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HomeMy WebLinkAboutR-1243-4-94RESOLUTION NO. 1243-4-94(R) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ALLEN, COLLIN COUNTY, TEXAS APPROVING AN ABATEMENT AGREEMENT BETWEEN THE CITY OF ALLEN AND PHOTRONICS-TOPPAN TEXAS, INC. TO ABATE AD VALOREM TAXES; AND AUTHORIZING THE MAYOR OF THE CITY OF ALLEN TO EXECUTE SUCH AGREEMENT. WHEREAS, in order to maintain and/or enhance the industrial economic and employment base of the Allen community; and, WHEREAS, the City of Allen has adopted Resolution Nos. 1013-12-90(R) and 1139-10-92(R) stating that it elects to be eligible to participate in tax abatement; and, WHEREAS, on the 21st day of April, 1994, the City Council of the City of Allen, Texas adopted Ordinance No. 1242-4-94 establishing Industrial Reinvestment Zone No. Four, City of Allen, Texas for industrial tax abatement, as authorized by Chapter 312 of the Texas Tax Code; NOW THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ALLEN, COLLIN COUNTY, TEXAS THAT: SECTION 1: The City Council of the City of Allen, Texas approves an abatement agreement between the City of Allen and PHOTRONICS-Toppan Texas, Inc. attached hereto as Exhibit "A". SECTION 2: The Mayor of the City of Allen, Texas is hereby authorized to execute a contract between the City and PHOTRONICS-Toppan Texas, Inc. to abate ad valorem taxes consistent with Exhibit "A". DULY PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF ALLEN, TEXAS, ON THE 21ST DAY OF APRIL , 1994. APPROVED: A0 Joe Farmer, MAYOR ATTEST: Ju Morr' on, CMC, CITY SECRETARY f ki AD VALOREM TAX ABATEMENT AGREEMENT This Agreement is entered into by and between the City of Allen, Texas ("ALLEN"), a Texas home rule municipal corporation of Collin County, Texas and PHOTRONICS-TOPPAN TEXAS, INC. ("PHOTRONICS"). WHEREAS, ALLEN represents that on the 21 st day of April, 1994, the Allen City Council adopted Ordinance No. 1242-4-94 which established Reinvestment Zone No. 4 in the City of Allen, Texas for Commercial/Industrial tax abatement, as authorized by the Property Redevelopment and Tax Abatement Act (§312.001 et seq of the Texas Tax Code (the "ACT"]); WHEREAS, ALLEN represents that it has adopted guidelines and criteria governing tax abatement (each, a "POLICY STATEMENT"); WHEREAS, ALLEN has elected to be eligible to participate in tax abatement; WHEREAS, ALLEN represents that its POLICY STATEMENT constitutes appropriate guidelines and criteria governing tax abatement agreements to be entered into by ALLEN as contemplated by the ACT; WHEREAS, ALLEN represents that this Agreement is entered into in order to maintain and enhance the economic and employment base of ALLEN for the long term interest and benefit of ALLEN; WHEREAS, PHOTRONICS represents that as consideration for this Agreement, PHOTRONICS will construct a facility on the PROPERTY, as identified in Exhibit "A" attached hereto, and move, deliver or transfer to the PROPERTY tangible personal property which real and personal property shall upon completion have a value of at least Twenty Million Dollars ($20,000,000.00); TAX ABATEMENT AGREEMENT - PHOTRONICS - Page 1 a edc\s-aa`ab to -p h o.6 F N WHEREAS, PHOTRONICS represents that it intends to maintain operations on the PROPERTY for not less than ten (10) years or until ALLEN has received ad valorem taxes from the site in an amount equal to all ad valorem taxes abated herein, whichever occurs first; WHEREAS, ALLEN represents that the contemplated use as stated herein of the PROPERTY, together with the contemplated improvements described in Section 2 of this Agreement are consistent with the purposes of the Reinvestment Zone, the intent of the POLICY STATEMENT and all applicable law; and WHEREAS, a copy of this Agreement has been furnished, in the manner prescribed by the ACT, to the presiding officers of the governing bodies of each taxing unit in which the PROPERTY is located; NOW THEREFORE, the parties hereto mutually agree as follows: PREMISES TO BE IMPROVED 1. The real property and improvements thereon to be the subject of this Agreement shall be that property as described in EXHIBIT "A" and made a part hereof and shall be hereinafter referred to as the PROPERTY. IMPROVEMENTS TO BE MADE 2. PHOTRONICS will construct (or cause to be constructed) on the property a commercial facility of approximately 40,000 square feet, or more, designed for office, manufacturing and warehousing uses, and other ancillary facilities, such as required parking, which will be more fully described in the submittals filed by PHOTRONICS with ALLEN from time to time in order to obtain a building permit(s) ("the TAX ABATEMENT AGREEMENT - PHOTRONICS - Page 2 aedc\e-9-e4\abte-ph0.6FN IMPROVEMENTS"). The improvements and the PROPERTY are sometime hereinafter collectively referred to as the PREMISES. TIME FOR CONSTRUCTION OF IMPROVEMENTS AND USE THEREOF 3. PHOTRONICS shall commence construction of the IMPROVEMENTS on the PROPERTY, which IMPROVEMENTS shall be substantially completed on or before December 31, 1995. An extension of time to complete the IMPROVEMENTS may be granted by ALLEN upon the request of PHOTRONICS, which approval will not be unreasonably withheld. In addition, PHOTRONICS shall have such additional time to complete the IMPROVEMENTS as may be required if PHOTRONICS is diligently pursuing completion of the IMPROVEMENTS and is prevented from timely completion by an event of "force majeure." For the purpose of this Agreement, "force majeure" shall mean a contingency or cause beyond the reasonable control of PHOTRONICS including, without limitation, acts of God, war, riot, civil commotion, insurrection, governmental action (unless caused by acts or omissions of PHOTRONICS), fire, explosion, flood, or strikes. The date of substantial completion of the IMPROVEMENTS shall be defined as the date a Certificate of Occupancy is issued for the IMPROVEMENTS by ALLEN. 4. PHOTRONICS represents that it is or will be legally or contractually liable to directly pay the ad valorem tax on the PREMISES and the tangible personal property located thereon ("T.P.P.") whether the PREMISES and the T.P.P are owned in fee or leased. PHOTRONICS shall, upon written request, provide the Collin County Appraisal TAX ABATEMENT AGREEMENT - PHOTRONICS - Page 3 aedcb-9-w\abte-pho.6FN District with satisfactory evidence of PHOTRONICS's legal or contractual obligation to pay the ad valorem taxes abated herein. 5. PHOTRONICS shall, from within one hundred twenty (120) days from the date a Certificate of Occupancy is issued until December 31, 2005 operate and maintain its operations on the PROPERTY or until Allen has received ad valorem taxes from the PREMISES in an amount equal to all the ad valorem taxes abated herein, whichever occurs first. TANGIBLE PERSONAL PROPERTY 6. PHOTRONICS agrees that on or before December 31, 1995 (such date being subject to extension on the same basis as provided in Section 3 above) it will install, move, transfer or otherwise deliver T.P.P. (i.e., equipment, furniture and fixtures) to the PREMISES, which when combined with the improvements will have a value of at least Twenty Million Dollars ($20,000,000.00), such value being determined by: (i) the current book value as determined in accordance with generally accepted accounting principals ("GAAP"); or (ii) the value determined by the Collin County Appraisal District, whichever is greater. PHOTRONICS represents that the improvements and T.P.P. are essential and necessary for its operations. GRANT OF TAX ABATEMENT 7. Subject to the terms and conditions of this Agreement, and subject to the rights of holders of any outstanding bonds of ALLEN, the ad valorem taxes applicable to (i) the increase in the aggregate value of the PREMISES and the T.P.P. located on the PROPERTY from the date of this Contract until December 31, 1995 over (ii) the TAX ABATEMENT AGREEMENT - PHOTRONICS - Page 4 aedcle-a44\abte-pho.6FN value of the PROPERTY on the certified tax role of the City of Allen as of January 1, 1994 shall be abated for six (6) tax years commencing with the tax year 1996 in accordance with the schedule listed on EXHIBIT "B" attached hereto and made a part hereof. The tax rates may change from year to year, however, the amount of tax paid and abated shall be in accordance to that given year's prevailing tax rate and assessed value. The parties to this Agreement agree that there are no improvements or T.P.P. located on the PROPERTY as of the date of execution of this Agreement. EVENTS OF DEFAULT 8. If PHOTRONICS, .during the term defined in Section 5 of this Agreement, breaches any of the obligations of this Agreement or allows the ad valorem taxes due ALLEN to become delinquent, then PHOTRONICS shall be deemed to be in default. In the event of default, ALLEN shall give PHOTRONICS written notice of such default. PHOTRONICS shall have ninety (90) days of said written notice ("the Cure Period") to cure the default; however, in the case of a default which cannot, with reasonable efforts, be cured within such ninety (90) day period, the Cure Period may be extended by ALLEN if PHOTRONICS (i) advises ALLEN of PHOTRONICS' intention to institute all steps reasonably necessary to cure such default; and (ii) institutes, and thereafter prosecutes to completion, all steps necessary to cure such default. If PHOTRONICS fails to cure the default within the ninety (90) day Cure Period, then this Agreement may be terminated by ALLEN unless such Cure Period is extended by ALLEN as provided herein. Notice shall be in writing and shall be delivered in accordance with Section 17(c) of this Agreement. TAX ABATEMENT AGREEMENT - PHOTRONICS - Page 5 aedcle-9-94\abte-pho.6FN 10 PAYMENT OF ABATED TAXES In the event of any such default, failure to cure, and termination, ALLEN shall be entitled to receive payment from PHOTRONICS of all ad valorem taxes which otherwise would have been paid to ALLEN without the benefit of abatement provided in Section 7 above in accordance with §312.205(a)(4) of the Texas Tax Code. Payment of those taxes payable to ALLEN shall be secured by a tax lien on the PREMISES and T.P.P. Such taxes shall be paid to ALLEN within ninety (90) days after the expiration of the Cure Period provided in Section 8 above. ALLEN may use any legal and lawful process or procedure to collect such taxes. Payment of the taxes, penalties, interest and attorney's fees as provided by the Texas Tax Code, shall be in lieu of any other damages payable by PHOTRONICS as a result of any default under this Agreement. ASSIGNMENT 10. The terms and conditions of this Agreement are binding upon the successors and assigns of the parties hereto. This Agreement cannot be assigned by PHOTRONICS unless written permission is first granted by ALLEN, which permission shall not be unreasonably withheld. INDEPENDENT RELATIONSHIP 11. It is understood and agreed between the parties that PHOTRONICS, in performing its obligations hereunder, is acting independently and ALLEN assumes no responsibilities or liabilities in connection therewith to third parties. In the event a breach of this Agreement by PHOTRONICS or lack of authority on the part of TAX ABATEMENT AGREEMENT - PHOTRONICS - Page 6 aedcle-9-e4\abte-pho.6FN PHOTRONICS causes a claim against ALLEN by a third party, PHOTRONICS agrees to indemnify and hold ALLEN harmless from any and all damages resulting therefrom including reasonable defense costs and reasonable attorney's fees. It is further understood and agreed among the parties that ALLEN, in performing its obligations hereunder, is acting independently and that PHOTRONICS assumes no responsibilities or liabilities in connection therewith to third parties. In the event a breach of this Agreement by ALLEN or lack of authority, on the part of ALLEN which may cause a claim against PHOTRONICS by a third party, ALLEN agrees to indemnify and hold PHOTRONICS harmless from any and all damages resulting therefrom including reasonable defense costs and reasonable attorney's fees. 12. Prior to completion, PHOTRONICS agrees that ALLEN, its agents and employees, shall have reasonable right of access to the PREMISES during regular business hours to inspect the IMPROVEMENTS and T.P.P. in order to insure compliance with this Agreement and all applicable state and local laws and regulations or valid waiver thereof. After completion of the IMPROVEMENTS and installation or delivery of the T.P.P., ALLEN shall have the continuing right, subject to PHOTRONICS's reasonable security requirements, to inspect the PREMISES during regular business hours to insure that the PREMISES are thereafter maintained and operated in accordance with this Agreement. AUTHORIZATIONS 13. This Agreement was authorized by Resolution of the Allen City Council at its council meeting on the 21st day of April, 1994, authorizing its Mayor to execute the Agreement on behalf of ALLEN. TAX ABATEMENT AGREEMENT - PHOTRONICS - Page 7 aedc\a-"4\abte-pho.6FN 14. This Agreement was entered into by PHOTRONICS pursuant to authority granted to its officers from PHOTRONICS' Board of Directors which will be certified by PHOTRONICS' corporate secretary. MISCELLANEOUS 15. ALLEN represents and warrants to the best of its knowledge as follows: (1) that the PROPERTY does not include any property that is owned or leased by an individual member of the Allen City Council or the Allen Planning and Zoning Commission, (2) that ALLEN has the authority to enter into this Agreement (3) that when this Agreement is executed and delivered it will be enforceable against ALLEN in accordance with its terms and Texas state law, and (4) that the terms and conditions of this Agreement do not impair the rights of holders of any outstanding bonds of ALLEN. 16. PHOTRONICS agrees that it will endeavor to make the PREMISES the point of sale for any materials and equipment purchased by PHOTRONICS for use on the PREMISES. 17. The parties further agree as follows: A. In the event that PHOTRONICS does not purchase the PROPERTY on or before August 12, 1994, this Agreement shall be null and void. B. This Agreement, including the recitals herein and its Exhibits, constitute the entire Agreement and understanding between the parties hereto, and supersede to any prior or contemporaneous oral or written agreement and understanding relating to the subject matter of this Agreement. This Agreement TAX ABATEMENT AGREEMENT - PHOTRONICS - Page 8 aedc\5-9-o4\abte-pho.6FN and its Exhibits may be modified or amended only by a duly authorized written instrument executed by the parties hereto; C. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute but one and the same instrument. It shall not be necessary that any single counterpart hereof be executed by all parties hereto so long as at least one counterpart is executed by each parry; D. Any notice or communication required or permitted hereunder shall be sufficiently given if personally delivered or if sent by registered or certified mail, return receipt requested, postage and fees prepaid to: (1) City of Allen (2) Photronics-Toppan Texas, Inc. Mayor and City Manager City of Allen One Butler Circle Allen, Texas 75002 President Photronics-Toppan Texas, Inc. 15 Secor Road - P. O. Box 5226 Brookfield, CT 06804 with a copy to the attention of the General Counsel. E. All warranties, covenants, and representations shall survive the execution of this Agreement. The parties hereto in executing, and in carrying out the provisions of this Agreement, are relying solely on the representations, warranties, and agreements contained in this Agreement or in any writing delivered pursuant to provisions of this Agreement herein provided for and not upon any representation, warranty, agreement, promise, or information, written or oral, made by any person other than as specifically set forth herein or therein; TAX ABATEMENT AGREEMENT - PHOTRONICS - Page 9 aedc\s-ac4\abte-pho.6FN F. In the event any section, subsection, paragraph, subparagraph, sentence, phrase or word herein is held invalid, illegal, or unenforceable, the balance of this Agreement shall stand, shall be enforceable and shall be read as if the parties intended at all times to delete said invalid section, subsection, paragraph, subparagraph, sentence, phrase or word. In such event, there shall be substituted for such deleted provision a provision as similar in terms and in effect to such deleted provision as may be valid, legal and enforceable; G. A portion or all of the PREMISES and the T.P.P. may be eligible for complete or partial exemption from ad valorem taxes as a result of existing law (such as the freeport exemption) or future legislation. This Agreement is not to be construed as evidence that such exemptions apply or do not apply to the PREMISES or the T.P.P.; and H. This Agreement shall be construed in accordance with the laws of the State of Texas and is performable in Collin County, Texas. EXECUTED on the /0 qday of , 1994. ATTEST: J Mor , on,, Secretary CITY OF ALLEN, TEXAS 4e�;e 3� �a4w-e-o, A Farmer, Mayor EXECUTED on the /D` day of A 6.4 '7 - ATTEST: 1994. ATTEST: Printed Name: G �•�'�,� Title: TAX ABATEMENT AGREEMENT - PHOTRONICS - Page 10 PHOTRONICS-TOPPAN TEXAS, INC. /rWName-._�,- ,,ry Title: f 1 '-Z5 e� aedc%a-9-e+labte-pho.6 FN EXHIBIT "A" LEGAL DESCRIPTION OF THE PROPERTY BEING a survey of a 10.000 acre tract of land situated in the Wm. PERRIN SURVEY, Abstract No. 708, Collin County, Texas, and being part of that certain 45.357 acre tract of land described as part of Tracts 1 & 3 in Deed recorded in Volume 1059, Page 833 and part of Tracts 1 & 2 in Deed recorded in Volume 1077, Page 231 and part of Tract I in Deed recorded in Volume 1059, Page 276, Deed Records of Collin County, Texas; and being more particularly described by metes and bounds as follows; COMMENCING at a 1/2" inch iron rod found at the Northeast corner of Bethany Tech Addition, an Addition to the City of Allen, Collin County, Texas, according to the Map or Plat thereof recorded in Volume F, Page 273, Plat Records of Collin County, Texas; THENCE N 76 degrees 00 minutes 03 seconds W, along the North line of Bethany Tech Addition, a distance of 1283.15' feet to an iron rod with cap found for the POINT OF BEGINNING, said iron rod being in the Easterly right-of-way line of U.S. HWY 75; THENCE N 14 degrees 03 minutes 12 seconds E, along the Easterly right-of-way line of said U.S. Hwy. No. 75, a distance of 644.73' feet to a 5/8" inch iron rod set for corner; THENCE S 81 degrees 08 minutes 35 seconds E, departing the Easterly right-of-way line of U.S. Hwy. No. 75, a distance of 200.83' feet to a 5/8" inch iron rod set for corner in the North line of the 10.000 acre tract described herein; THENCE S 76 degrees 00 minutes 03 seconds E, along the North line of said 10.00 acre tract, a distance of 460.00' feet to a 5/8" inch iron rod set for corner, said iron rod being the Northeast corner of said 10.000 acre tract; THENCE S 14 degrees 03 minutes 12 seconds W, a distance of 662.73' feet to a 5/8" inch iron rod set for corner, said iron rod being the Southeast corner of said 10.000 acre tract; THENCE N 76 degrees 00 minutes 03 seconds W, along the said South line of 10.000 acre tract, a distance of 660.00' feet to the POINT OF BEGINNING and CONTAINING 10.000 acres of land more or less. TAX ABATEMENT AGREEMENT - PHOTRONICS - Page 11 aed6a-s-s+\abte-pho.6FN EXHIBIT "B" SCHEDULE OF TAX ABATEMENT ON THE IMPROVEMENTS AND TANGIBLE PERSONAL PROPERTY AS IDENTIFIED IN THE AGREEMENT Ad valorem taxes on real and tangible personal property, to the extent the aggregate value of such real property and tangible personal property is in excess of the value of the PROPERTY on the certified tax role of the City of Allen as of January 1, 1994 shall be abated in accordance with the following schedule: Year Ad Valorem Tax Ad Valorem Tax To Be Abated to Photronics Paid to the City of Allen 1996 90% 10% 1997 90% 10% 1998 80% 20% 1999 60% 40% 2000 60% 40% 2001 60% 40% TAX ABATEMENT AGREEMENT - PHOTRONICS - Page 12 aedcb-ag4labte-pho.6FN