HomeMy WebLinkAboutContract 58103 CITY SECRETARY
C TRACT NO. 103
STATE OF TEXAS §
COUNTY OF TARRANT §
TAX ABATEMENT AGREEMENT
This TAX ABATEMENT AGREEMENT("Agreement") is entered into by and between
the CITY OF FORT WORTH, TEXAS ("City"), a home-rule municipality organized under the
laws of the State of Texas, and MP MAGNETICS LLC, a Delaware limited liability company
("Company").
RECITALS
A. On January 29, 2021, the City Council adopted Resolution No. 5337-01-2021,
stating that the City elects to be eligible to participate in tax abatement and setting forth guidelines
and criteria governing tax abatement agreements entered into between the City and various parties,
entitled"General Tax Abatement Policy" ("Policy"), which is incorporated herein by reference and
hereby made a part of this Agreement for all purposes.
B. The Policy contains appropriate guidelines and criteria governing tax abatement
agreements to be entered into by the City as contemplated by Chapter 312 of the Texas Tax Code,as
amended("Code").
C. On January 25,2022, ("Approval Date")the City Council adopted Ordinance No.
25301-01-2022 ("Ordinance") establishing Tax Abatement Reinvestment Zone No. 103, City of
Fort Worth,Texas("Zone").
D. Company, which manufactures rare earth materials, owns property located at
13840 Independence Parkway,which is located within the Zone and is more specifically described in
Exhibit"A"("Land"),attached hereto and hereby made a part of this Agreement for all purposes.
E. Contingent upon the receipt of a tax abatement, Company intends to construct a
facility of at least 200,000 square feet on the Land for its manufacturing operations.
F. As of November 18, 2021, Company submitted applications for tax abatement
("Applications")to the City concerning plans for development of the Land,including construction
of the Required Improvements,which Applications are attached hereto as Exhibit"B"and hereby
made a part of this Agreement for all purposes.
G. The contemplated use of the Land and the terms of this Agreement are consistent
with encouraging development of the Zone and generating economic development and increased
employment opportunities in the City, in accordance with the purposes for creation of the Zone, and
are in compliance with the Policy, the Ordinance and other applicable laws, ordinances, rules and
regulations.
H. Under this Agreement, Company is committed to invest a total of at least $100
million as follows:at least$40 million in Construction Costs for the Real Property Improvements and
at least $60 million in New Taxable Tangible Personal Property to be installed on the Land in
connection with manufacturing business operations within the Real Property IFPagr_1
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CIAL RECORD
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"Required Improvements"). Company is also committing to provide at least 30 new Full-time Jobs
whose average annual Salaries will equal at least $80,390.00. Therefore, the provisions of this
Agreement, as well as the proposed use of the Land and nature of the proposed Required
Improvements, as defined herein, satisfy the eligibility criteria for commercial/industrial tax
abatement pursuant to Section 4 of the Policy.
I. Written notice that the City intends to enter into this Agreement, along with a copy
of this Agreement,have been furnished in the manner prescribed by the Code to the presiding officers
of the governing bodies of each of the taxing units that have jurisdiction over the Land.
NOW, THEREFORE, in consideration of the mutual benefits and promises contained
herein and for other good and valuable consideration,the receipt and sufficiency of which is hereby
acknowledged,the parties agree as follows:
AGREEMENT
1. INCORPORATION OF RECITALS.
The City Council has found, and the City and Company agree, that the recitals set forth
above are true and correct and form the basis upon which the parties have entered into this
Agreement.
2. DEFINITIONS.
In addition to terms defined in the body of this Agreement, the following terms have the
definitions ascribed to them as follows:
Abatement means the abatement of a percentage(not to exceed sixty percent(60%)in any
year of the Abatement Term) of the City's incremental ad valorem real property taxes on any
improvements located on the Land (but not on the Land itself, which taxes will not be subject to
Abatement hereunder) and of the City's incremental ad valorem taxes on New Taxable Tangible
Personal Property, all calculated in accordance with this Agreement.
Abatement Term means the term of seven(7)consecutive years,commencing on January
1 of the Second Operating Year and expiring on December 31 of the Eighth Operating Year
thereafter, in which Company will receive the Abatement in accordance with this Agreement.
Affiliate means all entities, incorporated or otherwise, under common control with,
controlled by, or controlling Company. For purposes of this definition, "control" means fifty
percent(50%)or more of the ownership determined by either value or vote.
Annual Salary Commitment has the meaning ascribed to it in Section 4.6.
Annual Salary Percentage has the meaning ascribed to it in Section 6.5.
Applications has the meaning ascribed to it in Recital F.
Approval Date has the meaning ascribed to it in Recital C.
Business Equity Firm(s) ("BEFs") has the meaning assigned to it in the City of Fort
Worth's Business Equity Ordinance, as amended(Chapter 20,Article X of the City Code).
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BEF Construction Uommitment has the meaning ascribed to it in Section 4.4.
BEF Construction Percentage has the meaning ascribed to it in Section 6.3.
Certificate of Completion has the meaning ascribed to it in Section 5.
Code has the meaning ascribed to it in Recital B.
Completion Date means the date as of which all occupiable space within the Required
Improvements have received a permanent certificate of occupancy.
Completion Deadline means December 31, 2023.
Compliance Auditing Term means the term of seven(7)consecutive years,commencing
on January 1 of the First Operating Year and expiring on December 31 of the seventh (7th) year
thereafter, in which the City will verify and audit Company's compliance with the various
commitments set forth in Section 4 that form the basis for calculation of the amount of each annual
Abatement percentage hereunder.
Construction Costs means the following costs expended on or after the Approval Date
directly for the Required Improvements: actual site development and construction costs,site work,
infrastructure improvements, facility modernization, utility installation and including directly-
related contractor fees, labor costs, plus costs of supplies and materials, engineering fees,
architectural and design fees, and permit fees. Construction Costs specifically excludes any real
property acquisition costs or rent payments or other costs required by a lease.
Director means the director of the City's Economic Development Department.
Effective Date has the meaning ascribed to it in Section 3.
Eighth Operating Year means the eighth full calendar year following the year in which
the Completion Date occurred.
Event of Default means a breach of this Agreement by a party, either by act or omission,
as more specifically set forth in Section 7 of this Agreement.
First Operating Year means the first full calendar year following the year in which the
Completion Date occurred.
Full-time Job means a job provided to one (1) individual by Company on the Land for at
least forty(40)hours per week.
Land has'the meaning ascribed to it in Recital D.
Legal Requirements means federal,state and local laws,ordinances,rules and regulations,
including,but not limited to, all provisions of the City's charter and ordinances, as amended.
New Job has the meaning ascribed to it in Section 4.5.1.
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New Taxable Tangible Personal Property means any personal property other than
inventory or supplies that (i) is subject to ad valorem taxation by the City; (ii) is located on the
Land;(iii)is owned or leased by Company and used by Company for the business purposes outlined
in this Agreement; and (iv) was not located in the City prior to the date of full execution of this
Agreement.
Ordinance has the meaning ascribed to it in Recital C.
Overall Employment Commitment has the meaning ascribed to it in Section 4.5.1.
Overall Employment Percentage has the meanings ascribed to it in Section 6.4.1, 6.4.2,
and 6.4.3, as applicable.
Overall Improvement Percentage has the meaning ascribed to it in Section 6.2.
Personal Property Improvement Commitment has the meaning ascribed to it in Section
4.2.
Policy has the meaning ascribed to it in Recital A.
Real Property Improvement Commitment has the meaning ascribed to it in Section 4.1.
Real Property Improvements means a manufacturing facility constructed on the Land
consisting of at least 200,000 square feet, as verified in the Certificate of Completion issued by the
Director in accordance with this Agreement.
Records has the meaning ascribed to it in Section 4.9.
Required Improvements has the meaning ascribed to it in Recital E.
Salary means the cash payment or remuneration made to a person holding a Full-time Job,
including paid time off, commissions, and non-discretionary bonuses. A Salary does not include
any benefits,such as health insurance or retirement contributions,or reimbursements for employee
expenses, or any discretionary bonuses.
Second Operating Year means the second full calendar year following the year in which
the Completion Date occurred.
Term has the meaning ascribed to it in Section 3.
Zone has the meaning ascribed to it in Recital C.
3. TERM.
This Agreement takes effect on the date as of which the City and Company have all
executed this Agreement("Effective Date") and, unless terminated earlier in accordance with its
terms and conditions,expires simultaneously upon expiration of the Abatement Term ("Term").
4. OBLIGATIONS AND COMMITMENTS RELATED TO ABATEMENT.
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4.1. Real Property Improvements.
4.1.1. Company must expend or cause to be expended at least Forty Million
Dollars and Zero Cents ($40,000,000.00) in Construction Costs for the Real Property
Improvements by the Completion Date, and the Completion Date for the Real Property
Improvements must occur on or before the Completion Deadline ("Real Property
Improvement Commitment"). Failure to meet the meet this obligation constitutes an Event
of Default.
4.2. Personal Property Improvements.
4.2.1. New Taxable Tangible Personal Property having a value of at least Sixty
Million Dollars and Zero Cents ($60,000,000.00) ("Personal Property Improvement
Commitment")must be in place on the Land by January 1,2024. Failure to meet the meet
this obligation constitutes an Event of Default.
4.2.2. The value of the New Taxable Tangible Person Property is determined
solely by the appraisal district having jurisdiction over the Land at the time and reflected in
the certified appraisal roll received by the City from such appraisal district in such year.
4.4. Construction Spending Commitment for BEFs.
By the Completion Date, Company must expend or caused to be expended at least
fifteen percent(15%) of all Construction Costs for the Real Property Improvements with
BEFs, regardless of the total amount of such Construction Costs ("BEF Construction
Commitment").
4.5. Employment Commitment.
4.5.1. Company must employ and retain the following number of new Full-Time
Jobs on the Land by the dates set forth below ("Overall Employment
Commitment"). Company must retain all new Full-Time Jobs on the Land from
and after the dates set forth below through the Term of this Agreement (each a
"New Job"). A Full-Time Job will be considered new if the individual was hired
on or after the Approval Date.
a. Company must employ and retain a minimum of 30 new Full-
Time Jobs on or before December 31,2023.
b. Company must employ and retain a minimum of 60 new Full-
Time Jobs on or before December 31,2024.
C. Company must employ and retain a minimum of 90 new Full-
Time Jobs on or before December 31,2025.
4.5.2. Determination each year of compliance with the following Employment
Commitment will be based on the employment data provided by Company to the
City for the year under evaluation.
4.6 Average Annual Salary.
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4.6.1 In each year of the Compliance Auditing Term,the average annual Salary,
measured on a calendar year basis,for all new Full-Time Jobs provided and filled
on the Land, regardless of the total number of such Full-time Jobs, must equal at
least Eighty Thousand, Three Hundred Ninety Dollars and Zero Cents
($80,390.00)("Annual Salary Commitment").
4.6.2. Determination each year of compliance with the following Annual Salary
Commitment will be based on the employment data provided by Company to the
City for the year under evaluation.
4.7. Reports and Filings.
4.7.1. Final Construction Report.
Within sixty (60) calendar days following the Completion Date, in order
for the City to assess whether Company expended or caused to be expended at least
Forty Million Dollars and Zero Cents ($40,000,000.00) in Construction Costs for
the Real Property Improvements, and the extent to which the BEF Construction
Commitment was met, Company must provide the Director with a report in a form
reasonably acceptable to the City that specifically outlines the total Construction
Costs expended for the Real Property Improvements and the total Construction
Costs expended with BEFs for the Real Property Improvements, together with
supporting invoices and other documents necessary to demonstrate that such
amounts were actually paid,including,without limitation,final lien waivers signed
by the general contractor for the Real Property Improvements.
4.7.2. Annual Employment Report.
On or before February 1 of the Second Operating Year, and of each year
thereafter for the remainder of the Compliance Auditing Term,in order for the City
to assess the degree to which Company met in the previous year the Overall
Employment Commitment and the Annual Salary Commitment, Company must
provide the Director with a report in a form reasonably acceptable to the City that
sets forth the total number of individuals who held new Full-Time Jobs on the
Land, as well as the Salary of each, all as of December 31 (or such other date
requested by Company and reasonably acceptable to the City) of the previous
calendar year,together with reasonable supporting documentation.
4.7.3. General.
Company will supply any additional information reasonably requested by
the City that is pertinent to the City's evaluation of compliance with each of the
terms and conditions of this Agreement.
4.8. Inspections of Land and Improvements
4.8.1. At any time during Company's normal business hours throughout the
Term,the City will have the right to inspect and evaluate the Land,and any improvements
thereon,and Company will provide full access to the same,in order for the City to monitor
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compliance with the terms and conditions of this Agreement. Company will use reasonable
efforts to cooperate fully with the City during any such inspection and evaluation.
4.8.2. Notwithstanding the foregoing, Company may require that any
representative of the City be escorted by a Company representative or security personnel
during any such inspection and evaluation and abide by any site policies and protocols
regarding health,safety,and treatment of Company's confidential information.In addition,
upon request of the City at any time during the Term and the year following the Term, and
following at least 15 business days advance notice.
4.9. Audits.
The City has the right throughout the Term to audit the financial and business
records of Company that relate to the Real Property Improvements,Personal Property,and
the Land and any other documents necessary to evaluate Company's compliance with this
Agreement or with the commitments set forth in this Agreement,including,but not limited
to construction documents and invoices(collectively,"Records"). The City shall provide
Company with notice at least 15 business days prior to any audit under this Section 4.9.
Company must make all Records available to the City on the Land or at another location
in the City acceptable to both parties following prior notice and will otherwise use
reasonable efforts to cooperate fully with the City during any audit.
4.10. Use of Land.
I
The Land and any improvements thereon, including, but not limited to, the Real
Property Improvements, must be used at all times during the Term of this Agreement for
Company's lawful business operations, as set forth in this Agreement, and otherwise in a
manner that is consistent with the general purposes of encouraging development or
redevelopment of the Zone.
4.11. Abatement Application Fee.
4.11.1. The City acknowledges receipt from Company of the required Application
fee of Five Thousand Dollars ($5,000.00). Of such amount, Two Thousand Dollars
($2,000.00)is strictly nonrefundable and will be used by the City for the purposes set forth
in the Policy.
4.11.2. If construction work on the Real Property Improvements begins within one
(1)year from the date the Applications were filed(i.e.,November 18,2021),the remaining
Three Thousand Dollars ($3,000.00) of such fee will be credited to Company's benefit
against any permit,impact,inspection or other lawful fee required by the City in connection
with the Required Improvements.
4.11.3. If construction work for the Real Property Improvements does not begin
within one (1)year from the date the Applications were filed, Company will not receive a
credit or refund of any portion of the fee.
4.11.4 If there is a balance of any of the remaining Application fee funds after the
date on which the Director issues a Certificate of Completion,Company will be entitled to
a refund of such remaining Application fee funds, but only if Company submits a letter to
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the Director requesting such refund within ninety(90)calendar days following the date of
issuance of the Certificate of Completion.
5. CERTIFICATE OF COMPLETION.
Within ninety (90) calendar days following receipt by the City of the final construction
spending report for the Real Property Improvements submitted in accordance with this Agreement,
and assessment by the City of the information contained therein, if the City is able to verify that
the Company met all requirements for the Real Property Improvement, the Director will issue
Company a certificate stating the amount of Construction Costs expended for the Real Property
Improvements, as well as the amount of Construction Costs expended for the Real Property
Improvements specifically with BEFs ("Certificate of Completion"). The Certificate of
Completion will serve as the basis for determining whether the BEF Construction Commitment
was met.
6. TAX ABATEMENT.
6.1. Generally.
6.1.2. Subject to the terms and conditions of this Agreement, provided that the
Company met both the Real Property Improvement Commitment and Personal Property
Improvement Commitment,the City will grant an Abatement to the Company in each year
of the Abatement Term.
6.1.3. The amount of each Abatement that the City grants during such years will
be a percentage of the City's ad valorem taxes on any improvements located on the Land
(but not on the Land itself, which taxes will not be subject to Abatement hereunder) and
I on New Taxable Tangible Personal Property attributable to increases in the value of such
improvements and New Taxable Tangible Personal Property,which percentage will equal
the sum of the Overall Improvement Percentage, the BEF Construction Percentage, the
applicable Overall Employment Percentage,and the Annual Salary Percentage,as set forth
below(not to exceed sixty percent(60%)).
6.2. Real Property Improvement and Personal Property Commitments (5%).
City will grant an abatement to Company equal to five percent(5%)of the overall
Abatement ("Overall Improvement Percentage") if Company meets both the Real
Property Improvement Commitment and Personal Property Improvement Commitment.
6.3. BEF Construction Cost Spending(10%).
A percentage of the Abatement will be based on the whether the Company met the
BEF Construction Commitment (`BEF Construction Percentage"). If Company meets
the BEF Construction Commitment,the BEF Construction Percentage for each Abatement
hereunder will be ten percent(10%). If the Company does not meet the BEF Construction
Commitment,the BEF Construction Percentage for each Abatement hereunder will be zero
percent(0%).
6.4. Overall Employment
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6.4.1. Overall Employment 30-59 Employees (Up to 2.5%)
a. A percentage of the Abatement will be based on the extent to which the
Company meets the Overall Employment Commitment of between 30-59 new
Full-Time Employees in every year of the Abatement Term. The Overall
Employment Percentage for 30-59 new Full-Time Jobs in a given year will equal
the product of two and one-half percent (2.5%) multiplied by the percentage by
which the Company met the commitment in the previous calendar year,which will
be calculated by dividing the actual number of new Full-Time Jobs provided on
the Land in the previous year by 30.
b. For example, if Company only employed 25 individuals with new Full-
Time Jobs on the Land in 2026 instead of the required 30-59, the Overall
Employment Percentage for 30-59 new Full-Time Jobs in the following year would
be 2% instead of 2.5% (or .025 x [25/30]), or .025 x .83, or .020. If the Overall
Employment Commitment of between 30-59 new Full-Time Jobs is met or
exceeded in any given year,then the Abatement in the following year will be two
and one-half percent(2.5%).
6.4.2. Overall Employment 60-89 Employees (Up to 20%)
a. Beginning in the second year of the Abatement Term and continuing for each
year thereafter, the Overall Employment Percentage of between 60-89 new Full-
Time Jobs in a given year will equal the product of twenty percent (20%)
multiplied by the percentage by which the Company met the commitment in the
previous calendar year, which will be calculated by dividing the actual number of
new Full-Time Jobs provided on the Land in the previous year by 60.
b. For example, if Company only employed 55 individuals with new Full-
Time Jobs on the Land in 2027 instead of the required 60-89, the Overall
Employment Percentage for 60-89 new Full-Time Jobs for the following
year would be 20.8% instead of 22.5% (or .2 x [55/60]+.025), or .2 x .91 +
.025, or .183 + .025. If the Overall Employment Commitment of between
60-89 new Full-Time Jobs is met or exceeded in any given year, the
Abatement in the following year will be 22.5% (2.5% +20%).
6.4.3. Overall Employment 90 or greater Employees (Up to 20%)
a.Beginning in the third year of the Abatement Term and continuing for each year
thereafter,the Overall Employment Percentage of 90 or more new Full-Time Jobs
in a given year will equal the product of twenty percent (20%) multiplied by the
percentage by which the Company met the commitment in the previous calendar
year, which will be calculated by dividing the actual number of new Full-Time
Jobs provided on the Land in the previous year by 90.
b. For example, if Company only employed 85 individuals with new Full-
Time Jobs on the Land in 2027 instead of the required 90, the Overall
Employment Percentage for the 90 new Full-Time Jobs for the following
year would be 41.3% instead of 42.5% (or .2 x [85/90]+.025+.20), or .2 x
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City of Fort Worth and MP Magnetics LLC Page 9 of 26
.94+.025+.20,or.188+.025+.20. If the Overall Employment Commitment
90 or more new Full-Time Jobs is met or exceeded in any given year, the
Abatement in the following year will be 42.5% (2.5% +20%+20%).
6.5. Annual Salary(2.5%).
A percentage of the Abatement will be based on whether Company meets the
Annual Salary Commitment ("Annual Salary Percentage"). If Company meets the
Annual Salary Commitment in a given year, the Annual Salary Percentage for the
Abatement in the following year will be two and one-half percent(2.5%).
6.6. Abatement Limitations.
6.6.1. The amount of real property taxes to be abated in a given year will not exceed one
hundred fifty percent(150%) of the amount of the minimum Real Property Improvement
Commitment and the Personal Property Improvement Commitment multiplied by the
City's tax rate in effect for that same year. As a formula, this would be expressed as
$100,000,000(minimum Property and Personal Property Commitments)x 1.5 x City's Tax
Rate. The City and Company acknowledge that the Abatement cap is an annual cap and
not an aggregate cap.
7. DEFAULT,TERMINATION AND FAILURE TO MEET VARIOUS DEADLINES
AND COMMITMENTS.
7.1. Failure to Meet Real Property Improvement and Personal Property
Commitments.
Notwithstanding anything to the contrary herein, if the Company does not meet
both the Real Property Improvement Commitment and Personal Property Improvement
Commitment, an Event of Default will occur and the City will have the right to terminate
this Agreement, effective immediately, by providing written notice to Company without
further obligation to Company hereunder.
7.2 Failure to Meet BEF Construction and Overall Employment Commitments.
If the Company does not meet the BEF Construction Commitment, or the Overall
Employment Commitment in any given year, such event will-not constitute an Event of
Default hereunder or provide the City with the right to terminate this Agreement, but,
rather, will only cause the percentage or amount of Abatement available pursuant to this
Agreement to be reduced in accordance with this Agreement.
7.3 Forfeiture for Failure to Meet Annual Salary Commitment.
Notwithstanding anything to the contrary herein, if the Company fails to meet the
Annual Salary Commitments in any year of the Compliance Auditing Term, an Event of
Default will not occur, but the Abatement for that applicable year will be reduced by the
percentage set forth in Section 6.5.
7.4. Knowing Employment of Undocumented Workers.
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Company acknowledges that effective September 1, 2007, the City is required to
comply with Chapter 2264 of the Texas Government Code,enacted by House Bill 1196(80th
Texas Legislature), which relates to restrictions on the use of certain public subsidies.
Company hereby certifies that Company, and any branches, divisions, or departments of
Company, does not and will not knowingly employ an undocumented worker,as that term
is defined by Section 2264.001(4) of the Texas Government Code. In the event that
Company, or any branch, division, or department of Company, is convicted of a violation
under 8 U.S.C.Section 1324a(g (relating to federal criminal penalties and injunctions for
a pattern or practice of employing unauthorized aliens) and such violation occurs during
the Term of this Agreement.
• if such conviction occurs during the Term of this Agreement,this Agreement will
terminate contemporaneously upon such conviction (subject to any appellate
rights that may lawfully be available to and exercised by Company) and Company
must repay, within one hundred twenty (120) calendar days following receipt of
written demand from the City, the aggregate amount of Abatement received by
Company hereunder, if any,plus Simple Interest at a rate of two percent(2%)per
annum based on the amount of Abatement received in each previous year as of
December 31 of the tax year for which the Abatement was received,or
• if such conviction occurs after expiration or termination of this Agreement,
subject to any appellate rights that may lawfully be available to and exercised by
Company, Company must repay, within one hundred twenty (120) calendar days
following receipt of written demand from the City, the aggregate amount of
Abatement received by Company hereunder, if any,plus Simple Interest at a rate
of two percent (2%)per annum based on the amount of Abatement received in
each previousyear as of December 31 ofthe taxyearfor which theAbatement was
received.
For the purposes of this section, "Simple Interest" is defined as a rate of interest applied
only to an original value,in this case the aggregate amount of Abatement. This rate of interest
can be applied each year, but will only apply to the aggregate amount of Abatement and is
not applied to interest calculated. For example, if the aggregate amount of Abatement is
$10,000 and it is required to be paid back with two percent(2%)interest five years later,the
total amount would be$10,000+[5 x($10,000 x 0.02)],which is$11,000. This Section 7.6
does not apply to convictions of any subsidiary or affiliate entity of Company, by any
franchisees of Company, or by a person or entity with whom Company contracts.
Notwithstanding anything to the contrary herein, the parties agree that the Abatement is a
"public subsidy"(as that term is defined in Section 2264.001,Texas Government Code)for
the benefit of Company. This Section will survive the expiration or termination of this
Agreement.
7.5. Foreclosure on Land or Required Improvements.
Subject to Section 11, the City will have the right to terminate this Agreement
immediately upon provision of written notice to Company of any of the following events:
(i)the conveyance of the Land or the Real Property Improvements pursuant to an action to
foreclose or otherwise enforce a lien, mortgage or deed of trust on the Land or the Real
Property Improvements; (ii)the involuntary conveyance to a third party of the Land or the
Real Property Improvements; (iii) execution of any assignment of the Land or Real
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Property Improvements or deed in lieu of foreclosure to the Land or Real Property
Improvements; or (iv) appointment of a trustee or receiver for the Land or Real Property
Improvements and such appointment is not terminated within one hundred twenty (120)
calendar days after the appointment occurs.
7.6. Failure to Pay Taxes or Non-Compliance with Other Legal Requirements.
An Event of Default will occur if any ad valorem taxes owed to the City by Company
becomes delinquent and Company does not timely and properly follow the legal procedures
for protest or contest of any such ad valorem taxes,or Company is in violation of any material
Legal Requirement due to any act or omission connected with Company's operations on the
Land; provided,however,that an Event of Default will not exist under this provision unless
Company fails to cure the applicable failure or violation within thirty (30)calendar days (or
such additional time as may be reasonably required) after Company receives written notice
of such failure or violation.
7.7. General Breach.
In addition to Sections 7.1 — 7.6 and subject to Section 7.4, an Event of Default
under this Agreement will occur if either party breaches any term or condition of this
Agreement, in which case the non-defaulting parry must provide the defaulting parry with
written notice specifying the nature of the Default. Subject to Sections 7.1,7.2,and 7.3, in
the event that any Event of Default hereunder remains uncured after thirty (30) calendar
days following receipt of such written notice(or, if the defaulting party has diligently and
continuously attempted to cure following receipt of such written notice but reasonably
requires more than thirty (30) calendar days to cure, then such additional amount of time
as is reasonably necessary to effect cure, as determined by both parties mutually and in
good faith), the non-defaulting party will have the right to terminate this Agreement,
effective immediately,by providing written notice to the defaulting party.
7.11. Statutory Damages.
7.11.1 Company acknowledges and agrees that termination of this Agreement
due to an Event of Default by Company will (i) harm the City's economic development
and redevelopment efforts on the Land and in the vicinity of the Land; (ii) require
unplanned and expensive additional administrative oversight and involvement by the City;
and(iii)be detrimental to the City's general economic development programs,both in the
eyes of the general public and by other business entities and corporate relocation
professionals, and Company agrees that the exact amounts of actual damages sustained by
the City therefrom will be difficult or impossible to ascertain.
7.11.2 Therefore, upon termination of this Agreement for any Event of Default,
and as authorized by Section 312.205(b)(6) of the Code, Company must pay the
City, as damages authorized by the Code, an amount equal to all taxes that were
abated in accordance with this Agreement for each year in which an Event of
Default existed and which otherwise would have been paid to the City in the
absence of this Agreement.
7.11.3 The City and Company agree that the above-stated amount is a reasonable
approximation of actual damages that the City will incur as a result of an uncured
Tax Abatement Agreement between
City of Fort Worth and MP Magnetics LLC Page 12 of 26
Event of Default and that this Section 7.11 is intended to provide the City with
compensation for actual damages, as authorized by the Code,and is not a penalty.
7.11.4 The above-stated amount may be recovered by the City through
adjustments made to Company's ad valorem property tax appraisal by the appraisal
district that has jurisdiction over the Land and over any taxable tangible personal
property located thereon. Otherwise,this amount will be due, owing, and paid to
the City within sixty(60)calendar days following the effective date of termination
of this Agreement.
7.11.5 In the event that all or any portion of this amount is not paid to the City
within sixty (60) days following the effective date of termination of this
Agreement, Company will also be liable for all penalties and interest on any
outstanding amount at the statutory rate for delinquent taxes,as determined by the
Code at the time of the payment of such penalties and interest(currently, Section
33.01 of the Code).
8. INDEPENDENT CONTRACTOR.
It is expressly understood and agreed that Company will operate as an independent
contractor in each and every respect hereunder and not as agents, representatives or employees of
the City. As to the City, Company will have the exclusive right to control all details and day-to-
day operations relative to the Land and any improvements thereon and will be solely responsible
for the acts and omissions of their officers,agents,servants,employees,contractors,subcontractors,
licensees and invitees. Company acknowledges that the doctrine of respondeat superior will not
apply as between the City and Company, their officers, agents, servants, employees, contractors,
subcontractors, licensees, and invitees. Company further agrees that nothing in this Agreement
will be construed as the creation of a partnership or joint enterprise between the City and Company.
9. INDEMNIFICATION.
COMPANY,ATNO COST TO THE CITY,AGREES TO DEFEND,INDEMNIFYAND
HOLD THE CITY, AND ITS RESPECTIVE OFFICERS, AGENTS SERVANTS,
REPRESENTATIVES,AND EMPLOYEES,HARMLESSAGAINSTANYANDALL CLAIMS,
LAWSUITS,ACTIONS, COSTS AND EXPENSES OF ANY KIND, INCL UDING, B UT NOT
LIMITED TO, THOSE FOR PROPERTY DAMAGE OR LOSS (INCLUDING ALLEGED
DAMAGE OR LOSS TO COMPANY'S BUSINESS AND ANYRESULTING LOST PROFITS)
AND PERSONAL INJURY, INCLUDING DEATH, THAT MAY RELATE TO, ARISE OUT
OF OR BE OCCASIONED BY (i) COMPANY'S BREACH OF ANY OF THE TERMS OR
PROVISIONS OF THIS AGREEMENT OR (ii)ANYNEGLIGENT ACT OR OMISSION OR
INTENTIONAL MISCONDUCT OF COMPANY, ITS OFFICERS,AGENTS,ASSOCIATES,
EMPLOYEES, CONTRACTORS (OTHER THAN THE CIT19 OR SUBCONTRACTORS,
RELATED TO THE REQUIRED IMPROVEMENTS; THE LAND AND ANY OPERATIONS
AND ACTIVITIES THEREON, OR THE PERFORMANCE OR NON-PERFORMANCE OF
THISAGREEMENT OTHERWISE. THIS SECTION WILL SUR VIVEANY TERMINATION
OR EXPIRATION OF THIS AGREEMENT.
10. NOTICES.
Tax Abatement Agreement between
City of Fort Worth and MP Magnetics LLC Page 13 of
All written notices called for or required by this Agreement must be addressed to the
following, or such other party or address as either party designates in writing, by certified mail,
postage prepaid,or by hand delivery:
City: Company:
City of Fort Worth MP Magnetics LLC
Attn: City Manager Attn:Elliot D.Hoops
200 Texas Street General Counsel and Secretary
Fort Worth,Texas 76102 Address:
6720 Via Austi Parkway, Suite 450
With copies to: Las Vegas,NV 89119
City Attorney at the same address and the
Director at:
City of Fort Worth
Attn: Director
Economic Development
1150 South Freeway
Fort Worth,Texas 76104
11. EFFECT OF SALE OF LAND OR REQUIRED IMPROVEMENTS;
ASSIGNMENT AND SUCCESSORS.
11.1. Company may assign this Agreement, and all or any of the benefits provided
hereunder, without the consent of the City or the City Council to (a) an Affiliate that leases, owns
or takes title to the Land and owns or leases any New Taxable Tangible Personal Property or(b) a
successor to Company by merger or consolidation only if(i) prior to or contemporaneously with
the effectiveness of such assignment, Company provides the City with written notice of such
assignment, which notice must include the name of the Affiliate and a contact name, address and
telephone number for the Affiliate, and(ii)the Affiliate agrees in writing to assume all terms and
conditions of Company under this Agreement.
11.2. Otherwise, Company may not assign,transfer or otherwise convey any of its rights
or obligations under this Agreement to any other person or entity without the prior consent of the City
Council,which consent will not be unreasonably withheld,conditioned on(i)the proposed assignee
or successor agrees and proceeds to lease or take title to the Land and any New Taxable Tangible
Personal Property; (ii)the proposed assignee or successor is financially capable of meeting the terms
and conditions of this Agreement; and(iii)prior execution by the proposed assignee or successor of
a written agreement with the City under which the proposed assignee or successor agrees to assume
and be bound by all covenants and obligations of Company under this Agreement. Any attempted
assignment without the City Council's prior consent constitutes an Event of Default under this
Agreement. Any lawful assignee or successor in interest of Company of all rights under this
Agreement will be deemed"Company"for all purposes under this Agreement.
12. COMPLIANCE WITH LAWS, ORDINANCES,RULES AND REGULATIONS.
This Agreement,s subject to all applicable Legal Requirements.
Tax Abatement Agreement between
City of Fort Worth and MP Magnetics LLC Page 14 of 26
13. GOVERNMENTAL POWERS.
It is understood that by execution of this Agreement,the City does not waive or surrender
any of its governmental powers or immunities.
14. SEVERASILITY.
If any provision of this Agreement is held to be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions will not in any way be affected or
impaired.
15. NO WAIVER.
The failure of either party to insist upon the performance of any term or provision of this
Agreement or to exercise any right granted hereunder will not constitute a waiver of that parry's
right to insist upon appropriate performance or to assert any such right on any future occasion.
16. VENUE AND CHOICE OF LAW.
If any action, whether real or asserted, at law or in equity, arises on the basis of any
provision of this Agreement,venue for such action will lie in state courts located in Tarrant County,
Texas or the United States District Court for the Northern District of Texas—Fort Worth Division.
This Agreement will be construed in accordance with the laws of the State of Texas.
17. NO THIRD PARTY RIGHTS.
The provisions and conditions of this Agreement are solely for the benefit of the City and
Company, and any lawful assignee or successor of Company, and are not intended to create any
rights,contractual or otherwise,to any other persons or entities.
18. FORCE MAJEURE.
It is expressly understood and agreed by the parties to this Agreement that if the
performance of any obligations hereunder is delayed by reason of war, government action or
inaction, orders of the government, epidemics, pandemics, civil commotion, acts of God, strike,
inclement weather, shortages or unavailability of labor or materials, unreasonable delays by the
City(based on the then-current workload of the City department(s)responsible for undertaking the
activity in question) in issuing any permits, consents, or certificates of occupancy or conducting
any inspections of or with respect to the Land, Real Property Improvements, Personal Property
Improvements,or other circumstances that are reasonably beyond the control of the party obligated
or permitted under the terms of this Agreement to do or perform the same, regardless of whether
any such circumstance is similar to any of those enumerated or not, the party so obligated or
permitted will be excused from doing or performing the same during such period of delay, so that
the time period applicable to such design or construction requirement and the Completion Deadline
will be extended for a period of time equal to the period such party was delayed. Notwithstanding
anything to the contrary herein, it is specifically understood and agreed that any failure to obtain
adequate financing necessary to meet the Real Property Improvement Commitment or the Personal
Property Improvement Commitment will not be deemed to be an event of force majeure and will
not operate to extend the Completion Deadline in such an event.
Tax Abatement Agreement between
City of Fort Worth and MP Magnetics LLC Page 15 of 26
19. INTERPRETATION.
In the event of any dispute over the meaning or application of any provision of this
Agreement,this Agreement will be interpreted fairly and reasonably,and neither more strongly for
or against any party,regardless of the actual drafter of this Agreement. In the event of any conflict
between the body of this Agreement and the Applications,the body of this Agreement will control.
20. CAPTIONS.
Captions and headings used in this Agreement are for reference purposes only and will
not be deemed a part of this Agreement.
22. COUNTERPARTS.
This Agreement may be executed in multiple counterparts, each of which will be
considered an original,but all of which will constitute one instrument.
23. BONDHOLDER RIGHTS.
The Real Property Improvements will not be financed by tax increment bonds. This
Agreement is subject to the rights of holders of outstanding bonds of the City.
24. CONFLICTS OF INTEREST.
Neither the Land nor any improvements thereon are owned or leased by any member of
the City Council, any member of the City Plan or Zoning Commission or any member of the
governing body of any taxing unit with jurisdiction in the Zone.
25. ELECTRONIC SIGNATURES
This Agreement may be executed by electronic signature, which will be considered as an
original signature for all purposes and have the same force and effect as an original signature. For
these purposes, "electronic signature" means electronically scanned and transmitted versions
(e.g. via pdf file or facsimile transmission) of an original signature, or signatures electronically
inserted via software such as Adobe Sign.
26. ENTIRETY OF AGREEMENT.
This Agreement, including any exhibits attached hereto and any documents incorporated
herein by reference, contains the entire understanding and agreement between the City and
Company, and any lawful assign and successor of Company, as to the matters contained herein.
Any prior or contemporaneous oral or written agreement is hereby declared null and void to the
extent in conflict with any provision of this Agreement. Notwithstanding anything to the contrary
herein,this Agreement will not be amended unless executed in writing by both parties and approved
by the City Council of the City in an open meeting held in accordance with Chapter 551 of the
Texas Government Code.
Tax Abatement Agreement between
City of Fort Worth and MP Magnetics LLC Page 16 of 26
EXECUTED as of the last date indicated below:
[SIGNATURES IMMEDIATELY FOLLOW ON NEXT THREE(3)PAGES]
CITY: MP MAGNETICS LLC
A Delaware limited liability company
William Johnson By:
I�A-- xe--V�—
Assistant City Ma( ger Name: Elliot D. Hoops
Title: General Counsel and Secretary
Date: X Atg' S f c wt t r a Q �a
Date: �( �
FOR CITY OF FORT WORTH INTERNAL PROCESSES:
Approval Recommended: Contract Compliance Manager:
By signing I acknowledge that I am the
person responsible for the monitoring and
administration of this contract, including
By: ensuring all performance and reporting
Name: Robert Sturns requirements.
Title: Director, Economic Development OFFICIAL RECORQ
ARY
Tax Abatement Agreement between Fly WORTH, TX
City of Fort Worth and MP Magnetics LLC f9�
Approved as to Form and Legality: By: ,�A,Pgget�t1_
Name: Kelly
Title: Innovation Coordinator
By:
Name: Jt5 j�rOA,, City Secretary:
Title: Assistant City Attorney ./
Contract Authorization: By:
M&C: 22-0068 (Jan.25,2022) Name: a nette Goodal
Form 1295: 2021-825886 Title: Secretary
OFFICIAL RECORD
CITY SECRETARY
FT. WORTH,TX
Tax Abatement Agreement between
City of Fort Worth and MP Magnetics LLC Page 18 of26
STATE OF TEXAS §
COUNTY OF TARRANT §
BEFORE ME,the undersigned authority,on this day personally appeared William Johnson,
Assistant City Manager of the CITY OF FORT WORTH,a municipal corporation organized under
the laws of the State of Texas,known to me to be the person and officer whose name is subscribed to
the foregoing instrument,and acknowledged to me that the same was the act of the CITY OF FORT
WORTH, that he was duly authorized to perform the same by appropriate resolution of the City
Council of the City of Fort Worth and that he executed the same as the act of the CITY OF FORT
WORTH for the purposes and consideration therein expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this 1�O day of
2022.
wo'�" to Public in and for ,��������.,
�' SELENA ALA
°' i+sNotary Public, State of Texas
the State of Texas _:: :
Comm. Expires 03.31.2024
Notary ID 132422528
Notary's Printed Name
MP MAGNETICS LLC
a Delaware limited liability company:
STATE OF NEVADA §
COUNTY OF CLARK §
BEFORE ME,the undersigned authority,on this day personally appeared Elliot D.Hoops,
General Counsel and Secretary of MP MAGNETICS LLC, a Delaware limited liability
company,known to me to be the person whose name is subscribed to the foregoing instrument, and
acknowledged to me that he executed the same for the purposes and consideration therein expressed,
in the capacity therein stated and as the act and deed of MP MAGNETICS LLC.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this I day of
Zpt�,,r b#,r 32022.
Notary Public in and for DONNA WHITFIELD
the State of Nevada Notary Public,Stew of Nevado
�� ] ��' No.07-50611-1
- fbon od W12/Z �, ,14 My Appf.Exp.Nov.9,2023
Notary's Printed Name
OFFICIAL RECO'4'4
CITY SECRETARY
FT WORTH,TX
Tax Abatement Agreement between
City of Fort Worth and MP Magnetics LLC age 1<'�of°Z6---
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Tax Abatement Agreement between
City of Fort Worth and MP Magnetics LLC Page 20 of 26
EXHIBIT C
TAX ABATEMENT APPLICATIONS
FORT WORTH®
Economic Development
Incentive Application
Economic Development Department
1150 South Freeway
Fort Worth, Texas 76104
(817) 871-6021
Tax Abatement Agreement between
City of Fort Worth and MP Magnetics LLC Page of.
Incentive Application
f.APPLICANT INFORMATION.
Date.Nov 18,2021
Company Name:MP Magnetics LLC
Company Address: 6720 Via Austi Parkway,Suite 450
City:Las Vegas State: Nevada Zip: 89119
Contact Person:Adam Johnson Title/Position:VP-Corporate Development and Strategy
Telephone Number:702-389-6424
Mobile Telephone Number: 847-436-9881 Fax Number:n/a
E-Mail Address:ajohnson@mpmaterials.com
1.if the applicant represents a Company.(If a Developer and not a Company,proceed to#2.)
A.Company Ownership(check one): [:Publicly Traded Stock r7,Privately Held
B.Form of Business(choose one): Partnership
C.How long has the company been In operation(Years)?1
D.Company Industry:NAICS 332999-All Other Miscellaneous Fabricated Metal Product Manufacturing
E.Describe the Company's principal business:
MP Magnetics LLC's primary business is to manufacture rare earth magnets and related materials.MP Magnetics LLC is a
subsidiary of MP Materials Corp.(NYSE:MP),which specializes in mining and refining rare earth metals.MP Materials
Corp.'s open-pit mine in California is the only rare earth metal mining and processing facility in the United States,accounting
for approximately 15%of the world's supply of rare earth metals in 2020.
i
F.Describe the Company's international presence,if any:
MP Magnetics LLC does not currently have an international presence but may have an international presence in the future.
That international presence may include company-owned international facilities.
G.Describe the Company's corporate citizenship practices:
Sustainability is core to our mission.We believe our Mountain Pass rare earth metals mine is the world's cleanest,most
environmentally conscious rare earth facility.We endeavor to advance 11 of the United Nations'17 Sustainable
Development Goals,across areas including clean energy,green mining,ownership culture and employee empowerment,
and securing of strategic resources.
2.If the applicant represents a Developer.
A.Describe the Developer's experience and background.Please include similar projects that you have constructed including
the project type and location(attach additional sheets as necessary):
Not applicable.
B.Development Partners(Architect,Engineering Team, Interior Design,General Contract,etc.)
Not applicable.
Page 2 of 6 Next Page Previcus Page
Tax Abatement Agreement between
City of Fort Worth and MP Magnetics LLC Page I of:
lil.PROJECT INFORMATION
Please include below the project description, project benefits and how the project positively impacts the community. Any
Incentives given by the Cily should be considered only"gap"financing and should not he considered a substitute for debt and
equity. However,the City Is under no obligation to provide gap financing just because a gap exists. In order for a
Company or Developer to be eligible to receive incentives for a project,the Company/Developer:
A.Must complete and submit this application and the application fee to the City;
B.Company/Developer or Company/Developer's principals must not be delinquent in paying property taxes for any
property owned in Fort Worth;
C.Company/Developer or Company/Developer's principals must not have ever been subject to the City of Fort
Worth's Building Standards Commission's Review;
D.Company/Developer or Company/Developer's principals must not have any City of Fort Worth liens filed against
any other property owned by the applicant property owner/developer. "Liens"includes,but is not limited to,weed
liens,demolition liens,board-up/open structure liens and paving liens.
1.Project Description(attach additional sheets as necessary):
MP Magnetics LLC is evaluating an expansion of its business operations into either the Greater Dallas/Fort Worth or
Chicago markets.MP Magnetics LLC expects to buy land and construct an approximately 250,000 square foot facility to
include a headquarters,development center,and commercial manufacturing.The company intends to hire approximately 90
new employees to work at the facility.Of those 90 employees,approximately 20 will be classified as management or
engineering positions;and the other 70 employees will be classified as advanced manufacturing positions.
2.In what way will the project benefit the surrounding area or serve as a catalyst for additional development and/or business
opportunities for the local economy(i.e.attract suppliers or customers)?
This project will positively affect the surrounding area by creating 90 high-quality jobs and investing$100 million in a new
building,machinery,and equipment.Furthermore,the company will increase the supply chain for rare earth materials and
associated products,creating growth opportunities for rare earth metal processing,fabrication,research,and development in
the Fort Worth area.
3.Describe how the project positively impacts the community.
In addition to the benefits outlined above,the job creation associated with this project will have a compounding effect on new
jobs and wages in the area.According to JobsEQ,economic modeling for 90 new direct jobs indicates a compounding effect
of 39 indirect and induced jobs equating to an additional$7.77 million in total compensation within the region.
lll.PROJECT DETAILS
1.Proposed Project Site Address:13840 Independence Parkway,Fort Worth,TX 76177
2.Proposed Project Site Land Size(Acres):17.63 acres
3.Will environmental remediation be required?No
4. Is this an existing facility or will a new facility be constructed? r- New r Existing
A.If new,what is the construction:Anticipated Start Date:2/2022 Anticipated Completion Date:11/2022
B.If existing,is this an adaptive reuse?
5.Type of Project(choose one): Commercial/Industrie
6. Building Area(Square Feet)Requirements:
(a)Office 37,500
(b)Manufacturing 218,400
(c)Warehouse
(d)Showroom/Retail
(a)Other 2,500
Total Area(a+b+c+d+e): 258,400 SF
7.Will this facility be LEED certified,and if so,at what level? Yes
8.Public open space included within the proposed project site:No SF/Acres
Page 3 of 6 Next Page Previous Page
Tax Abatement Agreement between
City of Fort Worth and MP Magnetics LLC Page 23 of 26
III.PROJECT DETAILS(ConUneed)
9.!f the applicant represents a Company,(1f a Developer and not a Company,proceed to#10,)
A. Is the Company expanding Its existing local operations or relocating its operations from somewhere else to our area?
F7 Expansion r Relocation
B.if a relocation,where Is the company currently located?Las Vegas,Nevada
C.Does the company plan to lease or own the facility in Fort Worth? r Lease (✓Own
D.If the company is planning to lease space in Fort Worth,what Is the lease term? Years
E.Describe the specific operations and services to be provided or products to be manufactured at the proposed Fort Worth
facility(attach additional sheets as necessary)-
If Fort Worth is selected for the project,the company will construct a 250,000 square foot facility to include a headquarters,
development center(product,process,and applications),and commercial manufacturing.This facility will house the core
business functions of the company as well as research and development for product development and application testing.
Furthermore,the site will include a low-volume manufacturing facility with small-scale production capabilities for the
company's various products.
10.Development requests that will be for the project(select all that apply):
F?Replat
r Rezoning Current Zoning:K Heavy Ind. Requested Zoning: _
r Variances If yes,please describe:
r Downtown Design Review Board
r Landmark Commission
r Public Infrastructure Assistance
11.Real Estate Investment
A.Current Assessed Valuation of:Land$793,350 Improvements$0
B.Total Construction Costs:$40,000,000
C.Hard Construction Costs:$35,000,000
12.Business Personal Property and Inventory
A Business Personal Property
Total investment on equipment,machinery,furnishing,etc.:$60,000,000 r.Lease (✓Purchase
"Estimated taxable value of equipment,machinery,furnishing,etc.:$60,000,000
*'This is the value that will be on the tax rolls which includes all tangible property.
B.Inventory and Supplies
Value of Inventory:$10,400,000 _Value of Supplies: $13,300,000
Percent of inventory eligible for Freeport Exemption(inventory,exported from Texas within 175 days) %
13.Total Capital Investment(Real Estate and Business Personal Property):$100,000,000
IV.EMPLOYMENT AND JOB CREATION
On the Protect Site
1.How many persons are currently employed? 0
2.What percent of current employees above are Fort Worth residents? %
3.What percent of current employees above are Central City residents? %
Page 4 of 6 Next Page Previous Page
Tax Abatement Agreement between
City of Fort Worth and MP Magnetics LLC Page 24 of 26
IV.EMPLOYMENT AND JOB CREATION(Continued)
4.Please complete the following table for new jobs to be created from direct hire by applicant.
Currently At Completion Estimated By I Estimated By
Fifth Year I Tenth Year
Retained Jobs 0 0 0 0
New Jobs to be Created 0 90 90 90
Total Jobs at PrajecI Site 0 90 1) 90
%of Net Jobs to be filled by 0% 20% 204 20%
Fort Worth Residents
%of Net Jobs to he filled by 6% 1A 109i 1 a95
Central City resldents
5.Please attach a description of the jobs to be created,tasks to be performed for each and wage rate for each classification.
6.Does the applicant provide the following benefits: 1✓ Retirement [;Health [✓:,Dental r Domestic Partner
7.Average wage paid to employees to be located at the project site:$80,000
8.Describe the Company's talent recruitment efforts:
MP Magnetics LLC will post available positions on its website as well as with other popular job aggregation services,
including Indeed,Linkedln;and Monster.Furthermore,the company will partner with regional and local education providers
such as community colleges,universities,and trade schools as sources of talent recruitment and ongoing skills
development.The company will also work with the City of Fort Worth to identify any ongoing talent gaps or skills training
deficiencies.
V.INCENTIVES REQUEST
Incentive(s)Requested: T,/--Tax Abatement I— Chapter 380 Economic Development Program Grant
Do you intend to pursue abatement of County taxes? (a Yes (No
If requesting a Tax Abatement please refer to the Tax Abatement Policy for a comprehensive explanation of eligibility requirements.
VI.LOCAL COMMITMENTS
During Construction
1.What percent of the total construction costs described in Section III,Question 11 will be committed to:
A.Fort Worth businesses?25 %
B.Fort Worth Certified Minority and Women Business Enterprises?5 %
For Annual Supply and Service Needs
Regarding discretlonary supply and service expenses(i.e landscaping,office or manufacturing supplies,janitorial services,
etc.,excluding utilities):
2.What is the annual amount of discretionary supply and service expenses? $ 2,25Q,000
3.What percentage will be committed to Fort Worth businesses?25
4.What percentage will oe committed to Fort Worth Certified Minority and Women Business Enterprises?5
VII.DISCLOSURE5
Is any person or firm receiving any form of compensation,commission or other monetary benefit based on the level of
incentive obtained by the applicant from the City of Fort Worth?If yes,please explain and/or attach details.
The company has retained a site selection firm,Ginovus,LLC,to assist the company with the process.of selecting a location
for its new facility. As part of the site selection process,Ginovus is assisting the company with the incentive approval and
compliance management process.
Page 5of6 next page Previnusrar�e
Tax Abatement Agreement between
City of Fort Worth and MP Magnetics LLC Page 25 of 26
Vill.ADDITIONAL INFORMATION(TO BE ATTACHED)
These documents must be submitted with the appllcaton,otherwise the application will be deemed incomplete and will not be
reviewed:
a.)Attach a site plan of the project.
b.)Explain why incentives are necessary for the success of this project.Include a business pro-forma or other
documentation to substantiate your request.
c.)Describe any environmental impacts associated with this project.
d.)Describe the infrastructure improvements(water,sewer,streets,etc.)that will be constructed as part of this
project.
a.)Attach a talent:recruitment plan,if applicable.
f.)Attach a legal description or surveyor's certified metes and bounds description.
g.)Attach a copy of the most recent property tax statement from the appropriate appraisal district for all parcels
involved in the project.
h.)Attach a brief description of the employee benefit package(s)offered(i.e.health insurance,retirement,public
transportation assistance,day care provisions,etc.)including portion paid by employee and employer
respectively.
i.)Attach a plan for the utilization of Fort Worth Certified MNVBE companies.
j.)Attach a listing of the applicant's Board of Director's,if applicable.
k.)Attach a copy of Incorporation Papers noting all principals,partners,and agents and all Fort Worth properties
owned by each.
I.)Attach the purchasing representative's company contact information if known.
The cumpar,r is resN.—moie nor paying $5,000 as an application fee. If the application is withdrawn before the project Is
presented to City Council in Executive Session, the fee is refunded. Upon presentation to City Council in Open Session,
$2,000 is nonrefundable and is applied to offset costs incurred by the Economic Development Department.Upon approval
by City Council,the balance of$3,000 can be credited towards required building permits, inspections fees,replatting tees,
and other costs of doing business with the City related to the development.Any unused credit balance upon completion of the
Project will be tfunded upon request from the company.
IX.CERTIFICATION
On behalf of the applicant,I certify me information contained in this application,including all attachments to be true and
correct.I further certify that,on behalf of the applicant,I have read the current Incentive Policy and all other pertinent City of
Fort Worth policies and I agree with the guidelines and criteria state therein.
Printed Name: Elliot D.Hoops
Title: General Counsel
Date: Nov 18,2021
D41eM 0.Vo4 G Elid 0.Nlo�
Signature:EIIIOt D.Hoops Ds.::ml.n.ie io:w:as oeoD
Submit by E-mai
Print Form
Previous Page
Tax Abatement Agreement between
City of Fort Worth and MP Magnetics LLC Page 26 of2n
9/19/22,2:32 PM M&C Review
Official site of the City of Fort Worth,Texas
CITY COUNCILAGEi ' _ FOB WoRTH
Create New From This M
DATE: 1/25/2022 REFERENCE NO.: M&C 22-0068 LOG NAME: 17MPMAGNETICSTA
CODE: C TYPE: NON-CONSENT PUBLIC HEARING: NO
SUBJECT: (CD 7) Authorize Execution of a Seven-Year Tax Abatement Agreement with MP
Magnetics LLC, or Affiliates, for the Development of a 200,000 Square Foot Corporate
Office and Manufacturing Facility Having a Cost of at Least $100 Million, Located at
13840 Independence Parkway in Tax Abatement Reinvestment Zone No. 103, City of Fort
Worth, Texas
RECOMMENDATION:
It is recommended that the City Council:
1. Authorize the execution of a seven-year Tax Abatement Agreement with MP Magnetics LLC,
or Affiliates, for the development of a 200,000 square foot corporate office and
manufacturing facility having a cost of at least $100 million, located at 13840 Independence
Parkway in Tax Abatement Reinvestment Zone No. 103, City of Fort Worth, Texas; and
2. Find that the terms of, and the property subject to, the Tax Abatement Agreement meet the
criteria and guidelines set forth in the City of Fort Worth's General Tax Abatement Policy
(Resolution No. 5337-01-2021).
DISCUSSION:
MP Magnetics LLC is a company that manufactures rare earth materials. Founded in 2017, the
company is based in Las Vegas, Nevada. MP Magnetics LLC is rapidly expanding its presence and
market share in the United States (U.S). In addition to advanced manufacturing, functions within the
City of Fort Worth (City) facility will include housing the North American headquarters operations as
well as product design and prototyping.
Following a multi-state site selection process, an existing facility located at 13840 Independence
Parkway (Project Site) in Fort Worth was identified for the 200,000 square foot manufacturing
location. The property will be owned by MP Magnetics LLC or an Affiliate (MP Magnetics).
In order to facilitate the establishment of MP Magnetic's U.S. headquarters, the City proposes to
provide seven annual tax abatements to MP Magnetics with an estimated total value of
$2,762,300.00. The tax abatement will be tied to the amount of investment made by MP
Magnetics and satisfaction of other project and spending requirements, as follows:
Investment:
1. MP Magnetics must expend a minimum of $40,000,000.00 in total construction costs at the
Project Site on or before December 31, 2023,
2. MP Magnetics must locate taxable business personal property (BPP) that is new to the City at
the Project Site having a minimum taxable appraised value of $60,000,000.00 by January 1,
2024; and
3. MP Magnetics will be required to spend 15 percent of hard and soft construction costs with
contractors that are Business Equity Firms. Failure to meet this requirement will result in a
reduction of the grant by 10 percent.
MP Magnetics must provide a minimum of 30 full-time jobs on the Project Site by December 31,
2023 and maintain a minimum total of 30 full-time jobs on the at the Project Site for the term of the
agreement.
Average annual salary for all full-time jobs must be a minimum of$80,390.00. Salary includes direct
pay and planned bonuses, but not benefits, expense reimbursements, or discretionary bonuses.
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City Commitments:
1. The City will enter into a Tax Abatement Agreement with MP Magnetics for a term of seven
yea rs;
2. A percentage of MP Magnetics abatement will be tied directly to its ability to provide a
minimum of number of full-time jobs at the Project Site by certain dates. At a minimum, MP
Magnetics must provide 30 full-time jobs on the Project Site on or before December 31, 2023
and retain such jobs throughout the term of the Agreement. The abatement percentage will
graduate up if Company meets the minimum annual employment thresholds set forth in the
table below Failure to meet the employment commitment will result in a reduction of the
corresponding component of the abatement for that year proportional to the amount the
commitment was not met.
3. The amount of real property and BPP taxes to be abated in a given year will be equal to up to
sixty percent (60\%) of the incremental value of the property as determined by the Tarrant
Appraisal District multiplied by the applicable tax rate for the year. At no time will the
cumulative amount of the abatement exceed the lesser of (i) $2,762,300.00 or (ii) one
hundred fifty percent (150\%) of the amount of the minimum capital investment expenditure
for the Real Property Improvements and BPP. The percentage abatement will be calculated
per the table below; and
4. The first year in which MP Magnetics will be eligible to receive a tax abatement is the
2024 tax year, based on MP Magnetic's compliance with minimum construction costs for the
development and compliance with all other commitments during 2023.
TABLE - Maximum Potential Abatement with Corresponding Components:
Year 1 Year 2 Year 3
Property Owner or Potential Potential Potential
Company Commitment Abatement Abatement Abatement
Pase Commitment:
Real and Business
Personal Property 5.0 percent 5.0 percent 5.0 percent
Investment = $100M
BEF Commitments 10.0
(15\% of Total 10.0 percent 10.0 percent
Construction Costs) percent
Annual Commitments:
Average Annual Salary
for 30-90 Full-Time Jobs 2.5 percent F
.5 percent 2.5 percent
> $80,390.00
Overall
__
Employment>=30 (as 2.5 percent 2.5 percent 2.5 percent
applicable
Overall
Employment>=60 (as I - 20.0 percent 20.0 percent
applicable)
Overall Employment >=
90 (as applicable) - - 20.0 percent
Total I
20.0 40.0 percents 60.0 percent
percent
This project is located in COUNCIL DISTRICT 7.
FISCAL INFORMATION/CERTIFICATION:
The Director of Finance certifies that approval of this agreement will have no material effect on the
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Fiscal Year 2022 Budget. While no current year impact is anticipated from this action, any effect on
expenditures and revenues will be budgeted in future Fiscal Years and will be included in the long-
term financial forecast.
TO
Fund Department Account Project Program Activity Budget Reference# Amount
ID ID Year (Chartfield 2
FROM
Fund Department Account Project Program I Activity Budget Reference# Amount
ID I Year Chartfield 2
Submitted for City Manager's Office by. Jay Chapa (5804)
Originating Department Head: Robert Sturns (2663)
Additional Information Contact:
Robert Sturns (2663)
Kelly Baggett (2617)
ATTACHMENTS
MP Magnetics-Form 1295-Executed.pdf (CFW Internal)
TARZ103 map.pdf (Public)
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