01-14-2010 (WEDC) Minutes Minutes
Wylie Economic Development Corporation
Board of Directors Meeting
Thursday, January 14, 2010— 6:30 A.M.
Inwood National Bank—Conference Room
200 South Highway 78 —Wylie, Texas
CALL TO ORDER
Announcethe presence of a Quorum
President Fuller called the meeting to order at 6:30 a.m. Board Members present were: John
Yeager,Todd Wintters, Mitch Herzog, and Chris Seely.
WEDC staff present was Executive Director Sam Satterwhite and Administrative Assistant
Gerry Harris,
Ex-Officio Board Member Eric Hogue was present.
CITIZEN PARTICIPATION
There being no citizen participation, President Fuller proceeded to Action Items.
ACTION ITEMS
ITEM NO. I — Consider and act upon approval of the December 18, 2009 Minutes of the
WEDC Board of Directors Meeting.
MOTION: A motion was made by Mitch Herzog and seconded by John Yeager to
approve the December 18, 2009 Minutes of the WEDC Board of Directors
Meeting. The WEDC Board voted 5 — FOR and 0 — AGAINST in favor of
the motion.
ITEM NO. — Consider and act upon approval of the December 22, 2009 Minutes of the
WEDC Board of Directors Meeting.
MOTION: A motion was made by Mitch Herzog and seconded by John Yeager to
approve the December 22, 2009 Minutes of the WEDC Board of Directors
Meeting. The WEDC Board voted 5 — FOR and 0 —AGAINST in favor of
the motion.
ITEM NO. 3 — Consider and act upon approval of the January 8, 2010 Minutes of the
WEDC Board of Directors Meeting.
MOTION: A motion was made by John Yeager and seconded by Chris Seely to
approve the January 8, 2010 Minutes of the WEDC Board of Directors
Meeting. The WEDC Board voted 5 — FOR and 0 —AGAINST in favor of
the motion.
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January 14, 2010
age 2 of 6
ITEM NO. —Consider and act upon approval of the October 2009 Treasurer's Report.
Following the October 2009 WEDC Treasurer's Report was presented and approved by the
WEDC Board, staff realized that the Current Budget on the Revenue and Expense Report
reflected FT 2008-2009 rather than the new FY 2009-2010. That, in turn, affected the presented
and approved % of Budget figures. Staff presented the corrected Revenue and Expense Report
which when approved by the WEDC Board will also be submitted to the Wylie City Council to
be placed on file.
MOTION: A motion was made by Chris Seely and seconded by Mitch Herzog to
approve the amended October 2009 Treasurer's Report, The WEDC Board
voted 5 —FOR and 0 —AGAINST in favor of the motion.
ITEM NO. —Consider and act upon approval of the December 2009 WEDC Treasurer's
Report.
MOTION: A motion was made by Chris Seely and seconded by John Yeager to
approve the December 2009 WEDC Treasurer's Report. The WEDC Board
voted 5 FOR and o—AGAINST in favor of the motion.
ITEM NO. —Consider and act upon issues surrounding the 2009 WEDC Annual Report.
As per the WEDC By-laws, the WEDC must present an annual report to the Wylie City Council
no later than January 31st of each year. The report must include, but is not limited to, a review of
all expenditures made by the Board, a review of accomplishments, and a review of other than
direct economic development. Staff presented the Report which is believed to meet the intent of
the requirements of the By-laws with the same being presented to the Wylie City Council on
January 26, 2010.
President Fuller asked if the Mayor believed that the Council would be satisfied with the Report
and if further information should be provided. While clarifying that he could not speak for the
Council as a whole, Mayor Hogue believed that even during a challenging year for business
development, the Council is pleased with WEDC efforts.
The Board was satisfied with the report with staff recommending approval.
MOTION: A motion was made by John Yeager and seconded by Chris Seely to
approve the 2009 WEDC Annual Report as presented by staff and
recommend it be presented to the Wylie City Council. The WEDC Board
voted 5 FOR and -=AANS-'in favor f'the motion.
ITEM NO. —Consider issues surrounding a Performance Agreement between the WEDC
and Gardner Regency, LLC.
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January 14,2010
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As per the executed Performance Agreement, the WEDC is obligated to reimburse Savage
(Gardner Regency, LLC) for moving expenses in the amount of$254,357. The grant is payable
in five equal and annual payments of$50,871.40. The first installment was paid at the issuance
of the certificate of occupancy on 1-9-09 with the second payment being submitted for the
Board's approval.
Savage must maintain a minimum of $4,051,443 in real and personal property value and
maintain at least 35 full-time employees. As per the appraisal district documents and Form 941
Quarterly Tax Returns, Savage was appraised at $4,260,959 in 2009 and employed between 42
and 44 employees for the first three quarters of 2009. While not provided herein, staff did verify
that Savage paid their property taxes.
The WEDC holds a note on the 3.87 acres sold to Gardner Regency in the amount of$421,443.
Should there be no Default on the Performance Agreement, the WEDC shall forgive all
payments associated with the Note over a seven year period in equal amounts beginning on the
anniversary date Savage received a certificate of occupancy. With no event of Default identified,
Payment til associated with the Note in the amount of $60,206.14 was recommended to be
forgiven.
President Fuller requested that staff review the terms of the option Savage retains for the
•
• purchase of WEDC property adjacent and east of their property.
MOTION: A motion was made by John Yeager and seconded by Todd Wintters to
authorize the second payment of$50,871.40 to Gardner Regency, LLC for
reimbursement of moving expenses and approve the forgiveness of Payment
#1 associated with the Real Estate Lien Note in the amount of 0, 0 .14.
The WEDC Board voted 5 —FOR and 0—AGAINST in favor of the motion.
ITEM NO. — Consider and act upon issues surrounding the WEDC support of a Business
Center within the Rita &Truett Smith Library.
Staff was approached by Rachael Orozco, Library Director, and asked if the WEDC Board of
Directors would consider funding the materials and equipment required to support a Business
Center within the new Rita and Truett Smith Public Library. The amount requested was any part
of or all of the $18,750 required to fund the Business Center. Staff was initially supportive of the
concept since workforce training and business support services are key components within the
EDC enabling legislation.
Although the WEDC Board was generally positive about the request, the Board asked that staff
contact the WEDC attorney and the Wylie City Council to determine the legality of the funding as
well as Councils' support of the effort.
MOTION: A motion was made by Mitch Herzog and seconded by Todd Wintters to
approve the funding for materials to support a Business Center within the
Rita and Truett Smith Public Library in the amount of$1 ,70 subject to
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January 14,2010
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approval of the WEDC attorney and support of the Wylie City Council. The
WEDC Board voted 5 —FOR and 0—AGAINST in favor of the motion.
ITEM NO. 9 — Consider and act upon issues surrounding a Performance Agreement
between the WEDC and Sandell International (U.S.A.), Inc.
At the WEDC Board meeting on December 22nd, Sanden representatives conveyed to the WEDC
that costs to retool the PX line had increased significantly from the commitment levels within the
Performance Agreement executed on July 24, 2009. The cost of improvements has increased
from $8,52 million as per the Agreement to $9.24 million or an increase of 8.5%.
The new President of Sanden, Mr. Mark A. Ulfig, met with staff to inquire as to the potential for
any additional assistance,no matter the amount. Mr. Ulfig had hoped to have a response prior to
his upcoming trip to Japan on 1-12-10 to meet with the owner and senior management.
Mr. Ulfig spoke of new developments and future capital expenditure programs and hoped a
positive response from the WEDC on the PX issue would encourage Japan to locate a new piston
line in Wylie instead of a Sanden plant in Mexico. Staff explained to Mr. Ulfig that the WEDC
had been as aggressive as possible in terms of providing $300,000 in assistance and that any
additional request from Sanden could negatively impact future incentive programs from a
perception standpoint with the WEDC Board and CityCouncil. Mr. Ulfigagreed with staff's
p
perspective.
Staff stated that the new piston line reference above will require an investment of$14 million.
Locating the line to the Mexico plant would have lower operating costs than a United States
plant. However, Mr. Ulfig will be promoting the workforce and technical advantages in Wylie.
Mr. Ulfig is attempting to secure the investment for the piston line while in Japan.
Staff believed that there may be a compromise that would assist Sanden with their short term
cash flow issues while maintaining the intent of the Performance Agreement. Staff
recommended that the WEDC advance the entire $300,000 assistance package on or before April
1, 2010. All performance measures would remain in place and the WEDC will not forego any of
its rights afforded within the Agreement. Should the Board authorize the full advance of the
$300,000, staff would provide an amended Performance Agreement at the February Board
meeting.
MOTION: A motion was made by John Yeager and seconded by Chris Seely directing
staff to present the proposed amendment to Council and bring back to the
Board an amended Performance Agreement for their consideration. The
WEDC Board voted 5—FOR and 0—AGAINST in favor of the motion.
ITEM NO. 10 — Staff report: review issues surrounding the lease of WEDC facilities, an
Amended and Restated Performance Agreement between the WEDC and Woodbridge
Crossing, Greenway Investments, Leadership Wylie, and regional housing starts.
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Lease W C `c i i ' , : The Ferrell property has received its COand is currently leased.
The lease calls for $800 monthly with no outside storage. The contract also calls for the tenant
to mow and maintain the adjacent one acre fronting F.M. 544.
207-B Industrial Court (Prime Kuts) is now vacant. Outstanding rent and utilities owed to the
WEDC are approximately $1,340 with a $1,000 security deposit in place. Staff will begin
marketing the property immediately.
WEDC facilities now vacant are 207-B Industrial Court and 211 Industrial Court.
Woodbridge Crossing: Certificates of Completion on the two L-shaped buildings were issued
by the City of Wylie Building Department on December 29, 2009 days prior to the end of the
cure period for the Default). Woodbridge Crossing will now be eligible for sales tax
reimbursements up to a maximum $12 million if there is no other Default. Should there be
another Default; the maximum reimbursement will be lowered to 6 million,
Direct Development was finally able to secure the release from Target for the Comptroller of
Public Accounts to release sales tax figures attributable to their Wylie operation.
Greenway Investments: On Monday January 11th, staff along with the City Manager met with
Todd Petty and Mark Hardaway of Greenway Investments. Greenway representatives conveyed
that the current structure of the Performance Agreement with the WEDC makes it difficult if not
impossible to convey tracts within the reinvestment zone to a third party without that third party
being liable for the actions of other parties. Staff conveyed to Greenway the frustration level of
the Board with the WEDC perception that remediation would be required in order for the State to
issue a Final Certificate of Completion for the landfill on the Pennington tract across from Home
Depot.
At a future date, Greenway would like for the WEDC to discuss the potential for an Agreement
to be put in place to provide development assistance to an end user who wishes to develop the
Pennington tract. Even though the TCEQ has issued a Certificate of Completion, any developer
will encounter significant development costs because of the existence of the landfill.
At the Board's direction,staff will place an action item on the February agenda.
LeadershipWylie: The WEDC hosted its seventh annual Leadership Wylie class. Board
member Wintters and Mayor Hogue spoke to the class of 15 individuals on the overall
philosophy of economic development. Staff also presented a history of the WEDC and provided
specifics on past projects and future goals and objectives. The WEIjC continues to make this
event a priority in order to promote WEDC efforts to a potential leadership pool. After the
presentation, tours were taken of Bayco Products, Southern Fastening Systems of Texas, and
Extruders division of Atrium Companies.
Regional Housing `ate: As reported, Wylie closed the calendar year out with 257 new single
family permits. While still sharply down from prior year starts, Wylie continues to lead the
region in housing starts with almost half of all homes built in the quad city region of Wylie,
Sachse, Murphy, and Lavon. Tying into the housing figures, Wylie ranked number eight in the
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January 14, 2010
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nation in terms of growth of high-growth areas. The Gadberry Group, a demographic firm out of
Little Rock, has been developing this list since 2006. An excerpt of the study was attached for
the Board's review.
Mayor Hogue departed the meeting at 7:45 aim.
EXECUTIVE SESSION
The WEDC Board ofDirectors convened into Executive Session at 7:47 aim.
I. Consider issues surrounding the purchase of property located near the intersection of State
Highway 78 and FM 544 as authorized in Section 551.072 (real property) of the Local
Government Code, Vernon's Texas Code Annotated (Open Meetings Act).
IL Consider issues surrounding Project Orange as authorized in Section 551.087 (Economic
Development Negotiations) of the Local Government Code, Vernon's Texas Code
Annotated(Open Meetings Act).
III. Consider issues surrounding the purchase of property located near the intersection of F.M.
544 and Sander Boulevard as authorized in Section 551.07 (real property) of the Local
Goverment Code, Vernon's Texas Code Annotated (Open Meetings Act).
RECONVENE INTO OPEN MEETING
The WEDC Board of Directors reconvened into open session at 8:05 a.m, No action was taken
as a result of discussion held in Executive Session.
ADJOURNMENT
With no further business,President Fuller adjourned the WEDC Board meeting at 8:05 a.m.
'144k51,' Yid&
Marvin Fuller, President
ATTEST:
amuel DR. Satterwhite
Executive Director