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
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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)