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2001-264AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE A TAX ABATEMENT AGREEMENT WITH PETERBILT MOTORS COMPANY, A DIVISION OF PACCAR INC SETTING FORTH ALL THE REQUIRED TERMS OF THE TAX ABATEMENT AGREE- MENT IN ACCORDANCE WITH THE TERMS OF CHAPTER 312 OF THE TEXAS TAX CODE, SETTING FORTH THE VARIOUS CONDITIONS PRECEDENT TO PETERBILT MOTORS COMPANY, A DIVISION OF PACCAR INC RECEIVING THE TAX ABATE- MENT, PROVIDING FOR A SEVERABILITY CLAUSE, AND PROVIDING AN EFFEC- TIVE DATE WHEREAS, on the 31st day of July, 2001, after a public heanng duly held m accordance with Tex Tax Code §312 201 (the "Act"), the City Council passed Ordinance No 2001-,~'q (the "Ordinance") estabhshlng Relnvestment Zone No V, C~ty of Denton, Texas as a commer- cial/industrial relnvestment zone for tax abatement (the "Zone"), as authorized by Title 3, Chap- ter 312, Subehapter B of the Act, and WHEREAS, on the 1n~l day of June, 2001 Peterbilt Motors Company, a division of PAC- CAR Inc submxtted an appheatlon for tax abatement with various attachments to the City con- cerumg the contemplated use of certmn property located within the Zone, and WHEREAS, the City Council finds that the contemplated use of the premises and the contemplated improvements to the premises, as indicated by Peterbilt Motors Company, a divi- sion of PACCAR Ine are consistent with encouraging the development of the Zone ~n accordance with the purposes for its creation and are m compliance with the Denton Tax Abatement Policy, and WHEREAS, the C~ty Council deems it m the pubhc interest to enter ~nto a Tax Abate- ment Agreement with Peterbilt Motors Company, a division of PACCAR Ine, NOW, THERE- FORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS ~ That the findings contained in the preamble to this ordinance are true and correct and are adopted as a part of the whole ordinance ECTI~ That the City Council finds and determines the following 1 That the contemplated use of the premises and the contemplated improvements of the prem- ises, as indicated by Peterbilt Motors Company, a diwslon of PACCAR Inc are eonsastent w~th encouragmg the development of the Zone in accordance with the purposes of its crea- tion and are m compliance with the Denton Tax Abatement Pohcy 2 That the City Council finds that thc improvements sought by Peterbilt Motors Company, a division of PACCAR Inc within the Zone are feasible and practical and would be a benefit to the land to be mcluded in the Zone and to the City after the expiration of the Tax Abatement Agreement to be entered into with Peterbilt Motors Company, a division of PACCAR Inc 3 That the City Counml finds that the Tax Abatement Agreement contains all the terms which are mandatorily reqmred to be included in any tax abatement agreement under §312 205 of the Act 4 That, m accordance with §312 2041 of the Act, the City Council finds that not later than the date on which the City Council considered this ordinance, and not later than the seventh day before the date the City enters into a Tax Abatement Agreement with Peterbilt Motors Com- pany, a dlms~on of PACCAR Inc, that the City Manager, through the Director of Community Development, who are hereby designated and authorized by the City Council to give such notice, delivered to the presiding officer of the Denton Independent School District and Denton County a written notice that the City intends to enter into this Tax Abatement Agreement with Peterbilt Motors Company, a division of PACCAR Inc, and that this notice included a copy of the proposed Tax Abatement Agreement in substantially the form of the Tax Abatement Agreement attached to flus ordmance 5 That before the passage of this ordinance, the City Council held a public heanng in accor- dance w~th §312 201 of the Act end created Relnvestment Zone No V 6 The City Council finds that the project wlthm Remvestment Zone No V is a redevelopment of an existing busmess as defined m the Tax Abatement Policy and requires additional incen- tives to promote economic development that generally satisfies the requirements of the policy and the City Council hereby waives the minimum threshold requirement wlthm the policy for tax abatement and authorizes a tax abatement of 100% on the increased valuation of the im- provement in each year covered by the tax abatement agreement over the value of the prop- erty for the year in which the tax abatement agreement is executed as set fourth in the Agreement ~ That the Mayor, or in her absence, the Mayor Pro Tern, is hereby author- lzed to execute a Tax Abatement Agreement with Peterbilt Motors Company, a d~vislon of PACCAR Inc, substantially in the form of the Tax Abatement Agreement which is attached to and made a part of this ordinance for all purposes as if written word for word herein ~ That the City Council hereby mstruets and authorizes the City Manager to inspect, audit, and evaluate the progress of Peterbilt Motors Company, a division of PACCAR Inc to determme if it has met all of the conditions of the attached Tax Abatement Agreement prior to the tax abatement gomg into effect SECTION 5 That if any section, subsection, paragraph, sentence, clause, phrase, or word in this ordmance, or apphcatlon thereof to any person or circumstance is held invalid by Page 2 of 3 any court of competent 3unschctlon, such holding shall not affect the validity of the rem~umng portions of this orchnanee, the City Cotmml of the City of Denton hereby declares that they would have enacted such remmmng portions despite any such vah&ty SECTION.~__.6_6 That this ordinance shall become effective immediately upon its passage and approval , 001 PASSED AND APPROVED this the EUL1NE BROCK, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY BYf_j .. F- - -- - APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY Page 3 of 3 STATE OF TEXAS § TAX ABATEMENT AGREEMENT BETWEEN COUNTY OF DENTON § THE CITY OF DENTON AND PETERBILT CITY OF DENTON § MOTORS COMPANY, A DIVISION OF PACCAR INC Tbas Tax Abatement Agreement (the "Agreement") ~s entered into by and between the City of Denton, Texas (the "City"), duly acting herein by and through ~ts Mayor, and Peterbilt Motors Company, a division of PACCAR Inc, a Delaware Corporation authorized to do business m the State of Texas (the "Owner"), duly acting herein by and through its authorized officers WHEREAS, the City has adopted a resolution stating that ~t elects to be ehglble to par- tlclpate m tax abatement and has adopted guidelines and criteria govermng tax abatement agree- ments known as the Denton Tax Abatement Policy, and WHEREAS, on the 6th day of June, 2000, the City Council of Denton, Texas (the City Council") adopted the Denton Tax Abatement Pohcy (the "Policy") through the passage of Reso- lution No 2000-028 which Policy was amended on the lSt day of May 2001, by Resolution No 2001-020, which states that the City elects to become eligible to participate ~n tax abatement, which is attached hereto and incorporated hereto as Exhibit "A" and made a part of this Agree- ment for all purposes, and WHEREAS, the Policy constitutes appropriate "gu~dehnes and criteria" governing tax abatement agreements to be entered into by the C~ty as contemplated by SecUon 312 002 of the Texas Tax Code, as amended (the "Code"), and WHEREAS, on the 31st day of July 2001, the C~ty Council passed Ordinance No ~/-~-b--~/ (the "Ordinance") estabhshmg Remvestment Zone No V, City of Denton, Texas, as a commer- cml/industrial remvestmant zone for tax abatement (the "Zone"), as authorized by Title 3, Chap- ter 312, Subchapter B of the Code (the "Act"), and WHEREAS, Owner owns certmn real property being approximately 8 752 acres at or near 1700 Woodbrook within the corporate limits of the City of Denton, Texas as more particu- larly described m Exhibit "B" attached hereto and incorporated hereto by reference and made a part of th~s Agreement for all purposes (the "Pr~a~ses") located entirely w~thm the Zone, and WHEREAS, on the 1st day of June, 2001, Owner submitted an application for tax abate- ment with venous attachments to the City concerning the contemplated use of the Premises (the "Apphcat~on for Tax Abatement"), attached hereto and incorporated herein as Exhibit "C" and made a part ofthts Agreement for all purposes, and WHEREAS, the City Council has found that the contemplated use of the Premises, the Contemplated Improvements (as herelnaRer defined) to the Premises as set forth m tius Agree- ment, and the other terms hereof are consistent with encouragtng development of smd Zone m accordance with the purposes for its creation and are in compliance with the Policy and the Ordi- nance and s~mllar gmdelmes and criteria adopted by the City and all apphcable law, and WHEREAS, the Cl~y Council has found that the terms oft[ns Agreement, and the Prem- ises and Contemplated Improvements, meet the apphcable gmdehnes and criteria heretofore adopted by the City Council, whach are set forth m the Pohcy, and WHEREAS, the Caty Council has found that the Project constitutes a redevelopment pro- ject of the~type wbaeh reqmre addataonal mcentaves to promote economac development that gen- erally satisfy the requirements of the Pohcy, and the Caty Council has waaved the mammum threshold and determaned that ~t as necessary to exceed the maximum filly percent (50%) m tax abatement to develop new constructaon an the form of an addition to the Owner's Division Head- quarters, and WHEREAS, wnttan notaee that the Caty intends to enter ~nto thas Agreement, along wath a copy of thas Agreement, has been furmshed by the City, ~n the manner and by the tame pre- scribed by the Code, to the presachng officers of the govermng bodaes of each of the taxang units an which the Premises as located, NOW, THEREFORE, the Caty and Owner for and in consaderataon of the premases and the promases contained hereto do hereby contract, covenant, and agree as follows 1 CONDITIONS OF ABATEMENT A A condmon of the Abatement (defined below) as that, by December 31, 2002 (subject to force majeure delays not to exceed 180 days), the Owner shall make a eapatal invest- ment of at least $5,000,000 an the Contemplated Improvements on the Premases, mcludang reno- vataon, reconstruction, and repairs of the exastang building and amprovements for the redevelop- ment and renovataon of the facflaty for office use The kand, number, loeataon and details of the Contemplated Improvements are desenbed m the Apphcataon for Tax Abatement For the pur- poses of t[ns section, capatal investment wath respect to constructaon, renovating and repamng the Contemplated Improvements shall include costs related to the development and improvement of the real estate, including wathout lmaatataon, construction costs and design and engmeenng costs and such nnprovements and renovataons made by lessees of Owner that constatute perma- nent real property amprovements to the Premases For the purposes of t[ns paragraph, the term "force majeure" shall mean any carcumstance or any condatlon beyond the control of Owner, as set forth m Sectmn 22 "Force Majeure" w[nch makes ~t ampossable to meet the above-mentaoned threshold Prowded, however, should Owner fad to make a capital ~nvestment an the Contem- plated Improvements of at least $5,000,000 on or before December 31, 2002 the Agreement wall terminate and all tax abatements prevaously gaven will be refunded to the Caty by the Owner m accordance w~th Sectaon 1D hereof Provaded, further that Owner shall only be entatled to Tax Abatements not to exceed the amount of capital investment w[nch as made by Owner on the Premasea w[nch results m an increase m the value of real property improvements over the as- sessed value of the amprovements on January l, 2001 - the year in w[nch thas Agreement as exe- cuted No abatement wall be gaven on any increase m the value of the land or personal property For example, ~f Owner spends $5,000,000 on real property amprovements on the Premises m 2002, but the appraised value of the amprovements increases only $2,000,000 over the appraased Page 2 of 11 value in the 2001 base year, the tax abatement shall be hmlted to the $2,000,000 increase in the apprmsed value of the ~mprovements B A condition of the abatement is that the Contemplated Improvements be con- strutted, that the Owner mmntmn occupancy of the bmldlng for the full ten years of the Tax Abatement, and the Premises be used substantially in accordance w~th the description of the pro- ject set forth ~n the Apphcatlon for Tax Abatement C A condition of th~s abatement IS that throughout the Term of the Abatement, the Contemplated Improvements shall be operated and mmntmned for the purposes set forth hereto - for office use - so that the uses of the Premises shall be consistent with the general purpose of encouraging development or redevelopment of the Zone, except as otherwise authonzed or modified by ttus Agreement D If the total Contemplated Improvements constructed on the project do not meet the threshold value of $5,000,000 by December 31, 2002, this Agreement will be terminated and the Owner shall ~mmedmtely refund all tax abatements granted under th~s agreement by City w~th interest at 7% per annum from the date the Owner received the abatement Such threshold being a condition precedent to receiving a tax abatement If the Owner receives an abatement ~n error, the Owner shall ~mmediately, upon receiving not, ce from the C~ty, remit the amount by which the tax abatement should be reduced w~th interest at Seven percent (7%) per annum from the date the Owner received the abatement E In consideration of the abatement granted here~n Owner agrees to comply w~th all the terms and condlt~ons set forth m this Agreement 2 GENERAL PROVISIONS A The Cay has concluded that it has adopted guldehnes and criteria govermng tax abatement agreements for the C~ty to allow ~t to enter ~nto th~s Agreement contmmng the terms set forth here~n B The C~ty has concluded that procedures followed by the C~ty conform to the re- qmrements of the Code and the Ordinance, and have been and wall be undertaken m coordination with Owner's corporate, employee, and business relations requirements C The Premtses are not m an ~mprovement project financed by tax increment bonds D Neither the Premises nor any of the Improvements covered by th~s Agreement are owned or leased by any member of the C~ty Council, any member of the Planmng and Zomng Commission of the C~ty, or any member of the governing body of any taxing units jmmng ~n or adopting tlus Agreement g In the event of any conflict between the C~ty zomng ordinances, or other C~ty or- dinances or regulatxons, and th~s Agreement, such ordinances or regulations shall control Page 3 of 11 3 ABATEMENT TERMS AND CONDITIONS A In consideration of the Owner meeting all the terms and conditions of abatement set forth herem, the C~ty hereby grants a tax abatement ("Abatement") (1) to Owner relative to all improvements to the Premises (the "Improvements"), such Abatement to be subject to the fol- lowing terms and eondmons B The value of the Abatement on the Premises and the Improvements shall be the following portion of the increase in value of the Improvements on the premises over their value on January 1, 2001, the year in winch this Agreement is executed in accordance with Section 312 204 of the Code ONE-HUNDRED (100%) OF THE INCREASE IN VALUE ON THE IM- PROVEMENTS TO THE LAND ONLY LAND, INVENTORY, EQUIPMENT AND BUSINESS PERSONAL PROPERTY VALUES, AND OTHER TANGI- BLE PERSONAL PROPERTY IMPROVEMENTS ARE NOT ELIGIBLE FOR ABATEMENT C, The real property's current value - the value as of January l, 2001 - may not be abated D Owner shall have the right to protest and contest any or all appraxsals or assess- ments of the Premises and/or Improvements If Owner is successful in obtaining a reductxon In taxes based upon such protest or contest after a tax abatement for that year has been granted, it shall lmmedxately notify the City, through Its C~ty Manager E The term of the Abatement (the "Term") shall begin on January 1, 2002 (the "Be- ginning Date") and, unless sooner terminated as herein provided, shall end on the December 31st lmmedmtely precechng the 10t~ anmversary of the Beginmng Date or December 31,2011 F If the capital investment reqmrements of the Improvements are not met, the tax abatement will not be granted 4 RECORDS AND EVALUATION OF PROJECT A The Owner shall provide access and authorize inspection of the property by City employees and allow sufficient inspection of financial information to insure that the improve- ments are made and the threshold has been met according to the specificataons and conditions of thxs Agreement Such inspections shall be done In a way that wall not interfere with Owner's busmes~ operations Cxty shall annually (or such other tames deemed appropriate by the City) evaluate the Project to ensure compliance with this Agreement Owner shall provide reformation to the City on a form provided by the City for the evaluation The information shall include, without hm~tataon, an inventory hstmg the kind, number, and location of and the total ~nvestment Page 4 of 11 value of all amprovements to the property, ancludmg the value of all bufldangs and other struc- tures and permanent amprovements installed, renovated, repaared or located on the Premases B On or before August 1, the Caty Manager shall make a decasaon and rule on the eligabIhty of the Project for tax abatement based on the certificataon furnished each year by the Owner on or before June 1 of the taxable year and shall so notify Owner, the Joint Commattee on Tax Abatement, and the Caty Council If the Owner as dlssatasfied with the Caty Manager's deci- sion, at can appeal lus decasmn to the Caty Council The City Council's deeasmn on the matter shall be bmthng, final, and not appealable, except for arbatrary and capricious acts and aetaons, gross neghgence or willful mmconduet Any appeal shall be under the substantml evidence rule, provided, however, that notwathstandmg the foregomg, under no careumstances shall the Caty Manager or the Caty Council be authorized to termanate, reduce, or recapture the Abatement unless the condmons of the Abatement are not satasfied wlthan the tame frames specafied hereto C During normal office hours throughout the Term of thas Agreement, provadmg reasonable notice as g~ven to Owner, the Caty shall have access to the Premises by Caty employ- ees for the purpose of mspeetang the Premises and the Improvements in accordance with para- graph 4(A) to ensure that the Improvements are beang made in accordance wath the specafieatmns and conthtaons of thas Agreement and to verify that the conditaons of thas Agreement are beang comphed wath, provaded that such lnspectmns shall not interfere with Owner's normal business operataon$ D The Owner shall annually make a certaficatlon an writing to the Caty Council, the Commissioners Court of Denton County, and the Board of Trustees of the Denton Independent School District, on or before June 1st of each year thas Agreement as ~n effect, that certafies that the Owner is an eomphance with each applicable term of thas Agreement and any other tax abate- ment agreement at may have entered into wath Denton County and the Denton Independent School D~stnct E Nothing an this Agreement shall preclude Denton County and the Denton Inde- pendent School Dastnct from entenng ~nto tax abatement agreements whach contain different terms and condmons than thas Agreement and dafferent port~ons of abatement than shown in paragraph 3B and C of thas Agreement, m accordance wath Section 312 206(c) of the Act, Chap- ter 312, Subchapter B, of the Act, and all other apphcable laws 5 FAILURE TO MEET CONDITIONS A In the event that 0) anY of the conditaons in Sectaon 1 - "Condataons of Abate- ment'' - are not met, or (aa) Owner allows ars ad valorem real property taxes wath respect to the Premases or Improvements, or its ad valorem taxes wath respect to any tangable personal prop- erty, af any, owned by the Owner which as located in the Improvements, owed the City to become delinquent and fails to tamely and properly follow the legal procedures for protest and/or contest of any such ad valorem real property or tangible personal property taxes, or (iii) any other condi- tions of the Abatement Agreement are not met, then a "Condition Failure" shall be deemed to have occurred (at being understood that a Conditaon Failure relating to any condataon set forth in Page 5 of 11 paragraph 1 shall not be deemed to occur merely because at a particular tame at cannot be deter- maned whether such condition wall be met, but shall occur only ff at a pamcular tame at can be definitively determmed that such cond~tion wall not be met ) In the event that a Condition Fail- ure occurs, the C~ty shall give Owner written notme of such Condition Fmlure and if the Condi- tion Fmlure has not been cured or satisfied w]ttun mnety (90) days of said written notme, the Abatement shall be terminated m accordance wah paragraph 1A and E and Owner shall remit the amount of the Abatement plus interest from the tame the Owner received the Abatement for each year the Owner as out of eomphance Provided, however, that if such Condition Fmlure ~s not reasonably susceptible of cure or satisfaction within such ninety (90) day period and Owner has commenced and as pursuing the cure or satisfaction of same, then after first advising City Coun- cil of efforts to cure or satisfy same, Owner may utilize an additional ninety (90) days Tame in addition to the foregoing 180 days may be authorized by the City Council, and such authoriza- tion shall not be unreasonably withheld If a Condition Failure as not cured or satisfied after the expiration of the applicable notice and cure or satisfaction periods, the Abatement shall be termi- nated wath respect to the year m which notice of the Con&t~on Ftulure as given and for all future years It being understood that the Abatement w~th respect to any year prior to the year an wluch notice of the Conchtmn Fmlure as given shall not be forfeited or recaptured except as indicated under Sectton 5B and other applicable sections hereof Notwithstanding any prowslon an th~s Agreement to the contrary, Owner shall refund to the City all tax abatements previously received with interest for the year m which the notice of Condition Failure ~s g~ven B, If, however, the Owner fmls to make any improvements to the existing facility by December 31, 2002, and if Owner fails to invest $5,000,000 in ~mprovements by December 31, 2002, then the Agreement may be terminated by the City and the amount of the Abatement wall be reduced to zero m accordance with Sections lA and D If the Owner ftuls to malntmn its con- tractual obhgat~ons, including Owner's failure to mmntmn occupancy of the building for the full ten years of the Tax Abatement,, then this Agreement may be terminated by the City and the amount of the Abatement wall be reduced to zero an accordance with Section lA and D In th~s event, Owner shall refund to the City all tax abatements previously granted and received under this Agreement wath interest on the amount to be refunded at seven percent (7%) per annum C That an the event of a condition failure by Owner which as not cured or sat]stied as set forth hereto, m addition to a partial or total recapture of the tax abatement, the City may can- cel or modify this Agreement 6 EFFECT OF SALE, ASSIGNMENT, OR LEASE OF PROPERTY A The Abatement with respect to the Project shall vest an Owner and shall be as- signable, w~th City approval, whmh shall not be unreasonably withheld, to any ln&vldual, part- nersh]p, joint venture, corporation, trust or other enmy (irrespective of whether or not such as- signee Is related to or affihated with Owner) which acquires title to the Project Any assignee of Page 6ofll Owner or any assagnee of a darect or mdarect assagnee of Owner shall be treated as "Owner" un- der thas agreement 7 NOTICE All notmes called for or reqmred by thru Agreement shall be addressed to the following, or such other party or address as eather party desagnated m wntang, by certffied mml postage pre- prod or by hand dehvery OWNER CITY PACCAR Inc Machael A Conduff, Caty Manager 777 106th Avenue N E C~ty of Denton Bellevue, WA 98004 215 East MclCdnney P O Box 1518 Denton, Texas 76201 Bellevue, WA 98009 Attn B Robert Crowley D~rector - Domestm and Internataonal Tax 8 CITY COUNCIL AUTHORIZATION This Agreement was authorized by the C~ty Councal by passage of an enabling orthnance at Its meeting on the 31st day of July, 2001, authorizing the Mayor to execute thas Agreement on behalf of the City, a copy of which as attached hereto and ancorporated herein as af written word for word herein 9 BOARD OF DIRECTORS AUTHORIZATION This Agreement was entered into by Owner, pursuant to authority granted by the Peterbilt Motors Company, a davaslon of PACCAR Inc Evadence, whach must be satasfactory to the Caty, that the person sagmng this Agreement is authorized to band Owner to all the terms and condi- tions of the Agreement as attached hereto and incorporated here~n as Exhibit "D" as ~f written word for word hereto 10 SEVERABILITY In the event any section, subsection, paragraph, sentence, phrase or word is held invalid, illegal or unconstatntaonal, the balance of this Agreement shall stand, shall be enforceable and shall be read as af the partaes antended at all times to delete smd anval~d sectaon, subsectaon, para- graph, sentence, phrase, or word In the event that 0) the term of the Abatement wath respect to any property as longer than allowed by law, or (u) the Abatement apphes to a broader classffica- Page 7 of 11 tIon of property than is allowed by law, then the Abatement shall be valid with respect to the classification of property abated hereunder, and the portion of the term, that as allowed by law 11 ESTOPPEL CERTIFICATE Any party hereto may request an estoppel certificate from another party hereto so long as the certificate is requested an connection wnth a bona fide business purpose The certificate, which if requested will be addressed to the Owner, shall include, but not necessarily be limited to, statements that this Agreement xs m full force and effect without default (or if default exists the nature of default and curative action, which should be undertaken to cure same), the remain- ing term of this Agreement, the levels and remalmng term of the Abatement in effect, and such other matters reasonably requested by the party(ies) to receive the certificates 12 OWNER STANDING Owner, as a party to this Agreement, shall be deemed a proper and necessary party m any litigation questioning or challenging the validity of this Agreement or any of the underlying or- dinances, resolutions, or City Council actions authorlzmg same and Owner shall be entitled to intervene m satd litigation 13 APPLICABLE LAW This Agreement shall be construed under the laws of the State of Texas Venue for any action under flus Agreement shall be the State District Court of Denton County, Texas Tlus Agreement is performable in Denton County, Texas 14 RECORDATION OF AGREEMENT A certified copy of this Agreement an recordable form shall be recorded m the Deed Re- cords of Denton County, Texas 15 MUTUAL ASSISTANCE Ctty and Owner agree to do all things necessary or appropriate to carry out the terms and provisions of this Agreement and to aid and assist each other in carrying out such terms and pro- visions Owner and City agree at any time, and from time to tame, to execute any and all docu- ments reasonably requested by the other party to carry out the intent of this Agreement 16 ENTIRE AGREEMENT Page 8 of 11 This instrument with the attached exhibits contains the entire agreement between the par- ties with respect to the transactmn contemplated m this Agreement 17 BINDiNG This Agreement shall be binding on the parties and the respective successors, assigns, heirs, and legal representatives 18 COUNTERPARTS This Agreement may be executed in counterparts, each of whmh shall be deemed an original, but all of which together shall constitute one and the same instrument 19 SECTION AND OTHER HEADiNGS Section or other headings contmned in this Agreement are for reference purposes only and shall not affect m any way the meaning or ~nterpretatlon of this Agreement 20 NO JOiNT VENTURJ~ Nothing contained in this Agreement is intended by the part,es to create a partnership or j olnt venture between the parties, and any lmphcatlon to the contrary is hereby disavowed 21 AMENDMENT Th~s Agreement may be modified by the parties hereto to include other provisions which could have originally been mcluded m this Agreement or to delete provisions that were not originally necessary to this Agreement pursuant to the procedures set forth in Title 3, Chapter 312 of the Code 22 FORCE MAJEURE If, because of flood, fire, explosions, civil disturbances, strikes, war, acts of God, or other causes beyond the control of either party, e~ther party is not able to perform any or all of its obh- gatlons under this Agreement, then the respective party's obligations hereunder shall be sus- pended dunng such period but for no longer than such period of time when the party is unable to perform Page 9 of 11 That thls Agreement was EXECUTED th~s ~/¢~day of _~41~ o} 2001, by duly authorized officials of the City and by Peterbilt Moto(cw~o. mpa~,, a division PACCAR Inc, a Delaware corporation being authorized and in good standing to do business in the State of Texas CITY OF DENTON, TEXAS EULINE BROCK, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY AP ovED AS TO LEGAL FORM HERBERT L PROUTY, CITY;TATTORN DIVISION OF PACCAR, INC DOMESTIC & INTERNATIONAL TAX ATTEST JANIC~ ~[ D AMATO SECRI3T, ARY Page 10 of 11 STATE OF TEXAS § COUNTY OF DENTON § Before me, the undersigned authority, a Notary Public in and for said State of Texas, on th~s day personally appeared Euhne Brock, Mayor for the City of Denton, known to me to be the person who signed and executed the foregoing instrument, and acknowledged to me that this in- strument was executed for the purposes and consideration thermn expresse~/~ Given under my hand and seal of office th~s the Al day pf 2001 ' ..... - ...... Notary Pubhc in andffor the F, ,~°~P~ ANN FORSYTHE I~. ~.~,'~;~ N0tw/Pub,,c $.,e o~ Texas ~ State of Texas ]'<¢'~g,?..~,d't MAY 9, ~002 [ My Commission Expires STATE OF WASHINGTON § COUNTY OF KING § Before me, the undersigned authority, a Notary Public in and for said State of Washing- ton, on th~s day personally appeared B Robert Crowley, on behalf of Peterbilt Motors Company, a division of PACCAR Inc, known to me to be the Director of Domestm and International Tax for PACCAR Inc and to be the person who szgned and executed the foregoing instrument, and acknowledged to me that this instrument was executed for the purposes and consideration therein expressed G~ven under my hand and seal of office this the o2 q day of ~,_-/~-~ ~ , 2001 Notary Public ~n and for the State of Washington My Commission Expires ~ss~~ ~_ Pagellofll EXHIBIT "A" RESOL IONNO / A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS, AMENDING THE POLICY FOR TAX ABATEMENT FOR THE CITY OF DENTON TO ESTABLISH GUIDELINES AND CKITEKIA GOVERNING TAX ABATEMENT AGREEMENTS TO ALLOW WAIVER OF THE FIVE MILLION DOLLAR THRESHOLD AND THE MAXIMUM TAX ABATEMENT PERCENTAGE, TO DEFINE PROFESSIONAL POSITIONS, TO MAKE OTHER CHANGES AS SET FORTH IN THE AMENDED POLICY, AND DECLARING AN EFFECTIVE DATE WHEREAS, on June 6, 2000, the City Council adopted guidelines and cntena, known as the Denton Pohcy for Tax Abatement (sometimes referred to as "Tax Abatement Policy"), passing by Resolution No R2000-028, and WHEREAS, the City Cotmcll desires to promote economic development wlttun Denton, and WHEREAS, providing tax abatement and other economic development incentives within the City and its extratemtonal Iunsdmtlon will likely contribute to the economic development of Denton by encouraging major investment and the creation of jobs, and WHEREAS, the Property Development and Tax Abatement Act, Chapter 312 of the Tex Tax Code, allows the city to establish its own criteria for tax abatement and the City has previously adopted guidelines for tax abatement and resolutions No R90-018, R98-004 and R2000-028, and WHEREAS, the Joint Committee on Tax Abatement, composed of representatives of the City of Denton, the Denton Independent School District, and Denton County have recommended amendments to Section III "Value of Incentives" of the Tax Abatement Policy to allow wmver of the five nulhon dollar threshold and the maximum tax abatement percentage and to define professional positions, which is attached hereto as the amendment to the Tax Abatement Policy, and WHEREAS, any amendment to the Tax Abatement Pohcy requires an affirmative vote of three-fourths of the members of the City Council (slx affirmative votes) in accordance with Section 312 002(e) of the Tax Code, and WHEREAS, the City Council deems it In the public interest to continue to be ehgible for partimpat~on in tax abatement and to amend the new pohcles, guidelines and criteria govermng tax abatement agreements to be known as the Tax Abatement Policy, NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY RESOLVES SECTION 1 That the polices, guidelines and criteria found in the Denton Policy for Tax Abatement are hereby amended by amending Sectaon III "Value of Incentives" to allow a wmver of the five million dollar threshold and the maximum tax abatement pementage on a case-by-case basis, to define professional positions, and to make other changes set forth m the amended policy in accordance w,th the amendment that is attached to this Resolution as Exhibit A and made a part of this Resolution for all purposes From and after the effective date of th~s Resolution, the amended Tax Abatement Policy shall constitute policy gmdellnes and criteria governing tax abatement agreements for the City of Denton in accordance with Chapter 312 of the Tax Code SECTION 2 That the City Council hereby reasserts its decision to become eligible to participate in tax abatement The City Council provides certain tax incentives applicable to business enterprises in various remvestment zones which are established in the City, in accordance with the applicable provisions of Chapter 312 of the Tex Tax Code and m accordance with the guidelines and criteria established in the attached Exhibit A and in the amended Tax Abatement Policy SECTION 3 That save and except as amended hereby, all the remmmng sections, sentences, clauses, paragraphs and phrases of the Denton Policy for Tax Abatement shall remmn in full force and effect SECTION 4 That this resolution shall become effective immediately upon its passage and approval at the regular meeting of the C,ty Council of the City of Denton, Texas, on the 1st day of May, 2001, at which meeting a quorum was present and wluch meeting was held in accordance with the provisions of Tex Gev 't Code .{}551 001, et seq PASSED AND APPROVED this the /"~- day of ~2fi~'/~ ,2001 EULINE BROCK, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY BY t APPR/OVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY Page 2 of 2 EXHIBIT A SECTION III DENTON POLICY FOR TAX ABATEMENT III VALUE OF INCENTIVES The criteria outhned m the Apphcatmn will be used by the Jmnt Committee on Tax Abatement m determining whether or not ~t ~s ~n the best mtercsts of the affected taxing entitles to recommend that tax abatement be offered to a particular project Specific considerations wall include the degree to whmh the md~wdual project furthers the goals and object~vcs of the commtm~ty as described m the Denton Comprehensive Plan, as well as the relative ~mpact of the project New, expan&ng and modermzmg businesses may be considered for abatement ffthe minimum threshold, as described m Table 1 below, ~s met Once a determ~natton has been made that tax abatement should be offered, the value and term of the abatement may be determined by referencing the following table TABLE 1 Estabhshes a framework for cons~denng the length of abatement according to assessed real property value of ~mprovements and of tangible personal property located on the real property VALUE OF STRUCTURE AND PERSONAL PROPERTY YEARS OF PERCENTAGE OF IN MILLION DOLLARS ABATEMENT ABATEMENT 100 10 15- 25% 80 9 15- 25% 65 8 15-25% 50 7 15- 25% 35 6 15- 25% 20 5 15- 25% 15 4 15-25% 10 3 15-25% 5 2 15-25% To quahfy, compames must meet the m~mmum threshold of the pohcy ~n the first 24 months from the execunon of the agreement or as spemfied ~n the tax abatement agreement If upon ~mtml apphcat~on a project quahfies for tax abatement under the gmdehnes set forth ~n th~s pohcy, the taxing ent~t~es may consider granting an add~ttonal 5% abatement for each one of the following factors provided, however, that the total tax abatement does not exceed -1- 50% annually or continue for a period of more than ten years No applicant may receive credit for more than five of the following factors · The project will occupy a bmldlng that has been vacant for at least two years, · The project will create hlgh-sl~lled, h~gh-paylng jobs as documented by the applicant, (A breakdown of number of jobs per job classification and entry level wage per classfficationwfll be used to determine ehg~blhty), · The project will involve a s~gmficant relationship with one of the two tm~verslt~es in Denton, · At least 25% of the new jobs created by the project will be filled by Denton residents, · The project will provide knowledge-based jobs (at least 25 percent of jobs require college bachelors degree at entry level), · The project will donate slgmficant public art to the commumty (To qualify, donation must be approved by Greater Denton Arts Council and City Council), · The project will donate s~gmficant materials/equipment to the public schools (To qualify, donation must be approved by DISD and City Council ), · The project will create lmprovementsto the Denton Central Business District, · The project will result m the formation of a business park, · The project is an lntemat~onal or national headquarters facility The total tax abatement may not exceed 50% annually for ten years All abatements are subject to final approval of the City Council and DISD Board of Trustees, or the County Commlssloner'sCourt Even though a project may meet the cnterm as set forth in this pohcy, an apphcatlon may be demed at the d~scret~on of the City Councd and/or DISD Board of Trustees Tax abatement shall not apply to any pomon of the land value of thc project The thresholds as described in Table 1 are considered gmdchncs for cstabhshmg the Tax Abatement Agreement terms However, thc City and DISD may determine that a lower or higher percentage and/or a shorter or longer term of abatement may bc more appropriate for an individual proJeCt If abatement is approved, the City and DISD may consider applying all or a portion of the abatement in the first year or dunng any shorter period w~thm the term of the tax abatement agreement For example, an approved abatement of 25 percent for four years may be applied as 100 percent abatement for one year When the City of Denton and Denton Independent School D~stnct determine that incentives are required to retain existing businesses whmh propose to improve or redevelop property within the City limits, the Denton City Council and Denton Independent School District Board may consider these "special projects" on a case-by-case basis and reserve the right to waive the minimum threshold and/or exceed fifty percent (50%) m tax abatement The City of Denton and Denton Independent School District may also take into consideration as "special projects" the expansion/redevelopment of existing businesses that create new or additional professional jobs Abatement hareunder will only apply to thc increased valuation of the improvements over the appraised value of the property prior to such improvements as same is established by the Denton Central Appraisal District the year in which the tax abatement agreement is executed The City of Denton and Denton Independent School District may also consider other tax incentives authorized by law -2- Professional jobs are defined as "occupations which require specialized and theoretical knowledge which is usually acquired through college tranlng or through work experience and other training winch provides comparable knowledge, a calling requmng specialized knowledge and often long and intensive academic preparation, requires some research, analysis, report writing and presentations Special licensing, certification, or registration may be required to perform the job task, the work of professional positions is creative, analytical, evaluative, or interpretive, and is characterized by personal responslblhty to keep abreast of and exercise judgment and broad perspective m the application of an organized body of knowledge that is constantly studied to make new discoveries and interpretations or to improve the data, materials and methods, may involve some supervision and budgeting/planmng" When the City of Denton and Denton Independent School District determine that abandoned property may require additional incentives to promote economic development that generally satisfies the requirements of this policy, the taxing entlt~es may wave the mlmmum threshold and/or exceed fifty percent (50%) in tax abatement, or consider other tax incentives for special projects to redevelop abandoned buildings consistent with existing law For the purpose of this pohcy, an abandoned building is defined as a building that has been identified as being suitable for commercial or industrial development, has been vacant for a minimum of five years or has substantially declined in apprased value Abatement would, only be considered on the increased valuation of the improvements in each year covered by the tax abatement agreement over the value of the property for the year in which the tax abatement agreement is executed The City of Denton and Denton Independent School District may also consider other tax incentives authorized by law -3- REso, uT o A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS, REPLACING A POLICY FOR TAX ABATEMENT FOR THE CITY OF DENTON TO ESTABLISH GUIDELINES AND CRITERIA GOVERNING TAX ABATEMENT AGREEMENTS, AND DECLARING AN EFFECTIVE DATE WHEREAS, on January 21, 1998, the City Councd adopted gmdehnes and criteria, known as the Denton Policy for Tax Abatement, passing Resolution No R98-004, and WHEREAS, that Tax Abatement Policy has now expired, and WHEREAS, the City Council desires to promote economic development w~tlun Denton, and WHEREAS, prowd,ng tax abatement and other economic development lncenttves w~th~n the C~ty and its extratemtonal junsdmtlon wdl hkely contribute to the economm development of Denton by encouraging major investment and the creation of jobs, and WHEREAS, the Property Development and Tax Abatement Act, Chapter 312 of the Tex Tax Code, allows the city to establish ~ts own criteria for tax abatement and the City has previously adopted gmdelmes for tax abatement and resolutions No R90-018 and R98-004, and WHEREAS, the Jmnt Committee on Tax Abatement, composed of representatives of the City of Denton, the Denton Independent School D~stnct, and Denton County have recommended a new Tax Abatement Pohcy to replace the expired pohcy, which ~s attached hereto as the Denton Pohcy for Tax Abatement, and WHEREAS, the City Council deems ~t m the public ~nterest to continue to be eligible for partm~patlon m tax abatement and to adopt the new pohcles, gmdehnes and criteria governing tax abatement agreements to be known as the Denton Pohcy for Tax Abatement, NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY RESOLVES ~ That the polices, gmdehnes and criteria found ~n the Denton Policy for Tax Abatement, attached hereto is Exhibit A and made a part of tins Resolution and ~ncorporated here~n for all purposes, are in alt things approved and adopted From and after the effective date of thru Resolutton, the attached Denton Pohcy for Tax Abatement shall constitute pohcy gmdehnes and criteria govermng tax abatement agreements for the C~ty of Denton m accordance w~th Chapter 312 of the Tex Tax Code ~ That pursuant to Tex Tax Code Section 312 002(c) the guidelines and criteria adopted hereto shall be effective for two (2) years, dunng whmh t~me the gmdehnes may be amended or repealed by a vote of~ of the members of the Council SECTION 3 That the C~ty Council hereby reasserts its decm~on to become ehg~ble to pamclpate m tax abatement The C~ty Council prowdes certmn tax Incentives apphcable to business enterprises in various remvestment zones whmh are estabhshed m the City, m accordance with the apphcable prows~ons m Chapter 312 of the Tex Tax Code and ~n accordance with the gmdehnes and criteria estabhshed m the attached Exhibit A SECTION 4 That this resolution shall become effective ~mmedmtely upon ~ts passage and approval at the regular meeting of the City Council of the C~ty of Denton, Texas, on the 6th day of June, 2000, at which meeting a quorum was present and wh~gh meeting was held m accordance w~th the prov~saons ofTex Gov 't Code §551 001, et(~q. PASSED AND APPROVED flus the ~x. day of ~ ,2000 EULINE BROCK, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY Page 2 of 2 EXHIBIT A DENTON POLICY FOR TAX ABATEMENT I GENERAL PURPOSE AND OBJECTIVES The C~ty of Denton (C~ty) and the Denton Independent School District (DISD) are committed to the promotion of high quality development in all parts of the city and to an ongoing improvement in the quality of life for its citizens Insofar as these objectives are generally served by the enhancement and expansion of the local economy, the City and DISD will, on a case-by-case basis, give consideration to providing tax abatement as a stimulus for economic development in Denton It is the policy of the City and DISD that said consideration will be provided in accordance with the procedures and criteria outlined in this document Nothing herein shall imply or suggest that the City or DISD are under any obligation to provide tax abatement to any applicant Denton County ad valorem taxes also may be abated, however, applications will be considered separately under the guidelines of the Denton County tax abatement pohcy All applicants shall be considered on a case-by-case basis Abatements will be considered only as inducements to generate development that otherwise w°uld n°t °ccur Abatements wdl not be considered if constmctlonof a project already has begun Tax abatements, as described in this policy, will be available for new and/or existing fatalities and structures and for businesses wanting to locate, expand or modernize basic industries, corporate office headquarters or distribution centers, except as this policy may be limited for property described in Section 312 211 (a) of the Texas Property Tax Code (Vemons Texas Civil Statutes Annotated, hereinafter referred to as "Tax Code ") 1 II. JOINT TAX ABATEMENT COMMITTEE Requests for tax abatement shall be rewewed by the Joint Committee on Tax Abatement, said Committee being comprised of two elected officmls each from the City, the DISD and Denton County One additional staff person from each junsdmtmn shall be appointed to serve as a nonvoting, ex officio member of the committee The Joint Committee on Tax Abatement serves as a recommending body to the taxing entities regarding whether economic development ~ncentlves should be offered in each ~n&wdual case Its recommendation shall be based upon an evaluation of information submitted in the tax abatement apphcation and any add~t~onahnformat~on requested by the Committee or presented to the Committee The Tax Abatement Apphcat~on ~s presented as Exhth~t A of this policy All meetings of the Joint Committee shall be held m comphance with the Texas Open Meetings Act, Chapter 551 of the Texas Government Code III VALUE OF INCENTIVES The cmena outhned ~n the Appllcat~on will be used by the Joint Committee on Tax Abatement ~n determining whether or not ~t is m the best ~nterests of the affected taxing entrees to recommend that tax abatement be offered to a particular project Specffic considerations will include the degree to which the ln&Vldual project furthers the goals and objectives of the community as described in the Denton Comprehensive Plan, as well as the relative ~mpact of the project New, expanding and modermzmg businesses may be considered for abatement ~f the rmmmum threshold, as described in Table I below, is met Once a determlnatmn has been made that tax abatement should be offered, the value and term of the abatement may be determined by referencing the following table 2 TABLE 1 Estabhshes a framework for cons~denng the length of abatement according to assessed real property value of ~mprovements and of tangxble personal property located on the real property VALUE OF STRUCTURE AND PERSONAL PROPERTY YEARS OF >ERCENTAGE OF IN MILLION DOLLARS ABATEMENT ABATEMENT 100 10 15- 25% 80 9 15- 25% 65 8 15- 25% 50 7 15- 25% 35 6 15- 25% 20 5 15- 25% 15 4 15- 25% 10 3 15- 25% 15-25% 5 2 To quahfy, companies must meet the m~mmum threshold of the pohcy ~n the first 24 months from the execuUon of the agreement or as specffied m the tax abatement agreement If upon m~tml apphcaUon a project quahfies for tax abatement under the gmdehnes set forth m th~s pohcy, the taxing entrees may consider granting an additional 5% abatement for each one of the following factors prowded, however, that the total tax abatement does not exceed 50% annually or continue for a period of more than ten years Noapphcant may receive credit f°r m°re than fiv~e °f the f°ll°wmg fact°rs · The project wall occupy a bmld~ng that has been vacant for at least two years, · The project wall create h~gh-skfiled, h~gh-pay~ng jobs as documented by the apphcant, (A breakdown of number of jobs per job classfficatmn and entry level wage per class~ficatmn wall be used to determine ehg~bthty), The project wall revolve a s~gmficant relauonsh~p w~th one of the two umversmes ~n Dent°n' 3 · At least 25% of the new jobs created by the project wall be filled by Denton residents, · The project will prowde knowledge-based jobs (at least 25 percent of jobs require college bachelors degree at entry level), · The project wall donate s~gmficant public art to the commumty (To quahfy, donatmn must be approved by Greater Denton Arts Council and City Council), · The project wall donate slgmficant matenals/eqmpment to the public schools (To quahfy, donataon must be approved by DISD and Caty Cotmcd ), · The project will create amprovementsto the Denton Central Bus~ness Dastnct, · The project wall result an the formation of a bus~ness park, · The project as an lntemataonal or nataonal headquarters facd~ty The total tax abatement may not exceed 50% annually for ten years All abatements are subject to final approval of the City Council and DiSD Board of Trustees, or the County Comm~ssaoner's Court Even though a proleet may meet the criteria as set forth m th~s policy, an application may be demed at the dascretaon of the CaW Council and/or DISD Board of Trustees Tax abatement shall not apply to any portion of tt~ t~'~!1¢e 0~'the project The thresholds as described ~n Table 1 are considered gmdehnes for establishing the Tax Abatement Agreement terms However, the C~ty and DISD may determane that a lower or h~gher percentage and/or a shorter or longer term of abatement may be more appropriate for an ~nd~wdual project If abatement ~s approved, the C~ty and DISD may consider applying all or a portion of the abatement m the first year or during any shorter period w~thln the term of the tax abatement agreement For example, an approved abatement of 25 percent for four years may be apphed as 100 percent abatement for one year To receave tax abatement from the City, the owner of the project must enter into a contract w~th 4 Denton Mtmlclpal Electric Utlhtles to prowde electric serwce for a period of not less than five years and mmntmn performance of contractual obhgatmns for the full period of the contract, unless located in an area ~n whmh the Denton Mummpal Elecmc Utilities ~s not certffied to serve Upon recommendation of Denton Municipal Electric Utthtles, th~s reqmrement may be wmved ,When th~ ~ity ot~ Dent6n anlt Dentt>figndependefit School Distnct determine that abandoned property may require a~Onal ~i~ef~fl~, prora~ ~conorl~"el devel 0pment that generall ~ satisfies the reqmrements of this poheY,~ ~a~tdil~i eltflt~,~aT/wal~~the min{mgra threshold and/or exceed fifty percent (500~) In tax abatement, o~e4g~4}t~tliei" ,t~ tix~ eritt¥~if0tr sp~eifl~ projects to iedevelol~ abandoned bmldmgs consistent With exkstiiag I/~w,i~ F~6~e 'df ~ ~oli~y,~an abandoned building ~ defined as a b~aildmg that has been identffi~tl ~ bein~ sui ~lSte~for ~omm~ei~°f {gdustrial development, has been yacant for a m~mmum of five year~: has imbstantiallYde/~lin~'~ alcpraise~l value, Abatement would only be eonsdered on the increased Val~l~flt~tE4f t~ ilgl~rowments ill''ea¢l~ yea~ ~overefl by the tax abatement agreement over the value of the propef0~01~ th~'~yeaMi1 w'fiifih tlSo}h~x abatement agreement ~s executed The City of Denton and Denton Inde~i~g~en~l~6~ ~[~tfigt may also eonsid~ other tax ~ncent~ves authorized by law Prehmmary AEPheataon IV PROCEDURAL GUIDELINES Any person, organ~zatmn or corporation deslnng that the C~ty or DISD consider prow&ng tax abatement to encourage location or expansion of facthtles wtth~n the hmlts of the jurisdictions shall be reqmred to comply w~th the following procedural gmdehnes Nothing w~thm these gmdehnes shall ~mply or suggest that e~ther the City or DISD ~s under any obhgatlon to prowde tax abatement to any appheant. A Apphcant shall complete the attached "Apphcat~on for Tax Abatement" 5 B Applicant shall prepare a map or other documents provtdlng the follovang · precise location of the property and all roadways wattun 500 feet of the sate · ex~stmg uses and conditions of real property · proposed~mprovements and uses · any proposed changes ~n zoning · compatlbthty with the Denton Comprehensive Plan and applicable bmld~ng codes and City ordinances C A complete legal description shall be provided Applicant shall complete all forms and reformation detailed m the Apphcatlon and submit all reformation to the City Manager, City of Denton, 215 E McKlnney, Denton, TX 76201 D All lnformatmn m the application package detailed above wall be reviewed for completeness and accuracy Addmonal mformat~on may be requested as needed E The application wall be distributed to the appropriate City and DISD departments for internal review and comments Addmonal mformauon may be requested as needed F Copies of the complete apphcatmn package and staff comments will be prowded to the Joint Committee on Tax Abatement G Fiscal agents of the C~ty, DISD and County will review the application for comments and recommendation Add~tlonallnformatlon may be requested as needed Cons~deration of the AI/phca~t~on- FI The Joint Committee on Tax Abatement will consider the application at a regular or called meeting(s) Additional reformation may be requested as needed I The recommendation of the Joint Committee on Tax Abatement wall be forwarded, with all 6 relevant materials, to the chief adm~mstrattve officer of each taxing entity J If the C~ty Councd of Denton decides to grant a tax abatement, ~t shall call a public hearing to consider estabhshment of a tax remveslxnent zone in accordance w~th SecUon 312 201 of the Tax Code The re~nvestment zone must meet one or more of the criteria of Section 312 202 of the Tax Code K The C~ty Council of Denton shall hold a public heanng and determine whether the project is "feasible and practical and would be of benefit to the land to be ~ncluded within the zone and City after the exp~ration of the tax abatement agreement in accordance with Section 312 201" Special consideration shall be given to policies noted ~n the Denton Comprehensive Plan when des~gnaung a tax remvestment zone L The C~ty Council of Denton may consider adoption of an ordinance designating the area described in the legal description of the proposed project as a commercial/industrial tax abatement zone M The C~ty Councd may consider adoption of an ordinance or resolution approving the terms and conditions of a contract between the C~ty and the apphcant governing the provision of the tax abatement and the commitments of the applicant, including all the terms required by Section 312 205 of the Tax Code and such other terms and condmons as the City Council may reqmre Should the commitments subsequently not be satisfied, the tax abatement shall be null and void (unless the tax abatement agreement provides for a recapture of the property tax revenue lost proportionate to a partial failure to meet the mlmmum thresholds set forth in the agreement) and all abated taxes shall be prod lmmedtately to the City of Denton and all other taxing 3unsdlcuons participating in the tax abatement agreement Prowsmns to this effect shall 7 be incorporated into the agreement lq The govemmg bodies of Denton County and DISD may consider ratification of and participation in the tax abatement agreement between the City of Denton and the applicant O The City and DISD reserve the authority to enter into tax abatement agreements at differing percentages and/or terms as set forth in the guidelines of this policy, consistent with the requirements of the Tax Code Any tax abatement agreement will address vanous issues, including but not limited to, the follovang 1 General description of the project, 2 Amount of the tax abatement and percent of value to be abated each year, 3 Method of calculatlngthe value of the abatement, 4 Duration of the abatement, including commencement date and termination date, 5 Legal description of the property, 6 Kind, number, location and timetable of planned ~mprovements, 7 Specific terms and conditions to be met by applicant, 8 The proposed use of the facility and nature of construction, 9 Contractual obligations ~n the event of default, violation of terms or conditions, delinquent taxes, recapture, administration and assignment Annual Evaluation Upon completion of construction, the Joint Committee on Tax Abatement shall receive from the City Manager an annual evaluation of each abatement to insure compliance with the agreement and to report possible violations of the agreement to the taxing entities After new tax base numbers are received in July 8 of each year, the City Manager and his staff will have nmety (90) days to review and prepare a breakdown of those figures _Transfer or As~g_nment A contract for tax abatement may be transferred or assigned by the original applicant to a new owner upon approval by the various taxing jurisdictions after such a recommendation is made by the Joint Committee on Tax Abatement Local Busmesse~ and Minbrity Business Enterpnse.s In performing th-iS Ag~ement~ O'~qERS agree to use diligent efforts to purchase all goods and sermces from D~enton businesses whenever such goods and services are comparable in avmlability, quality and price As a mat~er of policy wtth respect to CITY projects and procurements,. CITY also encourages the use, if applicable, of~ qualified contractors, subcontractors and supphers where at least fifty-one percent (51%) of the' Ownership of such contractor, subcontractor or supplier as vested m racial or ethmc mmontles or women. In the selection of subcontractors, supphers or other persons or organizations proposed for work on this Agreement, the OWNERS agree to consader this pohcy and to use thetr reasonable and best efforts to select and employ such companxes and persons for work on this Agreement Job,Recrmii~gfroln Low-Moderate income Census Trncts OWNER, lessee or assignee of OWNER agrees it will endeavor to make available, or endeavor to cause lessees or assignees to make available, full-t~me or part-tame employment with on-the-job training for Denton citizens In this effort, OWNER, lessee or assignee agrees to reermt from the low-moderate ~ncome Census tracts as further defined in the Concentration of Low/Mod Income by Block Groups shown below 9 lO EX}HBIT A The City of Denton Tax Abatement Application About the Application The Tax Abatement Application provides the City with specific information on the project The information requested in the Application is designed to address the criteria developed within the City of Denton's Tax formation serves as the basis for fiscal analysis and overall project evaluation This Abatement Policy The in ......... '~o ....nt during, City Council deliberations evaluation is provided to Council Memoers aha serves as a uuu,,.~ ,~ ,-,*, .... ~, ~ The Application And The Agreement Specific mformatlon from the Application (like value of new investment and employment commitments) is lncorporated mto the Abatement Agreement Infact, the Apphcation ls an attachment to the Agreement Smcethe agreement is a binding contract, it is important that each question on the application be a~nswered in full and as realistically as possible Simply put, the application is part of the process from start to finish so you'll want to make sure you' re comfortable with the contents When Is The Apphcat~on Fmal~ The answer to this question is very simple When you tell us, "It's final" It is not uncommon for a property owner(s) to submit numerous Apphcatlons as drafts for informational and evaluative purposes only As conversations continue, the property owner will submit a finalized version of the Application that includes all of the commitments agreed to during the discussions What About Confidenttahty ~ Section 312 003 of the Texas Tax Code makes confidential information provided to the City as a part of this application that describes the specific processes or business activities to be conducted or the equipment or other property to be located on the property This information is not subject to public disclosure until the tax abatement agreement is executed Section 522 131 of the Texas Government Code (Texas Public Information Act) makes confidential information which relates to economic development negotiations between the City and a business prospect that the City seeks to have locate, stay or expand in or near the territory of the City The information must relate to a trade secret of the business prospect, commercial or financial information which the business prospect can demonstrate based on specific factual evidence that disclosure would cause substantial competitive harm to the person from whom the information was obtained or information about a financial or other incentive being offered to the business prospect by the City or by another person Information about a financial or other incentive being offered to the business prospect is required to be disclosed when an agreement is made with a business prospect The City is subject to disclosing most records and documents upon request under the Public Information Act Accordingly, please clearly mdicate and mark any reformation you consider proprietary Tlus would mclude anything m your apphcatlon which you consider a trade secret, commercial or f'manclal reformation wluch you can demonstrate by specific factual evidence that would cause substantial competitive harm if d~sdosed, ~nformatlon wluch describes the specific processes or business actiwties to be conducted or the eqmpment or other property for wluch the tax abatement is sought, any financial or other incentive you may be seelang from the City or any other reformation you deem to be confidential under the law Who is Authorized To Sign the Apphcatton ~ Because the Application itself is non-bmdmg, the person signing need not be the property owner or even an individual duly authorized to sign on behalf of the property owner However, if an Agreement is reached, the Apphcat~on will be an attachment to the Agreement and its contents will be b~ndmg through the authorized signature reqmred on the Agreement 11 S \TAX AB ATEMEN'I~TAX ABATEMENT POLICY 2000 FINAL DRAFT doc City of Denton Tax Abatement Application C~ty of Denton City Manager's Office Denton, Texas 76201 (940) 349-8307 (940) 349-8596 FAX 12 APPLICATION FOR TAX ABATEMENT CITY OF DENTON, TEXAS Property Owner Company or Project Name Madmg Address Telephone '-- I F.x No Contact Name Title -~hng Address Telephone -- 1 l,ax No 2 Prowde a chronology of plant openings, closing and relocanSns over the past 15 years __ _ 3 Prowde a record of mergers and f'mancml restructunng during the past 15 years 4 Wall the occupants of the project be owner~e'~ If lessee, are occupancy con~m~tm~nts already ex~stmg? 5 Is the project a relocation ~f ex~st~ng facthty o-~a new facd~ty to expand o~ons9 If relocation, g~ve current location 13 6 If an e×~stmg Denton business, will project result m abandonment of exlstm--~aclhty9 If so, the value of the exIsting facility will be subtracted from the value of the new facthty to arrive at total pro3ect value 7 Property Description - Attach a copy of the legal description detmhng property's metes and bounds - Attach map of project including all roadways, land use and zomng w~th~n 500 feet of s~te 8 Current Value Attach copy of latest property tax statement from the Denton County Central Apprmsal D~smct (include both real and personal property) 9 Increased Value/Estimated Total Cost of Project Structures $ ~ Site Development $ Personal Prope~3~ $ ~ O-~ improvements $ 10 Inthcate amount of tax abatement an~Ofyears requested for each taxing entity C~ty of Denton ~ ~ years years Denton Independent School D~stnct I -- Denton County[ -- % ] years List any other financial mcenUves th~s project will requ~:t/rece~ve Estimated Freeport Exemptmn Estimated Electric Utthty Industrml Development Rld~a EstImated Water/Wastewater Infrastructure Assistance 11 Give a brief description of the act~wt~es to be performed at th~s location, mcluding a descnptmn of products to be produced and/or services to be prowded 14 12 Project Constmctton Phase A Esttmate percentage of project development and constmctton dollars to be spent with Denton based contractors or sub-contractors Construction costs $ ~._~ercentage local contractors '" B ConStruction Employment Estunates Start Date (Mo/Yr) ~ Completion Date (Mo/Yr) No of Construction Jobs ~ Estunated Total Construction Payroll $ C Dascnbe any off-site infrastructure reqmrements · Water · Wastewater · Streets · Drainage · Other 15 13 Project Operation Phase Provide employment mformauon for the number of years tax abatement is requested I At Project [ Existing [ Start Date I At Term of Employment Information Operation / (mo/yr) / Abatement A Total number of permanent, full-time jobs ~ '-~ Employees transferred from outside Denton C Net permanent full-time jobs (A minus B ) E Total annual payroll for all permanent, full-tune jobs (A) F Types of jobs created List the job titles and number of positions in each category that will be employed at the facility Provide average wage for each category G Estamate annual utility usage for project Electric $ ~___~er $ Wastewater $ I Gas $ 14 Describe any other direct benefits to the City of Denton as a result of this project (e g, sales tax revenue or project elements identified m Tax Abatement Policy, Section Ili) 16 15 ~zoned appropriately~ Yes No Current zoning ~tred for proposed project Anticipated variances ls property platted? Yes No ~ttmg be necessary Yes No Discuss any enmronmantal impacts created by the project A List any permits for which applicant must apply Applicant will be reqmred to provide City with copies of all applications for environmental penmts upon completion of application(s) B Provide record of compliance to all envlromnental regulations for the past five years ..... , ,, - ~. ....... ,~s/resld~lsplaced and assistance that will be available from the requesting company 19 Provide description of any historically significant area included within the project's area as determined by the Historic preservation Officer If anY, glye detad °f h°w the hist°rically sigmficant area wall be preserved 20 Justification for Tax Abatement Request Substantiate and more fully describe the justification for this request include the amount of the abatement requested and sh°w h°w a wdl c°ntnbute t° the financial viabthty of the project Submit attachments If necessary 17 21 List addtt:onal abatement factors to be considered for thts project as outlined on pages 3 and 4 of the tax abatement pohcy 22 Fmancml Information Attach a copy of the latest au&ted fmanctal statement or, m the case of a new project, a busmess plan Th~s tax abatement apphcatton ts submttted wtth the acknowledgement that addmonal certffied financml tnformatton may be reqmred Authorized Stgnature Date 18 EXHIBIT "B" Legal DescnpUon of Peterbilt Motors Company property BE1NG all that certain tract or parcel of land lying and being situated m the R H Hopkins Survey, Abstract No 1694 and the J McGowan Survey, Abstract No 797, Denton County, Texas, and being a part of a called 1 447 acre tract, described in a deed to the Synod of Texas, Presbyterian FoundaUon of the Umted Presbyterian Church, U S A, a Texas Corporation, recorded m Volume 458, Page 224, Deed Records, Denton County, Texas, and a part of a 31 715 acre tract, described m a deed to the Synod of Texas, Presbyterian FoundaUon of the United Presbyterian Church, U S A, a Texas Corporation, recorded in Volume 485, Page 97, Deed Records, Denton County, Texas, and being more particularly described as follows BEGINNING at a wood right-of-way post at the northwest comer of said 1 447 acre tract, being the northeast comer of lot 1, of the replat of block 2, Southndge Center, recorded m volume 6, page 8 plat records, Denton County, Texas, and being on the south right-of-way line of Interstate Highway 35 East (a variable w~dth right-of-way), THENCE south 73 degrees 43 minutes 46 seconds east, with the north line of said 1 447 acre tract and the said south right-of-way line, a d~stance of 166 40 feet to a ½ inch iron p~n set with a yellow plastm cap stamped H&N 1849, THENCE south 78 degrees 35 minutes 00 seconds east, with the north line of said 1 447 acre tract and the said south right-of-way line, a distance of 342 58 feet to a ½ inch iron pan set with a yellow plastic cap stamped H&N 1849 at the lntersectmn of the said south right-of-way line and the west right-of-way line of Southndge Dnve (a 60 foot right-of-way), THENCE south 01 degrees 00 minutes 33 seconds east, with said west right-of-way line, a distance of 307 79 feet to a found iron pm at the northeast comer of lot 6, block 3, Southndge Center, recorded ~n Volume 3, Page 51 Plat Records, Denton County, Texas, THENCE north 89 degrees 43 minutes 58 seconds west, with the northlme of said block 3, a distance of 497 59 feet to a ½ anch iron pin set w~th a yellow plastic cap stamped H&N 1849 at the northwest comer of lot 3, block 3, and being on the east line of lot 2, of smd block 2, Soutlmdge Center, THENCE north 00 degrees 27 minutes 40 seconds west, with the east hne of said block 2, a d~stance of 419 87 feet to the point ofbeg~nmng, and contaimng m all 4 086 acre of land 4 486 ACRE TRACT Block 1, of Southndge, an addiUon to the C~ty Of Denton, as shown by the plat thereof, recorded in Volume 3, Page 51 Plat Records, Denton County, Texas BOTH TRACTS TOTALING 8 752 ACRES OF LAND EXHIBI~ ~ City of Denton Tax Abatement Application C~ty of Denton C~ty Manager's Office Denton, Texas 76201 (940) 349-8307 (940) 349-8596 FAX -9- , May 200l APPLICATION FOR TAX ABATEMENT CITY OF DENTON, TEXAS 1 Property Owner Peterbdt Motors Company Company or Project Name Division Headquarters Mailing Address 1700 Woodbrook Street Denton, TX 76205 Telephone (940) 591-4000 --------~xNo (940) 591-4260 Contact Name Jim Fykes Title Division Operations Manager Marling Address 1700 Woodbrook Street Denton, TX 76205 Telephone (940) 591-4004 --------~No (940)591-4130 2 Prowde a~chronology of plant opemngs, closing and relocations over the past 15 years Peterbilt ~elocated its division headquarters from Newark, CA t° Dent°n' TX m 1993 In addltmn, several Peterbilt suppliers have relocated to, or opened facilities tn, Denton 3 Provide a record of mergers and financial restmctunng during the past 15 years No changes tn corporate/financial structure have occurred tn the last 15 ~,, ars 4 Will the occupants of the project be owner or lessee? If lessee, are occupancy commitments already existing9 Occupants will include both current owners and employee transfers from a sister d~vislon currently located tn Dallas County 5 Is the project a relocation of existing facility or a new facthty to expand operatmns9 If relocation, give current location Project ls expansion of existing facilities for current owners, and relocation for sister division employees S~ster division ts currently leasing a Dallas county rental property In addmon, the project will provide for future expansion of existing operations -10- Tax Abatement Pohcy May 2001 06/14/01 08 89 FAX 428 468 8232 PACCAR DMC BVIJ'E ~002 6 "If an ex~hlg Den'ton business, yell project result {~ abandonment of ex~ng facthtyO il' so, the value of thc oxastmg faclhvy w,H be subtracted fi.om the value of the new facfll~ to amvc at total project velu= ' No, existmi{ facilit~s w~ll st~ll be uuhzcd properD' D~mu~puon - Atlach ~, copy of be legal ~lescrtp~ion dcmilmg propc~'s metes ~d bo~ ~ AUac~mup of pm]cc: ~cludmg ~11 fedways, l~d use and zo~ ~ 5~ fcc~ of sxte Blue ~aps A~ached ~ ~ch copy of latest prope~ ~x ~at~*~,~ ~om ~ De,wu Co~y Cen~l App~ ~nt V~uc ~ Dtsmct (mcludc bo~ rcm ~d p~onal prup~) --~2,798,527 poi ~m aua~hed p~op~ a~isah ~ct~ied ~]ue~ted Total Cost of ~oj~t S~c~S ~5,400,000 ~ Site D~e~opment ~300,000 ~&cam ~o~t of ~ aba~mCu~ a~b~r of ye~ ~¢que~d for ~ach Dc~ou,~d~dent Sch~l Dism~ 100 % I0 D~Wn CO~ 100 % 10 ye~ - Li~ any o~=r ~c{~ mccn~ves ~ project ~ -~t~d F~e~ofl Ex~mp~on ~ $0 - B~ated Blec~c U~ ~dus~ Developm~t ~d~r $0 G~ve a brmf dcscnpUo~ of ~c ac~fl~ w he p~Ko~e~ at ~s locaUon, mcludmg ~ demcnpUOu oF pruduct~ to be produced ~o~ sew~u~s to b~ pro.de& ~at ope~Ho~ will con~Ue to ~o~on as ~ ~v~ma headqua~c- for Peterbilt Motors Company. mclu~g u~uon, ~ce, mal~, ~ke~g, mud r~la~d ~tces related to ~ prodUcuon of heaW du~ Acu~es ~fe~ed ~ a result et ~e p~j~ot ~ ~oludc Fmm~cm~le~ml acuvm~s s~tcf ~v~zO~ -11 - T~ Abu~=~nt Policy M~y 3001 12 ProJect Construction Phase A Estimate percentage of project development and construction dollars to be spent with Denton based contractors or sub-contractors Construction costs $ 6,100,000 I Percentage local contractors 25% B Construction Employment Estrmates Start Date (Mo/Yr) 08/01/2001 Completion Date (Mo/Yr) 04/01/2002 No of Constmctmn Jobs 100 Estimated Total Construction Payroll $2,000,000 C Describe any off-site mfrastructure reqmrements · Water No New * Wastewater No New · Streets No New · Drainage No New · Other New 2nd Elecmcal Service Tax Abatement Pohcy May 2001 - 12 ~ 13 ProJect Operatton Phase Provide employment information for the number of years tax abatement is requested At ProJect Existing Start Date At Term of Employment Informatton Operation (mo/yr) Abatement (tf applicable) / A Total number of permanent, full-ttme jobs 149 149 184 B Employees transferred from outside Denton 35 C Net permanent full-time jobs (A minus B ) 149 149 149 E Total annual payroll for all permanent, full-time $11,427,400 $11,427,400 $13,521,800 jobs (A) F Types of jobs created List the job titles and number of pos~ttons In each category that will be employed at the facility Provide average wage for each category Management 3 positions Average Salary = $134,000 Credit Managers 3 positions Average Salary = $96,000 Sales 4 positions Average Salary = $63,000 Credit Analyst 9 positions Average Salary -- $53,000 Collection 7positions Average Salary-- $51,000 Administration 9 positions Average Salary = $35,000 Total Positions 35 positions Average Salary = $60,000 In addttlon, as the track market strengthens, the existing operation will increase staff as build rate increases G Estimate annual utthty usage for project Electric $63,000 Water $2,500 Wastewater $5,500 Gas $4,000 (Indicates annual utility usage of new facilities only) 14 Describe any other direct benefits to the City of Denton as a result of this project (e g, sales tax revenue or project elements ~dentffied in Tax Abatement Policy, Sectton III) The transferring sister division will create sales tax revenues as a result of their day to day operatmns, including the pumhase of supplies, meals and entertainment expenses, lodging, etc Tax Abatement Policy May 2001 ~ 13 - 15 Is property zoned appropriately? ~ No Current zoning Commercial/Office Zonmg reqmred for proposed project No change requtred Anttctpated variances None antlctpated at this ttme 16 Is property platted* ~ No Will replattmg be necessary Yes [] 17 Dtscuss any environmental ~mpacts created by the project A List any permits for which applicant must apply Applicant will be reqmred to provide Caty with cop~es of all apphcat~ons for enwromnental permits upon completion of application(s) Office building construction will have minimal impact to environment New constmctton will be similar to extstmg famhtles and will comply to current landscape and storm water requirements B Provide record of compltance to all environmental regulations for the past five years Peterbtlt has complied with all regulations with no violations 18 Provide spectfic detail of any businesses/residents that will be displaced and assistance that will be available from the requesting company No displacement will occur In addition, Peterbilt will provide an aesthetically pleasmg architectural design and landscape plan that will compliment the existing neighborhood 19 Prowde description of any historically slgntficant area included within the project's area as determined by the Historic preservation Officer If any, give detail of how the htstorlcally slgmficant area will be preserved None to our knowledge 20 Justlficatton for Tax Abatement Request Substantiate and more fully describe the justtficatlon for th~s request Include the amount of the abatement requested and show how it will contribute to the financtal vtablltty of the project Submtt attachments if necessary See attached justfficatton reformation Tax Abatement Pohcy May 2001 - 14 - 21 List additional abatement factors to be considered for this project as outlined on pages 3 and 4 of the tax abatement policy There will be potential relocation of permanent residence of current and future individuals employed by the sister division, as well as revenues created from the daily activmes of all Peterbilt employees traveling to and working in Denton Additionally, it increases energy consumption at this location, which is provided by Denton utility companies Peterbflt's total operations will continue to be a contributor to the economic development and growth of the city through additional expansion, by both Peterbilt and Peterbilt suppliers, and through charitable contributions such as the United Way With that growth will be increased employment by people hying in the city of Denton and in Denton county 22 Financial Information At~ach a copy of the latest audited financial statement or, in the case of a new project, a business plan Please see attached PACCAR Inc audited Financial Statements for 2000 In 2000, Peterbilt represented 33% of PACCAR Inc's total revenues, and 41% of PACCAR Inc's total net income This tax abatement apphcatlon is submitted with the acknowledgement that additional certified financial reformation may be required Tax Abatement Pohcy May 2001 - ]. 5 - 20 Justification for Tax Abatement Request Peterbilt Motors Company is currently considering a $6 1 million expansion project that would increase the size of our cresting Division office by apprommately 31,700 square feet This expansion would allow one of our sxster divisions, PACCAR Financial, to transfer their operations to Denton It would also allow us to grow our existing business, and establish Denton as a consolidated office location for PACCAR Inc that could potentially attract other PACCAR Inc divisions, and/or d~vlslon branches, to Denton To help justify this expansion project, Peterbilt ~s applying for 100% property tax abatement for 10 years As an existing business, we reahze that under a new amendment to the tax code we are potentially eligible for 100% tax abatement We feel that 100% tax abatement is reasonable m the light of Peterbdt's current level of ~nvestment in Denton Peterbilt would save approximately $56K per year in property taxes for the first ten years, which makes this expansion substantially more appealing to PACCAR Inc when it chooses how to allocate capital funds After the ten-year abatement period tax revenue will increase by 83K Th~s is, of course, in addition to the $73K of taxes that Peterbilt currently pays for its Division office and adjacent land Attachment 20A and 20B illustrate the current tax situation, and the proposed tax scenario with 100% tax abatement In addition, it must be noted that this scenario conservatively assumes that the tax rates will remain constant However, we estimated an annual 4% increase in assessed value for the ten-year period This increase will vary with the changes in real estate market value Peterbilt Motors Company has been an economic and social partner with the City of Denton for 20 years and looks forward to continuing that relationship well ~nto the future Peterbilt has provided both financial and non-financial support to many organizations within Denton and Denton County - Denton Adult Daycare Center - Denton Arts Councd - Denton Benefit League - Denton Black Chamber of Commeme - Denton Chamber of Commerce - Denton County Friends of the Family - Denton Festival Foundation - Denton High School - Denton Holiday Festival Association - Denton Main Street Mardt Gras - Denton Parks Foundation - Denton Police Association - Denton Senior Center - Keep Denton Beautiful - North Central Texas College - North Texas State Fair - Special Olympics - Spirit of Christmas - Texas Woman's Umverslty - Umvers~ty of North Texas Peterbilt and its employees have been major contributors to the Denton County Umted Way Peterbilt employees also serve on boards and committees - Denton Chamber of Commerce - Denton County United Way - LINT Advisory Board for Community Services - Support UNT School of Business Executive Development Program The expansion project we are proposing will serve to brighten our future m Denton, and help promote the continuous development of Denton as a growing center for business in North Texas The expansion will benefit C~ty of Denton, Denton County, and Denton ISD by increasing sales and property tax revenues, and spur additional consumer spending as high level professional employees travel to and relocate ~nto Denton In summary, the property tax abatement we are requesting will help turn this expansion project proposal into an approved expansion project that will strengthen Peterbilt and PACCAR Inc, and ~mprove the quality of life for the c~ttzens and businesses of Denton NOTICE OF APPRAISED VALUE DENTON APPRAISAL DI STRI CT Th~s ~s NOT a Tax B~II PO BO]( 2818 3911 MORSE ST DENTON, TX 76202-2816 940-566-0904 FAX 940-387-4824 I~;TRO 972-434-2602, Date 05/11/2001 & Account # (Refer to thru # when inquiring about your property) R27313 Street Address 1700 WOODBROOK Property Description PACCAR INC (27860) SOUTRRIDGE, BLOCK l, LOT 1 PETERBILT MOTORS 3200 AIRPORT RD DENTON, TX 76207-2108 Overlapping County Information II,,,I,II,,,,I,IIl,,,I,,,I,,I,l,,,llll,,,l,,I,II,,,ll,,,I,,,ll Dear Property Owner We have appraised the property hsted above for the 2001 tax year Based on the appraisal date of Januar~ 1 of this year the apprmsal m as follows !Appraiee, i t~rf, Orrnat, iEt~, ,' '/ . ,.'ri rL~stYear PrOposed ThlsYear Land's Market Value 596,94~ 596,946 Agrxcultural or Timber Market Value C 0 Agrxcultural or T~mber Productxwty Value C 0 Improvements (Buildings) Apprazsed Value 1,886,083 1,933,540 Personal Property Apprazsed Value ~ 0 Mzneral Interest Appraised Value ~ 0 Total Market Value of this Property 2,483,02~ 2,530,486 Total Appraised Value (w~th Homestead L[m[t) 2,~83,02~ 2,530,~86 Exempt [ on s 2,483,0~9 )ENTON couNT?r 2,530;486 " 0 2,530,486 0.231930 5,868 96 2,483,029 )ENTON lSD 2,530,486 0 2,530,486 1.844000 46,662.16 2,483,029 :IT~ OF DENTON 2,530,486 0 2,530,486 0.528150 13,364.76 ~OTAL 65,895.88 The above tax estimates use last yea~s tax rates for the t~lng umts The governing body of each umt school board counb commissioners and so on decldeswhetherprope~taxesincmase Theappmisaldlstnctonlydetermlnesyourprope~svalue Thetaxlngunltswlllsett~mteslaterth~syear The Texas Legislature does not set the amount of your local taxes Your prope~y tax burden ~s dec~ded by your locally e[ected officals and a~l ~nqmnes concermng your taxes should be directed to those officials If you are 65 er older and received the $10 000 school tax exempbon on your home last year from the school I~sted above your school taxes for th~s year will not be h~gher than when you first received the exemption on this home I~ you ~mproved your prope~ (by adding rooms or buildings) your school tax ceiling may increase for improvements If you are a sullying spouse age 55 or older you may retain the school tax ceding Contact the appramal office If you d~sagree w~th thru yeafs proposed value for your prope~ or ff you have any problems w~th the prope~ descnpbon or address ~nformabon If the problem cannot be resolved you have a right to schedule a heanng w~th the apprmsal rewew board (ARB) by fihng a WRITTEN protest with the Board You may either use the provided form or prepare a letter (including your name your prope~y s descrlpllon and any appramal office acbons w~th which you d~sagree) Your protest must be delivered by ma~l to the above address or In person at the appraisal d~stnct office before the protest dea~hne Normal office hours are 800 AM to 5 O0 PM Monday through Friday In add,bun the Denton CAD office will be open 8 00AM to 8 00 PM Tuesdays and Thursdays sta~mg May 29 2~1thmughJune14 2001 Ifyouhaveotherquest~onsorneedmore~nformahon pleasecontacttheappra~saloff~ceat the phone number or addresses hsted above S ~ncerely, Pr~t Deadhne ARa Headngs B~ln ~uDe 1~ ~ 200~ Chzef Apprazser May 31, 2001 Joe Rogers Locattom of ARB Hearings Enclosures Denton Appraxsal D[str~ct 3911 Morse St Denton, TX 76208 MRY-~l-2001 14 19 FROM DENTON CRD 940-~8T-4824 TO 940 591 4110 P ~02x002 NOTICE OF APPRAISED VALUE :PO BOX 2816 3911 ~ S~ 05/ 1:3~'1'~ ',~ 76202-2816 Date 940-566-0904 ~ 940-38~-~24 A~unt ~797A ~, ~1~~n ~ ~ 2, ~694 ~ ~ (4~109) 777 10~ A~ ~ Ove~i,~ Cou~y I.fo~o. ~.~ ~ 98004 O~r Pm~y We ~ave ea~d ~e ~pe~y II~e~ a~ve ~or me200Z t~ y~r B~d e~ ~e a~m~( ~te of danuaw 1 of this year. the ~mlaal ~ ~ f~lo~ , ~ ..... Lan~ ~ Ma~ V.lue ~u~uml or Timer M~ Valu. ' 108 900 0 Ag~u~uml ~ ~m~r P~iv~y V~ue 0 0 Impmv~en~ ~u~dl~s) ~pml~ Value 159 ~ 141 163 / ~6 Paschal Pm~ A~.I~ Value 0 0 Mineral Intem~ Appm~ Va~ue 0 0 T~.~ ~et Value of ~ls Pmpe~y 2 ~, 041 2 72,756 T~al ~ml~ Value (~h Hom~e~ Um~ 2 ~, 041 272,756 ~ ~ 272z75~ 0 272,;56 231930 ~2 60 ~ Z~ Tho above tax e~mates use last years tax rates for the taxing units The govemlng body of each unit school board, county commissioners and so on -- decides whether property taxes Increase The apprmsal d~stnct only determines your prope~'y's value The taxing un~ v~ll set tax rates later this year The Texas Legislature does not set the amount of your local taxes. Your pro~erty tax burden is decided by your locally elected officials, and all mclu~res concemmq your taxes should be directed to those officials it you ara 65 or older and received ~he $10,000 school tax exemption on your homo last year from the sc~oo~ listed above your school t~xes for this year w~ll not be higher then when you first recewed tho exemption on thrs home If you ~mproved your property(by adding rooms or buildings) your schoot tax =oiling may Increase for improvements If you are a solving spouse age S5 or aider, you may retain t~e school tax ceiling Contact the apprmsal office ~f you d~segree with this year's proposed value tot your propers/or ~' you have any problems wit~ Ge property description or address information If the problem cannot be resolved you a right to schedule a hearing wt~ the appraisal review board (ARB) by filing a WRI [ I cH protest w~th thc E~Oard You may either use the provided fo~n or prepare a otter (inc ud ng your narco, your propertys de~cnpbon, and arly appraisal office a~ona with which you d~segrcc) Your pretest must be dc]worod by ma~l to thc above address or m person at the appraisal d~'~cC office b~ore the protest deadline Normal office hours are 8 O0 AN to $ O0 PM Monday through Friday In add~bon, the Denton CAD office will be open 8 O0 AN to 8 O0 P/~ Tuesdays and Thurdays ~artlng May 29.2001 through June 14 2001 If you here any other queSt:ions or need more Information please contact the apprarsal office at the phone humbert; or addreseea liGted above ...... u~w-~ .Li, 20t~d. ~ CJ~lef ~opra~e~ ...... [~1[o.. qf ARB H~dnga I Denton, ~X 76208 Enclosures CONSOLIDATED STATEMENTS OF INCOME Year Ended December 31 2000 1999 1998 (mdhons except per share data) Net sales $7,437 0 $8,648 2 $7,577 7 Costs and Expenses Cost of sales 6,497 3 7,282 4 6,431 0 Selhng, general and admlmstrat~ve 395 3 582 5 580 3 Interest and other, net (9 4) 9 1 8 8 6,885 2 7,874 0 7,020 1 Truck and Other Income Before Income Taxes 553 8 774 2 557 6 Revenues 482 4 372 8 317 1 Costs and Expenses Interest and other 303 7 219 9 178 3 Selhng, general and adm~mstrattve 59 9 54 4 62 6 Provision for losses on receivables 42 4 20 7 14 0 406 0 295 0 254 9 Fmanctal Serwces Income Before Income Taxes 76 4 77 8 62 2 Gain on sale of subsidiary 33 2 Investment income 34 9 38 0 33 3 Total Income Before Income Taxes 665 1 923 2 653 1 Income taxes 223 3 339 6 236 3 Net Income $ 4418 $ 5836 $ 4168 Net Income Per Share Basic $ 5 76 $ 7 46 $ 5 34 Diluted $ 5 73 $ 741 $ 5 30 Weighted average number of common shares outstanding 76 7 78 2 78 1 See notes to consohdated financlal statements PACCAR Inc and Substdlarles CONSOLIDATED BALANCE SHEETS ASSETS December 31 2000 1999 (millions of dollars) Current Assets Cash and cash equivalents $ 5150 $ 5115 Trade and other receivables, net of allowance for losses (2000- $22 8 and 1999- $55 7) 550 8 570 2 Marketable securities 594 7 530 7 Inventories 303 1 384 5 Deferred taxes and other current assets 117 7 122 1 Total Truck and Other Current Assets 1,861:3 2,119 0 Equipment on lease, goodwill and other 412 8 356 2 Property,_plan_t an_~ e_qulpme_nt,_net 882 6 875 3 Total Truck and Other Assets 5,156 7 5,350 5 Cash and cash equivalents 21 7 16 9 Finance and other receivables, net of allowance for losses (2000- $104 6 and 1999- $81 3) 5,268:3 4,766 5 Less unearned interest (:363 8) (326 3) 4,904 5 4,440 2 Equipment on operating leases, net 1:39 0 91 2 Other assets 49 0 :34 2 Total Flnanctal Services Assets 5,114 2 4,582 5 $8,270 9 $7,933 0 LIABILITIES AND STOCKHOLDERS EQUITY December 31 2000 1999 (milhons of dollars) TRUCE AND OTHER Current LmblIIt~es Accounts payable and accrued expenses $1,097 7 $1,259 3 Current portion of long-term debt and commercial paper 69 1 70 1 Dividend payable 76 4 125 3 Income taxes 25 2 78 9 Total Truck and Other Current Llablhtles 1,268 4 1,533 8 Long-term debt 124 7 182 2 O_t_he_r, ,_ncl_u_dl_ng deferred taxes ...... 512 0 395 7 Total Truck and Other Lmbihtles 1,905 1 2,111 7 FINANCIAL SERVICES Accounts payable, accrued expenses and other 92 2 114 9 Commercial paper and bank loans 2,273 7 2,113 4 Term debt 1,530 2 1,292 3 Deferred Income taxes and other 220 6 190 1 Total Ftnancial Serwces Ltablhttes 4,116 7 3,710 7 STOCKHOLDERS EQUITY Preferred stock, no par value - authorized 1 0 million shares, none issued Common stock, $1 par value - authorized 200 0 million shares, 78 8 mflhon shares issued (including 2 4 mflhon treasury shares) 78 8 78 3 Add~tional paldqn capital 645 0 626 9 Retamed earnings 1,854 1 1,580 9 Less treasury shares - at cost (105 8) Accu_mula_t_~.d o_t_he_r _co__mp_rehe_nsive__m_c~_me (~lo__ss_) __ (221 0) (175 5) T_ot_al_S_tockh_olde?s' Equ~__ty ............ 2,249 I 2,110 6 $8,270 9 $7,933 0 See notes to consohdated financ~al statements PACCAR Inc and Sub$~dmr~es REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS Board of Directors and Stockholders PACCAR Inc We have audited the accompanying consolidated balance sheets of PACCAR Inc and subs~&anes as of December 231, 2000 and 1999, and the related consolidated statements of income, stockholders' equity and cash flows for each of the three years in the period ended December 231, 2000 These financial statements are the responsibihty of the Company's management Our respons~blhty is to express an oplmon on these finan- cial statements based on our audits We conducted our audits in accordance with auditing standards generally accepted an the United States Those standards require that we plan and perform the au&t to obtain reasonable assurance about whether the financial statements are free of material misstatement An audlt includes examlmng, on a test basis, evidence supporting the amounts and disclosures in the financial statements An audit also includes assessing the accounting principles used and s~gmficant estimates made by management, as well as evaluating the overall financial statement presentation We believe that our audits provide a reasonable basis for our opinion In our opmmn, the financial statements referred to above present fairly, in all material respects, the consoh dated financial position of PACCAR Inc and subsl&anes at December 31,2000 and 1999, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 231, 2000, in conformity with accounUng principles generally accepted in the United States Seattle, Washington February 19, 2001 July~,~2001 DELEGATION OF AUTHORITY I hereby authorize B Robert Crowley, Tax Director of PACCAR Inc (the "Company"), m the name and on behalf of the Company, to execute the tax abatement agreement, and all related documents, between the Company and the C~ty, County and School D~stnct of Denton, Texas Mark C PIgott Chairman and Chief Executive )fficer