HomeMy WebLinkAboutContract 58103-A1First Amendment to CSC 58103 Page 1 of 2
FIRST AMENDMENT TO CITY SECRETARY CONTRACT NUMBER 58103,
A TAX ABATEMENT AGREEMENT BETWEEN
THE CITY OF FORT WORTH AND MP MAGNETICS, LLC
This First Amendment to City Secretary Contract Number 58103 (“First Amendment”)
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”).
A.The City and Company are currently parties to that certain Tax Abatement
Agreement on file with the City Secretary’s Office as City Secretary Contract Number 58103
(“Agreement”).
B.Prior to executing the Agreement, the City and Company intended the Completion
Date to include the receipt of either a temporary or permanent certificate of occupancy, as reflected
in the executed term sheet between the City and Company.
C.Therefore, this First Amendment does not constitute a modification of the
Agreement but merely corrects a scrivener’s error that the City and Company desire to memorialize
through this First Amendment.
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:
1. The definition of Completion Date was always intended to include the receipt of
either a temporary or permanent certificate of occupancy and, therefore, the definition is amended
to read as follows:
“Completion Date means the date as of which all occupiable space within
the Required Improvements have received either a temporary or
permanent certificate of occupancy.”
2. Capitalized terms used but not identified in this First Amendment have the
same meanings assigned to them in the Agreement.
3. Except as otherwise specifically amended in this First Amendment, the
Agreement remains in full force and effect.
4. This First Amendment may be executed electronically in multiple
counterparts, each of which will be considered an original, but all of which constitutes one
instrument.
EXECUTED as of the last date indicated below:
First Amendment to CSC 58103 Page 2 of 2
CITY:
By: ___________________________
William Johnson
Assistant City Manager
Date: ___________________________
MP MAGNETICS LLC
A Delaware limited liability company
By: ___________________________
Name: Elliot D. Hoops
Title: General Counsel and Secretary
Date: ___________________________
FOR CITY OF FORT WORTH INTERNAL PROCESSES:
Approval Recommended:
By: ______________________________
Name: Robert Sturns
Title: Director, Economic Development
Approved as to Form and Legality:
By: ______________________________
Name: Tyler F. Wallach
Title: Assistant City Attorney
Contract Authorization:
M&C: 22-0068 (Jan. 25, 2022)
Form 1295: 2021-825886
Contract Compliance Manager:
By signing I acknowledge that I am the
person responsible for the monitoring and
administration of this contract, including
ensuring all performance and reporting
requirements.
By: ______________________________
Name: Kelly Baggett
Title: Innovation Coordinator
City Secretary:
By: ______________________________
Name: Jannette Goodall
Title: City Secretary
12/21/23, 11:52AM
CITY COUNCIL AGENDA
Create New From This M&C
DATE:
CODE
1/25/2022 REFERENCE
N O..
C TYPE:
M&C Review
M&C 22-0068 LOG NAME
NON- PUBLIC
CONSENT HEARING:
17MPMAGNETICSTA
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:
M&C Review
1. The City will enter into a Tax Abatement Agreement with MP Magnetics for a term of seven
years;
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:
Property Owner or
Company
Commitment
Year 1
Potential
Abatement
Year 2
Potential
Abatement
Year 3
Potential
Abatement
Base Commitment:
Real and Business
Personal Property
Investment = $100M
BEF Commitments
(15\% of Total
Construction Costs)
Annual Commitments:
5.0 percent
5.0 percent
5.0 percent
Average Annual
Salary for 30-90 Full-
Time Jobs >
$80,390.00
Overal I
Employment>=30 (as
applicable
Overall
Employment>=60 (as
applicable)
Overall Employment
>= 90 (as applicable)
10.0 percent 10.0 percent 10.0 percent
2.5 percent
2.5 percent
2.5 percent
2.5 percent
20.0 percent
Total 20.0 percent 40.0 percent 60.0 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
Fiscal Year 2022 Budget. While no current year impact is anticipated from this action, any effect on
2.5 percent
2.5 percent
20.0 percent 20.0 percent
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12/21/23, 11:52AM M&C Review
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 I Reference # Amount
ID ID Year (ChartField 2)
Fund Department Account Project Program Activity Budget Reference # Amount
ID � ID 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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