07-25-2014 (WEDC) Minutes Minutes
Wylie Economic Development Corporation
Board of Directors Meeting
Friday, July 25, 2014 6:30 A.M.
WEDC Offices—Conference Room
250 South Highway 78 —Wylie, Texas
CALL TO 0 ' )ER
Announce the presence of a Quorum
President Marvin Fuller called the meeting to order 6:30 a.m. Board Members present were John
Yeager, Mitch Herzog,Demond Dawkins and Todd Wintters.
Ex-officio member Mindy Manson was present.
WEDC staff present was Executive Director Sam Satterwhite and Gerry Harris.
Wylie Police Officer Donna Valdepena attended the meeting.
CITIZEN PARTICIPATION
Lynn Grimes announced that the WEDC Board was invited to attend and participate in the B&B
Theatre 5K Race taking place on August 2, 2014. Proceeds will go to the Wylie Christian Care
Center.
With no further citizen participation, Mr. Fuller proceeded to Action Items.
ACTION ITEMS
ITEM NO. 1 — Consider and act upon approval of the June 19, 2014 Minutes of the Wylie
Economic Development Corporation (WEDC) Board of Directors Meeting.
MOTION: A motion was made by Todd Wintters and seconded by John Yeager to
approve the June 19, 2014 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 June 2014 WEDC Treasurer's
Report.
MOTION: A motion was made by Mitch Herzog and seconded by Demond Dawkins to
approve the June 2014 WEDC Treasurer's Report. The WEDC Board voted
5 —FOR and 0—AGAINST in favor of the motion.
WEDC —Minutes
July 25, 2014
Page 2 of 11
ITEM NO. 3 — Consider and act issues surrounding a WEDC Enrichment Grant
application.
Staff presented a Grant application from Taste of Home, LLC requesting assistance with
cosmetic and safety improvements to their business located at 302 North Ballard. Taste of Home
is owned and operated by Ms. Kathy Goodwin. The structure was built in 1901 and renovated
for its current use in 2008.
Taste of Home has requested assistance with the replacement of rotted wood on both the main
structure and an outbuilding used for storage, replacement of the handicap ramp, and
replacement of rotted window frames along with scraping and painting of the same. Pictures
were provided along with the application. Taste of Home is also undertaking significant interior
improvements totaling in excess of$12,000 in 2014 and 2015.
With Board approval staff will enter into a Letter of Agreement with Taste of Home under which
the accepted bid will be an exhibit and Taste of Home will be reimbursed for the contemplated
work upon payment in full to the contractor and submittal of all paid invoices to the WEDC.
Staff recommended that the WEDC Board of Directors approve an Enrichment Grant in the
amount of $14,375 to Taste of Home, LLC as per the low bid submitted by Around Town
Contractors.
While not a part of the Program Guidelines, Board Members Herzog and Yeager believed that it
is important that businesses applying for grants under this program personally fund a portion of
the project cost. Board Members Dawkins and Wintters commented that the intent of the
program is to enhance the aesthetic environment of commercial businesses and that their
participation should be secondary. Board Member Herzog commented that the Grant Program
guidelines should be amended to include financial participation by the applicant which exhibits
an added level of commitment by the applicant.
The WEDC Board of Directors directed staff to extend the offer of an Enrichment Grant to Taste
of Home, LLC in the amount of$10,000 to be paid after submission of paid invoices equal to
$14,375.
MOTION: A motion was made by Mitch Herzog and seconded by John Yeager to
approve an Enrichment Grant to Taste of Home in the amount of$10,000
following the expenditure of $14,375 by Taste of Home on the
improvements specified within the Around Town Contractors bid. The
WEDC Board voted 5 —FOR and 0—AGAINST in favor of the motion.
ITEM NO. 4 — Consider and act upon issues surrounding the WEDC Enrichment Grant
Program Guidelines.
Prior to moving forward with processing future applications, staff requested clarification as it
pertains to owner occupied structures versus tenant occupied structures.
WEDC —Minutes
July 25, 2014
Page 3 of 11
As a reminder to the Board, staff indicated that the Program was designed to address aesthetics
and structural degradation of commercial structures in Wylie. The question staff raised is
whether the ownership and occupancy matters, so long as upgrades and enhancements are being
made to the area. Staff believed that a landlord has a greater responsibility to maintain a lease
property in a well ordered manner, but is that any different from an owner occupied structure as
it relates to the goal of the Program. Staff commented further that if a tenant has a lease with a
landlord that states the structure is to be maintained to a certain standard, should the WEDC
address issues that are the landlord's contractual responsibility.
Staff recognized that this is a circular argument and can be applied to an owner occupied
property as well. As the Program is continued through the balance of this fiscal year into FY
2014—2015, staff sought clarification and direction from the Board.
Staff requested Board direction pertaining to owner occupied projects versus lease properties.
While the Board understood the premise behind staffs argument, they were not willing to draw a
distinction between owner occupied and lease projects. However, Board Member Todd Wintters
believed that language should be added to the Program Guidelines encouraging applicants to
personally fund a portion of the bid amount for improvements. The Board stopped short
however of identifying a specific percentage required by the Board.
MOTION: A motion was made by Mitch Herzog and seconded by Todd Wintters to
amend the Enrichment Grant Program Guidelines to specify that
applications identifying financial participation by the owner will be given
preferential consideration. The WEDC Board voted 5 — FOR and 0 —
AGAINST in favor of the motion.
ITEM NO. 5—Consider and act upon election of WEDC officers for FY 2014—2015.
On June 10, 2014 the Wylie City Council appointed Mr. Todd Wintters to a three year term as
Member of the Wylie Economic Development Corporation Board of Directors. On June 24,
2014 the appointee was sworn in by City Secretary Carole Ehrlich.
On an annual basis and following the selection of WEDC Board Members by the Wylie City
Council, the WEDC elects officers for the upcoming year. Staff presented a copy of the WEDC
By-laws, Section V-Officers, for the Board's review which details the process for selection of
officers and the duties of the same.
On June 21, 2013, the WEDC Board of Directors elected the current officers:
Marvin Fuller.........................President
Mitch Herzog ........................Vice President
John Yeager ......................Secretary
Todd Wintters........................Treasurer
WEDC—Minutes
July 25, 2014
Page 4 of 11
Board Member Mitch Herzog commended President Marvin Fuller for the outstanding job he
does as President and asked that he remain in office as President. Mr. Fuller then asked if the
remaining officers would like to remainin their positions. All existing officers accepted.
MOTION: A motion was made by John Yeager and seconded by Demond Dawkins to
re-elect a slate of officer including Marvin Fuller as President, Mitch
Herzog as Vice President, John Yeager as Secretary, and Todd Wintters as
Treasurer. The WEDC Board voted 5 —FOR and 0 —AGAINST in favor of
the motion.
Item No. 6—Consider and act upon issues surrounding the FY 2014—2015 WEDC Budget.
Staff presented Draft #3 of the FY 2014 — 2015 WEDC Budget. Staff only addressed changes
made to Draft#2 and was prepared to recommend final approval and submittal to the Wylie City
Council for the same.
Fund Balance — While staff believed its 10-1-14 Unreserved Beginning Fund Balance was
accurate, the Finance Department notified the WEDC on 7-22-14 that our Fund Balance is
$1,068,355 opposed to the $865,340 provided to the Board in June. The $203,015 overage was
traced to the use of an estimated ending fund balance for FY 2012 —2013. The $203,015 will be
placed within Incentives—Future Projects.
Personnel Services (Direct Compensation) —The new Executive Assistant has a starting salary
of$41,000. With a start date of August 4, 2014, staff is budgeting for a 5% increase ($2,050) to
be considered by the Executive Director in August 2015.
Personnel Services (Insurance) — The Finance Department provided the WEDC with final
figures for Insurance, Medicare, Workers Compensation, and Unemployment Compensation.
The final figures represent a $3,251 increase over what was presented to the Board within the
previous budget discussions.
Travel, Training & Recruitment— Staff has increased training for the new Executive Assistant
from $500 to $2,000. The Texas Economic Development Council has several EDC training
seminars that will be helpful in orienting our new staff person to economic development policies
and practices.
Incentives—Future Projects—Future Projects has been adjusted from $812,023 to $1,000,900.
Staff presented a draft budget to the Wylie City Council on July 15, 2014. Staff highlighted
existing incentive commitments and debt service requirements for FY 2014 — 2015.
Councilmembers had no questions about current or proposed.
Staff recommended that the Board of Directors approve the FY 2014—2015 WEDC Budget with
following amendments of (1) increasing the Fund Balance from $865,340 to $1,068,355 at the
direction of the Finance Director, (2) increasing the Incentive Account — Future Projects from
$812,023 to $1,000,900, (3) increasing Training by $1,500, (4) increasing Personnel Services —
WEDC—Minutes
July 25, 2014
Page 5 of 11
Insurance by $3,251, and further directing staff to present a final budget to the Wylie City
Council for approval.
MOTION: A motion was made by Mitch Herzog and seconded by Todd Wintters to
approve the FY 2014—2015 WEDC Budget as amended. The WEDC Board
voted 5 —FOR and 0—AGAINST in favor of the motion.
Item No. 7 — Consider and act upon issues surrounding the utilization and tracking of
WEDC sports tickets.
Staff reported that a concerned citizen recently requested documentation on the use of sporting
tickets purchased by the WEDC since 2011. The WEDC currently is a 25% season ticket holder
for the Dallas Mavericks and a 16% owner in a Texas Rangers season ticket package. The
WEDC ownership interest represents 11 games and 13 games respectively.
In consolidating records for the request, staff accessed its Outlook calendar on which the
company names are documented for each event. Staff discovered that anything older than 12
months was being deleted via an auto archive function within the Outlook program. Staff
contacted the City Secretary and confirmed that the State requirement for keeping calendars is
the balance of the calendar year and an additional 12 months. Therefore, the WEDC was out of
compliance with the State retention requirement for calendars by 6 months.
Regarding the retention requirement, staff has reset the auto archive setting to 24 months which
brings the WEDC into compliance from this point forward. Also, staff will initiate changes in
how the use of sports tickets are tracked. In addition to the company affiliation being identified
on a manual log, individuals present will also be identified as well as the purpose for which the
WEDC is interacting with the same. Further, being that this issue could at any time become a
negative distraction based upon the promotional nature of the expenditure; staff will maintain
these records well beyond the retention requirement for additional transparency.
Staff recommended that the WEDC Board approve enhanced documentation requirements for
the use of sporting tickets purchased by the WEDC.
The Board directed staff to include a 'Promotional Expenditure Report' specifying the use of all
sporting tickets within the monthly Staff Report.
MOTION: A motion was made by Todd Wintters and seconded by Demand Dawkins
requiring staff to provide a Promotional Expenditures Report within all
future Staff Reports. The WEDC Board voted 5 —FOR and 0 — AGAINST
in favor of the motion.
Item No. 8 — Consider and act upon a draw request by the City of Wylie for constructing
associated with the extension of Woodbridge Parkway.
The Wylie City Council and WEDC Board of Directors approved a draw note with American
National Bank of Texas in the amount of$1.4 mm to be used for construction costs associated
WEDC—Minutes
July 25,2014
Page 6 of 11
with the extension of Woodbridge Parkway. The WEDC has until August 15, 2014 to draw the
necessary funds from ANB to satisfy the WEDC commitment to this $8 mm project. To date
there has been six draw requests by Mario Sinacola totaling $1.79 mm out of a $4.4 mm contract
to complete roadway and bridge improvements from Hensley Lane south to approximately the
Sachse City Limits.
The Wylie City Engineer estimates WEDC funding to equal $976,000 which includes $75,000 in
potential change orders associated with additional depth on bridge piers and a concrete cap over
an existing sanitary sewer line. The following was presented as a breakdown of costs incurred
by each entity: Sachse - $2.8 mm, Wylie—$1.78 mm, Collin County- $3.87 mm.
Staff anticipated presenting American National Bank with the attached support documentation
and requesting that the funds be transferred to the WEDC on August 15, 2014. Woodbridge
Parkway is anticipated to be open to traffic in early September.
A recommendation was made to the WEDC Board authorizing staff to process a draw request to
American National Bank in the amount of$976,000.
MOTION: A motion was made by Todd Wintters and seconded by John Yeager to
authorize staff to process a draw request to American National Bank in the
amount of$976,000. The WEDC Board voted 5 —FOR and 0 AGAINST
in favor of the motion.
Item No. 9 Consider and act upon approval of a Loan Agreement with American
National Bank in the amount of$400,000 and all other closing documents necessary to fund
the purchase of 1.246 acres from Jerry &Carolyn Buchanan.
As directed by the WEDC Board of Directors on June 19, 2014 and further evidenced by the
Board's ratification of Real Estate Contract between the WEDC and Buchanan, staff directed
American National_Bank to draw Loan Documents under which the WEDC is borrowing
$400,000 at a fixed interest rate of 3.77% over a 60 month amortization period. Staff presented
Loan Documents to the Board comprised of a Loan Agreement, Promissory Note, Security
Agreement, and Certificate of Corporate Resolution.
ANB will be securing the WEDC debt with sales tax receipts with the WEDC required to
maintain a 1:1 annual debt service coverage ratio. Annual debt service will be $87,902 which is
included within the FY 2014 — 2015 WEDC Budget. There are no bank or attorney fees
associated with this Loan and there is no prepayment penalty.
Staff reported that Exco has agreed to extend the existing lease with Buchanan through January
2016 which will trigger the WEDC prepaying Buchanan for Exco lease payments through the
same period. The lease extension will be completed by the first week.in August. While staff had
hoped to close by August 1st, closing will take place on August 15th which is in compliance with
the Buchanan Real Estate Sales Contract. Staff further reported that the Wylie City Council has
reviewed and accepted the WEDC purchase of 1.246 acres located at 400 South Highway 78 at
their July 22, 2014 Council Meeting.
WEDC—Minutes
July 25, 2014
Page 7 of 11
Staff recommended that the WEDC Board of Directors approve all Loan Documents associated
with the borrowing of $400,000 from The American National Bank of Texas and further
authorize the WEDC President Marvin Fuller and Secretary John Yeager to execute all
documents necessary to effectuate said Loan Documents.
MOTION: A motion was made by Mitch Herzog and seconded by Todd Winners to
authorize WEDC President Marvin Fuller and Secretary John Yeager to
execute all documents necessary to effectuate said Loan Documents. The
WEDC Board voted 5—FOR and 0—AGAINST in favor of the motion.
DISCUSSION ITEMS
ITEM NO. 10 — Staff report: review issues surrounding Performance Agreements between the
WEDC and: Woodbridge Crossing, Ascend Custom Extrusions, CSD Woodbridge, The Wedge
Corporation, Dank Real Estate, Swimcat, and EXCO Tooling Solutions, WEDC properties
located at 2804 F.M. 544 and 605 Commerce, truck route for Martinez Lane, Wylie-PHS LP,
alternate date for WEDC Board Meeting in August, hiring of new WEDC Executive Assistant,
WEDC Executive Director Performance Evaluation, and regional housing starts.
Woodbridge Crossing
The Sales Tax Reimbursement Report was presented which identified all sales taxes received
through June 2014 within Woodbridge Crossing for the City General Fund, the WEDC, and the
4B. As a reminder, the City and WEDC reimbursed 85% of all sales tax generated within
Woodbridge Crossing through September 2013 with the reimbursement percentage reduced to
65% thereafter. Due to the default under the Amended and Restate Performance Agreement,
Woodbridge Crossing is only eligible to receive up to $6 million in sales tax reimbursement
through September 2021 opposed to the maximum reimbursement of $12 million originally
contemplated.
$2,276,323 has been reimbursed through the March filing period with net receipts of
$1,458,236.32 after reimbursements. As well, $1.9 mm has been paid in ad valorem taxes to the
City of Wylie (excluding the WISD). Staff is in the process of updating ad valorem values for
Woodbridge Crossing. Further, TJ Maxx and Home Goods are scheduled to open the second
week of August.
Ascend Commercial Lease and Performance Agreement
The Ascend Custom Extrusion Critical Dates Analysis and Performance Agreement Monitoring
Procedures were presented. Payment #4 of 5 for the Economic Incentives has been funded with
Ascend meeting all Performance Obligations within Sections A and B of the attachment.
Also presented was the Performance Agreement between the WEDC and ACE which was
approved in December 2013. Payment #1 of 4 has been funded with Ascend meeting all
Performance Obligations within Section A of the attachment.
WEDC—Minutes
July 25, 2014
Page 8 of 11
Finally, Ascend has installed its third press and anticipates being at capacity by the end of 2014.
CSD Woodbridge Performance Agreement
On July 15, 2013 a certificate of occupancy (CO) was issued for Kroger Marketplace. Beginning
October 1, 2013 and ending October 1, 2023, Clark Street Development is eligible to receive a V2
cent sales tax reimbursement from the WEDC (City of Wylie not part of sales tax reimbursement
agreement). The WEDC has received the fourth Comptroller monthly report identifying five
businesses paying sales tax on a consistent basis. The second reimbursement was made to CSD
Woodbridge LLC in June 2014. Kroger has been added to the aggregate total, but they did not
pay sales tax last month so they were not in the total. Quarterly payments will be made to Clark
Street based upon the data provided by the Comptroller.
In addition to the $100,000 reimbursement incentive paid by the WEDC at CO, Clark Street is
eligible to receive cumulative incentives of$1,100,000 over the life of the Agreement.
The Wedge Corporation
The Wedge continues to quote an opening date of Fall 2014 with staff under the impression they
will open in late October. The WEDC will fund 50% of the committed incentive package
($275,000) for infrastructure assistance this fiscal year.
Dank Real Estate (Deanan Gourmet Popcorn)
The steel frame is being delivered the week of 7-21-14. With a maximum $30,000 incentive
package, Deanan will qualify for a $15,000 payment should they receive a Building Permit
valued at no less than $600,000 and receive a Certificate of Occupancy from the City of Wylie
by 2-1-15.
Swimcat(Jarrod Rush State Farm)
Mr. Rush is still on schedule to complete his project by November 1, 2014. Mr. Rush will
qualify for a$15,000 incentive payment under the existing Performance Agreement.
EXCO Tooling Solutions
Mr. Tommy Pulliam has been hired by Exco to construct a 25,000 square foot facility on WEDC
property located on Commerce Street in Wylie. The zoning and platting process begins with the
Planning & Zoning Commission on August 5th.
WEDC Property Located at 2804 F.M. 544
Staff filed a writ on 7-14-14 finalizing the eviction process of Lighting Signs & Solutions.
While a considerable amount of 'large items' (signs, forklift, etc.) were removed from the
property, the WEDC was required to hire a local contractor to dispose of the remaining property
which is predominately trash. Staff believes the property will be ready to lease by August 4m.
WEDC—Minutes
July 25, 2014
Page 9 of 11
WEDC Property Located at 605 Commerce
10,000 square feet of the Hobart building remains vacant. Staff has been negotiating with I2R to
locate an automotive shop owned by the Cates Company (parent company to I2R) to Wylie.
This negotiation has been in conjunction with the larger project on Hensley.
Mr. Tommy Pulliam is going to assist the WEDC in building a bathroom and two offices. As
well, Mr. Pulliam is going to build a dividing wall which can be utilized in the short term by
Exco for the storage of construction materials. Being that Exco is using 100% of the site,there is
no room for even a storage unit for construction trailer.
Truck Route.for Martinez Lane
Holland Hitch representatives have approached the WEDC and requested assistance in realigning
Westgate Way to intersect Martinez Lane. The concern for Holland is that trucks have to make
an unsafe u-turn at Westgate to travel southbound on Highway 78. Holland also believes that the
westbound turn onto Alanis from Martinez is too tight to utilize the controlled intersection at
Alanis and 78. The obstacles to this request are funds required to rebuild Westgate to align with
Martinez, acquiring additional land from Greenway, redesigning the Westgate intersection, and
dealing with the high pressure jet fuel line at the southeast corner of the Greenway tract.
After speaking with Ascend and Savage, it seems that the true problem is that drivers are either
unwilling to take the Alanis route to utilize the light at 78 and Alanis or drivers are unfamiliar
with the Alanis route and attempt to make the u-turn at 78 & Westgate.
Staff has approached the City Engineer and requested that `truck route' signs be placed on
Martinez directing southbound traffic to Alanis. The City Engineer does not object to this
approach and will consider the WEDC request.
Wylie-PHS LP
The WEDC will close on the 0.93 acre tract adjacent to WEDC lots on Cooper Drive on July
24th. The Board will recall that this property includes a detention pond. Following closing, staff
will approach Chase Bank and Auto Zone to purchase additional property and work with the City
Engineer to determine if the detention pond can be removed by enhancing off-site drainage.
Alternate Date for August WEDC Board Meeting
The next Regular Board of Directors meeting is on August 15, 2014. Staff is requesting that the
Board Meeting be moved to the 14'h. This request is due to the Buchanan real estate closing
being scheduled for the 15th with the bank requiring all closing documents (including the
approved July 25th Minutes) by the afternoon of the 14`h.
WEDC—Minutes
July 25, 2014
Page 10of11
Hiring of new WEDC Executive Assistant
Staff has hired Mrs. Angel Wygant to replace Gerry Harris. Mrs. Harris will train Mrs. Wygant
beginning August 4th until her last day with the WEDC on September 30th.
WEDC Executive Director Performance Evaluation
Staff presented a Performance Evaluation Report which has historically been utilized to evaluate
the Executive Director. Upon final direction provided by the Board, staff intends to place this
performance evaluation on the August Board Meeting Agenda. As the Board members are
completing this form over the next several weeks, staff will email a summary of
accomplishments since the last evaluation. Upon completion, please forward your comments to
the WEDC President.
Regional Housing Starts
Nine homes were permitted in Wylie for June 2014. Sachse, Lavon and Murphy permitted a
combined thirty-four homes over the same period.
No action was requested by staff for this item.
EXECUTIVE SESSION
The WEDC Board took a short recess at 8:17 a.m. before going into Executive Session. Officer
Valdepena left the meeting at 8:17 a.m.
The WEDC Board recessed into Closed Session at 8.•23 a.m."in compliance with Section 551.001
et.seq. Texas Government Code,to wit:
Section 551.087 (Economic Development) of the_Local Government Code, Vernon's Texas
Code Annotated(Open Meetings Act).
• Project 2013-9a
• Project 2014-7a
• Project 2014-7b
• Project 2014-7c
• Project 2014-7d
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:
• State Highway 78 and Sanden Boulevard
' CONVENE INTO OPEN MEETING
The WEDC,Board of Directors reconvened into open session at 9:25 a.m. and took no action.
WEDC—Minutes
July 25,2014
Page 1 I of 1 I
• 1.10 ' I NT
With no further business, President Fuller adjourned the WEDC Board meeting at 9:25 a.m.
Marvin Fuller,President
ATTEST:
e-r
Samuel Satte hite,Director