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R-96-05-09-14A - 5/9/19967 Ordinance No. G- 96- 04- 25 -9I, created Reinvestment Zone No. Eighteen in the City of Round Rock, Texas, and WHEREAS, in accordance with Chapter 312, Tax Code, V.A.T.S. as WHEREAS, the City Council, on the 25th day of April, 1996, in amended, the City desires to enter into a tax abatement agreement with Photronics Texas, Inc., regarding property located in said Reinvestment Zone No. Eighteen, and WHEREAS, the Council has determined that all requirements of the guidelines and criteria adopted by Ordinance No. G-95-09-14-9P have been complied with, Now Therefore BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS That the Mayor is hereby authorized and directed to execute on behalf of the City a Tax Abatement Agreement with Photronics Texas, Inc. ATTEST: RESOLVED this 9th day of May, 1996. LAND, City Secretary C \WPDOCS \RESOLOSI \RS60509A WPD /kg RESOLUTION NO. R- 96- 05- 09 -14A CHARLES CUISPEPPER, Mayor City of Round Rock, Texas - THE STATE OF TEXAS COUNTY OF WILLIAMSON TAX ABATEMENT AGREEMENT RECITALS 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 and Travis Counties, Texas, duly acting herein by and through its Mayor, hereinafter referred to as "City "; and Photronics Texas, Inc. a Texas corporation, duly acting by and through its President or any Vice President, hereinafter referred to as "Owner ". WHEREAS, on the 25th day of April, 1996, the City Council, of the City of Round Rock, Texas, adopted Ordinance No. G- 96- 04 -25 -91 establishing Reinvestment Zone No. 18, City of Round Rock, Texas for commercial /industrial tax abatement, hereinafter referred to as "Ordinance No. G- 96- 04- 25 -9I ", 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 No. G- 93- 12- 09 -9G, 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, the contemplated use of the Premises (as hereinafter defined) and Improvements (as hereinafter defined) as well as the terms of this Agreement are consistent with encouraging development in said Reinvestment Zone No. 9 in accordance with the purposes for its creation and are in compliance with Ordinance No. G- 93- 12 -09 -9G and the guidelines and criteria adopted by the City and all applicable laws; and WHEREAS, the Improvements constitute a major investment within Reinvestment Zone No. 18 that will substantially increase the appraised value of the property within the zone; and will contribute to the retention of expansion of primary and secondary employment within the City; and WHEREAS, the City finds that there will be no substantial adverse effects on the provision of governmental services or on its tax base and that 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: C:\ WPDOCS \ACITY \AOASE:CM1 .1.WPD /zl. 1 1. Property Subject to Agreement. The property to be the subject of this Agreement shall be that property included within the Reinvestment Zone No. 18 which is more fully described in Exhibit "A" which is made a part hereof and shall be hereinafter referred to as the "Premises." 2. Construction of Improvements. The Owner shall promptly commence construction of its facility as described in Exhibit "B" on the Premises (said facility hereinafter referred to as "Improvements ".) The Improvements shall consist of a two story photomask manufacturing facility containing 40,000 square feet and photomask production equipment. The total construction cost of the Improvements is approximately Nine Million and no /100 Dollars ($9,000,000.00) for the building and Twenty One Million and no /100 Dollars ($21,000,000.00) for the production wquipoment, which improvements areto be substantially complete on or about July 31, 1996; provided that Owner shall have such additional time to complete the Improvements as may be required in the event of "force majeure" if Owner is diligently and faithfully pursuing completion of the Improvements. For this purpose, "force majeure" shall mean any contingency or cause beyond the reasonable control of Owner including, without limitation, acts of God or the public enemy, war, riot, civil commotion, insurrection, governmental or de facto governmental action (unless caused by acts or omissions of Owner), fires, explosions or floods, and strikes. The date of completion of the Improvements shall be defined as the date a Certificate of Occupancy is issued by the City. 3. Completion of Improvements. The Owner agrees and covenants that it will diligently and faithfully in a good and workmanlike manner pursue the completion of the Improvements as a good and valuable consideration of this Agreement. Owner further covenants and agrees that all construction of the Improvements will be in accordance with all applicable state and local laws and regulations or valid waiver thereof. In further consideration, Owner shall thereafter, from the date of a Certificate of Occupancy is issued until the expiration of this Agreement, continuously operate and maintain the Premises as a semiconductor fabrication facility. 4. Provision of lobs The Owner agrees and covenants that it will provide and /or retain at least the number of jobs on the Premises from the completion date of the Improvements throughout the term of this Agreement according to the following schedule: Date Retain New Total On July 31, 1997 n/a 50 50 2 Date Retain New Total On December 31, 1997 50 0 50 On December 31, 1998 50 10 60 On December 31, 1999 60 12 72 On December 31, 2000 72 8 80 On December 31, 2001 80 8 88 On December 31, 2002 88 9 97 On December 31, 2003 97 10 107 The Owner shall provide to the City annual manpower reports in the form attached hereto as Exhibit "C" and made a part hereof, 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 10 below unless the number of jobs actually provided is less than seventy -five percent (75 %) of the 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 7 below shall be reduced. The percentage of tax abatement shall be reduced by the same percentage that the actual number of jobs bears to the scheduled number of jobs. By way of illustration, if on December 31, 1997 Owner has provided ten percent (10 %) fewer jobs than is required, then its abatement shall be reduced by ten percentage points (i.e. the 55% abatement shall be reduced ten percentage points to a 45% abatement.) Failure of the Owner to provide at least seventy -five percent (75 %) of the number of jobs required by this Agreement shall be considered an event of default. 6. Application for Tax Abatement. The Owner agrees and covenants that the attached application for tax abatement (Exhibit "B ") is a part of this Agreement, and Owner further warrants that the information provided in that application is true and correct. If any materially false or misleading information is provided in said application, City shall have the discretion to declare this Agreement to be in default and City shall be entitled to the remedies provided for in paragraph 10. 7. Portion of Taxes Abated. Subject to the terms and conditions of this Agreement, and subject to the rights of the holders of any outstanding bonds of the City, a portion of ad valorem real and personal property taxes from the Premises otherwise owed to the City shall be abated. City hereby acknowledges that it is not aware of any terms or conditions of any outstanding bonds which would invalidate this Agreement. Said abatement shall be an amount equal 3 to the below- stated percentages assessed upon the increased value of the Premises and Improvements over the value in the year in which this Agreement is executed, in accordance with the terms of this Agreement and all applicable state and local regulations: Tax Year 1997 Tax Year 1998 Tax Year 1999 Tax Year 2000 Tax Year 2001 Tax Year 2002 Tax Year 2003 55% abatement 55% abatement 55% abatement 55% abatement 55% abatement 55% abatement 55% abatement These abatements shall be for seven (7) tax years beginning January 1, 1997. 8. Right of Inspection. The Owner further agrees that the City, its agents and employees shall have the right to enter upon the Premises at any reasonable time to inspect the Improvements in order to determine whether the construction of the Improvements is in accordance with this Agreement and all applicable Federal, state, and local laws, ordinances, and regulations or valid waiver thereof. After completion of the Improvements, the City shall have the continuing right to enter upon and inspect the Premises at any reasonable time to determine whether the Premises are thereafter maintained and operated in accordance with this Agreement and all applicable Federal, state, and local laws, ordinances, and regulations. If the City determines that a violation of a Federal, state or local law, ordinance or regulation exists on the Premises, the City may, in addition to any other authorized enforcement action, provide to the Owner written notice of such violation. For the purposes of this Agreement, the Owner shall have ten (10) days from the date of the notice to cure or remedy such violation. If the Owner fails or refuses to cure or remedy the violation within the ten (10) day period, the Owner is subject to the forfeiture, at the discretion of the City, of any right to any tax abatement for a portion of the period or the entire period covered by this Agreement. In addition, the failure or refusal to cure or remedy the aforesaid violation shall be considered a default of this Agreement under paragraph 10. 9. Cost of Improvements and Personal Property added to the Premises. The Owner agrees and covenants that upon completion of the Improvements to add, and during the term of this Agreement to retain, real and personal property with a taxable value of not less than $30,000,000.00 Within sixty (60) days following completion of the Improvements and by March 1, of each year thereafter, Owner shall provide to the 4 City documentation showing to the satisfaction of the City that the value of taxable real property, personal property and equipment is in compliance with the foregoing. 10. Events of Default. In the event that (1) the Improvements for which an abatement has been granted are not completed in accordance with this Agreement or (2) Owner allows its ad valorem taxes owed the City to become delinquent and fails to timely and properly follow the legal procedures for protest and /or contest of any such ad valorem taxes; or (3) Owner breaches any of the terms or conditions of this Agreement, then this Agreement shall be in default. In the event that the Owner defaults in its performance of (1), (2), or (3) above, then the City shall give the Owner written notice of such default and if the Owner has not cured such default within thirty (30) days of said written notice, this Agreement may be terminated by the City by written notice to Owner. Such notice shall be in writing and shall be delivered by personal delivery or certified mail to: Jeffrey P. Moonan Senior Vice President General Counsel and Secretary 1061 E. Indiantown Rd., Suite 318 Jupiter, FL 33477 As liquidated damages in the event of default and in accordance with Section 312.205, Tax Code, V.A.T.S., as amended, all taxes which otherwise would have been paid to the City without the benefit of abatement (without the addition of penalty, but interest will be charged at the statutory rate for delinquent taxes as determined by Section 33.01 of the Tax Code) shall become a debt owed by Owner to the City and shall be due, owing and paid to the City within sixty (60) days of the expiration of the above mentioned applicable cure period. The City shall have all remedies for the collection of the recaptured tax revenue as provided generally in the Tax Code for the collection of delinquent property taxes. 11. Agricultural land. It is understood and agreed by the City and the Owner that if the Premises have been designated and taxed as agricultural land pursuant to Chapter 23, Subchapter C, Tax Code, V.A.T.S., this Agreement shall not be effective and no abatement will be 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. 12. Authorizations: a) City. This Agreement was authorized by Resolution of the City Council at its council meeting on the 9th day of 5 May, 1996, authorizing the Mayor to execute the Agreement on behalf of the City. b) Photronics. This Agreement was authorized by the Board of Directors of Owner on the day of May, 1996, which authorization is attached hereto as Exhibit "D ". 13. Miscellaneous provisions. a) City representations. The City represents and warrants that the Premises do not include any property that is owned by a member of its respective council or boards, agencies, commissions, or other governmental bodies approving, or having responsibility for the approval of, this Agreement. b) Agreement binds successors. The terms and conditions of this Agreement are binding upon the successors and assigns of all parties hereto. c) Assignment. This Agreement cannot be assigned by Owner unless written permission is first granted by the City, which permission shall not be unreasonably withheld; provided however, Owner may assign its rights under this Agreement to an entity which is wholly owned by Owner. No assignment shall be approved if the assignor or assignee are indebted to the City for ad valorem taxes or other obligations. d) Owner acting independently. It is understood and agreed between the parties that the Owner, in performing its obligations hereunder, is acting independently, and the City assumes no responsibilities or liabilities in connection therewith to third parties. e) Owner's Indemnity. During the term of this Agreement, Owner agrees to indemnify and hold City harmless from any and all kinds of claims, losses, damages, injuries, suits, or judgments which may accrue to Owner, City, or third parties arising out of this Agreement. f) Venue. This Agreement is performable in Williamson County, Texas, and venue for any suit arising hereunder shall be in Williamson County, Texas. Witness our hands this day of 19 6 ATTEST: JOANNE LAND, City Secretary CITY •F ROUND ROCK, TEXAS CHARLES CULP aR, Mayor PHOTRONICS TEXAS, INC. By: 7 , its Lot Five (5), REMAINDER OF subdivision in to the map or 87, Pages 140D Travis County, EXHIBIT "A" Legal Description Block A, RESUBDIVISION OF THE LOT 2, CORRIDOR PARK I, a Travis County, Texas, according plat thereof recorded in Volume and 141A of the Plat Records of Texas 8 EXHIBIT "B" (Application for Tax Abatement) 9 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 these 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. APPLICANT INFORMATION: DATE: 04/ 10 /1996 Company Name: Photronics Texas, Inc Address: 15 Secor Road P.O. Box 5226 Brookfield. CT 06804 -3972 II. PROJECT INFORMATION: A. Description of area to be designated as reinvestment zone: (attach map) Photronics intends to build a photomask manufacturing facility within the bounds of Corridor Park 1 in excess of 40,000 square feet (gross). The intended site is designated Lot 5, Tract 3 and is bound on the south by Michael Angelo Way and on the east by Wadley Place. The site consists of5.542 acres and is a resubdivision of the remainder of Lot 2, Corridor Park, Bk. 87. pgs 1400 - 141.4. B. Description of eligible improvements (real property) to be constructed: Photronics intends to build a two story photomask manufacturing facility. Constructed within the facihty will be up to 14,000 square feet ofCLASS 1 and 10 cleanroom commonly found in the semiconductor industry. Housed within the cleanroom will be precision lithography, process, metrology and repair tools. External to the cleanroom will be appropriate environmental support equipment commonly used for HVAC and air filtration in CLASS 10 and below cleanroom. C. Current assessed value: Based on the 1995 tax year's assessment, the assessed value of the property is S337,894. D. Estimated value of eligible improvements: Photronics estimates that when the facility is operating with two production lines, the value of improvements could be S 30.11. The improvements consist of S9 .11 for the building cleanroon and 821,1! for production equipment. Operations can commence prior to installation of two production lines. It is within our reasonable operating budget to continue adding value through personal property at a rate of S5 AI per year for the remaining period of the tax abatement. Rates could be affected by business trends. E. Description of ineligible (taxable) property to be included in project: not applicable txabmt.3.14.95 1 Commencement Date: Completion Date: # of Construction Jobs May '96 - July '96 May '97 - July `97 > 100 F. Estimated value of ineligible property: not applicable G. Estimated value of site as of January I preceding abatement agreement: Land: The site's 1995 assessed value was 5337,894. Improvements: none. Personal Property: none. H. This project is: " (X) A Neu Plant 0 ) An Expansion 0 ) A Modernization If Modernization: Estimated economic life of existing plant: years Added economic life from modernization: years I. Tax abatement required: _55% of eligible property for year 1. _55%_ of eligible property for year 2. _55 %_ of eligible property for year 3. _55%_ of eligible property for year 4. _55% of eligible property for year 5. _55% of eligible property for year 6. _55 % _ of eligible property for year 7. III. ECONOMIC INFORMATION: A. Construction Estimates: B. Estimated number of jobs to be created: (Unburdened) Local Transfer Total Est. Salaries 1. December 31,1997 47 3 50 S 1.73! 2. December 31.1998 57 3 60 5 2.1.51 3. December 31.1999 69 3 72 S 2.51 4. December 31.2000 77 3 80 S 2.83! 5. December 31,200/ 85 3 88 S 3.2M 6. December 31.2002 94 3 97 5 3.5M 7. December 31,2003 104 3 107 S 4.0,11 C. Other estimated taxes generated by project: Sales Tax: Photronics will generate sales tax on manufactured product as dictated by the end users tax and usage status. i 04 -10 -1996 01 46PM FROM PLI RuSIN 51 05828 • Otfi¢!s ' ): aor,appltcabis 'S 'pia Zane is IO ij7: J! • RcemdRock Sc6ao] Disaict Other wan : { :. 4 Oithrd Travis .. I : RoandXact Indepividifit Jc Ioo1 D/s iic1 Water Cakral impro i lk'ai c# ME= and Las ccIintl Es Bar • • 1i ' r,. ; 1 12 capital ufTexaaIfiginvoy, SY4 170 j ; • it zx 4 Texas 78746 . ! ! , 4 , • • ! o J72 306 -1975 ' I i ! • � y � i y ± gi p •• J • ma y ' /� � y p p 1 { �q ;Ito I$ ( 1i aiidit4Yyisi st;ten:PM! bops. }6 • a i d $ y ' 3' • • • y '! • .1 it ! !' 1 1 71 1 '' 1 I • . i. a. ! • :11 I • • `i • ;1 - ii i , I • 1tiIINWIANO7 SDI NONWOHd WdS17 :80 96. Ti "'L6°. 02420/.96 , 14936 r $'512 3469742 - •C0114. IND. PROP. 4.,' ;.u.c -- 3— �;; F 1 I 1 \� ti ii 1 f Djta -^Cw' DUST- — i\ VOL. 1 I S PG. 468 — - \ r 2 ` � R 44 � 1 LOT . D.. 1 \ Drt ER 1ND x M» I i 1 VC \ L 11532. r2. 1 , ` } N27 • 15.62' a: �'� y,- !i.....01 , i n l Le, 5 I! L rn k IN � ° " 1 �l N 1 t . :1 - I :‘t.)\ I TRA T T ' 5 A FiE — 100 t m0 1 - x100' CURVE TABLE CORRDOR PAIR of No. I Delta fladlL Arc Length Chard Length Chard Bearing C1 2:36'06' 33D.O0 158.9B 157.44 N4B 15'05 "µ C2 f 8950'19 71100 71.38 28.7.' N7929'39 W 03 1 ,720'54 270.00 6222 01.91 S46:2OO W ORR B5. LOT OR ARK PGS. 55R- 5E4 1 0 005/005 d Photronics (Reinvestment Zone # 18, 5.542 Ac) I, of (Owner) do certify that on December 31, 19 there were full time employees at STATE OF TEXAS § § COUNTY OF WILLIAMSON § EXHIBIT "C" MANPOWER REPORT Signature: Printed Name: Title: Date: BEFORE ME, the undersigned Notary Public, on this day personally appeared of (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; and that every statement contained in the Manpower Report is within his knowledge and true and correct. SUBSCRIBED AND SWORN TO BEFORE ME on the day of ,19 to certify which witness my hand and official seal. Notary Public, State of Texas Printed Name: My Commission Expires: EXHIBIT "D" (Authorizaation by Photronics Board of Directors) 11 T ' Staff Resource Person: Joe Vining Staff Recommendation: Approval • t t N Date: May 7, 1996 Subject: City Council Meeting May 9, 1996 Item: 14.A. Consider a resolution authorizing the Mayor to enter into a tax abatement agreement with Photronics Texas, Inc. This tax abatement agreement is being created as an incentive for a new industry, Photronics, that will have a significant impact on the Round Rock tax base. Photronics will build a two story photomask manufacturing facility of approximately 40,000 sq.ft. Constructed within the facility will be approximately 14,000 square feet of CLASS 1 and 10 cleanrooms commonly found in the semiconductor industry. Housed within the cleanroom will be precision lithography, process, metrology and repair tools. External to the clean room will be environmental support equipment commonly used for HVAC and air filtration in CLASS 10 and below cleanrooms. According to the terms of the agreement, the total construction cost of the improvements is approximately $9 million for the building and $21 million for the production equipment. These improvements should be substantially complete on or before July 31, 1997. This new industry will provide at least 107 new jobs by the last year of the agreement. This is a 7 year 55% tax abatement based on the increased value of the premises and improvements. Using the current ad valorem tax rate of .42635, the approximate value of this abatement equates to $70,348 per year over the course of the agreement. Note: Tax Abatement Agreement for Photronics Texas, Inc. (R- 96- 05- 09 -14A) was amended by Resolution No. R 96 06 - 03 - 3B on June 3, 1996. Mayor Charles Culpepper Mayor Pro -tem Earl Palmer Council Members Robert Sttuka Rod Morgan Rtrk Steuart Martha Chavez Jimmy Joseph City Manager Robert L. Bennett. Jr. City Attorney Stephan L. Sheets May 13, 1996 Mike Jolly Chief Financial Officer Round Rock Independent School District 1311 Round Rock Avenue Round Rock, TX 78681 Dear 04111*- Resolution No. R- 96- 05- 09 -14A was approved by the Round Rock City Council on May 9, 1996. Enclosed is a copy of the resolution and agreement for your files. If you have any questions, please do not hesitate to call. Sincerely, e Land Assistant City Manager/ City Secretary Enclosure(s) THE CITY OF ROUND ROCK 221 East Main Street Round Rock. Texas 78664 512 -218 -5400 Fax 512 -218 -7097 1.800-735-2989 (TDD) 1-800-735-2988 (Voice) Mayor Charles Culpepper Mayor Pro Earl Palmer Council Members Robert Stluka Rod Morgan Rtck Steuart Martha Chavez Jimmy Joseph City Manager Robert L Bennett. Jr City Attorney Stephan L. Sheets May 13, 1996 Forrest Child Tax Assessor /Collector P.O. Box 1750 Round Rock, TX 78680 Dear Mr. Child: Resolution No. R- 96- 05- 09 -14A was approved by the Round Rock City Council on May 9, 1996. Enclosed is a copy of the resolution and agreement for your files. If you have any questions, please do not hesitate to call. Sincerely, Joanne Land Assistant City Manager/ City Secretary Enclosure(s) THE CITY OF ROUND ROCK 221 East Main Street Round Rock, Texas 78664 512-218-5400 Fax 512- 218 -7097 1- 800 - 735 -2989 (TDD, 1- 800 -735 -2988 (Voice) Mayor Charles Culpepper Mayor Pro•tem Earl Palmer Council Members Robert Sttuka Rod Morgan Rmk Stewart Martha Chavez Jimmy Joseph City Manager Robert L. Bennett, Jr City Attorney Stephan L. Sheets May 13, 1996 Dear Mr. Harris: Sincerely, enc: Tax Abatement Agreement mm THE CITY OF ROUND ROCK 221 East Main Street Round Rock, Texas 78664 512- 218 -5400 Brown, McCarroll, Oaks and Hartline, PC Attn: Jerry Harris, Attorney 111 Congress Avenue, Ste. 1400 Austin, TX 78701 re: PhotronicsTexas, Inc. tax abatement agreement Enclosed are two original documents that require signatures. We also need Exhibit D (Authorization by Photronics Board of Directors). Please have the documents signed and provide the information for Exhibit D. Send these documents back and I will obtain the city secretary's signature. A completed original will then be forwarded back to you for your records. - Please call if you have any questions. Mona Ryan, P1axYning Technician Planning and Community Development City of Round Rock, Texas Fax 512- 218 -7097 1-800-735-2989 (TDD1 1- 800 - 735 -2988 (Voice)