THE CITY OF KERRVILLE, TEXAS za December 2, 1996 TO: Carl Browning, Kerrville Independent School District ,/Bob Denson, Ken County John Mosty, Upper Guadalupe River Authority SUBJ: Notification of City of Kerrville's consideration of Tax Abatement Agreement with William and Lyndia Rector, owners of property at 707 Water Street (The Davis Building). Dear Sirs: The city of Kerrville will be considering an agreement with the Rector's at the December 10 City Council meeting to allow the abatement of taxes for improvements made to the above mentioned property. This item was previously scheduled for consideration on November 26, but due to modifications in the proposed agreement was tabled. In accordance with state requirements which govern tax abatements the city is obligated, as the lead taxing entity in this case, to notify you of its intent to take such action. Should this action be taken you will have 90 days from the execution of the agreement to either abate taxes at the same level as the city or to not abate taxes. There is no penalty for choosing not to abate. The Rectors have made improvements to this property amounting to an increase over base value of approximately $108,000. Based on this investment the percentage of this amount that would be eligible for abatement during a five year period would be 75% the first year, 65% the second, 55% the third, 45%n the fourth, and 35% the fifth and final year. Assuming that the city affirms this request I would encourage you to take action on this matter as soon as practical at one of your upcoming meetings. I have included a copy of the revised proposed tax abatement agreement with this letter. Thank you in advance for your help and should you have any questions please do not hesitate to contact me. Sincerely, v k Mc y Director of Human Resources and Economic Development cc: David Oehler, Ken Appraisal District 800JUNCTIONHIGHWAY • KERRVILLE,TEXAS78028~069 • 210/257-8000 OFFICE OF THE CITY ATTORNEY CITY OF KERRVILLE, TEXAS I N T E R MEMO O F F I C E To: Kirk McCarley, Director of Human Resources and Economic Development From: Kevin B. Laughlin, City Attorney ~~~~ Subject: Revisions to Tax Abatement Agreement with Dr. & Mrs. Rector Date: December 3, 1996 Enclosed is the revised tax abatement agreement with Dr. and Mrs. Rector. The primary changes to the agreement are as follows: Paragraph 3 has been amended by changing the date by which three employees must be on the payroll from December 31, 1997, to June 1, 1997, and the manpower reporting date from December 31 of each year to June 30. In rereading the tax abatement guidelines, the manpower report is to be as of June 1 of each year. 2. Paragraph 6 has been amended is such a manner as to not be applicable to a default resulting from too few people being employed as described in Paragraphs 4 and 5. The effect of this change and the change to Paragraph 7 that limits its effect to defaults under Paragraph 6 is to limit the recapture of previously abated taxes to defaults resulting from breaches of the agreement for reasons other than failure to maintain the proper workforce level. 3. Paragraph 11 has been changed to limit inspections conducted during the term of the agreement to agreement compliance matters only. Paragraph 11 has also been modified to limit recapture of previously abated taxes to defaults of the agreement other than those described in Paragraphs 5 and 6, which relate to work force issues. 4. Paragraph 12 has been modified as to the dates, with the first year of abatement being 1997. 5. Exhibit "B" has been modified to delete the reference to the upstairs apartments. 6. Exhibit "E" has been modified to reflect the date required by the abatement guidelines. Please distribute the modified agreement to the other entities and to Dr. Rector. Let me know if you have any questions. TAX ABATEMENT AGREEMENT This Tax Abatement Agreement ("Agreement") is entered into by and between the City of Kerrville, Texas, a home rule city and Municipal Corporation of Ken County, Texas, duly acting herein by and through its Mayor, hereinafter referred to as "City" and William R. Rector and wife, Lyndia A. Rector, hereinafter referred to collectively as "Owner". WITNESSETH: WHEREAS, on May 9, 1995, the City Council of the City of Kerrville, Texas, passed Ordinance No. 95-11 establishing Reinvestment Zone No. 2, City of Kerrville, Texas, for commercial/industrialtax abatement, hereinafter referred to as "Ordinance No. 95-11", as authorized by Chapter 312, Tax Code, V.A.T.S. as amended, hereinafter referred to as the "Code"; and WHEREAS, the City has adopted Resolution No. 90-106, as amended by Resolution No. 90-114 and reaffirmed by Resolution No. 95-110, which resolution adopted appropriate guidelines and criteria governing reinvestment zones and tax abatement agreements to be entered into by the City as contemplated by the Code; and WHEREAS, in order to maintain and/or enhance the commerciaUindustrial economic and employment base of the Kerrville area to the long-term interest and benefit of the City and County, in accordance with Ordinance No. 95-11 and the Code; and WHEREAS, the contemplated use of the Premises, as hereinafter defined, the contemplated improvements to the Premises in the amount as set forth in this Agreement and the other terms hereof are consistent with encouraging development of said Reinvestment Zone No. 2 in accordance with the purposes for its creation and are in compliance with Ordinance No. 95-11 and the guidelines and criteria adopted by the City and all applicable law; and WI~REAS, the Improvements as defined below constitute a major investment within Reinvestment Zone No. 2 that will substantially increase the appraised value of property within the zone and will contribute to the retention or expansion of primary and secondary employment within the City and County; and WHEREAS, the City finds that there will be no substantial adverse affect on the provision of city services or on its tax base and the planned use of the Premises will not constitute a hazard to public safety, health, or welfare, NOW THEREFORE, the parties hereto do mutually agree as follows: 1. The property to be the subject of this Agreement shall be that property described in Exhibit "A", attached hereto and made a part hereof and shall be hereinafter referred to as "Premises". 2. The Owner shall promptly commence construction of the renovations to the Premises, described in Exhibit `B" (hereinafter referred to as "Improvements"), with total construction cost of approximately Fifty Thousand and no/100 Dollars ($50,000) and to be substantially complete on or about December 31, 1996; provided, that Owner shall have such additional time to complete the Improvements as may be required in the event of "force majeure" if Owner is diligently and faithfully pursuing completion of the Improvements. For this purpose, "force majeure" shall mean any contingency or cause beyond the reasonable control of Owner, including, without limitation, acts of God or the public enemy, war, riot, civil commotion, insurrection, governmental or de facto governmental action (unless caused by - acts or omissions of Owner), fires, explosions or floods, and strikes. The date of completion of the Improvements shall be defined as the date a Certificate of Occupancy is issued by the City of Kerrville. 3. The Owner agrees and covenants to diligently and faithfully, in a good and workmanlike manner, pursue the completion of the Improvements as a good and valuable consideration of this Agreement. Owner further covenants and agrees that all construction of the Improvements will be in accordance with all applicable state and local laws and regulations or valid waiver thereof. In further consideration, Owner shall thereafter, from the date a Certificate of Occupancy is issued until the expiration of this Agreement, continuously operate and maintain the Premises as a retail gift shop. 4. The Owner agrees and covenants that the Improvements shall provide employment according to the following accumulative schedule: By June 1, 1997 3 jobs The Owner shall provide to the City annual manpower reports, attached hereto as Exhibit "E" and made a part hereof, not later than June 30 of each year this agreement is in effect indicating the number of employees on the payroll on June 1 of that year. 5. Regardless of anything contained herein to the contrary, the failure by Owner to provide the number of jobs set out in the above schedule shall not be considered an event of default as defined in paragraph 6 below unless the number of jobs actually provided is less than seventy- five percent (75%) of number set out in the schedule. If the actual number of jobs provided at the end of any year is less than the scheduled number but is seventy-five percent (75%) or more, then the percentage of tax abatement for the following year as provided in Paragraph 11, below, shall be reduced for that year. The percentage of tax abatement shall be reduced by the same percentage that the actual number of jobs are less than the scheduled number of jobs. Byway of illustration, the schedule requires 3 jobs by June 1, 1997, but if only 2 jobs are provided, then the tax abatement for 1997 shall be reduced from 75% to 50% (i.e. 2/3 = 66.7% of required jobs, thus 75% less 25%). 6. In the event that (1) the Improvements for which an abatement has been granted are not 2 completed in accordance with this Ageement, or (2) Owner allows its ad valorem taxes owed the city to become delinquent and fails to timely and properly follow the legal procedures for protest and/or contest of any such ad valorem taxes, or (3) Owner breaches any of the terms or conditions of this Agreement other than Paragraphs 4 or 5, then this Agreement shall be in default. In the event that the Owner defaults in its performance of (1), (2), or (3) above, then the City shall give the Owner written notice of such default and if the Owner has not cured such default within thirty (30) days of said written notice, or, if such default cannot be cured by the payment of money and cannot with due diligence be cured within a 90-day period owing to causes beyond the control of the Owner, this Agreement maybe terminated by the City. Notice shall be in writing and shall be delivered by personal delivery or certified mail to: William R. Rector 107 Larry Lee Drive Kerrville, TX 78028 7. As liquidated damages in the event of default as described in Paragraph 6, above, and in accordance with Section 312.205, Tax Code, V.A.T.S., as amended, all taxes which otherwise would have been paid to the City without the benefit of abatement (but without the addition of penalty; interest will be charged at the statutory rate for delinquent taxes as determined by Section 33.01 of the Tax Code) will become a debt to the City and shall be due, owing and paid to the City and within sixty (60) days of the expiration of the above- mentioned applicable cure period as the sole remedy of the City. The City shall have all remedies for the collection of the recaptured tax revenue as provided generally in the Tax Code for the collection of delinquent property taxes. The parties acknowledge that actual damages in the event of default and termination would be speculative and impossible to determine. 8. Owner represents and warrants that the Premises does not include any property that is owned by a member of City's council or boards, agencies, commissions, or other governmental bodies approving, or having responsibility for the approval of, this Agreement. 9. The terms and conditions of this Agreement are binding upon the successors and assigns of all parties hereto. This Agreement cannot be assigned by Owner unless written permission is first granted by City, which permission shall not be unreasonably withheld. No assignment shall be approved if the assignor or assignee are indebted to the City for ad valorem taxes or other obligations. 10. It is understood and agreed between the parties that the Owner, in perforniing its obligations hereunder, is acting independently, and the City assumes no responsibilities or liabilities in connection therewith to third parties. Owner agrees to indemnify and hold City harmless from any and all kinds of claims, losses, damages, injuries, suits, or judgments arising from the intentional or negligent acts of Owner, its heirs, successors, representatives, assigns, 3 employees, agents, or contractors. 11. The Owner further agrees that the City, its agents and employees shall have the right to enter upon the Premises at any reasonable time to inspect the Improvements in order to determine whether the construction of the Improvements is in accordance with this Agreement and all applicable Federal, State, and Local laws, ordinances, and regulations or valid waiver thereof. After completion of the Improvements, the City shall have the continuing right to enter upon and inspect the Premises at any reasonable time to determine whether the Premises are thereafter maintained and operated in accordance with this Agreement. If the City determines that a default of this Agreement not otherwise described in Paragraphs 5 and 6, above, has occurred, the City may, in addition to any other authorized enforcement action, provide to the Owner written notice of such default. For the purposes of this Agreement, the Owner shall have ten (10) days from the date of the notice to cure or remedy such violation. If the Owner fails or refuses to cure or remedy the violation within the ten (10) day period, the Owner is subject to the forfeiture, at the discretion of the City, of any right to any tax abatement for a portion of the period or the entire period covered by the Tax Abatement Agreement. 12. Subject to the terms and conditions of this Agreement, and subject to the rights and holders of any outstanding bonds of the City, a portion of ad valorem real property taxes from the property otherwise owed to the City shall be abated. City hereby acknowledges that it is not aware of any terms or conditions of any outstanding bonds which would invalidate this Agreement. Said abatement shall be an amount equal to the below-stated percentages assessed upon the increased value of the Property and Improvements over the value in the year in which this Agreement is executed, in accordance with the terms of this Agreement and all applicable state and local regulations. The percentage of abatements are as follows: Year 1997 75% abatement Year 1998 65% abatement Year 1999 55% abatement Year 2000 45% abatement Year 2001 35% abatement These abatements shall be for 5 years beginning January 1, 1997. 13. The Owner agrees and covenants that the attached application for tax abatement (Exhibit "C") is a part of this agreement, and Owner further warrants that the information provided in that application is true and correct and that any materially false or misleading information that is provided to the taxing jurisdictions maybe grounds for termination of the agreement, with possible liability for recovery of abated taxes. 14. It is understood and agreed by the City and the Owner that if the Premises has been designated and taxed as agricultural land pursuant to Chapter 23, Subchapter C, Tax Code, 4 V.A.T.S., that this Agreement shall not be effective and no abatement granted until Owner has removed the agricultural use designation and all taxes due pursuant to Section 23.55, Tax Code, V.A.T.S., as amended, (roll back taxes) have been paid. 15. This Agreement was authorized by Resolution of the City Council at its Council meeting on the 10th day of December, 1996, authorizing the Mayor to execute the Agreement on behalf of the City. 16. This Agreement is performable in Kerr County, Texas. WITNESS OR HANDS THIS DAY OF , 19 CITY OF KERRVILLE, TEXAS By: Charles P. Johnson, Mayor ATTEST: Rv~ Sheila Brand, City Clerk APPROVED AS TO FORM: By: Kevin B. Laughlin, City Attorney Bv: William R. Rector By: Lyndia A. Rector D:\WPDOCS\ECODEVLP\CONTRACI~Tax Abatement.wpd 5 EXHIBTT "A" PROPERTY DESCRIPTION Part of Lot 2, Block 24, J.D. Brown's Addition, City of Kerrville, Kerr. County, Texas, otherwise known as 707 Water Street, Kerrville, Texas EXHHIBIT "B" DESCRIPTION OF IMPROVEMENTS Renovation of existing downtown building for use as retail space. CITY t~F KERRVILLE TAX ABATEI~'tE.NT APPLICATION Company Name : C~ i c k F~ S Address: ~o ~ roAT~~ s7-~£eT~ K~n2~~1/~c Telephone : ~ io - 89~- GG z z Name (s) of Principal Ownez, Partners, or Directors of the Company or Corporation: l~~~~iArn /l. R~e102 AiJD Lynic~.'A /~'~• /~tc7oR Contact Person : ~- ~} Nd: A ~ c ~-702 Address: ioo ~A2~Y ~~~ Kt2R/,'~/.~~Tzps Telephone: ~~p_as--~_~3y~ Type of Business Operation Proposed: G,'.~ T s~oP, !-~~g~Ti.,f,/Ts Cu~sTR:~s) Current Location: aY/ EARL G R~r2~ Kt'Rn~~/Ir Years In Business: Ioy 1'!' ~ ` x ~ "' a Tr/Y .z ~ o o s j „p,c a -~.,.~- ' Note : Certain Additional Drawings May Be Required Prior to Approval . Proposed Cost of Improvements: $ S'o~ o00 (e~a~7_ cosT r'~ b~ fno~,~~/~~~ w~,-. ~~~~ Number of Jobs the Project Will Create: 3 Expected Source of Applicants For Jobs Created: ~. o ~ ~ Estimated Annual Payroll: $~~s,poo Source of Project Funding: P~RSoN.~/ -f~,,,a/s Please describe the type and value of any economic development incentive recruested: Abp l.•GA~7','d rJ ~02 T,4x A 6A-?`t.rl6,~T ; a RR ;~,v.[37`~,f.~T" z vti,.~ vM~..c2 ~Qso(v?,'e,~ ~/o. 9s-~~o. o-~ ~4pr~:! .~s ~99.f-. App~.~A,~% ,'s :.~ -~~ ~ a,.~`t-o,,.~~ 2 e ~N,,LST~.r~7" z oNe ~-z. In addition to the information provided "on page 1 of this application, please provide the following information with your•application. 1. A plat showing the precise location of the property, all xoadways within 200 feet of t_he site, and all existing zoning and land uses on the site and within 200 feet of the site.- Pl-cast s~ A%/~cl-c~ 2. A complete legal description of the property. f ~2~ o ~ I,oT 2 13 /ocl~ .2 y~ /3RoWN C7a?+?c~' c,.rn7'i< 1TRSrr} 3. .X~ny other information you feel will assist the City in determining the economic impact of the project .on the City of Kerrville. • bn~C o,G !~-` l'J~~•lo~;CGS /~-vivo/,a7to ,•N Duw..~70..~,.~r j~~,~Oi,,~r•e.~ Pnedr<7 OfD;carip ~„~ 4. Company financial statements will be required. `°"'R~°" ~~5~'I ``''f`• CERTIFICATION: I hereby certify that the information contained in this application is true and correct to the best of my nowledge. Name Title Date Atte t: am Title Date City or Kerrville Received: Name Title Date EXHIBIT "D" RESOLUTION OR OTHER AUTHORIZATION OF OWNER'S BOARD OF DIRECTORS NOT APPLICABLE TO THIS AGREEMENT EXHIBIT "E" MANPOWER REPORT I, William R. Rector, do certify that on June 1, ,there were _ individuals employed full time at 707 Water Street, Kerrville, Texas. William R. Rector STATE OF TEXAS § COUNTY OF KERR § BEFORE ME, the undersigned Notary Public, on this day did personally appear William R. Rector, owner of the property located at 707 Water Street, Kerrville, Texas, being by me duly sworn on his oath deposed and said that he is duly qualified and authorized to make this affidavit and that every statement contained in the Manpower Report is within his knowledge true and correct. SUBSCRIBED AND SWORN BEFORE ME on the day of , 19_, to certify which witness my hand and official seal. Notary Public, State of Texas THE CITV OF KERRVILLE, TEXAS November 18, 1996 TO: Carl Browning, Kerrville Independent School District 'Bob Denson, Kerr County John Mosty, Upper Guadalupe River Authority SUBJ: Notification of City of Kerrville's consideration of Tax Abatement Agreement with William and Lyndia Rector, owners of property at 707 Water Street (The Davis Building). Dear Sirs: The city of Kerrville will be considering an agreement with the Rector's at the November 26 City Council meeting to allow the abatement of taxes for improvements made to the above mentioned property. In accordance with state requirements which govern tax abatements the city is obligated, as the lead taxing entity in this case, to notify you of its intent to take such action. Should this action be taken you will have 90 days from the execution of the agreement to either abate taxes at the same level as the city or to not abate taxes. There is no penalty for choosing not to abate. The Rectors have made improvements to this property amounting to an increase over base value of approximately $108,000. Based on this investment the percentage of this amount that would be eligible for abatement during a five year period would be 75% the first year, 65% the second, 55% the third, 45% the fourth, and 35% the fifth and final year. Assuming that the city affirms this request I would encourage you to take action on this matter as soon as practical at one of your upcoming meetings. I have included a copy of the proposed tax abatement agreement with this letter. Thank you in advance for your help and should you have any questions please do not hesitate to contact me. Sincerely, Kirk McC Director of Human Resources and Economic Development cc: David Oehler, Ken Appraisal District ~a 800JUNCTIONHIGHWAY • KERI2NILl.E,TD(AS78028~069 • 210/257-8000 THE STATE OF TEXAS § COUNTY OF KERR § TAX ABATEMENT AGREEMENT This Tax Abatement Agreement ("Agreement") is entered into by and between the City of Kerrville, Texas, a home rule city and Municipal Corporation of Kerr County, Texas, duly acting herein by and through its Mayor, hereinafter referred to as "City" and William R. Rector and wife, Lyndia A. Rector, hereinafter referred to collectively as "Owner". WITNESSETH: WHEREAS, on May 9, 1995, the City Council of the City of Kerrville, Texas, passed Ordinance No. 95-11 establishing Reinvestment Zone No. 2, City of Kerrville, Texas, for commerciaUindustrial tax abatement, hereinafter referred to as "Ordinance No. 95-11", as authorized by Chapter 312, Tax Code, V.A.T.S. as amended, hereinafter referred to as the "Code"; and WHEREAS, the City has adopted Resolution No. 90-106, as amended by Resolution No. 90-114 and reaffirmed by Resolution No. 95-110, which resolution adopted appropriate guidelines and criteria governing reinvestment zones and tax abatement agreements to be entered into by the City as contemplated by the Code; and WHEREAS, in order to maintain and/or enhance the commerciaUindustrial economic and employment base of the Kerrville area to the long-term interest and benefit of the City and County, in accordance with Ordinance No. 95-11 and the Code; and WHEREAS, the contemplated use of the Premises, as hereinafter defined, the contemplated improvements to the Premises in the amount as set forth in this Agreement and the other terms hereof are consistent with encouraging development of said Reinvestment Zone No. 2 in accordance with the purposes for its creation and are in compliance with Ordinance No. 95-11 and the guidelines and criteria adopted by the City and all applicable law; and WHEREAS, the Improvements as defined below constitute a major investment within Reinvestment Zone No. 2 that will substantially increase the appraised value of property within the zone and will contribute to the retention or expansion of primary and secondary employment within the City and County; and WHEREAS, the City finds that there will be no substantial adverse affect on the provision of city services or on its tax base and the planned use of the Premises will not constitute a hazard to public safety, health, or welfare, NOW THEREFORE, the parties hereto do mutually agree as follows: 1. The property to be the subject of this Agreement shall be that property described by metes and bounds and map attached hereto as Exhibit "A" and made a part hereof and shall be hereinafter referred to as "Premises". 2. The Owner shall promptly commence construction of the renovations to the Premises, described in Exhibit "B" (hereinafter referred to as "Improvements"), with total construction cost of approximately Fifty Thousand and no/100 Dollars ($50,000) and to be substantially complete on or about December 31, 1996; provided, that Owner shall have such additional time to complete the Improvements as may be required in the event of "force majeure" if Owner is diligently and faithfully pursuing completion of the Improvements. For this purpose, "force majeure" shall mean any contingency or cause beyond the reasonable control of Owner, including, without limitation, acts of God or the public enemy, war, riot, civil commotion, insurrection, governmental or de facto governmental action (unless caused by acts or omissions of Owner), fires, explosions or floods, and strikes. The date of completion of the Improvements shall be defined as the date a Certificate of Occupancy is issued by the City of Kerrville. 3. The Owner agrees and covenants to diligently and faithfully, in a good and workmanlike manner, pursue the completion of the Improvements as a good and valuable consideration of this Agreement. Owner further covenants and agrees that all construction of the Improvements will be in accordance with all applicable state and local laws and regulations or valid waiver thereof. In further consideration, Owner shall thereafter, from the date a Certificate of Occupancy is issued until the expiration of this Agreement, continuously operate and maintain the Premises as a retail gift shop. 4. The Owner agrees and covenants that the Improvements shall provide employment according to the following accumulative schedule: By December 31, 1997 3 jobs The Owner shall provide to the City annual manpower reports, attached hereto as Exhibit "E" and made a part hereof, within sixty (60) days following the end of each calendar year. 5. Regardless of anything contained herein to the contrary, the failure by Owner to provide the number of jobs set out in the above schedule shall not be considered an event of default as defined in paragraph 6 below unless the number of jobs actually provided is less than seventy- five percent (75%) of number set out in the schedule. If the actual number of jobs provided at the end of any year is less than the scheduled number but is seventy-five percent (75%) or more, than the percentage of tax abatement for the following year as provided in paragraph 11 below shall be reduced. The percentage of tax abatement shall be reduced by the same percentage that the actual number of jobs are less than the schedule number of jobs. By way of illustration, the schedule requires 3 jobs by December 31, 1996, but if only 2 jobs are provided, then the tax abatement for 1997 shall be reduced from 75% to 50% (i.e. 2/3 = 2 66.7% of required jobs, thus 75% less 25%). By way of clarification, failure to provide at least sixty-six and 70/100 percent (66.7%) of the number of jobs shown on the above schedule shall be considered an event of default of this Agreement. 6. In the event that (1) the Improvements for which an abatement has been granted are not completed in accordance with this Agreement, or (2) Owner allows its ad valorem taxes owed the city to become delinquent and fails to timely and properly follow the legal procedures for protest andlor contest of any such ad valorem taxes, or (3} Owner breaches any of the terms or conditions of this Agreement, then this Agreement shall be in default. In the event that the Owner defaults in its performance of (1), (2), or (3) above, then the City shall give the Owner written notice of such default and if the Owner has not cured such default within thirty (30) days of said written notice, or, if such default cannot be cured by the payment of money and cannot with due diligence be cured within a 90-day period owing to causes beyond the control of the Owner, this Agreement maybe terminated by the City. Notice shall be in writing and shall be delivered by personal delivery or certified mail to: William R. Rector 107 Larry Lee Drive Kerrville, TX 78028 7. As liquidated damages in the event of default and in accordance with Section 312.205, Tax code, V.A.T.S., as amended, all taxes which otherwise would have been paid to the City without the benefit of abatement (but without the addition of penalty; interest will be charged at the statutory rate for delinquent taxes as determined by Section 33.01 of the Tax Code) will become a debt to the City and shall be due, owing and paid to the City and within sixty (60) days of the expiration of the above-mentioned applicable cure period as the sole remedy of the City. The City shall have all remedies for the collection of the recaptured tax revenue as provided generally in the Tax Code for the collection of delinquent property taxes. The parties acknowledge that actual damages in the event of default and termination would be speculative and impossible to determine. Owner represents and warrants that the Premises does not include any property that is owned by a member of City's council or boards, agencies, commissions, or other governmental bodies approving, or having responsibility for the approval of, this Agreement. 9. The terms and conditions of this Agreement are binding upon the successors and assigns of all parties hereto. This Agreement cannot be assigned by Owner unless written permission is first granted by City, which permission shall not be unreasonably withheld. No assignment shall be approved if the assignor or assignee are indebted to the City for ad valorem taxes or other obligations. 10. It is understood and agreed between the parties that the Owner, in performing its obligations hereunder, is acting independently, and the City assumes no responsibilities or liabilities in connection therewith to third parties. Owner agrees to indemnify and hold City harmless from any and all kinds of claims, losses, damages, injuries, suits, or judgments arising from the intentional or negligent acts of Owner, its heirs, successors, representatives, assigns, employees, agents, or contractors. 11. The Owner further agrees that the City, their agents and employees shall have the right to enter upon the Premises at any reasonable time to inspect the Improvements in order to determine whether the construction of the Improvements is in accordance with this Agreement and all applicable Federal, State, and Local laws, ordinances, and regulations or valid waiver thereof. After completion of the Improvements, the City shall have the continuing right to enter upon and inspect the Premises at any reasonable time to determine whether the Premises are thereafter maintained and operated in accordance with this agreement and all applicable Federal, State, and Local laws, ordinances and regulations. If the City determines that a violation of a Federal, State or Local law, ordinance or regulation exists on the Premises, the City may, in addition to any other authorized enforcement action, provide to the Owner written notice of such violation. For the purposes of this Agreement, the Owner shall have ten (10) days from the date of the notice to cure or remedy such violation. If the Owner fails or refuses to cure or remedy the violation within the ten (10) day period, the Owner is subject to the forfeiture, at the discretion of the City, of any right to any tax abatement for a portion of the period or the entire period covered by the Tax Abatement Agreement. 12. Subject to the terms and conditions of this Agreement, and subject to the rights and holders of any outstanding bonds of the City, a portion of ad valorem real property taxes from the property otherwise owed to the City shall be abated. City hereby acknowledges that it is not aware of any terms or conditions of any outstanding bonds which would invalidate this Agreement. Said abatement shall be an amount equal to the below-stated percentages assessed upon the increased value of the Property and Improvements over the value in the year in which this Agreement is executed, in accordance with the terms of this Agreement and all applicable state and local regulations. The percentage of abatements are as follows: Year 1996 75% abatement Year 1997 65% abatement Year 1998 55% abatement Year 1999 45% abatement Year 2000 35% abatement These abatements shall be for 5 years beginning January 1, 1996. 13. The Owner agrees and covenants that the attached application for tax abatement (Exhibit "C") is a part of this agreement, and Owner further warrants that the information provided in that application is true and correct and that any materially false or misleading information that is provided to the taxing jurisdictions may be grounds for termination of the agreement, 4 with possible liability for recovery of abated taxes. 14. It is understood and agreed by the City and the Owner that if the Premises has been designated and taxed as agricultural land pursuant to Chapter 23, Subchapter C, Tax Code, V.A.T.S., that this Agreement shall not be effective and no abatement granted until Owner has removed the agricultural use designation and all taxes due pursuant to Section 23.55, Tax Code, V.A.T_S., as amended, (roll back taxes) have been paid. 15. This Agreement was authorized by Resolution of the City Council at its Council meeting on the 26`~ day of November, 1996, authorizing the Mayor to execute the Agreement on behalf of the City. 16. This Agreement is performable in Kerr County, Texas. WITNESS OR HANDS THIS DAY OF , 19 CITY OF KERRVILLE, TEXAS By: ATTEST: By: Sheila Brand, City Clerk APPROVED AS TO FORM: By: D'~WPDOCS~ECODE VLP~CONTRACTffax Abatement.wpd Kevin B. Laughlin, City Attorney Charles P. Johnson, Mayor William R. Rector By: By: Lyndia A. Rector 5 EXHIBIT "A" PROPERTY DESCRIPTION Part of Lot 2, Block 24, J.D. Brown's Addition, City of Kerrville, Kerr County, Texas, otherwise known as 707 Water Street, Kerrville, Texas EXHIBIT "B" DESCRIPTION OF IMPROVEMENTS Renovation of existing downtown building, with downstairs area being renovated for use as retail space and upstairs renovated to be used as three residential apartments, approximately 2700 square feet total area. CITY OF RERRVILLE TAX ABATEMENT APPLSCATION Company Name : C t2 i c k F7 S Address : ~ 0 7 c~ ATE s'T~ £ fT, K ~ /tR v; !!.-c Telephone: .2io- SyG-~Gz.z Name (s) of Principal Owner, Partners, or Directors of the Company or Corporation: ~ . W ; ~li Arn R. R ~ c l 0 2 A•~v ~. ~ •,rc~.'A ~n • /4t c7~e Contact Person: ~-yN~ig R~GT2 Address: ioo r~aaY x...u, Kt~n~%~/R~TxAs Telephone: Rio-as`~-33yK Type of Business Operation Proposed: G ; ~ % s ~°P , ~PA~T"'E^'TS (u~ sT.s.'R:) Current Location: a y/ FAR L G L1/t/1 ~, xfRrt/i//! Years In Business: /o y.c~~S Expected Date of Opening : o ~d6¢R ~~ i 5 9.S- Please provide a brief description of the project: (ie., new building, building expansion, type of construction, square f~o^otage) ~rl`/0//}T'dN DT l~AViS (~/r'/d.~NGj t7oWNSTRiaS -~02 G~~T' S~C~o~ ~1rSTr9iR$ ~-a'L 3 ftES~~.~,~T:k( fr~~ARTi~,f.uTs ,gp~,ROx;~~7'f/Y ~~oo s~,.a~ce -~~-~'" . Note: Certain Additional Drawings May Be Required Prior to Approval. Proposed Cost of Improvements : $ Soy o00 (~~~c-~ c o sT i ~ b-~ ono v,'~~~/ ~~.,-. Number of Jabs the Project Will Create: 3 Expected Source of Applicants For Jobs Created: ~.ocA/ Estimated Annual Payroll : $ ' ,~'S, o00 Source of Project Funding: P~asaNa/ ~u~v~s Please describe the type and value of any economic development incentive requested: flip li cf~~,`vnJ ~-02 Ti4K Ali F}-1`~rn~r,,,T ; ,v (Z~ i,vv.[s/~ml./T z.DN~ ~N~~c2 R~..solvT;onf ~/o. 9s-r~o. of ~4pR:f ~s 199s-. f~pp~;cA,~% ;s :~ ~ o w~~ wn~ ~ e i •v,~tsT7.r~7` z oNL ~x-z. EXHIBIT "C" In addition to the application, please your application. information provided "on Page 1 of this provide the following information with 1. A plat showing the precise location of the property, all roadways within 200 feet of the site, and all existing zoning and land uses on~the site and within 200 feet of the site. P!-cast s.u Aii~~~,.d 2. A complete legal description of the property. ~(artT a ~ t,aT 2 !.i/oc.k ~Y, /32owN ~9a7+?a~ wnTt< sTarET) 3. Any other information you feel will assist the City in determining the economic impact of the project on the City of Kerrville. bn1~ o,F ~ F-r 13~.'rd.~NG S l~.~.vo/aT0 ..v Duw.~TowN~ RsNov~-T.•eti onedre7" OED%ca'T-io bs~ 4. Company financial statements will be required. `°""`"°" '~"s~''' ``''~f`' CERTIFICATION: I hereby certify that the infarmation contained in this application is true and correct to the best of my nowledge. Name Tint3,e ~~ a 8, i9 9.S^ Date Atte t: am Title Date EXHIBIT "D" RESOLUTION OR OTHER AUTHORIZATION OF OWNER'S BOARD OF DII2ECTORS NOT APPLICABLE TO THIS AGREEMENT EXHIBIT "E" MANPOWER REPORT I, William R. Rector, do certify that on December 31, 19~ there were _ individuals employed full time at 707 Water Street, Kerrville, Texas. William R. Rector STATE OF TEXAS § COUNTY OF KERR § BEFORE ME, the undersigned Notary Public, on this day did personally appear William R. Rector, owner of the property located at 707 Water Street, Kerrville, Texas, being by me duly sworn on his oath deposed and said that he is duly qualified and authorized to make this affidavit and that every statement contained in the Manpower Report is within his knowledge true and correct. SUBSCRIBED AND SWORN BEFORE ME on the day of , 19_, to certify which witness my hand and official seal. Notary Public, State of Texas Item `. 14 Consider and discuss allowing the abatement of taxes for improvements made to Wiiliam and Lyndia Rector, owners of property at 7~7 Water Street {The Davis Puilding). {County Judge) This item was discussed by the Co~_~rt and the Co~_ir^t passed on this item at this time, till the City acts on this item first then the Co~_~nty can act on it. This is to be placed on the next Court's agenda. 1~~~:~<<~t~~?.~~ Item 2.14 Consider anc~ disc~zss allowing the abatement of taxes for improv?meats made to William and Lydia Rector owners of property at 707 Water Street !The Davis Building) Discussion Only December 9, 1996 Vol. U pg 837