R-96-06-13-10C - 6/13/1996 RESOLUTION NO. R-96-06-13-10C
WHEREAS, the City Council, on the 25th day of April, 1996, in
Ordinance No. G-96-04-25-9J, created Reinvestment Zone No. Nineteen in
the City of Round Rock, Texas, and
WHEREAS, in accordance with Chapter 312 , Tax Code, V.A.T.S . as
amended, the City desires to enter into a tax abatement agreement with
Dupont Photomasks, Inc . , regarding property located in said
Reinvestment Zone No. Nineteen, 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 Dupont Photomasks,
Inc .
RESOLVED this 13th day of June, 1996 .
Y'l 66'"
CHARLES CULtEPHER, Mayor
City of Round Rock, Texas
ATTEST:
E LAND, City Secretary
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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";
Williamson County, duly acting herein by and through the County
Judge, hereinafter referred to as "County"; and DuPont Photomasks,
Inc, a corporation, duly acting by and through its
President or any Vice President, hereinafter referred to as "Owner" .
RECITALS
WHEREAS, on the 25th day of April, 1996, the City Council, of
the City of Round Rock, Texas, adopted Ordinance No. G-96-04-25-9J
establishing Reinvestment Zone No. 19, City of Round Rock, Texas for
commercial/industrial tax abatement, hereinafter referred to as
"Ordinance No. G-96-04-25-9J", 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. 19 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. 19 that will substantially increase the
appraised value of the 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 and County find 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
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constitute a hazard to public safety, health, or welfare, NOW
THEREFORE, the parties hereto do mutually agree as follows :
1. Property Subject to Agreement. The property to be the
subject of this Agreement shall be that property included within the
Reinvestment Zone No. 19 which is more fully described .in Exhibit
"A" which is made a part hereof and shall be hereinafter in
to
as the "Premises . "
2. Construction of Improvements. The Owner shall promptly
commence construction of its facility as described in the application
for tax abatement, (a copy of which is attached hereto as Exhibit
"B") on the Premises (said facility hereinafter referred to as
"Improvements" . ) The Improvements shall consist of two (2) new
buildings (30, 000 sq/ft) and associated equipment to increase the
capacity of Owner' s existing photomask business . The total
construction cost of the Improvements is approximately Two Million
and no/100 Dollars ($2, 000, 000 . 00) for the building and Thirty-four
Million and no/100 Dollars ($34, 000, 000 . 00) for the production
equipment, which Improvements are to be substantially complete on or
before April 1, 1997; 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. Co=letion 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 photomask fabrication facility.
4 . Provision of jobs 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-
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Date Retain New Total
On April 1, 1997 153 40 193
On December 31, 1997 193 10 203
On December 31, 1998 203 5 208
On December 31, 1999 208 5 213
On December 31, 2000 213 5 218
On December 31, 2001 218 5 223
The Owner shall provide to the City and County 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 b_y 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 90% abatement
shall be reduced ten percentage points to a 80% 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 or County shall have the discretion to declare this
Agreement to be in default and City and/or County 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 and County, a portion
of ad valorem real and personal property taxes from the Premises
otherwise owed to the City and County shall be abated. City and
County hereby acknowledge that it is not aware of any terms or
conditions of any outstanding bonds which would invalidate this
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Agreement. Said abatement shall be an amount equal 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 90% abatement
Tax Year 1998 85% abatement
Tax Year 1999 75% abatement
Tax Year 2000 60% abatement
Tax Year 2001 40% abatement
Tax Year 2002 20% abatement
Tax Year 2003 1.5% abatement
These abatements shall be for seven (7) tax years beginning
January 1, 1997 .
8. Riqht of Inspection. The Owner further agrees that the
City and County, 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 and
County 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 and County determines that
a violation of a Federal, state or local law, ordinance or
regulation exists on the Premises, the City or County 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 and/or County, 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 $36, 000, 000 .00 .
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Within sixty (60) days following completion of the Improvements
and by March 1, of each year thereafter, Owner shall provide to the
City and County documentation showing to the satisfaction of the
City and County 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 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 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, this Agreement may be terminated by the City or County by
written notice to Owner. Such notice shall be in writing and shall
be delivered by personal delivery or certified mail to:
DuPont Photomasks, Inc.
Attn. :
100 Texas Ave.
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 (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 County 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 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 .
11. Agricultural land. It is understood and agreed by the
City, County, 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.
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12 . Authorizations:
a) :l . This Agreement was authorized by Resolution
of the City Council at its council meeting on the _ day of
May, 1996, authorizing the Mayor to execute the Agreement on
behalf of the City.
b) Commissioners Court. This Agreement was authorized
by Resolution or Order of the Williamson County Commissioners
Court at its meeting on the day of May, 1996, authorizing
the County Judge to execute the Agreement on behalf of the
County.
c) DuPont Photomasks, Inc. This Agreement was
authorized by the Board of Directors of Owner, which
authorization is attached hereto as Exhibit "D" .
13. Miscellaneous provisions .
a) Citv and County representations . The City and the
County represent and warrant 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
o 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
and County, 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 ass_gnee
are indebted to the City or county 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
obligaticns hereunder, is acting independently, and the City
and County assume no responsibilities or liabilities in
connection therewith to third parties .
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e) Owner' s Indemnity. During the term of this Agreement,
Owner agrees to indemnify and hold City and County harmless
from any and all kinds of claims, losses, damages, injuries,
suits, or judgments which may accrue to Owner, City, County,
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 June, 1996.
CIT OF ROUND ROCK, TEXAS
6'/'A06-At
CHARLES CTIJP8WER, Mayor
ATTEST:
J NNE LAND, City Secretary
WILLIAMSON COUNTY COMMISSIONERS
COURT
John Doerfler, County Judge
ATTEST:
DUPONT PHOTOMASKS, INC.
By
its
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EXHIBIT "A"
Page 1 of 1
Property Description
The new building site is approximately 1 .0 acres of the
existing 14.31 acres that DPI owns on- the corner of Texas
Ave. and Greenhill Drive. The new facility is part of the
long term master plan to expand the capability and capacity
of the Round Rock site.
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DuPONT Photomasks Inc.
(Reinvestment Zone # 199 14.316 Ac.)
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EXHIBIT B
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:-3/7/96
Company Name: DuPont Photomasks Inc. and/or Assigns
Address: 100 Texas Ave.
Round Rock, TX 78664
II. PROTECT INFORMATION:
A. Description of area to be designated as reinvestment zone: (attach map) ,a
1 . 0 mere s - ib _ 14. 31 acre site at corner of Texas Ave.
and Greenhill Drive.
B. Description of eligible improvements (real property) to be constructed:
9 Ruilrlinac and assnr-iaterl improvements ( 30 .000 sg/ft total )
to expand capability and capacity of existing business
(see attachment for further rlearnr;=t i nn)
C. Current assessed value:
$16, 098 , 202 .00
r
D. Estimated value of eligible improvements:
Buildings $2 Million
Equipment $34 Million
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Attachment to Exhibit B
Description of Improvements
To Be Constructed
DPI will construct a 30,000 square foot facility consisting
of two buildings. The primary building ( 26,000 sq/ft. ) is
designed to manufacture advanced products for our leading
edge customers. The secondary building (4,000 sq/ft. ) is
the central plant designed to support the main building.
The existing parking lot will be expanded to provide access
to the new docks and central plant. A new parking area
will be built to access the front of the building from
Greenhill Drive.
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E. Description of ineligible (taxable) property to be included in project:
Conference Room, Cafeteria, Furniture, etc.
F. Estimated value of ineligible property:
$500,000
G. Estimated value of site as of January 1 preceding abatement agreement:
Land: ( 1 .0 acres) $27, 225
Improvements: 0
Personal Property: 0
H. This project is:
( x ) A New Plant ( ) An Expansion ( ) A Modernization
If Modernization:
Estimated economic life of existing plant: 10 years
Added economic life from modernization: 10 years
I. Tax abatement requested:
10 0 % of eligible property for year 1.
9 0 % of eligible property for year 2.
8 0 % of eligible property for year 3.
r,-,i _% of eligible property for year 4.
5 0 % of eligible property for year 5.
M. ECONOMIC INFORMATION:
A. Construction Estimates:
Commencment Date: Completion Date: # of Construction Jobs
3/15/96 4/1/97 200
B. Estimated number of jobs to be created:
Local Transfer Total Est. Salaries
1. December 31, 1997 35 5 40 $2 Million
2. December 31, 199 8 8 2 10 .5 Million
3. December 31, 1999 4 1 5 . 25 Milli
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4. December 31, 2 0 0 0 4 1 5 . 25 Million
5. December 31, 2001 E4 1 5 . 25 Million
C. Other estimated taxes generated by project:
Sales Tax: 0
Other (Identify): o
D. The proposed reinvestment zone is located in:
City: Round Rock
County: Williamson
School District: Round Rock Independent School District (RRISD)
Other Taxing Water Control & Improvement District #3 of Williamson,
Jurisdiction: N Ilam and Lee Counties
e A�//
Signature of Authorized Company Official
Van H. Leichliter - General Counsel and Executive Vice President
Printed Name and Title of Authorized
Company Official
Company Representative to be contacted:
Name: Van H. Leichliter Title: General Counsel & Exec. V.P.
Address: 100 Texas Avenue, Round Rock TX 78664
Telephone No.: (512) 388-8827
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.
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VERIFICATION
STATE OF TEXAS
COUNTY OF WILLIAMSON
BEFORE ME, the undersignNJptar Public, on this da x personally
appeared �, LeiGf r �€ a,.at (title) 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; 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 day of_ 7�h-r��✓ .
19 9(v , to certify which witness my hand and official seal.
1ACKIE L CALLAHAM 4PnTted
PZme:!-J�k-/�
lic, ate of Texas
NOTARY PUBLIC L . (fA-1l2hQ pvt
Comm.E pf 111--13-98 My Commission Expires: /l-/3 9B
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EXHIBIT "C"
MANPOWER REPORT
I, Charles M. Beaston V.P. Administratiorof DuPont Photomasks, Inc.
(Owner) do certify that on December 31, 19 5 there were 15 3 full time employees
at DuPont Photomasks, Inc.
Signature:
Charles M. Beaston
Printed Name:
Vice President Administration
Title:
March 8 , 1996
Date:
STATE OF TEXAS §
COUNTY OF WILLIAMSON §
BEFORE ME, the unlegned Notary Publi
nc, on this day personally
appeared ,. ire e-g n .�A. �cAV,, - � - �h a i`a4a (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 _ P-G` day
Of 19--q& , to certify which witness my hand and official
seal.
JACKIE L CALLAHAM
NOTARY PUBLIC otary Public, State of Texas
State of Texas rinted Name:Zle-Z6 c, L, ,CA oQ-'tAk-0-
p Comm. Exp. 11-13-98 My Commission Expires: 11 -13 9f�
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EXHIBIT D
Resolution of Board of Directors
DUPONT PHOTOMASKS, INC.
SECRETARY'S CERTIFICATE
I, Van H. Leichliter, Secretary of DuPont Photomasks, Inc. (the "Corporation"), a corporation
existing under the laws of the State of Delaware, do hereby certify that the following is a true
and correct copy of a resolution duly adopted by the Board of Directors of the Corporation on
December 21, 1995. I do further certify that such resolution remains in full force and effect:
RESOLVED, that the Chairman, President, any Executive Vice President, the Treasurer or any
Assistant Treasurer, together with the Secretary or Assistant Secretary of the Corporation hereby
are authorized to sign and execute on behalf of this Corporation any and all proposals, contracts,
and/or indemnity, surety or guaranty bonds or agreements necessary in connection with its
business with national, state or local governments,corporations,partnerships,individuals,whether
in the United States, the Commonwealth of Puerto Rico, territories of the United States or foreign
countries.
IN WITNESS WHEREOF, I hereto set my signature and the Seal of the Corporation this '2'
day of_ , 1996.
ol
Secretary
(SEAL)
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Date: June 11, 1996
Subject: City Council Meeting June 13, 1996
Item: 10.C. Consider a resolution authorizing the Mayor to execute a tax
abatement agreement with Dupont Photomasks, Inc.
Staff Resource Person: Joe Vining
Staff Recommendation: Approval
Dupont Photomasks, Inc. (DPI) has been operating in Round Rock since 1987.
The new facility is part of their long term master plan to expand the capability
and capacity of the Round Rock site.
DPI will construct a 30,000 square foot facility consisting of two buildings. The
primary building (26,000 sq.ft.) is designed to manufacture advanced photomask
products. The secondary building (4,0000-sq.ft. ) is the central plant designed to
support the main building. The existing parking lot will be expanded to provide
access to the new docks and central plant.
The total construction cost of the improvements is approximately Two Million
Dollars ($2,000,000)for the building and Thirty-four Million Dollars ($34,000,000)
for the production equipment. The improvements are scheduled to be
substantially completed by April 1, 1997.
This is a seven year tax abatement beginning 1997 that will be based on$36M at
the following percentage rates: 90%, 85%, 75%, 60%,40%, 20%, and 15%. Using
the current ad valorem tax rate of.42635,the approximate amounts will be
abated:
1997 $138,137
1998 130,463
1999 115,115
2000 92,092
2001 61,394
2001 30,697
2002 23,023
$590,922
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