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03-16-2007 (WEDC) Minutes Minutes Wylie Economic Development Corporation Board of Directors Meeting Friday, March 16, 2007—6:00 A.M. Inwood National Bank— Conference Room 200 South Hwy. 78—Wylie,Texas CALL TO ORDER Announce the presence of a Quorum (due to extenuating circumstances, the location of the WEDC Board Meeting was relocated to the WEDC Conference Room located at 108-C West Marble; a notice to relocate was posted at the above address prior to the Board Meeting being called to order). Vice President Young called the meeting to order at 6:14 a.m. Board Members present were: Gary Bartow, Mitch Herzog, and John Yeager. Staff present was Executive Director Sam Satterwhite and Administrative Assistant Gerry Harris. Ex-Officio Members present were Mayor John Mondy and City Manager Mindy Manson. CITIZEN PARTICIPATION There being no citizen participation, Vice President Young proceeded to Action Items. ACTION ITEMS ITEM NO. 1 — Consider and Act Upon Approval of the March 2, 2007 Minutes of the WEDC Board of Directors Meeting. MOTION: A motion was made by Gary Bartow and seconded by Mitch Herzog to approve the March 2, 2007 Minutes of the WEDC Board of Directors Meeting. The WEDC Board voted 4—FOR and 0—AGAINST in favor of the motion. ITEM NO. 2 — Consider and Act Upon Issues Surrounding Approval of the February 2007 WEDC Treasurer's Report. Staff pointed out that interest earnings are now being posted monthly as evidenced by the $1,560.82 interest posting in the February financials. Staff also noted that the County did reimburse the WEDC for the appraisal relating to the sale of the Ferrell R.O.W. and fund all closing costs. The funds received from the sale ($23,085.93) are to be posted within the March 2007 financial statements. Also identified was the WEDC share of audit services provided by Rutledge & Crain as posted in the amount of$1,920.00. Other than the noted items, staff identified no irregularities and recommended approved the February 2007 WEDC Treasurer's Report. MOTION: A motion was made by Mitch Herzog and seconded by Gary Bartow to approve the February 2007 WEDC Treasurer's Report. The WEDC Board voted 4— FOR and 0—AGAINST in favor of the motion. WEDC—Minutes March 16,2007 Page 2 of 5 ITEM NO. 3 — Consider and Act Upon Issues Surrounding Paving Improvements of Martinez Lane. Staff updated the Board regarding paving improvements to Martinez Lane. Staff had no recommendation with the Board taking no action. ITEM NO. 4 — Consider and Act Upon Issues Surrounding a Purchase Agreement and Development Agreement Between JTM Technologies and the WEDC. Staff presented Section 2.02 A of the Real Estate Sales Contract between the WEDC and JTM Technologies wherein the WEDC has committed to "subordinate the vendor's lien within twenty-four hours of issuance of a building permit" which must be issued no later than July 31, 2007. Staff noted that Chase Bank has indicated that they will not enter into the construction loan with JTM until which time as the 2.01 acres has been subordinated to Chase. Therefore, should the WEDC not subordinate, JTM will have to fund the architect out of pocket prior to the loan being executed and then be reimbursed from the construction loan after the permit is approved. In defense of Chase, JTM is attempting to come up with as few dollars out of pocket as possible other than the $30,150 to be paid to the WEDC at closing. As well, JTM does not want to spend $40,000 for the architect without the construction loan being executed. Staff summarized that the WEDC had requested subordination at permit so that the WEDC would not be behind any other liens (i.e. architect, excavation, etc.) prior to construction. The largest expense prior to construction is generally the architect, which in this case is $43,800. Staff proposed to the board to increase the cash at closing from $30,150 to $43,800which is equal to the architect's fees. Should Chase fund the architect out of the construction loan and JTM not get to permit (and subsequent construction), then Chase will have most likely foreclosed on the land and the WEDC will be purchasing the site back from Chase for $43,800. Once JTM gets to permit (the point at which the WEDC subordinates within the existing Contract), $13,650 is returned to JTM. JTM has committed to not draw beyond the S43,800 prior to permit and has provided closing documentation evidencing no soft costs such as closing fees within the construction loan. Staff recommended that the WEDC Board of Directors authorize President Fuller to execute an amendment to the Real Estate Contract in the form of a Security Agreement between the WEDC and JTM Technologies which provides for an additional $13,650 to be paid to the WEDC at closing which will be returned to JTM Technologies once a building permit has been issued for a facility as described within Section 1 of the Performance Agreement. MOTION: A motion was made by Gary Bartow and seconded by Mitch Herzog authorizing staff to draft a Security Agreement, and President Fuller to execute the same, which provides for an additional $13,650 to be paid at closing by JTM and to provide terms which reimburses JTM in the same amount at which time JTM receives a Building Permit for a facility as described within Section 1 of the Performance Agreement. The WEDC Board voted 4 — FOR and 0 — AGAINST in favor of the motion. WEDC —Minutes March 16, 2007 Page 3 of 5 ITEM NO. 5 — Consider and Act Upon Issues Surrounding Promotional Expenditures by the WEDC. Staff presented that within the FY 2006 — 2007 budget, the WEDC Board approved $12,000 specifically for Sporting Events. With those monies, the WEDC purchased a one-quarter season package (22 games) for Maverick and Stars games at the American Airlines Center. As the playoffs approach, the WEDC has an opportunity to purchase one-quarter of the playoff tickets for $5,716. The entire package includes four rounds of playoffs per team with the maximum potential for sixteen home games. Should either team not reach the final game in their respective series, the advanced funds for the remaining games will be credited towards next years purchase or refunded to the WEDC. Staff further commented that the WEDC budgeted $10,000 within Community Development as `General Funds' within the Promotional Expenditure Policy. As per the WEDC Promotional Expenditure Policy, "any expenditure of General Funds in amounts over $2,000 for promotional purposes must be approved by the Board of Directors." Staff reviewed that General Funds are miscellaneous promotional expenditures. Any expenditure for promotional purposes must "advertise or publicize the City of Wylie for the purpose of developing new and expanded business enterprises; and serve a public purpose." Mr. Herzog supported the use of funds for this purpose, but questioned whether the WEDC should have created a line item within its FY 2006 — 2007 for such expenses. Staff responded that the $10,000 in `General Funds' were budgeted for unforeseen expenditures and that the Board, nor staff, contemplated this expense at the time the original budget was approved. Both Mr. Bartow and Mayor Mondy commented that while sporting events can foster and strengthen relationships between the WEDC and potential clients, it is imperative that the "right" customers are entertained at these events. Furthermore, Mr. Bartow and Mayor Mondy instructed staff that if the expenditure is approved, staff must continue to document each and every event in terms of the firms that are present and the business purpose (or project) served. Mr. Bartow also added that for these events to ultimately be effective, in terms of relationship building, staff or Board presence is required without excuse. Staff recommended that the WEDC Board of Directors authorize the expenditure of$5,716 for one- quarter of a playoff package for the Dallas Mavericks and Stars. MOTION: A motion was made by Gary Bartow and seconded by John Yeager authorizing the expenditure of $5,716 for sporting tickets equal to one-quarter of a playoff package for the Dallas Mavericks and Stars. The WEDC Board voted 4 — FOR and 0—AGAINST in favor of the motion. EXECUTIVE SESSION The WEDC Board of Directors convened into Executive Session at 6:35 a.m. I. Consider and Act Upon Issues Surrounding the Purchase of 3.2 Acres Located Near the Intersection of Hensley and Sanden Boulevard as Authorized in Section 551.072 (Real WEDC— Minutes March 16, 2007 Page 4 of 5 Property) of the Local Government Code, Vernon's Texas Code Annotated (Open Meetings Act). II. Consider and Act Upon Issues Surrounding an Incentive Agreement for the Benefit of Commercial Retail Development Near the Intersection of McCreary Road and F.M. 544 as Authorized in Section 551.087 (Economic Development Negotiations) of the Local Government Code,Vernon's Texas Annotated (Open Meetings Act). III. Consider and Act Upon Issues Surrounding the Purchase of 5.0 Acres Located Near the Intersection of F.M. 544 and State Highway 78 as Authorized in Section 551.072 (Real Property) of the Local Government Code, Vernon's Texas Code Annotated (Open Meetings Act). IV. Convene into Executive Session to Hold Deliberations Regarding Economic Development Negotiations (offer of financial incentives to "Project 95K") as Authorized in Section 551.087 (Economic Development Negotiations) of the Local Government Code, Vernon's Texas Code Annotated(Open Meetings Act). RECONVENE INTO OPEN MEETING The WEDC Board of Directors reconvened into open session at 7:15 a.m. Executive Session Item No. 1: A motion was made by John Yeager and seconded by Gary Bartow to approve the purchase of 3.2 acres from Global Innovation Corporation for $155,000 plus all closing costs further authorizing WEDC President Marvin Fuller to execute all documentation necessary to effectuate the purchase. The WEDC Board voted 4—FOR and 0—AGAINST in favor of the motion. Executive Session Item No. 2: No action was taken as a result of discussions surrounding Item No. 2. Executive Session Item No. 3: A motion was made by Gary Bartow and seconded by Mitch Herzog authorizing staff to enter into an Employment Agreement between the WEDC and Russell & Rodriguez L.L.P. The WEDC Board voted 4—FOR and 0—AGAINST in favor of the motion. Executive Session Item No. 4: No action was taken as a result of discussions surrounding Item No. 4. ADJOURNMENT Prior to adjournment, staff noted for the record that Mr. Gary Bartow had resigned from the WEDC Board of Directors and that this would be his last meeting. Staff acknowledged the tireless efforts of Mr. Bartow and thanked him for his contributions over the past three years. The Board, Mayor and City Manager echoed staffs comments. WEDC —Minutes March 16, 2007 Page 5 of 5 With no further business, Vice President Young adjourned the WEDC Board meeting at 7:25 a.m, Merrill Young, Prelterent ATTEST: cam, �!.' b r �C Samuel D.R. Satterwhite Executive Director