DEPARTMENT: Economic Development
DEPARTMENT HEAD: Rene Dominguez
COUNCIL DISTRICTS IMPACTED: Council District 6
SUBJECT:
An Ordinance to amend a Tax Phase-In Agreement with Maxim Integrated Products, Inc
SUMMARY:
Staff is requesting City Council action to approve an amendment to a Tax Phase-In Agreement with Maxim Products, Inc. (Maxim) in connection with the assignment of Maxim's interest in the agreement to TJ Texas, Inc. (Jazz).
BACKGROUND INFORMATION:
Maxim was established in 1983, with headquarters in Sunnyvale, California, and is a worldwide leader in the design, development, and manufacturing of linear and mixed-signal integrated circuits. In order to attract Maxim to San Antonio, in December 2004 City Council approved a Tax Phase-In Agreement (Tax Abatement Agreement) for a 10-year, 100% tax abatement and a $1.5 million economic development grant agreement for workforce training from the City's Economic Development Incentive Fund.
Under the Tax Abatement Agreement, Maxim committed to investing $136.2 million in real and personal property improvements and creating at least 575 full-time jobs by December 31, 2014. In addition, the Tax Abatement Agreement requires Maxim to maintain at least 575 full-time jobs through the end of the recapture period, which commenced on January 1, 2015 and expires on December 31, 2020.
Just prior to the end of the Maxim's jobs and investment reporting cycle for 2015, Maxim informed the City of the pending sale of its San Antonio manufacturing facility to Jazz, a U.S. subsidiary of Tower Semiconductor Ltd. Jazz intends to continue and grow current operations at the project site, which includes the creation of additional full-time jobs.
In 2015, the first year of the recapture term, Maxim reported a total capital investment of over $237 million in real and personal property and the creation and maintenance of 511 jobs, 64 jobs short of the total jobs required under the Tax ...
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