Title
Consider approving Resolution No. 2025-214 authorizing the City Manager to ratify an Economic Development Incentive Agreement with FormFactor, Inc.; and take appropriate action.
Body
REQUESTOR:
Economic Development
BACKGROUND:
The company, FormFactor, Inc., has or intends to acquire land and one or more buildings located at 4350, 4331, and 4345 Innovation Drive and 4352 North Beltwood Parkway, Farmers Branch, Texas, 75244, for the establishment of an advanced manufacturing and probe card assembly facility.
The project represents a capital investment of approximately $286,000,000 over fifteen (15) years, consisting of $55,000,000 in real property improvements and $231,000,000 in personal property, including semiconductor fabrication and Micro-Electro-Mechanical System (MEMS) probe manufacturing equipment.
The City Council approved a Letter of Intent (LOI) at the October 21, 2025, City Council meeting. This item ratifies the contract that was built from the LOI.
DISCUSSION:
The proposed Resolution No. 2025-214 ratifies an economic development incentive agreement with FormFactor, Inc., and grants the City Manager the authority to negotiate and execute any necessary changes.
FormFactor, Inc. has expressed its intent to create approximately 650 high-paying jobs with an average annual wage of approximately $81,700. The agreement is structured to:
• Provide an economic development grant pursuant to Chapter 380 of the Texas Local Government Code;
• Ensure a competitive economic position for the city to have an advanced semiconductor manufacturing and classroom facility.
The City’s legal authority for entering into such agreements is granted under Article III, Section 52-a of the Texas Constitution and Chapter 380 of the Texas Local Government Code, which allows municipalities to provide economic development incentives to promote and stimulate business and commercial activity.
FISCAL IMPACT:
FormFactor, Inc. will continue to pay taxes on the property at the baseline value before any investment. The incentive agreement provides for a shared benefit resulting from the increase in taxable value, increase in sales tax, and increase in water consumption. The agreement provides for cash grant tranches totaling $2,000,000, based on performance milestones, and up to $250,000 in façade and infrastructure improvements. The agreement has strong claw-back provisions to protect the City. The anticipated timeline for return on investment is twelve years.
The term of the agreement is 15 years.
DISTRICT:
District 4
POSSIBLE COUNCIL ACTION:
1. I move to approve Resolution No. 2025-214 as presented.
2. I move to approve Resolution No. 2025-214 with modifications.
3. I move to table the issue for further study or take no action.
ATTACHMENT(S):
1. Resolution No. 2025-214
2. Economic Development Incentive Agreement Draft