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R-91-1683 - 12/19/1991RESOLUTION NO. . W O 3 WHEREAS, the City Council of Round Rock, Texas, on the 19th of December, 1991 in Ordinance No. o o 0 , created the Reinvestment Zone No. Two, City of Round Rock, Texas, and WHEREAS, in accordance with the Property Redevelopment Tax Abatement Act, Chapter 312, Local Government Code, as amended, the City desires to enter into a tax abatement agreement with Textek Plastics, Inc. regarding property located in said Reinvestment Zone, Now Therefore, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS, That the Mayor is hereby authorized to sign on behalf of the City the Tax Abatement Agreement attached hereto and incorporated herein for all purposes. RESOLVED this 19th day of December, 1991. ATTEST: E LAND, City Secretary MIKE ROBINSON, Mayor City of Round Rock, Texas 1 ,03 9 3"‘ .1%70 " "" 1! ".. 1.4 e : S'''' 'A'• S" '''' ............% I E......' .....' ...• ... •• r:.‘t.e.teZ::- aim. onlurt •A —..., , f121 . or so- i 1 ..; •Te'V -.....2 H .... .. tsff .. *toga • ., I I , PROPOSED .1 11 REIN — --, -.to A 4 . , -v.! VESTMENT 40 . .....e. . , ■ EXISTING 1: ZONE TWO it 1 REIN — --k LOT 2A LoT ,.. ;VESTMENT fE 1 \ rt " `ZONE ONE i L,Ilz.:(:.— •••• . 1 •1 1I ef* •• • N TI Or 3 e E St= THE STATE OF TEXAS COUNTY OF WILLIAMSON . TAX ABATEMENT AGREEMENT This Tax Abatement Agreement ( "Agreement ") is entered into by and between the City of Round Rock, Texas, a home rule city and Municipal Corporation of Williamson County, Texas, duly acting herein by and through its Mayor, hereinafter referred to as "City"; the County of Williamson, Texas duly acting herein by and through its County Judge, hereinafter referred to as the "County"; and Textek Plastics, Inc., duly acting by and through its President or any Vice President, hereinafter referred to as "Owner ". WITNESSETH: WHEREAS, on the � day of £E.G& 199/ , the City Council of the City of Round Rock, Texas, passed Ordinance No. ? establishing Reinvestment Zone No. City of Round Rock, Texas for commercial /industrial tax abatement, hereinafter referred to as "Ordinance No. a as authorized by Chapter 312, Tax Code, V.A.T.S. as amended, hereinafter referred to as the "Code "; and WHEREAS, the City has adopted Ordinance Number 2556, which Ordinance adopted appropriate guidelines and criteria governing reinvestment zones and tax abatement agreements to be entered into by the City as contemplated by the Code; and WHEREAS, in order to maintain and /or enhance the commercial /industrial economic and employment base of the Round Rock area to the long term interest 6 and benefit of the City and County, in accordance with Ordinance No. 2556 and the Code; and WHEREAS, the contemplated use of the Premises, as hereinafter defined, the contemplated improvements to the Premises in the amount as set forth in this Agreement and the other terms hereof are consistent with encouraging development of said Reinvestment Zone No. Two in accordance with the purposes for its creation and are in compliance with Ordinance No. and the guidelines and criteria adopted by the City and all applicable law; and WHEREAS, the Improvements as defined below constitute a major investment within Reinvestment Zone No. Two that will substantially increase the appraised value of property within the zone and will contribute to the retention or expansion of primary and secondary employment within the City and County; and WHEREAS, the City finds that there will be no substantial adverse affect on the provision of city services or on its tax base and the planned use of the Premises will not constitute a hazard to public safety, health, or welfare, Now Therefore, the parties hereto do mutually agree as follows: 1. The property to be the subject of this Agreement shall be machinery and equipment (hereinafter referred to as "Improvements ") to be installed on real property located within Reinvestment Zone No. Two, which is described in Exhibit "A ", and hereinafter referred to as the "Premises. ". 2. The Owner shall promptly commence installation of the Improvements, described in Exhibit "B" on the Premises with a value of approximately $1,673,195 and to be substantially complete in accordance with the 2 schedule described in Exhibit "B"; provided, that Owner shall have such additional time to install the Improvements as may be required in the event of "force majeure" if Owner is diligently and faithfully pursuing completion of the Improvements. For this purpose, "force majeure" shall mean any contingency or cause beyond the reasonable control of Owner induding, without limitation, acts of God or the public enemy, war, riot, civil commotion, insurrection, governmental or de facto governmental action (unless caused by acts or omissions of Owner), fires, explosions or floods, and strikes. 3. The Owner agrees and covenants that it will diligently and faithfully in a good and workmanlike manner pursue the installation of the Improvements as a good and valuable consideration of this Agreement. Owner further covenants and agrees that all installation and construction of the Improvements will be in accordance with all applicable state and local laws and regulations or valid waiver thereof. In further consideration, Owner shall hereafter, until the expiration of this Agreement, continuously operate and maintain the Premises as the Round Rock Facility of Textek Plastics, Inc . 4. The Owner agrees and covenants that the Textek Plastics facility shall provide employment according to the following accumulative schedule: By December 31, 1992 22 jobs By December 31, 1993 27 jobs By December 31, 1994 32 jobs By December 31, 1995 - 36 jobs { By December 31, 1996 43 jobs 3 The Owner shall provide to the City and County annual manpower reports within sixty (60) days following the end of each calendar year. Regardless of anything contained herein to the contrary, the failure by Owner to provide the number of jobs set out in the above schedule shall not be considered an event of default as defined in paragraph 5 below unless the number of jobs actually provided is less than seventy -five percent (75 %) of number set out in the schedule. If the actual number of jobs provided at the end of any year is less than the scheduled number but is seventy-five percent (75 %) or more, then the percentage of tax abatement for the following year as provided in paragraph 10 below shall be reduced. The percentage of tax abatement shall be reduced by the same percentage that the actual number of jobs are less than the scheduled number of jobs. By way of illustration, if the schedule requires 100 jobs by December 31, 1991, but only 90 jobs are provided, then the tax abatement for 1992 shall be reduced from 100% to 90 %. If the schedule requires 200 jobs by December 31, 1993, but only 160 jobs are provided, then the tax abatement for 1994 shall be reduced from 25% to 5 %. By way of clarification, failure to provide at least seventy-five percent (75 %) of the number of jobs shown on the above schedule shall be considered an event of default of this Agreement. 5. In the event that (1) the Improvements for which an abatement has been granted are not installed in accordance with this Agreement or (2) Owner allows its ad valorem taxes owed the City and /or County to become delinquent and fails to timely and properly follow the legal procedures for protest and /or contest of any such ad valorem taxes; or (3) Owner breaches any of the terms or conditions of 4 this Agreement, then this Agreement shall be in default. In the event that the Owner defaults in its performance of (1), (2), or (3) above, then the City or County shall give the Owner written notice of such default and if the Owner has not cured such default within thirty (30) days of said written notice, or, if such default cannot be cured by the payment of money and cannot with due diligence be cured within a 90 -day period owing to causes beyond the control of the Owner, this Agreement may be terminated by the City or County. Notice shall be in writing and shall be delivered by personal delivery or certified mail to: TEXTEK PLASTICS, INC. 2500 TELLABS DRIVE ROUND ROCK, TEXAS 78664 As liquidated damages in the event of default and in accordance with Section 312.205, Tax Code, V.A.T.S., as amended, all taxes which otherwise would have been paid to the City and County without the benefit of abatement (but without the addition of penalty; interest will be charged at the statutory rate for delinquent taxes as determined by Section 33.01 of the Tax Code) will become a debt to the City and County and shall be due, owing and paid to the City and County within sixty (60) days of the expiration of the above mentioned applicable cure period as the sole remedy of the City and County The City and County shall have all remedies for the collection of the recaptured tax revenue as provided generally in the Tax Code for the collection of delinquent property taxes. The parties acknowledge that actual damages in the event of default and termination would be speculative and impossible to determine. 5 6. The City and the County each represent and warrant that the Premises and /or Improvements do not include any property that is owned by a member of their respective councils or boards, agencies, commissions, or other governmental bodies approving, or having responsibility for the approval of, this Agreement. 7. The terms and conditions of this Agreement are binding upon the successors and assigns of all parties hereto. This Agreement cannot be assigned by Owner unless written permission is first granted by the City and County, which permission shall not be unreasonably withheld. Any assignment shall provide that the assignee shall irrevocably and unconditionally assume all duties and obligations of the assignor as set out in the agreement. No assignment shall be approved if the assignor or assignee are indebted to the City or County for ad valorem taxes or other obligations. 8. It is understood and agreed between the parties that the Owner, in performing its obligations hereunder, is acting independently, and the City and County assume no responsibilities or liabilities in connection therewith to third - parties. Owner agrees to indemnify and hold City and County harmless from any and all kinds of claims, losses, damages, injuries, suits, or judgments. 9. The Owner further agrees that the City and County, their agents and employees, shall have reasonable right of access to the Premises to inspect the Improvements in order to insure that the installation of the Improvements are in accordance with this Agreement and all applicable state and local laws and regulations or valid waiver thereof. After installation of the Improvements, the City and County shall have the continuing right to inspect the Premises to insure 6 that the Premises are thereafter maintained and operated in accordance with this Agreement. 10. Subject to the terms and conditions of this Agreement, and subject to the rights and holders of any outstanding bonds of the City and County, a portion of ad valorem taxes from the Improvements otherwise owed to the City and County shall be abated. City and County hereby acknowledge that they are not aware of any terms or conditions of any outstanding bonds which would invalidate this Agreement. Said abatement shall be an amount equal to the below - stated percentages assessed upon the value of the Improvements, in accordance with the terms of this Agreement and all applicable state and local regulations. The percentage of abatements is as follows: Year 1993: 100% abatement Year 1994: 75% abatement Year 1995: 75% abatement Year 1996: 50% abatement Year 1997: 25% abatement These abatements shall be for five years beginning January 1, 1993. 11. The Owner agrees and covenants that the attached application for tax abatement (Exhibit "C ") is a part of this Agreement, and Owner further warrants that the information provided in that application is true and correct and that any materially false or misleading information that is provided to the taxing jurisdictions may be grounds for termination of this Agreement with possible liability for recovery of abated taxes. 7 12. It is understood and agreed by the City, County, and the Owner that if the Premises has been designated and taxed as agricultural land pursuant to Chapter 23, Subchapter C, Tax Code, V.A.T.S., that this Agreement shall not be effective and no abatement granted until Owner has removed the agricultural use designation and all taxes due pursuant to Section 23.55, Tax Code, V.A.T.S., as amended, (roll back taxes) have been paid. 13. This Agreement was authorized by Resolution of the City Council at its council meeting on the 19th day of December, 1991, authorizing the Mayor to execute the Agreement on behalf of the City. 14. This agreement was authorized by the minutes of the Commissioners Court of Williamson County, Texas, at its meeting on the 6th day of January, 1992, whereupon it was duly determined that the County Judge would execute the agreement on behalf of Williamson County 15. This Agreement was entered into by Textek Plastics, Inc. pursuant to authority granted by its Board of Directors on the 10th day of December, 1991, whereby the President was authorized to execute this Agreement on behalf of Textek Plastics, Inc., a copy of which authorization is attached hereto as Exhibit 'D ". 16. This shall constitute a valid and binding Agreement between the City and Textek Plastics, Inc. when executed in accordance herewith, regardless of whether the County executes this agreement. If the County executes this Agreement this shall constitute a valid and binding agreement between the County and Textek Plastics, Inc. when executed on behalf of said parties, for the abatement of the County's taxes in accordance therewith. 8 17. This Agreement is performable in Williamson County, Texas. Witness our hands this day of JAnl U/4 Ri ATTEST: Land, City Secretary APPR D AS 5lZ Stepha L. Sheets, City Attorney ATTEST: AP ATTEST: TO F APPROVED TO FO RM: Attorney for Williamson Coun By: ttorney fo Textek Plastics, Inc. Corporation Mike Robinson, Mayor COMMISSIONERS COURT OF WILLIAMSON COUNTY By: TEXTEK PLASTICS, INC. 9 George Freeborn, its President ' EXHIBIT "A" Property Description Lot 2A in the Replat of Amanda Subdivision, Lot 2 Sr 3, Block "A" . 10 ' EXHIBIT "B" Description of Improvements To Be Constructed Machinery and Equipment shall be installed in accordance with the following: minimum values and schedule Minimum cumulative value of Date of which machinery and Machinery and Equipment Equipment shall be installed $ 705, 666 Dec. 31, 1992 $ 978,451 Dec. 31, 1993 $ 1,219,990 Dec. 31, 1994 $ 1,446,888 Dec. 31, 1995 $ 1,673,195 Dec. 31, 1996 11 EXHIBIT "C" APPLICATION FOR TAX ABATEMENT This is to certify that the statements contained herein are true and correct. The signers hereof are authorized to make these statements on behalf of the applicant. The filing of this document acknowledges familiarity and conformance with guidelines and criteria for granting tax abatement. This application will become part of the agreement which shall be enforceable and binding on the applicant. False representations will be grounds for terminating the agreement. Any such false statements shall be considered a default which renders the agreement void. This application should be filed with the City Manager of the City of Round Rock, 221 East Main Street, Round Rock, Texas 78664. I. APPLICANT INFORMATION: DATE: December 6, 1991 A. Company Name: TEXTEK PLASTICS, INC. B. Address: 9800 West Commerce, San Antonio, Tx., 78227 II. PROTECT INFORMATION: A. Description of area to be designated as reinvestment zone: (attach map) Lot 2A in "Replat of Amanda Subdivision, Lot 2 & 3, Block A "; 5.8417 Acres B. Description of eligible improvements (real property) to be constructed: Not applicable. Abatement requested for machinery and equipment only. C. Current assessed value: Land and building not applicable for abatement D. Estimated value of eligible improvements: Machinery and Equipment 1992 $ 705,666 (1 - - 93) Machinery and Equipment 1993 $ 978,451 (1 -1 -94) Machinery and Equipment 1994 $ 1,219,990 (1 -1 -95) Machinery and Equipment 1995 $ 1,446,888 (1 - - 96) Machinery and Equipment 1996 $ 1,673,195 (1 -1 -97) PAGE 2 OF EXHIBIT "C" E. Description of ineligible (taxable) property to be included in project: Existing buildings and land F. Estimated value of ineligible property: Land - $445,312 Buildings - $211,915 G. Estimated value of site as of January 1 preceding abatement agreement: (1) Land Not applicable (Not to be abated) (2) Improvements Not applicable (Not to be abated) (3) Personal Property None H. This project is: ('I) A New Plant (Machinery and equipment in existing building) ( ) An Expansion ( ) A Modernization If Modernization: Estimated economic life of existing plant: N/A years Added economic life from modernization: N/A years I. Tax abatement requested: 100 % of eligible property for year 1. 75 % of eligible property for year 2. 75 % of eligible property for year 3. 50 % of eligible property for year 4. 25 % of eligible property for year 5. III. ECONOMIC INFORMATION: A. Construction Estimates: (1) Commencement Date: Tanuary (2) Completion Date: March (3) Number of Construction Jobs: unknown ,19 92 ,1992 B. Estimated number of jobs to be created: Local Transfer Total 1. December 31, 19 92 22 ! 22 2. December 31, 19 93 27 27 3. December 31, 19 94 32 32 4. December 31, 19 95 36 36 5. December 31, 19 96 43 43 C. Other estimated taxes generated by project: (1) Sales Taxes: S20,000 annually (2) Other (Identify): -0- D. The proposed reinvestment zone is located in: (1) City: Round Rock (2) County: Williamson (3) School District: Round Rock Independent School District (4) Other Taxing Jurisdiction: County Education District Water Control and Improvement District Signature of . thorized Company Official George P. Freeborn, President Name and Title of Authorized Company Official Company Representative to be contacted: George E. Freeborn Name President Title 9800 W. Commerce, San Antonio, TX 78227 Address 512- 675 -4950 Telephone PAGE 3 OF EXHIBIT "C" ■ Upon receipt of the application, the City of Round Rock may also require copies of the latest annual stockholders report, audited financial statements, bank references, and any other information required to evaluate the application. STATE OF TEXAS COUNTY OF BEXAR EILLIE I. SCHNEEIDER xW COSAMISi3N EXPIRES Aurat 3, 1995 PAGE 4 OF EXHIBIT "C" VERIFICATION BEFORE ME, the undersigned Notary Public, on this day personally appeared George E. Freeborn , President of Textek Plastics, Inc. (Owner), being by me duly sworn on his oath deposed and said that he is duly qualified and authorized in all respects to make this affidavit; that he has read the above and foregoing Application For Tax Abatement; and that every statement contained in the Application is within his knowledge and true and correct. SUBSCRIBED AND SWORN TO BEFORE ME on the /1 'day of L_2( WeJ?199/, certify which witness my hand and official seal. ( eL.0dC Notary Public, State of Texas Printed Name:Zic -/-,GZ. /7Ne.iO2� My Commission Expires: 3 - - 7 -95 EXHIBIT "D" STATE OF TEXAS )( COUNTY OF BEXAR )( CERTIFICATE OF ADOPTION AND RESOLUTION I, TINA FREEBORN, Secretary of TEXTEK PLASTICS, INC., a corporation duly authorized and existing under the laws of the State of Texas, do hereby certify that the following resolutions appear in the records of the corporation, and that said resolutions were unanimously adopted by unanimous consent of the Board of Directors of TEXTEK PLASTICS, INC. on December 10, 1991, and that said resolutions have not been rescinded, amended, or modified: "RESOLVED, that TEXTEK PLASTICS, INC. be and it hereby is, authorized to enter into a Tax Abatement Agreement by and between the City of Round Rock, Williamson County, and the Round Rock Independent School District for the abatement of certain property taxes in conjunction with the corporation entering into a Lease Agreement by and between Baker Hughes Incorporated for the premises located at 2550 Tellabs Drive, Round Rock, Texas, to be used for custom manufacturing including plastic injection molds. FURTHER RESOLVED, that GEORGE E. FREEBORN, President of the corporation, be, and he hereby is, authorized to enter into and execute said Tax Abatement Agreement and said Lease Agreement on behalf of the corporation with such changes or modifications as he may deem appropriate and he is hereby authorized and directed to do and perform any and all acts and deeds and to execute any additional documents necessary to effectuate the intent and purpose of the preceding resolution. IN WITNESS WHEREOF, I have hereunto set my hand and seal of said corporation on this the 10th day of December, 1991. TINA FREEBORN, Secretary of TEXTEK PLASTICS, INC. STATE OF TEXAS )( COUNTY OF BEXAR )( BEFORE ME, the undersigned authority, on this day personally appeared TINA FREEBORN, Secretary of TEXTEK PLASTICS, INC., a corporation, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that she executed the same for the purposes and consideration therein expressed, in the capacity therein stated and as the act and deed of said corporation. GIVEN UNDER MY HAND AND SEAL OF OFFICE on this the / / yl �day of December, 1991. GS7_itc Notary Public, State of Texas. DATE: December 17, 1991 SUBJECT: City Council Meeting, December 19, 1991 ITEM: 9.A. Consider a resolution authorizing the Mayor to enter into a tax abatement agreement with Textek Plastics, Inc. STAFF RESOURCE PERSON: Joe Vining The proposed tax abatement agreement between TEXTEK PLASTICS, INC., the City of Round Rock and Williamson County will result in the following: 1.) An investment in machinery and equipment of $1,673,195 phased in over five years. 2.) The addition of 43 jobs phased in over 5 years with initial job creation of 22 new employees in 1992. These jobs are all new jobs to the Austin MSA. The proposed abatement will abate taxes on machinery and equipment only. The abatement requested is as follows: Tax Percentage Estimated City Estimated Co. Year Abatement Abatement Abatement 1993 100% $ 4,410 $ 2,470 1994 75% $ 4,586 $ 2,568 1995 75% $ 5,719 $ 3,202 1996 50% $ 4,522 $ 2,532 1997 25% $ 2,614 $ 1,464 Total: $ 21,851 $12,236 The Williamson County Commissioner's Court has scheduled action on this item for their December 30th meeting. A copy of the proposed Tax Abatement Agreement is attached for your information. Economic Impact: ❑ $21,851 estimated total tax abatement over five (5) years. ❑ The plant will create 22 new jobs in 1992 and an additional 21 jobs over five (5) years.