Main Street Plaza in downtown Round Rock with blue shade sails, a statue and people gathered — Main Street Plaza in downtown Round Rock, 2021. (Photo: Another Believer / Wikimedia Commons, CC BY-SA 4.0)

October 20, 2026 · 3 min read

Round Rock Weighs Three More Years of Hotel-Tax Rent Help for Penfold Theatre

The extension would bring the city's total to $671,354. The council also votes on a $600,000 jobs incentive for a semiconductor-equipment maker.

Round Rock has been paying the rent for Penfold Theatre Company with hotel tax money since 2024. On Thursday, the City Council will decide whether to keep paying for three more years.

The council meets at 6 p.m. Oct. 22 at City Hall, 221 East Main Street. The two Penfold items are listed as resolutions on the agenda.

What the city would pay

Under a grant agreement signed Feb. 22, 2024, the city paid the nonprofit theater’s base rent and operating expenses for 18 months, a total of $326,330. Penfold leases Suite 290 in the Rock Creek Plaza shopping center from R.C. Center Limited Partnership. The grant agreement lists the space at 2120 and 2132 N. Mays and 2199 N. IH 35.

The proposed amendment would extend the grant 36 months and add $345,024, bringing the city’s total to $671,354. The payments would go straight to the landlord and step down over time:

$10,834 a month for 12 months, starting with the 23rd month of the lease
$9,584 a month for the next 12 months
$8,334 a month for the final 12 months

For those three years, the city would cover only part of the base rent and none of the operating expenses. Penfold would pay the rest under its lease. A separate tri-party agreement with the landlord would revive the 2024 payment arrangement, which expired when the first payment period ended. If the city pays late, it owes a late charge of $100 or 10% of the past-due amount, whichever is greater. If it defaults, the landlord could sue the city or demand the remaining payments within 10 business days.

The money comes only from the city’s hotel occupancy tax. State law limits that tax to promoting tourism and the hotel industry, and promoting the arts is one of the allowed uses. The amendment says the grant is not backed by property taxes and depends on hotel tax money being available and budgeted each year.

The front of Round Rock City Hall, a light-colored stone building with its name on the wall

Round Rock City Hall, photographed in 2010. Photo: Billy Hathorn / Wikimedia Commons, CC BY 3.0.

$600,000 for a chip-equipment maker

Earlier that evening, the Round Rock Transportation and Economic Development Corporation meets at 5 p.m. in the same chambers. The council will then be asked to approve the corporation’s incentive deal with PulseForge, Inc.

According to the agreement, PulseForge designs and makes semiconductor manufacturing equipment. It has a plant at 400 Parker Drive, Suite 1130, which has an Austin mailing address but is inside Round Rock city limits. The company would agree to:

Spend at least $6 million on building improvements and $14 million on new equipment by the end of 2031
Keep its 50 existing jobs
Add 60 new jobs paying an average starting salary of $100,000 plus benefits: 20 by the end of 2029 and 40 more by the end of 2031

If it meets those targets, the corporation would pay PulseForge $250,000 in 2030 and $350,000 in 2032, for a total of $600,000. The company would file a job affidavit every April. If it defaults, the corporation could take back what it paid, with interest. The agreement runs through Dec. 31, 2036.

Residents may speak for up to three minutes during citizen communication at the start of the meeting.