R-96-11-07-10G - 11/7/1996 RESOLUTION NO. R-96-11-07-10G
WHEREAS, on June 13, 1996 the City Council adopted
Resolution No. R-96-06-13-10C approving a Tax Abatement Agreement
with DuPont Photomasks, Inc. ("DuPont") , and
WHEREAS, DuPont has requested that the Tax Abatement
Agreement be amended to reflect some changes in its development and
construction plans, and
WHEREAS, the requested amendments are acceptable to the
Council , 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 an amended Tax Abatement Agreement, a copy of
said agreement being attached hereto as Exhibit "A. "
RESOLVED this 7th day of November, 1996 .
CHARLES CUL PER, Mayor
City of Round Rock, Texas
ATTEST:
PANNE LAND, City Secretary
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TIE 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 Delaware
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
constitute a hazard to public safety, health, or welfare, NOW
THEREFORE, the parties hereto do mutually agree as follows:
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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 referred 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 (25, 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-eight Million and
no/100 Dollars ($38, 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. 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
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 30 183
On December 31, 1997 193 20 203
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 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 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 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
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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 15% 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
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
$40, 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
City and County documentation showing to the satisfaction of the City
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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. :Executive Vice President & General Counsel
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. Aariaultural 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.
12. Authorizations:
a) City. This Agreement was authorized by Resolution of
the City Council at its council meeting on the 7 ' day of
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A&CM&2. 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 , 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) City 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 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 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 assignee are
indebted to the City or county for ad valorem taxes or other
obligations.
d) Conveyance pursuant to financing of Improvements. It
shall not be a default of this Agreement for Owner to convey the
Premises and/or Improvements to a third party lender for the
purpose of financing the construction and/or purchase of the
Improvements. As long as Owner is otherwise in compliance with
the terms of this Agreement, the owner of the Premises and
Improvements, whether the Owner or third party lender, will be
entitled to receive the abatements provided for herein.
e) 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 and County
assume no responsibilities or liabilities in connection therewith
to third parties.
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f) 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.
g) Venue . This Agreement is performable in Williamson
County, Texas, and venue for any suit arising hereunder shall be
in Williamson County, Texas.
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Witness our hands this day of 1996.
CITYPF ROUND ROCK, TEXAS
(//446M��
CHARLES CUtP9PPER, Mayor
AT EST:
J NNE LAND, City Secretary
WILLIAMSON COUNTY COMMISSIONERS COURT
%rL '��& 12—q-q6
J hn Doerfle County Judge
ATTEST:
464/
DUPONT PHOTOMASKS, INC.
By. )j
its �jcPc yTid�
v/c e PLas r moi✓T 6 PNP.t�! ry�,✓SeL
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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 # i 9, 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: 10/18/9 6
Company Name: DuPont Photomasks, Inc.- and/or Assigns
Address: 100 Texas Ay _nuP ' R
Mound Rock, Texas 7§§§4
11. PROTECT INFORMATION:
A. Description of area to be designated as reinvestment zone: (attach map)
14 .31 acre site at corner of Texas Avenue and Greenhill Dr.
B. Description of eligible improvements (real property) to be constructed:
2 Buildings and associated improvements ( 25, 000 sq/ft total)
to expand capability and capacity of existing business
( see attachment for further description)
C. Current assessed value:
S16 -098 _ 202 _00
D. Estimated value of eligible improvements:
building: $2 Million
equipment: $38 Million
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ATTACIDWAT TO EXHIBIT B
Description of Improvements
To Be Constructed
DPI will construct a 25 , 000 square foot facility consisting
of two buildings. The primary building ( 21,000 sq/ft. ) is
designed to manufacture advanced products for our leading
edge customers. The secondary building 14 ,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:
CnnfPrennp Rnnm_ CafPtPria - Furniture Ptr
F. Estimated value of ineligible property:
$500. 000
G. Estimated value of site as of January 1 preceding abatement agreement:
Land: =.= ( 14:31 acres) - $16 , 098, 202. 00
Improvements: 0
Personal Property: o
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:
90 %b of eligible property for year 1. _20 % of eligible property
85 %o of eligible property for year 2. for year 6 .
75 %o of eligible property for year 3.
60 % of eligible property for year 4. 15—% of eligible property
40 of eligible property for year 5. for year 7 .
M. ECONOMIC INFORMATION:
A. Construction Estimates:
Commencement 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 40 5 45 2 Million
2. December 31, 1998 8 2 10 .5 Million
3. December 31, 1999 4 1 5 .25 MiA-
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4. December 31,2 0 o 0
5. December 31,2 0 01
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C. Other estimated taxes generated by project:
Sales Tax: 0
Other (Identify): 0
D. The proposed reinvestment zone is located in:
City: Round Rock
County: Williamson
School District: Round Rock Independent School District (RRISD)
Other Taxing jurisdiction: Brushy Creek WCID
A/
Signature of Auth ed Company Official
Van H. Leichliter - Ceneral Counsel & Executive Vice President
Printed Name and Title of Authorized._:
Company Official
Company Representative to be contacted:
General Counsel &
Name: Van H. Leichliter Title: Executive Vice President
Address: 100 Texas Avenue, Round Rock, Texas 78664
Telephone No.: 512/310-6527
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 undersigned Notary Public, on this day personally
appeared Van H. Leichliter I Gen Counsel (title) of DuPont Pho nmosks
(Owner), being by me duly sworn on his oa%i 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 12A day of Nab
19 , to certify which witness my hand and official seal.
\\M
#_ M�9�w MAY Fw. Notary Public, State of Texas
,N VV
Printed Name: 5CNC--D
My Commission Expires: 3-14-9
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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 §
�I BEFORE ME, the undersigned Notary Pu lic, on this day personally
appeared �i1��r1e� &I, ��A�V., /1�r�;,. �,�� ,� � (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 sw� day
Of — , 19 ''Lo , to certify which witness my hand and official
seal.
Y )ACKIE L CALLRHAM trin
ry Public, State of Texas
NOTARY PUBLIC
State of Texas tedName:5�&
Comm. Exp. 11-13-98 My Commission Expires:
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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 '2-0
day of , 1996.
Secretary
(SEAL)
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Date: November 5, 1996
Subject: City Council Meeting November 7, 1996
Item: 10.G. Consider a resolution authorizing the Mayor to execute an
amended Tax Abatement Agreement with DuPont Photomasks,
Inc.
Staff Resource Person: Joe Vining
Staff Recommendation: Approval
Dupont Photomasks, Inc. (DPI) is amending their tax abatement that was authorized by
resolution on June 13, 1996. DPI has revised the overall square footage size of the new
buildings from 30,000 to 25,000 and increased the production equipment costs from
$34M to $38M. In addition, the startup employee count was decreased by 10 employees
(193 to 183)but offset in the second year by increasing the count by 10.
An additional provision has been added to the contract under"13. Miscellaneous
provisions" that addresses conveyance pursuant to financing of improvements.
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