11-15-2013 (WEDC) Minutes Minutes
Wylie Economic Development Corporation
Board of Directors Meeting
Friday,November 15, 2013 6:30 A.M.
WEDC Offices—Conference Room
250 South Highway 78—Wylie, Texas
CALL TO ORDER
Announce the presence of a Quorum
President Marvin Fuller called the meeting to order 6:30 a.m. Board Members present were John
Yeager,Demond Dawkins, Todd Winners, and Mitch Herzog.
Ex-officio member Mindy Manson was present.
WEDC staff present was Executive Director Sam Satterwhite and Senior Assistant Gerry Harris.
Assistant City Manager Jeff Butters was present.
CITIZEN PARTICIPATION
With no citizen participation,Mr. Fuller proceeded to Action Items.
ACTION ITEMS
ITEM NO. 1 — Consider and act upon approval of the November 1, 2013 Minutes of the
Wylie Economic Development Corporation (WEDC)Board of Directors Meeting.
MOTION: A motion was made by Mitch Herzog and seconded by John Yeager to
approve the November 1, 2013 Minutes of the Wylie Economic
Development Corporation. The WEDC Board voted 5 — FOR and 0 —
AGAINST in favor of the motion.
ITEM NO.2—Consider and act upon approval of the October WEDC Treasurer's Report.
Board President Fuller requested that future Inventory Sub-ledger reports reflect the appraised
value of the improvements separate from land value for the Randack property. Further,the same
report should reflect that improvements on the McMasters and Perry properties were demolished.
Staff noted that the expiration of the draw period (August 15,2014) for the note with American
National Bank for roadway improvements to Woodbridge Parkway should be specified within
the footnotes of the Balance Sheet Sub-ledger. President Fuller requested that the current report
be amended to reflect the same.
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November 15, 2013
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MOTION: A motion was made by Todd Winners and seconded by Demand Dawkins
to approve the October WEDC Treasurer's Report as amended. The WEDC
Board voted 5 —FOR and 0—AGAINST in favor of the motion.
ITEM NO.3—Consider and act upon issues surrounding a Performance Agreement
between the WEDC and Sanden International(U.S.A.),Inc.
As a reminder, on May 17, 2013 staff presented a Performance Agreement between the WEDC
and Sanden for Board approval. Both Sanden and the WEDC had agreed upon terms of the
Agreement while staff was only waiting on support documentation from Sanden detailing a $24
million investment in a new piston manufacturing line and the number of pistons to be produced
annually.
Staff reviewed that the WEDC had structured a $500,000 incentive to support the installation of
a piston line with a minimum cost of$24 mm. Upon Sanden providing support documentation
that $24 mm was expended and that the line was operational, the WEDC proposed to fund a
$100,000 grant and additional grants of$150,000 over the next four years. Following the capital
expenditure impacting the total assessed valuation of the Sanden property, the WEDC would
then reimburse 50% of property taxes paid to the City of Wylie on the new value up to a
maximum $50,000 annually for 5 years. At the time the Agreement was drafted in April 2013
the WEDC was utilizing the threshold valuation of$56,241,300. Since that time the value of
Sanden real and personal property has been certified at$60,051,408.
As reported at the previous Board meeting, Sanden only spent $17,752,778 on the new piston
line as opposed to the $24 mm identified in the Request for Proposal (RFP) received by the
WEDC on May, 3, 2012. Staff commented that even though the investment is significantly less
than what had been report3ed by Sanden officials, the $17.7 mm expenditure is still a significant
investment and represents Sanden's continued commitment to the Wylie community.
In light of the shortfall and in an attempt to demonstrate that Sanden is continuing to invest in
Wylie, the WEDC was provided with an investment summary that Sanden has made in the Wylie
plant since January 2013. In addition to the piston line, Sanden was required to upgrade its PX
Line ($4.7 mm) and purchase Test Benches ($1.6 mm) in support of a new line of business from
Nissan. Sanden did however acknowledge that this investment was not contemplated in the
original RFP.
Staff has received all support documentation for the Piston Line improvements and 'Nissan'
improvements and is satisfied that these expenditures were made in Wylie. Sanden also
committed that a minimum 3 million pistons will be produced annually which will be a
performance measure linked to the tax reimbursement.
Staff proposed that the WEDC fund a $100,000 grant based upon the piston line improvements
following the payment of 2013 taxes on or about February 2014. However, staff does not
believe that additional cash grants of $150,000 over four years are warranted. Staff further
recommends that the 50% property tax reimbursement remain in place and that the value of the
Nissan improvements be subject to the reimbursement as well opposed to only accounting for
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November 15, 2013
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piston line value. Based upon staff depreciation assumptions, allowing Sanden to be reimbursed
for the $6.3 mm in Nissan improvements should allow Sanden to reach the maximum $50,000
reimbursement annually. If the Nissan improvements are netted out, the package will be reduced
by approximately $46,000 over 5 years. The only change proposed to the property tax
reimbursement would be to increase the threshold valuation to $60,051,408.
Staff recommended that the WEDC Board of Directors authorize staff to amend the Performance
Agreement with Sanden International to allow for a maximum incentive over five years of
$350,000.
MOTION: A motion was made by John Yeager and seconded by Mitch Herzog to table
the issue until the next regular Board Meeting. The WEDC Board voted 5 —
FOR and 0—AGAINST in favor of the motion.
ITEM NO. 4 — Consider and act upon issues surrounding the sale of WEDC
property to Ascend Custom Extrusions,LLC.
Staff indicated that the sale of WEDC property to Ascend would not take place as
anticipated and most likely be delayed for 6 months. Board member Herzog directed
staff to continue to strongly encourage Ascend to close on the proposed sale.
No action was taken on the item.
ITEM NO. 5—Consider and act upon issues surrounding a Performance Agreement
between the WEDC and Ascend Custom Extrusions,LLC.
Staff reviewed the terms of a second Ascend Performance Agreement associated with the
21,000 square foot expansion and purchase of a third extrusion press. The package
commits the WEDC to fund up to $172,000 over a four year period assuming Ascend
completes the proposed expansion and installs a new extrusion press with a purchase
price (including installation) of$4.5 mm.
Staff committed that the Performance Agreement associated with the above incentive package
will be completed and presented to the Board at the December Regular Meeting.
MOTION: A motion was made by John Yeager and seconded by Mitch Herzog to table
the issue until the next regular Board Meeting. The WEDC Board voted 5 —
FOR and 0—AGAINST in favor of the motion.
DISCUSSION ITEMS
ITEM NO. 3 — Staff Report: review issues surrounding an Amended and Restated
Performance Agreement between the WEDC and Woodbridge Crossing, Performance
Agreement between the WEDC and ACE, T.W. Snider & Associates, Performance Agreement
between the WEDC and B&B Theatres Operating Company, and regional housing starts.
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November 15, 2013
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Woodbridge Crossing
The Sales Tax Reimbursement Report was presented which identified all sales taxes received
through August 2013 within Woodbridge Crossing for the City General Fund, the WEDC, and
the 4B. As a reminder, the City and WEDC will be reimbursing 85% of all sales tax generated
within Woodbridge Crossing through October 2013 with the reimbursement percentage reduced
to 65% thereafter. October 2013 figures will be received by the WEDC in December 2013.
Woodbridge Crossing is eligible for a maximum $6 million in sales tax reimbursement through
September 2021.
$1,984,179 has been reimbursed to date with net receipts of $1,128,258 after reimbursements.
As well, $1.4 mm has been paid in ad valorem taxes to the City of Wylie (excluding the WISD).
Sales tax receipts reported to the Comptroller for August 2013 were down 7% over the prior year
receipts.
Ascend Commercial Lease and Performance Agreement
The Ascend Custom Extrusion Critical Dates Analysis and Performance Agreement Monitoring
Procedures were presented. Payment#3 of 5 for the Economic Incentives has been funded with
Ascend meeting all Performance Obligations within Sections A and B of the attachment.
T.W. Snider&Associates
Mr. Snider will begin his second and final pour of the parking lot behind his office building the
week of November 18th and should not have any problem meeting the December 13, 2013
deadline for issuance of a shell final CO.
B &B Theatres Operating Company Performance Agreement
In June, the WEDC began receiving a Sales Tax Area Report from the Comptroller which tracks
taxable sales generated from the Wylie B&B Theatre. As per the B&B Theatre Performance
Obligations, the WEDC will fund Incentive No. 2 of $25,000, plus sales tax reimbursements,
following the certification by the Central Appraisal District of a minimum appraised value of$10
mm on or about September 1,2014.
Regional Housing Starts
Thirty homes were permitted in Wylie for October 2013. Sachse, Lavon and Murphy permitted
a combined forty-two homes over the same period.
No action was requested by staff for this item.
EXECUTIVE SESSION
The WEDC Board recessed into Closed Session at 7:28 a.m. in compliance with Section 551.001
et.seq. Texas Government Code to wit:
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November 15, 2013
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Section 551.087 (Economic Development) of the Local Government Code, Vernon's Texas
Code Annotated (Open Meetings Act).
• Project 2013-4a
• Project 2013-5c
• Project 2013-9a
• Project 2013 -11a
• Project 2013-11b
Section 551.072 (Real Estate) of the Local Government Code, Vernon's Texas Code Annotated
(Open Meetings Act). Consider the acquisition of property located near the intersection of
Ballard&Alanis.
Section 551.071 (Consultation with Attorney) of the Local Government Code, Vernon's Texas
Code Annotated(Open Meetings Act):
• Discuss a demand letter and potential litigation associated with Project CRI.
RECONVENE INTO OPEN MEETING
The WEDC Board of Directors reconvened into open session at 8:53 a.m. and took no action.
ADJOURNMENT
With no further business, President Fuller adjourned the WEDC Board meeting at 8:53 a.m.
Marvin Fuller,President
ATTEST:
Samuel Satterwhite,Director