R-01-05-24-12A2 - 5/24/2001O \WPDOCSRESOLUTM10524A2 WPDhh
RESOLUTION NO. R- 01- 05- 24 -12A2
WHEREAS, Sears, Roebuck and Co., ( "Sears ") is one of the largest
retailing companies in the world, and
WHEREAS, Sears is in need of expanding its facilities to
accommodate expected growth in its direct telephone and Internet sales
business, and
WHEREAS,Sears has expressed to the City of Round Rock ( "City ")
its desire to maintain its strong competitive position in the retailing
industry by entering into a mutually beneficial economic development
program with the City, and
WHEREAS, § 380.001 Local Government Code provides that a
municipality may establish an economic development program ( "Program ")
to promote local economic development and to stimulate business and
commercial activity in the municipality, and
WHEREAS, the City Council has determined that the Program
described in Exhibit A will meet the goals set forth in said § 380.001
and will be of mutual benefit to both parties, NOW THEREFORE
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ROUND ROCK,
TEXAS THAT
The City Council hereby offers to establish a § 380.001 Program as
generally outlined in Exhibit "A" in exchange for Sears locating its
needed expansion facilities in the City.
The City Council hereby finds and declares that written notice of
the date, hour, place and subject of the meeting at which this
Resolution was adopted was posted and that such meeting was open to the
public as required by law at all times during which this Resolution and
the subject matter hereof were discussed, considered and formally acted
upon, all as required by the Open Meetings Act, Chapter 551, Texas
Government Code, as amended, and the Act.
RESOLVED this 24th day of May, 2001.
ATTEST:
E LAND, City Secretary
a. 11
2
RO T A. STLUKA,C. , Mayor
City of Round Rock, Texas
ECONOMIC DEVELOPMENT PROGRAM
The terms of the §380.001 Program Agreement to be offered to Sears in exchange for Sears
Locating its needed expansion facilities to the City of Round Rock are as generally outlined below.
1. Sears agrees to locate in the City a facility from which Sears will make retail sales over the
telephone and Internet so that such sales made to customers residing in Texas are subject
to the City's sales tax.
2. In consideration of the foregoing, the City agrees to share with Sears the proceeds of the
net amount of sales tax received from the state of Texas by the City derived from sales tax
collected by Sears on taxable Texas sales as a direct result of Sears's location in the City.
This sharing agreement applies only to sales tax collected by Sears from sales occurring
over the telephone or Internet.
3. Sears's share of said sales tax collected shall be equal to 60% for the first ten years and
50% for the last twenty years of the Program Agreement.
4. The term of the Program Agreement will be until December 31, 2031.
5. Sears agrees to submit to the City data in sufficient detail to determine the amount of sales
tax collected each month.
6. In the event that Sears shall relocate or expand its business so that any telephone and/or
Internet sales made to customers residing in Texas are no longer subject to the City's sales
tax, then Sears agrees to pay the City a sum equal to the amount of money it received as a
result of the sharing agreement set forth in paragraph 3. above.
DATE: ! ` May'18, 2001
SUBJECT: City Council Meeting — May 24, 2001
ITEM:
Resource:
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Sponsor:
12.A.2 Consider a resolution establishing an Economic Development
Program with Sears, Roebuck and Co. The establishment of the
Program is the first step in approving an agreement with Sears,
whereby it will locate its telephone and Internet sales business in
the City.
Bob Bennett, City Manager
David Kautz, Finance Director
Nancy Yawn, Public Affairs Director
Staff has been in discussions with Sears, Roebuck and Co. regarding
the locating of its telephone and Internet sales to
Round Rock. Round Rock will be the on -line sales site for the entire
Sears product line and the Great Indoors. Round Rock has been in
competition for this retailer with other cities in Texas and California.
Based on the terms in the attached agreement, the location of Sears to
Round Rock fits well with the City's business recruitment and sales
tax model.
Authority for entering into an agreement of this type with Sears is
provided by Section 380 of the Local Government Code. A
requirement of Section 380 is the establishment of a program to
promote local economic development and to stimulate business and
commercial activity in the municipality.
N/A
N/A
N/A
N/A
On -line retailing of the Sears product line in Texas requires the
collection of state and local sales taxes on those sales. Consolidating
the point -of- ordering for sales in Texas to a Round Rock location
enables the local sales tax to be collected by the City of Round Rock.
Since this type of retailing enables the consolidation of sales from
across the state and is a single retailing site for this type of
transaction, Round Rock proposes to share a portion of the local sales
tax with Sears as outlined in the agreement. The sales tax sharing
arrangement is based upon sales transactions not yet located in Texas
and, as such, represent no current or future cost for the City.
This type of activity is beneficial to the City in that it produces sales
tax revenue from consolidated statewide sales and it enables
diversification of our sales tax base.
N/A
N/A
, Mayor
RobertA. Volta, Jr. ,
Mayor Pro -tem
Earl M. Hairston
Council Members ,
Tom Nielson
Carrie Pitt "
Earl Palmer
Isabel Callahan
Jimmy Joseph .
City Manager
Robert I. - Bennett Jr.-
City Attorney '
Stephan L Sheen;
CITY OF ROUND ROCK
June 6, 2001
Mr. Ron Douglas
Sears, Roebuck and Co.
Vice - President of Real State
3333 Beverly Road, Mail Stop B2 -154b
Hoffman Estates, IL 60179
Dear Mr. Douglas,
The Round Rock City Council approved Resolutions No. R- 01- 05 -24-
, 12A2 and R- 01- 05- 24 -12A3 at their regularly scheduled meeting on
May 24, 2001. Resolution No. R- 01- 05- 24 -12A2 approves the
establishment of an Economic Development Program for Sears,
Roebuck and Co. Resolution No. R- 01- 05- 24 -12A3 approves the
Economic Development Program Agreement.
Enclosed is a copy of the resolutions and original agreements for
your files. If you have any questions, please do not hesitate to
contact David Kautz at 218 -5430 .
Si cerely,
J`o`anne Land
Assistant City Manager/
City Secretary
Enclosures
Cc: Susan Russell
Assistant General Counsel
Fax: 512-218-7097 . 1- 800 - 735 -2989 TDD
www.ci round - rock.tx as
221 Fast Main Street
Round Rock Texas 78664
512- 218 -5400
1. 800. 735.2988 Voice