agreement.
C. Air Products agrees to assist the City, if so requested by the City, in the preparation
of any documentation necessary for the preparation and approval of any of the
documents or actions required by the City to perform any of the obligations under this
Agreement. Air Products further shall prepare or cause to be prepared any preliminary
architectural or engineering plans and financial data and projections reasonably
requested by the City in order to assist the City in carrying out the purposes of this
Agreement. Air Products agrees to proceed in good faith towards the development of
the Project. Upon Completion of the Project and during the term of this Agreement, Air
Products shall maintain the property, improvements, and premises in a commercially
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Air Products 380 Industrial District Agreement 12112009
reasonable manner, comparable to the maintenance of similar hydrogen steam
methane reformer facilities; shall operate the Project; and shall timely pay all ad valorem
taxes assessed against the property subject to exercise by Air Products of its legal
rights to contest, protest, or appeal the taxes.
Section 3.02. Job Creation. Air Products' receipt of the City Commitment is subject to
the following job performance requirement ("Jobs Requirement"):
A. Air Products agrees to construct the Project and assure that at the CC HSMR
Facility at least four (4) new full time jobs will be created, with an average annual salary
of at least $60,000, and a gross payroll of at least $240,000 by the end of calendar year
2011. Air Products will use its reasonable efforts to fill any new positions with local
residents residing within the City.
B. As used in this Agreement, the term "jobs" means full-time equivalent positions
providing a regular work schedule of at least 35 hours per week.
C. Upon the request of the City, or its designee, Air Products shall submit
documentation as reasonably necessary to evidence satisfaction that Air Products has
met the Jobs Requirement.
Section 3.03. Operational Requirements.
A. Air Products' receipt of the City Commitment is subject to the following commitment
("Operational Requirement"): Air Products agrees to maintain the Project as a hydrogen
steam methane reformer facility for the duration of the period during which the City
Commitment is paid; any default in this obligation shall result in the forfeiture of the right
to receive reimbursement for any of the City Commitment.
B. Air Products' failure to achieve Completion of the Project within 12 months from the
Effective Date is a default under this Agreement, and Air Products shall forfeit the right
to receive reimbursement.
Section 3.04. Utilization of Local Contractors and Suppliers. In all of its
procurements entered into after the Effective Date, including, but not limited to,
procurements of supplies, materials, equipment, service contracts, construction
contracts, and professional services contracts, Air Products shall use reasonable efforts
to procure same from businesses located within Nueces and San Patricio Counties,
unless supplies or services are not reasonably and competitively available within the
area. Air Products shall make reasonable efforts to determine local availability and
competitiveness of other supplies, materials, equipment, service, construction, and
professional service contracts, but shall not be required to maintain records regarding
this requirement other than those normally kept in its usual course of business.
Section 3.05. Monitoring by the City. Monitoring to determine Air Products'
compliance with the terms of this Agreement for compliance purposes will be done by
the City no less than twice per year during the period of construction, and on an annual
basis after Completion. During the monitoring process, the City will make maximum use
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Air Products 380 Industrial District Agreement 12112009
of any State and Federal submissions for the determination of contract compliance.
Monitoring may be accomplished by City personnel or other persons designated by the
City. Air Products agrees to reasonably cooperate with the City in the monitoring
process.
Section 3.06. Confidential Information. Any information provided in connection with
contract compliance determinations under this Agreement will be treated by the City as
privileged commercial information under Section 552.110 of the Texas Public
Information Act, Chapter 552, Texas Government Code, if each page and sheet is
clearly marked and identified as proprietary information that should not be made
available to the public. If a request is received for the information, the request and
information will be forwarded to the Attorney General for a determination under Section
552.301 of the Act. The City will withhold the information from the requester under
Section 552.305 of the Act, until after the Attorney General's decision is received. The
City will only release the information if directed to do so by the Attorney General.
ARTICLE IV
PROJECT FINANCING AND FUNDING
Section 4.01. Project Financing for the CC HSMR Facility.
A. The City covenants and agrees upon the Effective Date of this Agreement to create
a special fund ("Reimbursement Account") for the benefit of Air Products for the
purpose of paying the City Commitment related to the CC HSMR Facility. The City shall
fund the Reimbursement Account through the term of this Agreement from the
difference between the ad valorem tax payments received from Air Products for the CC
HSMR Facility and the in -lieu of tax amount calculated according to Section 4.02.E
("City Commitment"). The City shall annually fund the City Commitment from the funds
deposited in the reimbursement account under this Agreement and the amount of the
City Commitment under this Agreement shall be paid by the City to Air Products under
the terms of this Agreement.
B. The Reimbursement Account shall always remain unencumbered by the City and
segregated from all other funds of the City. The funds are held in trust by the City for
Air Products to be used subject to and solely under the terms of this Agreement as long
as Air Products is in compliance with this Agreement. The City agrees that it will pay to
Air Products the City Commitment in the form of annual cash payments within ninety
(90) days after Air Products notifies the City that it has paid the ad valorem taxes related
to the CC HSMR Facility each year, which payments shall be made by the City from the
Reimbursement Account.
Section 4.02. City Commitment.
A. Under its authority under Chapter 380, the City agrees to pay the City Commitment
to Air Products. It is intended by the Parties that the City Commitment will be paid by
the City solely out of the Reimbursement Account. The annual amount of the City
Commitment is set forth in Section 4.02.E. Payments to Air Products of the City
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Air Products 380 Industrial District Agreement 12112009
Commitment will commence upon Completion and will continue through the term of this
Agreement. The City agrees that it will pay the City Commitment during the term of this
Agreement (solely from the reimbursement account), if the Project has achieved
Completion by the respective dates required in Section 3.01.A. The payments are not
subject to any reduction, whether offset or otherwise, except under Section 3.03 of this
Agreement.
B. The Parties agree that the City Commitment will be limited solely to the funds
deposited or required to be deposited into the Reimbursement Account under this
Agreement.
C. The City shall determine the amount of the City Commitment annually. The City
agrees to deposit from the ad valorem tax payment of Air Products related to the CC
HSMR Facility an amount equal to the annual City Commitment into the Reimbursement
Account under Section 4.01(A) of this Agreement, and pledges the fund to the payment
of the City Commitment as provided in this Agreement. The City Commitment shall be
remitted to Air Products ninety (90) days after Air Products notifies the City that it has
paid the ad valorem taxes related to the CC HSMR Facility each year.
D. The City shall maintain complete books and records showing deposits to and
disbursements from the Reimbursement Account, which books and records shall be
deemed complete if kept under generally accepted accounting principles as applied to
Texas municipalities. The books and records shall be available for examination by the
duly authorized officers or agents of Air Products during normal business hours upon
request made not less than five business days prior to the date of the examination. The
City shall maintain the books and records throughout the term of this Agreement and
store the books and records for four years after a transaction.
E. The City Commitment is determined as follows:
1. For the purposes of this Section 4.02.E, the following words are defined as set forth
in this Agreement:
"Improvements" have the meaning set forth in Section 1.04(3), Texas Tax Code.
"Personal property" has the meaning set forth in Section 1.04(4), Texas Tax
Code.
2. Each year during the term of this Agreement, the City Commitment is the difference
between (i) the total ad valorem taxes assessed on the property of the CC HSMR
Facility and paid by Air Products, as described in Exhibit B, and (ii) the in -lieu of tax
amount determined as follows:
a. In -lieu of taxes on property located on the land prior to Completion.
(1) An amount in -lieu of taxes on property located on the land prior to Completion equal
to zero percent (0%) of the amount of ad valorem taxes which would otherwise be
payable to City by Air Products.
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Air Products 380 Industrial District Agreement 12112009
(2) On or before July 31 of each year or upon final determination of property values by
NCAD, whichever is later, during the term of this Agreement, Air Products shall provide
to City's Department of Financial Services a written statement of its opinion of the
market value sworn to by an official of Air Products authorized to do the same.
b. In -lieu of taxes on property existing on the land as of Completion and any new
property added to the land after Completion.
(1) For property existing on, or new property added after, Completion, in -lieu of the
percentages of the amount of ad valorem taxes as calculated in paragraph b., the in -lieu
of tax payment shall be based on the percentage shown in the Chart 4.02.E.2.b based
on the year of use. Payments under this provision will not exceed sixty percent (60%)
of the amount of ad valorem taxes that would otherwise be payable to City by Air
Products.
(2) The first year of use for purposes of this Section 4.02.E.2.b:
(i) With respect to property existing on the land as of Completion, shall be deemed to
begin the first day of January after Completion.
(ii) With respect to new property, shall be deemed to begin on the first day of January
next following the date when the new property is placed in use.
(3) Section 4.02.E.b.(2)(ii) applies to construction of new Improvements, Personal
Property, or facilities and to the expansion of existing Improvements, Personal Property,
or facilities on the land.
(4) To qualify as new Improvements, Personal Property, or facilities, the value of all new
Improvements, Personal Property, or facilities in any single year must exceed a
cumulative value of at least $3,000,000.00.
(5) New Improvements, Personal Property, or facilities not included within this Section
4.02.E.2.b are deemed to be included within the provisions of paragraph Section
4.02.E.2.a.
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Air Products 380 Industrial District Agreement 12112009
Chart 4.02.E.2.b
Year of
Use
%
Year of
Use
%
Year of
Use
%
Year of
Use
%
1st year
6%
4th year
26%
7th year
50%
10th
year
60%
2nd year
12%
5th year
34%
8th year
58%
11th
year
60%
3rd year
19%
6th year
42%
9th year
60%
12th or
more
year
60%
d. Minimum and maximum annual increases of in -lieu of tax value.
(1) If in any year, the total in -lieu of tax value of property under Section 4.02.E.2.a and b
is not at least an annual increase of 3% over the previous year, the value of the oldest
new property, which has not been captured under Section 4.02.E.2.b, that is needed to
meet the minimum required increase in value is added to the total in -lieu of value of
property for that year only. Payments under this provision will not exceed one hundred
percent (100%) of the ad valorem taxes on the property existing on the Effective Date,
based on the appraised value of the existing property for that year, and sixty percent
(60%) of the ad valorem taxes that would be payable to City by Air Products for property
constructed after the Effective Date.
(2) However, if in any year, the total in -lieu of tax value of property is more than 6%
higher than the previous year, the increase in in -lieu of tax values for that year shall be
capped at 6%.
e. Fire protection. At Air Products' option, Air Products may pay to the City an
additional amount for City fire protection equal to fifteen percent (15%) of the amount
which would be payable on 100% of assessed value of Improvements located on the
land notwithstanding the provisions of paragraph B. Air Products agrees to use
commercially reasonable efforts to equip the Project with equipment, and to provide
training to its employees, reasonably appropriate to address emergencies or industrial
disasters occurring at the Project.
f. The present ratio of ad valorem tax assessment used by City is one hundred percent
(100%) of the fair market value of property. Any change in the ratio used by City shall
be reflected in any subsequent computations under this Agreement. This Agreement
and the method of determining and fixing the amount of in -lieu of taxes payments under
this Agreement shall be subject to all provisions of law relating to determination of
market value and taxation, including, but not limited to, laws relating to rendition,
assessment, equalization, and appeal.
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Air Products 380 Industrial District Agreement 12112009
g. In determining Air Products' in -lieu of tax amount required under this Agreement, the
calculation is made utilizing the fair market value of all property determined by NCAD or
its successor under provisions of the Texas Property Tax Code. Air Products shall
timely provide information and reports required under Texas law, rules, and regulations
to NCAD or its designee, so that the appraisal process can be completed under all
applicable state laws. Upon written request each year by the City's Department of
Financial Services, Air Products will provide the City with the certified fair market value
assessment for use in calculation and preparation of the annual in -lieu tax amount. The
calculation must be made without reference to the exemption for pollution control
property in Section 11.31, Texas Tax Code, and Article VIII, Section 1-1, Texas
Constitution, as they presently exist or may be amended, using the fair market value of
pollution control equipment certified by NCAD. In addition, all the amounts shall be
calculated without reference to any new tax exemption or any increase in an existing tax
exemption enacted after January 1, 1995.
h. If Air Products elects to protest the valuation set on any of its properties by Nueces
County Appraisal District (NCAD) for any year or years during the term of this
Agreement, it is agreed that nothing in this Agreement precludes the protest and Air
Products has the right to take all legal steps desired by it to reduce the same, except
with regard to the exemptions in Section 4.02.E.2.g. Notwithstanding any protest by Air
Products, Air Products agrees to pay to City an initial tax payment, on or before the date
payment is due under this Agreement of at least the amount of the taxes on the property
that would be due by Air Products to City under this Agreement on the basis of
renditions filed by Air Products with City's Department of Financial Services for that year
under Section 4.02.E.2.b(2) or on the basis of the assessment under this Agreement for
the last preceding year, whichever is higher. When the valuation on the property has
been finally determined, either as the result of final judgment of a court of competent
jurisdiction or as the result of other final settlement of the controversy, then within thirty
(30) days thereafter Air Products shall make to City any additional payment due based
on the final valuation. If as a result of final judgment of a court of competent jurisdiction,
or as the result of other final settlement of the controversy, the valuation of Air Products'
property is established as an amount less than the amount used to compute the initial
tax payment for that year by Air Products, then within thirty (30) days thereafter City
shall make to Air Products any payment due based on the difference between the initial
payment and that which is computed based on the final settlement.
i. The Parties agree that, if, during the term of this Agreement, the Industrial District
agreement terms are renegotiated, the terms as renegotiated shall be applied to this
Section 4.02 for the purposes of calculating the in -lieu of tax amount used to determine
the annual City Commitment.
Section 4.03. Treatment Similar to Land Within Industrial District. To the extent
permitted by law, the Parties agree that, for so long as the property is used for the
purposes of operating a hydrogen steam methane reformer facility, the purpose of this
Agreement is to treat the property related to the CC HSMR Facility as property not
within the corporate limits of the City and to that end, Air Products will expect and
request no services from the City, except services for which contract is made under this
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Air Products 380 Industrial District Agreement 12112009
Agreement or services provided by separate payment by Air Products, such as water,
gas, storm water, or wastewater, City shall provide no services except as similar
services are provided to industries within Industrial District No. 1, and City shall not
require permitting or apply other regulations in a manner other than is done for
industries within Industrial District No. 1, and Air Products shall comply with all
applicable federal and state, statutes, laws, rules, and regulations.
ARTICLE V
ADDITIONAL DUTIES AND RESPONSIBILITIES
Section 5.01. Amendment of Agreement. Upon the request of Air Products, the City
may agree to amend this Agreement to provide for any reasonable changes necessary
to carry out the intent of this Agreement. The City's consent to an amendment of this
Agreement will not be unreasonably withheld.
ARTICLE VI
TERM OF THE AGREEMENT AND OTHER OBLIGATIONS
Section 6.01. Term and termination. This Agreement has a term ("term") beginning
on the Effective Date of this Agreement and continuing coextensive with the term and
continuation of Industrial District agreements for industries within Industrial District
No. 1.
ARTICLE VII
DEFAULT
Section 7.01. Default.
A. If the City does not perform its obligations under this Agreement in substantial
compliance with this Agreement and, if the default remains uncured for a period of 60
days after notice of the default of this Agreement has been given, in addition to the
other rights under the law or given Air Products under this Agreement, Air Products may
enforce specific performance of this Agreement, or seek a writ of mandamus to perform
obligations under this Agreement.
B. If Air Products does not perform its obligations under this Agreement in substantial
compliance with this Agreement, and, if the default remains uncured for a period of 60
days after notice of the default under this Agreement has been given or the longer
period as is reasonably necessary to cure default if the default cannot be cured within
60 days, then the City may terminate this Agreement and City may recover funds
previously paid to Air Products under this Agreement in an amount proportionate to the
uncured default. Such proration is determined by deducting the period during which the
CC HSMR Facility satisfies the Operational Requirements (stated as a percentage) from
100%, and multiplying the resulting percentage to the amount of the City Commitment
paid to Air Products to the date of such termination. For the purposes of this
Agreement, since greater benefits are provided to Air Products in the earlier years of
this Agreement, the amount of funds that the City will be entitled to recover in
connection with such a termination will be greater in the early years of this Agreement,
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Air Products 380 Industrial District Agreement 12112009
and may include up to 100% of the City Commitment for all prior years. For example, if
the CC HSMR Facility never satisfies the Operational Requirements or only satisfies the
Operational Requirements for a limited period of time, the City could recover up to
100% of all prior City Commitment payments during the prior years of this Agreement.
But if Air Products satisfies the Operational Requirements of the CC HSMR Facility for
two thirds of the facility's useful life, the City could only recover 33% of prior City
Commitment paid to Air Products. Recovery of such funds as provided in this
subsection B shall be the City's sole and exclusive remedy, and Air Products' sole and
exclusive liability, for any termination pursuant to this subsection B.
C. Notwithstanding anything in this Agreement that is or may appear to be to the
contrary, if the performance of any covenant or obligation to be performed under this
Agreement by either Party is delayed as a result of circumstances that are beyond the
reasonable control of the Party (which circumstances may include, without limitation,
pending or threatened litigation, acts of God, war, acts of civil disobedience, fire or other
casualty, shortage of materials, adverse weather conditions (such as, by way of
illustration and not limitation, severe rain storms or below freezing temperatures,
hurricane, or tornados), labor action, strikes, or similar acts) the time for the
performance is extended by the amount of time of the delay. The Party claiming delay
of performance as a result of any of the foregoing "force majeure" events shall deliver
written notice of the commencement of any the delay resulting from the force majeure
event not later than seven days after the claiming Party becomes aware of the
circumstances causing the delay, and if the claiming Party fails to so notify the other
Party of the occurrence of a force majeure event causing the delay, the claiming Party is
not entitled to avail itself of the provisions for the extension of performance contained in
this Section.
D. Should Air Products fail to achieve Completion by the date required in Section
3.01.A, this Agreement terminates without obligation of City to provide reimbursement to
Air Products.
ARTICLE VIII
GENERAL
Section 8.01. Severability. If any provision of this Agreement is held to be invalid or
unenforceable by any court of competent jurisdiction for any reason, the provision is
fully severable, and the remainder of this Agreement remains in full force and effect.
This Agreement must be construed and enforced as if the invalid or unenforceable
provision had never comprised a part of this Agreement.
Section 8.02. Indemnification. Air Products agrees to indemnify, defend,
and hold the City and its respective council members, board members,
officers, employees, and agents, harmless from any actions, suits, liens,
claims, damages, expenses, losses, and liabilities (including reasonable
attorneys' fees and expenses) arising from any grossly negligent act or
omission on the part of Air Products to the extent Air Products is held liable
Page 12 of 16
Air Products 380 Industrial District Agreement 12112009
for the act or omission under a final, unappealable order of a court with
jurisdiction over Air Products or the property.
Section 8.03. Notice.
A. Any notice or other communication required or permitted to be given under this
Agreement must be given to the other Party at the following address:
If to Air Products: Air Products LLC
ATTN: Vice President -Taxes
c/o Air Products and Chemicals, Inc.
7201 Hamilton Boulevard
Allentown, PA 18195-1501
If to the City: City of Corpus Christi
ATTN: City Manager
1201 Leopard Street (78401)
P. 0. Box 9277
Corpus Christi, Texas 78469
With \a copy to: City of Corpus Christi
ATTN: City Attorney
1201 Leopard Street (78401)
P. 0. Box 9277
Corpus Christi, Texas 78469
B. Any the notice or communication is deemed given on the date so delivered or so
deposited in the mail, unless otherwise provided in this Agreement.
C. Either Party may change the above address by sending written notice of the change
to the other Party in the manner provided in Section 8.03.A.
D. With the consent of the receiving Party, notice may be given by facsimile
transmission or electronic mail.
Section 8.04. Amendments and Waivers. Any provision of this Agreement may be
amended or waived if the amendment or waiver is in writing and is signed by the City
and Air Products.
Section 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.
Page 13 of 16
Air Products 380 Industrial District Agreement 12112009
B. If Air Products is seeking City consent to assign, City Council shall consider the
consent to assign within thirty (30) days of the written notification. If the decision is not
received by the Party seeking consent within sixty (60) days of their request for consent,
the assignment is deemed approved.
C. Notwithstanding the foregoing, the City consents to Air Products' assignment to a
lending institution of all of Air Products' rights under this Agreement as security for
repayment of one or more loans to finance the construction or ownership of the Project
or construction of the Improvements.
D. Air Products shall give written notice of its assignment of its rights under this
Agreement to the City within five business days of the occurrence of the assignment.
E. The foregoing provisions of Section 8.05 notwithstanding, any assignment of Air
Products' rights 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 does not release Air
Products from its obligations under Section 3.01.0 of this Agreement.
Section 8.06. Exhibits; Titles of Articles, Sections, and Subsections.
A. The exhibits attached to this Agreement are incorporated in this Agreement and are
considered a part of this Agreement for the purposes stated in this Agreement, except
that in the event of any conflict between any of the provisions of the exhibits and the
provisions of this Agreement, the provisions of this Agreement prevail.
B. All titles or headings are only for the convenience of the Parties, and may not be
construed to have any effect or meaning as to the agreement between the Parties to
this Agreement.
C. Any reference in this Agreement to a section or subsection is considered a reference
to the section or subsection of this Agreement unless otherwise stated.
D. Any reference in this Agreement to an exhibit shall be considered a reference to the
applicable exhibit attached to this Agreement unless otherwise stated.
Section 8.07. Construction. This Agreement is a contract made under and shall be
construed under and governed by the laws of the United States of America and the
State of Texas, excluding conflicts of laws, as the laws are now in effect. Venue for any
action arising under this Agreement lies in the state district courts of Nueces County,
Texas.
Section 8.08. Entire agreement. This written Agreement represents the final
agreement between the parties, and may not be contradicted by evidence of prior,
contemporaneous, or subsequent oral agreements of the Parties. There are no
unwritten oral agreements between the Parties.
Page 14 of 16
Air Products 380 Industrial District Agreement 12112009
Section 8.09. Approval by the parties. Whenever this Agreement requires or permits
approval or consent to be given by either Party, the Parties agree that the approval or
consent may not be unreasonably withheld or delayed.
IN WITNESS WHEREOF, the parties to this agreement have caused this instrument to
be duly executed as of the day of , 2009.
ATTEST CITY OF CORPUS CHRISTI, TEXAS
Armando Chapa 'Angel R. Escobar
City Secretary City Manager
APPROVED AS TO FORM:
R. Jay Reining
First Assistant City Attorney
For City Attorney
Page 15 of 16
Air Products 380 Industrial District Agreement 12112009
AIR PRODUCTS LLC
By:
Charles G. Stinner
Vice President
THE STATE OF PENNSYLVANIA
COUNTY OF
This instrument was acknowledged before me on , 2009, by
Charles G. Stinner, Vice President for Air Products LLC, a Delaware limited liability
company, on behalf of the company.
Notary Public
State of Pennsylvania
Page 16 of 16
Air Products 380 Industrial District Agreement 12112009
Exhibit A
Air Products, LLC
Estimated Project Investment
Tax Exempt Equipment 41,744,135
Tax Exempt Fabrication Materials 2,674,599
Tax Exempt Engineering Labor 4,852,924
Tax Exempt Fabrication Labor 2,964,723
Sub -Contractor Labor & Materials 7,763,619
Total 60,000,000
A-1
Air Products 380 Industrial District Agreement 12112009
Exhibit B
MEDINA CONSULTANTS
ENGINEERING AND SURVEYING
FIELD NOTES DESCRIPTION
Being a 1.61 acre tract of land, more or less, out of that certain 26.40 acres (called 25.97 ac. Tract) which is
out of the Enrique Villareal Grant, Abstract No. 1, Nueces County, Texas, a portion of that certain 42.55
acre tract conveyed to Peter J. Whelan by deed recorded in Volume 145, Pages 359 and 360, Deed Records
Nueces County, Texas, and being the same land set out as Coastal Javelina Addition, as shown by the Map
or Plat thereof, recorded in Volume 54, Page 56 and 57, Map Records Nueces County, Texas and being
more fully described by metes and bounds as follows:
BEGINNING at a point, from which a 3/4inch iron pipe was found bears N 24° 42' 57" W — 59.49 feet for
the northwest comer of said 25.97acre tract, said point being the northwest comer of this tract;
THENCE N 87° 12' 56" E, a distance of 72.00 feet to a point, for the northeast comer of this tract;
THENCE S 02° 47' 82" E, a distance of 98.50 feet to a point, for an inner corner of this tract;
THENCE N 87° 12' 56" E, a distance of 19.24 feet to a point, for a corner of this tract;
THENCE S 02° 47' 28" E, a distance of 449.90 feet to a point, for a corner of this tract;
THENCE N 87° 12' 56" E, a distance of 15.00 feet to a point, for a corner of this tract;
THENCE S 02° 47' 28" E, a distance of 38.10 feet to a point, for the southeast corner of this tract;
THENCE S 87° 12' 56" W, a distance of 90.00 feet to a point, for a corner of this tract;
THENCE N 02° 47' 28" W, a distance of 171.58 feet to a point, for an inner corner of this tract;
THENCE N 83° 07' 43" W, a distance of 139.99 feet to a point, for a corner of this tract;
THENCE N 18° 05' 30" E, a distance of 341.58 feet to a point, for a comer of this tract;
THENCE N 02° 47' 28" W, a distance of 72.28 feet to the PLACE OF BEGINNING containing 1.61
acres of land, more or less.
This Field Notes Description constitutes a legal document, and, unless it appears in its entirety, in its original form, including
preamble, seal and signature, surveyor assumes no responsibility or liability for its correc _ss. It is strongly recommended, for the
continuity of future surveys that this document be incorporated in all future conveyance shout any ; inions or deletions.
t5
May 7, 2008
050503.doc
ictor S. Medina
Registered Professional Land Surveyor
License Number 3419
SUBSIDIARY OF MEDINA CONSULTANTS
7009 S STAPLES — SUITE 102-A — CORPUS CHRISTI, TEXAS 78414 — PHONE 361-993-2955 — FAX 361-993-2955
B-1
Rom
• 200'
PLOT DATE:
2.405 AC.
OUNNTNA6
ooC.e29000DNNI
LINE
DISTANCE
BEAR/NG
L1
59.49'
N 24'42'57' W
12
72.00'
N 67'1256' E
13
98.50' -
5 074728' E
L4
79.24'
N 8712'56' E
L5
449.90'
5 02'47'28' E
16 -
15.00'
N 871256' £
L7
38.70'
S 074728' E
18
90.00'
S 871256' W
L9
177.58'
- N 02'4728' W
110
139.99'
N 850743" W
LII
341.58'
N 18'0530' £
L12
72.28'
N 02'4728' W
INTERSTATE 3"?
GRAPHIC SCALE
200' 400'
600'
Scale: 1. - 200' feet
I. F REBY TWT TO OF 168 KNOWLEDGREGISTERED PROFESSION& E,
EO
R
PEN NS AN ACIWI. SURVEY NIDE ON THE GROUND UNDER YY SUPERVISE*
AND SUBSTANTIALLY COMPLIES WITH THE MEM STANDARDS FOR LAND
SUR,EYBD N TOMS AS SET FORTH BY 114E TEXAS WED OF PROMISOR1E
III EWE
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S.TEM
TEBBIERED PROFESSION!.IND M.WI I*
34
LEM Ns UN
THIS BOUNDARY WAS DONE WITHOUT
THE BENEFIT OF A TTRE COMMITMENT, THUS
EASEMENT ARE SHOWN.
ALL BEARINGS' AND DISTANCES REFER 10
THE TEAS STATE PLANE COORONNIE SMELT
OF 1927, TEXAS SOUTH .20NE
PLAT OF:
BEING A 1.61 ACRE TRACT OF LAND, MORE OR LESS.
OUT OF THAT CERTAIN 26.40 ACRES WHICH IS OUT OF THE
ENRIOUE VILtAKAL GRAM. ABSTRACT No. 1, NUECES
COUNTY, 1EJRAS. A PORTION OF TLNT CERTAIN 42.55 ACRE
TRACT CONVEYED ID PETER J. EWIEUN BY OEM RECORDED
N VOLUME 145. PAGES..359 NID 360. DEED RECORDS NUECES
COUNTY, TEXAS, AND BEING THE SAYE LAND SET OUT AS
COASTAL JAVELIN 40030011, AS MOMN BY THE NAP OR PLAT
01311f. RIIORDED N VOIIAE 54, ME 56 ND 57, MIP RECORDS
WEDS OM IX
Completion Dote: 09/30/0g In. Home: 090906.DWG
Scale: 1" = 200• Sor1eyed by: WT & RC/
Drawn by: RC Checked by: VSM
B-2
090906-1.61oc.
CO
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