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06-19-2003 (WEDC) Minutes Minutes WYLIE ECONOMIC DEVELOPMENT CORPORATION June 19, 2003 Board Members Present Gary Bowland Marvin Fuller(arrived at 7:22 a.m.) Kevin St. John(arrived at 7:20 a.m.) John Yeager Merrill Young Staff Present Samuel Satterwhite, Executive Director With notice of the meeting posted in time and manner required by law and a quorum of Board members present, the Board of Directors of the Wylie Economic Development Corporation (WEDC) met in Regular Session on June 19, 2003 in the Conference Room of Woodbridge Golf Club located at 7400 Country Club Drive, Wylie, Texas. The meeting was called to order by President John Yeager at 7:12 a.m. ITEM NO. 1 —Consider and Act Upon Approval of Minutes for the April 25, 2003,Regular Board of Directors Meeting of the Wylie Economic Development Corporation. MOTION: A motion was made by Gary Bowland and seconded by Merrill Young to approve the minutes for the April 25, 2003, Regular Board of Directors Meeting of the Wylie Economic Development Corporation. The WEDC Board of Directors voted 3 — FOR and 0 — AGAINST in favor of the motion. ITEM NO. 2 — Consider and Act Upon Approval of the April, 2003 Treasurer's Report for the Wylie Economic Development Corporation. MOTION: A motion was made by Kevin St. John and seconded by Merrill Young to approve the April, 2003 Treasurer's Report for the Wylie Economic Development Corporation. The WEDC Board of Directors voted 4—FOR and 0—AGAINST in favor of the motion. ITEM NO. 3 — Consider and Act Upon Approval of the May, 2003 Treasurer's Report for the Wylie Economic Development Corporation. The May, 2003 Treasurer's Report for the WEDC was unavailable for consideration. Therefore, no motion was required of the WEDC Board of Directors and no action was taken. WEDC —Minutes June 19, 2003 Page 2 ITEM NO. 4 — Consider and Act Upon Issues Surrounding the Development of WEDC Property Located at 404 S. Highway 78. Staff reported to the Board that Dickey's Barbecue is currently focusing on a site located at the intersection of Century Way and State Highway 78. Staff further presented to the Board that discussions had been held with Staubach Company to potentially represent the WEDC 5-acre site on State Highway 78. The WEDC Board of Directors believed that Staubach Company will bring a presence to the WEDC site which will allow for wider marketing of the site and greater potential for development. MOTION: A motion was made by Kevin St. John and seconded by Merrill Young to employ Staubach Company as the exclusive real estate broker for the WEDC 5-acre site on State Highway 78. The motion further authorized the Executive Director to execute the Exclusive Listing Agreement between Staubach and the WEDC. The WEDC Board of Directors voted 5 —FOR and 0—AGAINST in favor of the motion. ITEM NO. 5—Consider and Act Upon Issues Surrounding a Loan Agreement Between the WEDC and Hoffman Blastroom Equipment,Inc. Staff reported to the WEDC Board of Directors that Hoffman Blastroom Equipment has filed for bankruptcy protection under Chapter 11 of the Bankruptcy Code. Under a Loan Agreement between the WEDC and Hoffman Blastroom Equipment, the WEDC is owed $22,895.40. Staff reported that the only known debt, aside from the WEDC, is to Banc One for $427,912. Staff commented that balance of the total debt must be three to four times in excess of$427,912 based upon lines of credit, equipment loans, and construction loans. The Board instructed staff to determine the exacted amount owed to creditors by Hoffman. Based upon the assumption that the debt is in excess of$1.5 million, the Board believes that any amount of WEDC funds utilized to secure a$22,895.40 position will be a waste. Also, the Board believes that the spirit of the Loan Agreement has been met (i.e. the Agreement is in its final year and an 8,384 square foot office and 32,600 square foot manufacturing facility exists on the site, from which taxes will be generated for at least the next 20 years). The Board members agreed that unless the total outstanding debt to secured creditors is $600,000 or less, the WEDC should not participate in the bankruptcy proceeding of Hoffman Blastroom Equipment. MOTION: A motion was made by Merrill Young and seconded by Kevin St. John to not participate in bankruptcy proceedings of Hoffman Blastroom Equipment should the debt associated with the proceedings exceed $600,000. The WEDC Board of Directors voted 5 — FOR and 0 — AGAINST in favor of the motion. WEDC—Minutes June 19, 2003 Page 3 ITEM NO. 6 — Discuss and Act Upon Issues Surrounding a Loan Agreement Between Chester F. LaGrone, Cynthia Althuser LaGrone and the WEDC. Being that Althuser is not in default as defined by the Loan Agreement between the WEDC and the LaGrone's, staff recommended the WEDC Board of Directors forgive the 3rd and final payment of$18,413.34. MOTION: A motion was made by Merrill Young and seconded by Marvin Fuller to forgive the 3rd and final payment ($18,413.34) associated with the Loan Agreement between the WEDC and Chester F. LaGrone and Cynthia Althuser LaGrone. The WEDC Board of Directors voted 5 —FOR and 0— AGAINST in favor of the motion. ITEM NO. 7 — Consider and Act Upon Issues Surrounding Mutual Access Between LSI, Inc. (Walgreen's) and WEDC Property Located at 404 S. Highway 78. Staff reported that LSI, Inc. (investment group with controlling interest in property surrounding Walgreen's) constructed an access road from State Highway 78 to Walgreen's. As depicted in the attachment to a letter from LSI to the WEDC, the access road encroaches on County land fronting the WEDC 5-acre site. Due to the unauthorized encroachment, the County is requiring LSI purchase the impacted property. LSI proposed that in exchange for the WEDC not objecting to the sale of County land fronting WEDC property, LSI will offer the site to the WEDC, or its successors, at the same purchase price for a period of 5 years. Staff recommended to the WEDC Board that an indefinite period of time be required for the WEDC's recommendation to the County. Board members feared that the sale of land between the WEDC site and State Highway 78, regardless of a commitment to resell at cost, could present problems at some time in the future. Board members believed that if the impacted site must be sold, staff should convey to the County that the WEDC will buy the site to prevent future title and ownership problems. MOTION: A motion was made by Kevin St. John and seconded by Gary Bowland authorizing the WEDC Executive Director to contract for the purchase of ±4,500 square feet of property from Collin County. The WEDC Board of Directors voted 5 —FOR and 0—AGAINST in favor of the motion. ITEM NO. 8—Consider and Act Upon Issues Surrounding a Conditional Grant Agreement Between the WEDC and Extruders Division of Atrium Companies,Inc. Staff reported to the WEDC Board of Directors that the City of Wylie may be considering an economic development grant to Extruders Division of Atrium Companies in lieu of a tax abatement package which was to be implemented in 2001. WEDC —Minutes June 19, 2003 Page 4 This item was presented as information only requiring no motion or action by the WEDC Board of Directors. ITEM NO. 9 — Staff Presentation Surrounding the Impact of Property Tax Reduction on the City of Wylie and the WEDC. Staff presented information to the WEDC Board of Directors pertaining to the utilization of sales tax receipts for property tax reduction (PTR). The impact on property tax rates, economic development as it pertains to sales tax collections, an historical analysis of economic development projects, property tax rates of surrounding communities, and projected WEDC revenues through 2007 were discussed as they relate to PTR. This item was presented as information only requiring no motion or action by the WEDC Board of Directors. ITEM NO. 10—Staff Update of Retail/Commercial Projects Impacting the City of Wylie. Staff presented an update on issues pertaining to Home Depot, Bank of America, Wendy's, the median break at Martinez, Chili's, Lowe's Home Improvement and Carlisle. ITEM NO. 11 —Citizen Participation. There being no citizen participation, President Yeager proceeded to Item No. 12. ITEM NO. 12—Adjourn. There being no further business, the meeting was adjourned at 8:45 a.m. John Y er,President Attest: Samuel D.R. Satterwhite Executive Director