12-07-2016 (WEDC) Minutes Minutes
Wylie Economic Development Corporation
Board of Directors Meeting
Wednesday, December 7, 2016—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 at 6:36 a.m. Board Members present were John
Yeager, Todd Wintters and Bryan Brokaw.
Ex-officio member Mayor Eric Hogue and City Manager Mindy Manson were present.
WEDC staff present was Executive Director Sam Satterwhite, Assistant Director Jason Greiner and
Senior Assistant Angel Wygant.
CITIZEN PARTICIPATION
With no citizen participation, President Fuller proceeded to Action Items.
ACTION ITEMS
ITEM NO. 1 — Consider and act upon approval of the November 18, 2016 Minutes of the Wylie
Economic Development Corporation (WEDC) Board of Directors Meeting.
Staff noted a correction to the November 18,2016 Minutes in the Citizen Participation section. The date
of the B&B Fun Run was incorrectly stated as November 9, 2016 and corrected to November 19, 2016.
MOTION: A motion was made by John Yeager and seconded by
Todd Wintters to approve the November 18, 2016 Minutes of the Wylie Economic
Development Corporation as amended. The WEDC Board voted 4—FOR and 0—
AGAINST in favor of the motion.
ITEM NO. 2—Consider and act upon approval of the November 2016 Treasurers Report.
Staff reviewed key items within the November 2016 Treasurer's Report and noted that ACG Texas was
added to the Treasurers Report in October and inadvertently added again in November. This duplication
has been corrected.
MOTION: A motion was made by John Yeager and seconded by
Bryan Brokaw to approve the November 2016 Treasurers Report for the Wylie
Economic Development Corporation as amended. The WEDC Board voted 4 —
FOR and 0—AGAINST in favor of the motion.
WEDC—Minutes
December 7, 2016
Page 2 of 6
ITEM NO.3—Consider and act upon WEDC Resolution 2016-02 (R) approving Loan Documents
between the WEDC and Billy R. Jarrard, Jr. in the cumulative amount of $300,000 for the
acquisition of Lot 1, Railroad Industrial Park, an Addition of the City of Wylie, Collin County,
Texas, as recorded in Volume C, Page 748, of the Map Records of Collin County, pledging as
security the sales and use tax receipts the WEDC receives from the City of Wylie for repayment
of said Loan, and further authorizing Marvin Fuller to execute all documents necessary to
effectuate the Loan Documents.
Staff reminded the Board that the WEDC is under contract to purchase a 0.29-acre tract from Mr. Billy
Jarrard, Jr. for $300,000. Staff had originally negotiated a purchase price of$325,000 and an owner-
financed 10 year note at 4.25%. The survey came in at 2,365 square feet less than had been anticipated
with staff negotiating a $25,000 reduction in purchase price while allowing an increase in the interest
rate on the note to 4.5%. The only other issue which is out of the ordinary, but required by the Seller,is
a pre-payment penalty equal to the amount of the outstanding interest which would be paid over the life
of the note.
As a review, the acquisition of this tract was pursued by the WEDC so as to prevent haphazard
development of the lot located at the corner of Birmingham & 78. The adjacent tract to the Jarrard lot
is comprised of a 0.55-acre tract owned by Wylie Industrial Court Development, Ltd. and a 0.2-acre lot
owned by TxDOT fronting Hwy 78. Wylie Industrial Court has the sole right to purchase the TxDOT
right-of-way as the only adjacent property owner. While a combined tract of 0.75-acre is relatively
small, it can be developed and has been under contract in the past.
It was staffs opinion that by combining the Jarrard lot with the adjacent 0.75-acre, more development
options will now exist in terms of the number of developers seeking out lots in excess of one acre, and
provide a building pad more efficiently oriented to Hwy 78. Being that Jarrard is taking the sales tax as
collateral,the WEDC will be able to sell the property without the lot being encumbered.
Closing on the tract is scheduled for December 28th. Prior to closing, the Wylie City Council must
approve the project and specifically the pledging of the V2 cent sales tax as collateral which is scheduled
for consideration on December 13, 2016. Also, required prior to closing will be the execution of the
Agreement by Jarrard subordinating his Note to all existing and future loans between the WEDC and
American National Bank.
Staff recommended that the WEDC Board of Directors approve WEDC Resolution 2016-02 (R)
approving Loan Documents between the WEDC and Billy R. Jarrard, Jr. in the cumulative amount of
$300,000 for the acquisition of Lot 1, Railroad Industrial Park, an Addition of the City of Wylie, Collin
County, Texas, as recorded in Volume C, Page 748 of the Map Records of Collin County, pledging as
security the sales and use tax receipts the WEDC receives from the City of Wylie for repayment of said
Loan and further authorizing Marvin Fuller to execute all documents necessary to effectuate the Loan
Documents.
The Board inquired about the status of the tenant in that building and staff explained that the tenant has
been informed of the sale of the property and will continue to lease on a month-to-month basis. Staff
also informed the Board that the property may close a few days early to accommodate holiday conflicts.
WEDC—Minutes
December 7, 2016
Page 3 of 6
MOTION: A motion was made by Todd Wintters and seconded by
John Yeager to approve WEDC Resolution 2016-02 (R) approving Loan
Documents between the WEDC and Billy R. Jarrard, Jr. in the cumulative amount
of$300,000 for the acquisition of Lot 1, Railroad Industrial Park, an Addition of
the City of Wylie, Collin County, Texas, as recorded in Volume C,Page 748 of the
Map Records of Collin County, pledging as security the sales and use tax receipts
the WEDC receives from the City of Wylie for repayment of said Loan and further
authorizing Marvin Fuller to execute all documents necessary to effectuate the Loan
Documents. The WEDC Board voted 4—FOR and 0—AGAINST in favor of the
motion.
ITEM NO. 4 — Consider and act upon a Performance Agreement between the WEDC and Reva
Hospitality Wylie,LLC.
Reva Hospitality Wylie, LLC initially came to the WEDC in an attempt to evaluate options surrounding
the construction of a new hotel in Wylie. Following direction from the WEDC Board in Executive
Session, and an oral commitment by WEDC staff for assistance, Reva Hospitality Wylie entered into a
contract on the property.
Reva Hospitality Wylie plans to construct a$9.2 million dollar, four-story, 60,000 square foot, 98-room
hotel at the southwest corner of FM 544 and Sanden Blvd. The hotel will either be a Hampton Inn &
Suites or a Holiday Inn Express & Suites. Should the project move forward, construction will begin
within the first quarter of 2017 with a completion date of December 31, 2017.
Reva Hospitality Wylie requested that the WEDC provide economic assistance with qualified
infrastructure improvements for the project. The attached Agreement proposes a total maximum
incentive of$450,000 which is broken down as follows:
Incentive No. 1 $100,000
> Acquisition of title to the property by January 31, 2017
> Certificate of Occupancy by December 31, 2017
➢ Qualified infrastructure expenditures verified at no less than$450,000
Additional Incentives ...........up to $350,000
➢ Quarterly Reimbursement Incentives equal to 50% of the Local Hotel Occupancy Taxes
paid to the City of Wylie.
Should Reva Hospitality Wylie fail to obtain a permanent Certificate of Occupancy by December 31,
2017, but does obtain such Certificate of Occupancy by June 30, 2018, the Reimbursement Incentives
will be reduced by$100,000, making the total eligible Reimbursement Incentive $350,000. In the event
Company fails to obtain the permanent Certificate of Occupancy for the Improvements by June 30,2018,
or fails to meet the balance of the Performance Obligations,none of the Reimbursement Incentives shall
be paid to the Company and this Agreement shall terminate.
WEDC—Minutes
December 7, 2016
Page 4 of 6
Based upon a$4 million appraised valuation using an income approach and conservative sales estimates
from Reva Hospitality, the project's estimated return on investment is relatively short (approx. 18
months).
As an amendment to the Performance Agreement that was brought to staffs attention by WEDC counsel,
a requirement for Separated Building Materials Contracts was presented. As described by staff, these
types of contracts are negotiated by the owner/contractor to separate the building materials from the
labor within the construction contracts so that sales tax on those materials can be specifically identified
and local sales tax paid on the same to the local Wylie jurisdiction. While neither staff or Reva where
previously aware of this process, staff requested latitude from the Board to negotiate this language into
the final Performance Agreement. President Fuller and Wintters supported this amendment and asked
that this language be included in all future WEDC Agreements.
Staff recommended that the WEDC Board of Directors approve Performance Agreement as amended
between WEDC and Reva Hospitality Wylie,LLC providing for a maximum incentive of$450,000 and
further authorizing the WEDC Executive Director to execute said Agreement.
MOTION: A motion was made by Todd Wintters and seconded by
John Yeager to approve a Performance Agreement between WEDC and Reva
Hospitality Wylie,LLC providing for a maximum incentive of$450,000 and further
authorizing the WEDC Executive Director to execute said Agreement. The WEDC
Board voted 4—FOR and 0—AGAINST in favor of the motion.
DISCUSSION ITEMS
ITEM NO. 5 — Staff report: review issues surrounding WEDC Performance Agreement Summary,
W&M Activity Report,Dallas Whirlpools,Ltd,Performance Agreement with FLM Development,LLC.,
Highway 78 WEDC Pad Sites, WEDC Annual Report,B&B Theatres Operating Company Performance
Agreement, Promotional Activities, and regional housing starts.
WEDC Performance Agreement Summary
Attached for the Board's review was a summary of all outstanding Performance Agreements including:
ACG Texas LP, Ascend Custom Extrusion, All State Fire Equipment, B&B Theatres Operating
Company, Clark Street Development, Dank Real Estate, Exco Extrusion Dies, FLM Development,
Freudiger Holdings, Getset, KREA Acquisition, McClure Partners, Patna Properties, VIAA Properties,
Von Runnen Holdings, Wedge Corporation, Woodbridge Crossing, and Wylie Flower& Gift.
Woodbridge Crossing
Attached for the Board's review was the Sales Tax Reimbursement Report which identifies all sales
taxes received through November 2016 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 Restated Performance Agreement,
Woodbridge Crossing is only eligible to receive up to $6 million in sales tax reimbursement through
September 2021 as opposed to the maximum reimbursement of$12 million originally contemplated.
WEDC—Minutes
December 7, 2016
Page 5 of 6
$3,911,460.60 in reimbursement has been earned through November 2016 with net receipts of
$3,133,319.57 after reimbursements. As well, it is estimated that $3.5 mm has been paid in ad valorem
taxes to the City of Wylie (excluding the WISD). As shown on the Sales Tax Reimbursement Report,
$119,713.90 was generated in sales tax in September 2016 versus$108,521.03 in September 2015. This
represents 10.31% increase over 2015 receipts.
W&MActivity Report
Attached for the Board's review was a spreadsheet tracking all activities with W&M Environmental for
FY 2014-15 and FY 2015-16. W&M has prepared Phase I&II reports for Mann Made,K&M,Business
Way, 111 N. Ballard, 908 Kirby, 201 Industrial Court, is processing the VCP application for the
Commerce property, and processing the Municipal Setting Designation through the City.
Dallas Whirlpools, Ltd Property
Approximately 2 weeks past the original closing date, the WEDC finalized the purchased of 4.7 acres
from Dallas Whirlpool, Ltd. The primary delay was a result of an existing tenant and our requirement
that they execute an estoppel certificate indicating that there will be no future maintenance of the building
through the end of their lease which expires on 4-30-17. To secure the estoppel and subsequent amended
lease, the WEDC was required to forgo the collection of three month's rent, or$9,000.
Staff will be moving forward with demolition of the structure on the southeast corner of the site in late
December/early January along with some general clean-up of the property which will include high
weeds, chain-link fences, and various debris. A concept site plan is currently being prepared for the
WEDC & City properties which will include 2 pad sites fronting 544 with office/flex space to the north
and wrapping around to Commerce Street. Finally,the VCP and MSD applications have been amended
to include the 4.7 acre WEDC site.
Performance Agreement with FLM Development
Staff was contacted by FLM and informed that the 4,200-square foot office building contemplated in the
Performance Agreement approved on 11-18-16 was reduced to 3,800 square feet due to unforeseen site
restraints. Staff will be bringing the issue back to the WEDC Board in January to either amend the
Agreement or void the same in advance.
Highway 78 WEDC Pad Sites
Staff reported that CFA was nearing the end of their due diligence period which was scheduled to expire
on 12-26-16. Following expiration, a 90-day permitting period will begin within which the WEDC will
undertake site improvements including deceleration lanes, a mutual access drive, and median
improvements. CFA will close on the property approximately 15 days after completion of the
improvements which will be approximately 2 years from the date the project was first discussed with
CFA representatives at ICSC.
WEDC—Minutes
December 7, 2016
Page 6 of 6
WEDC Annual Report
With the December Board Meeting moved up, consideration of the Annual Report will be moved to
January with presenting of the same to the Wylie City Council on 1-24-17.
Promotional Activities
As reported regularly,the WEDC has a V4 interest in Maverick's Season tickets for the 2016-17 Season.
A spreadsheet tracking the use of those tickets was attached for the Board's review.
Regional Housing Starts
Eleven homes were permitted in Wylie for the month of November 2016. Sachse, Lavon, Murphy
permitted a combined eighteen over the same period. Monthly Inspiration permits are not reported until
the 10th of each month and are therefore not updated within this report.
No action was requested by staff for this item.
EXECUTIVE SESSION_
Recessed into Closed Session at 7.•41 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 2016-10a
• Project 2016-10b
• Project 2016-11b
RECONVENE INTO OPEN MEETING
The WEDC Board of Directors reconvened into open session at 8:09 a.m. and took no action:
ADJOURNMENT
With no further business, President Fuller adjourned the WEDC Board meeting at 8:09 a.m.
Marvin Fuller,President
ATTEST:
,00
am-
Samuel Satterwhite,Director