07-20-2006 (WEDC) Minutes Minutes
Wylie Economic Development Corporation
Board of Directors Meeting
Thursday, July 20, 2006—6:00 P.M.
Inwood National Bank—Conference Room
200 South Hwy. 78 —Wylie,Texas
CALL TO ORDER
Announce the presence of a Quorum.
President Fuller called the meeting to order at 6:00 p.m. Board Members present were:
Gary Bartow, Mitch Herzog, and Merrill Young.
Staff present was Executive Director Sam Satterwhite and Administrative Assistant Gerry
Harris. Also present was Mayor John Mondy.
Board Member Yeager and Ex-Officio Member/City Manager Roath were not present.
CITIZEN PARTICIPATION
There being no citizen participation, President Fuller proceeded to Action Items.
ACTION ITEMS
ITEM NO. 1 —Consider and Act Upon Approval of the June 22, 2006 Minutes of the
WEDC Board of Directors Meeting.
In reviewing the June 22nd WEDC Minutes, President Fuller noted that the quarterly
interest earnings had not been recorded to date. Staff was instructed to contact the
Finance Department to request interest earnings be recorded monthly. The Board also
discussed the potential need of hiring the City of Wylie auditor to rectify the outstanding
issues within the WEDC Balance Sheet.
MOTION: A motion was made by Merrill Young and seconded by Gary Bartow
to approve the June 22, 2006 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 Approval of the June 2006 WEDC
Treasurer's Report.
Staff indicated that the WEDC Balance Sheet should be complete by August 16, 2006.
President Fuller also requested that staff clarify the status of$18,364 within the Balance
Sheet identified as AP Pending.
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July 20, 2006
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MOTION: A motion was made by Merrill Young and seconded by Mitch
Herzog to table the June 2006 Treasurer's Report. The WEDC Board
voted 4—FOR and 0—AGAINST in favor of the motion.
ITEM NO. 3 — Consider and Act Upon Issues surrounding WEDC Advertising in
the Wylie Connection Magazine.
Staff presented an opportunity for the WEDC to advertise in a new promotional tool
being implemented by the Wylie Chamber of Commerce. The Chamber will be
publishing a bi-monthly magazine entitled the Wylie connection to be distributed to over
20,000 homes in the Wylie, Sachse, and Murphy communities. Staff represented that the
Wylie Connection is a good opportunity to promote the WEDC locally.
The Board instructed staff to place a signed contract within the promotional expenditures
file in addition to the invoice. The Board also suggested that staff submit an article to
appear in the magazine which would inform the public of the functions of the WEDC.
MOTION: A motion was made by Gary Bartow and seconded by Mitch Herzog
authorizing the Executive Director to enter into a contract with the
Wylie Chamber of Commerce for $3,985 to advertise in the Wylie
Connection Magazine. The WEDC Board voted 4 — FOR and 0 —
AGAINST in favor of the motion.
ITEM NO. 4 — Consider and Act Upon Issues surrounding a Real Estate Contract
Between the WEDC and Roy N. Perry, Dorris J. Perry, and Randall A. Perry.
While a previously approved purchase price of$195,000 was authorized at the May 25,
2006 Board meeting, staff had been authorized to negotiate the Perry contract up to
$200,000. Staff presented an executed Real Estate Contract to the Board with a purchase
price of$200,000.
MOTION: A motion was made by Mitch Herzog and seconded by Gary Bartow
to ratify the Real Estate Contract between Roy N. Perry, Dorris J.
Perry, and Randall A. Perry. The WEDC Board voted 4 FOR— and
0 - AGAINST in favor of the motion.
ITEM NO. 5 — Consider and Act Upon Issues Surrounding a Lease and
Performance Agreement Between the WEDC and Almost Home.
Staff presented a draft Commercial Lease between Almost Home and the WEDC. The
terms presented establish not only the terms of the lease, but terms of a potential cash
incentive of$18,000 toward the construction of a 5,000 square foot facility to house the
future operations of Almost Home (Lessee). The initial term of the lease is 36 months.
Should Lessee demonstrate that it has purchased property either by a Warranty Deed or
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July 20, 2006
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other evidence acceptable to the WEDC; the lease will be extended by 12 additional
months. At the end of the 12 additional months, should Lessee construct a minimum
5,000 square foot facility with cumulative real and personal property investment values
of $350,000, the WEDC will provide a maximum cash incentive of$18,000 ($500 per
month for the initial 36-month period). Should Lessee not meet the Incentive
Requirements outlined in Article 3.1, the lease will revert to a month to month lease and
the WEDC obligation to fund the cash incentive expires.
Staff also presented to the Board that the existing air conditioning system was inspected
by a local air conditioning company which identified that the system will not perform to
even a minimum level of acceptance through the end of the summer. A quote from the
local company identified that replacing the unit is estimated at $4,128. President Fuller
commented that while the presented lease is "as-is", the WEDC should initially present
the property to Almost Home with the basic services in good working order.
MOTION: A motion was made by Merrill Young and seconded by Gary
Bartow to execute a Commercial Lease between the WEDC and
Almost Home further authorizing the Executive Director to expend
up to $4,128 to replace the existing air conditioning system. The
WEDC Board voted 4 FOR — and 0 AGAINST in favor of the
motion.
Following the approval of the lease, Board member Herzog commented that should
redevelopment of the Hughes tract be accelerated and the WEDC desires to sell the tract
to a third party, the WEDC will be committed to a lease of 36 months. Staff agreed and
commented that it is unlikely that the area will redevelop within the next 24 months
based upon the on-going operations of B.E.&H. and Mann Made, Inc. President Fuller
suggested a 24-month lease with a termination clause providing 6 months notice is given.
Therefore, should the WEDC determine in the next 18 months that the existing facilities
need to be removed for redevelopment efforts, notice can be given and the lease be
terminated after 24 months.
The WEDC Executive Director was directed to execute a lease with Almost Home with
the following provision:
• The WEDC requires 24-hour access to the outbuilding on the northern tract;
• A lease term of 24 months with automatic 6-month extension if no notice is
given;
• The Lease may be terminated by either party should a 6-month notice be given;
• Should the WEDC terminate the lease prior to the 36-month period described
within Section 3.1, Almost Home will still qualify for the maximum incentive of
$18,000 should the terms of Section 3.3 be met; and
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July 20, 2006
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• An annual escalator be included within the Lease providing for an increase in
property taxes payable by the WEDC.
MOTION: A friendly amendment was made by Merrill Young and seconded by
Gary Bartow modifying the lease term to 24 months, providing an
escalator for tax increases, 6-month notice to terminate, and
providing for the qualification for up to $18,000 in incentives should
the lease terminate in 24 months. The WEDC Board voted 4 FOR—
and 0—AGAINST in favor of the friendly amendment.
ITEM NO. 6 — Consider and Act Upon Issues Surrounding a Lease Between the
WEDC and Foam Construction, Inc.
The WEDC will close on the Hughes tract on Industrial Court on July 25, 2006. Delta-E
Foam is currently leasing 211 A Industrial Court with no formal lease in place. Delta-E
has been contacted and informed that the WEDC will require a written lease as of July
25h. Staff was instructed to execute a commercial lease with a lease rate of $2,000 a
month until January 1, 2007, at which time the rate would increase to $2,600. The lease
term will b month-to-month and be"as-is".
MOTION: A motion was made by Gary Bartow and seconded by Merrill
Young to execute a Commercial Lease between the WEDC and
Delta-E. The WEDC Board voted 4 FOR — and 0 — AGAINST in
favor or the motion.
ITEM NO. 7 — Consider and Act Upon Issues Surrounding a Letter of Intent
Between the WEDC and JTM Technologies.
MOTION: A motion was made by Merrill Young and seconded by Gary
Bartow to table consideration of a Letter of Intent between the
WEDC and JTM Technologies. The WEDC Board voted 4 FOR —
and 0—AGAINST in favor of the motion.
ITEM NO. 8 — Consider and Act Upon Issues surrounding Development of WEDC
Property Located on Martinez Lane.
Staff presented an estimate from TXU Electric to relocate overhead electric lines for
$59,957. As discussed when purchasing the property, the lines should be relocated
creating approximately 2.5 acres of developable property. Staff is still awaiting a
response from Mike Boyd with Nathan Myers to make a determination as to the location
of the flood plane. Staff reminded the Board that the location of the flood plane is an
estimate provided by FEMA. Should the flood plane actually be located farther west.
The need to relocate the lines will be diminished. TXU proposes to locate the lines to the
east to a location which will not hinder development.
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July 20, 2006
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Staff provided estimates from Helmberger Associates pertaining to the water and sewer
improvements on Martinez Lane. Should the WEDC choose to pave the entire section
from State Highway 78 to Alanis, the estimated cost is $506,072. Should the WEDC
choose to improve the section from the WEDC property line to Alanis, the estimated cost
is $346,660. Staff indicated that a portion of the section fronting Holland Hitch from
State Highway 78 to the WEDC property line is made up of 50' of patched and
deteriorated concrete. The balance of the section narrows to a 30' wide asphalt road as is
the remaining 1,200' to Alanis.
Staff recommended that the Board consider funding the entire 1,800' section of Martinez
The benefit is obviously the enhancement to the WEDC 25-acre tract. The WEDC is
already approved to borrow up to $366,000 for improvements to Martinez. Staff further
represented that the City of Wylie has ±$50,000 in escrow for perimeter street fees
leaving a remaining unfunded amount of$90,072.
The Board instructed staff to provide a cost benefit analysis related to future value of the
WEDC property at build-out compared to land and improvement costs. The Board
further instructed staff to pursue participation from Holland Hitch for the improvements
fronting their site. Staff provided that Holland has already indicated they believed that
improvements to the street fronting their site should be the responsibility of the City of
Wylie. President Fuller instructed staff to continue pursuing their participation.
MOTION: A motion was made by Mitch Herzog and seconded by Gary
Bartow to table the issue until more information could be obtained
by Staff. The WEDC Board voted 4 FOR— and 0—AGAINST in
favor of the motion.
ITEM NO. 9—Consider and Act Upon Issues Surrounding an Incentive Agreement
Between the WEDC and Extruders division of Atrium Companies.
Staff presented that the WEDC entered into an Incentive Agreement with Extruders
division of Atrium Companies on July 27th 2005. The package was partially comprised
of an $80,000 grant for construction of the expanded facility and purchase of a new paint
line. The balance of the package totals $150,000 over the next three years should
extruders maintain total employment of 480 individuals each year and submit to the
Collin County Central Appraisal District a combined fair market value for real and
personal property of$26,248,935.
The minimum appraised value was established by combining the existing real property
valuation of $9,815,768 and the personal property valuation of $13,133,167. These
figures were ascertained from the Appraisal District as of July 12, 2005. Combining
these figures with commitments to add $600,000 in real property improvements and
$2,700,000 in personal property improvements resulted in a combined minimum
valuation (benchmark) of $26,248,935. Staff provided that erroneous figures were
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July 20, 2006
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utilized to establish the $26 million benchmark. While the data was gathered in July
2005, unbeknownst to staff and Extruders, the outsourcing firm handling Extruders taxes
was able to lower their 2005 taxable valuation to $8,288,878 for real property and to
$11,615,340 for personal property, thus inflating the benchmark by$3,044,717.
Staff recommended that the valuation benchmark should be lowered to reflect those
actual values upon which taxes were paid for the 2005 tax year being that their
inaccuracy severely hampers Extruders ability to receive their remaining three payments
of $50,000. Staff claimed that intent of the Agreement was for Extruders to add
$600,000 and $2,700,000 respectively. An inflated benchmark takes away from the
intent of the Agreement. The data which must remain constant is the employment figures
and the commitment to increased property values by$3.3 million.
Board members Bartow and Young commented that Extruders provided the WEDC with
the benchmark data and reviewed the Incentive Agreement prior to executing the same.
The aggressive accounting practices of Extruders should not lessen their commitments.
Staff countered by stating that faulty data has led to consideration of this issue. Board
member Fuller suggested that the WEDC wait to see the final valuation figures from the
Collin County Central Appraisal District prior to further consideration.
MOTION: A motion was made by Gary Bartow and seconded by Mitch
Herzog to table consideration surrounding an amendment to the
Incentive Agreement between the WEDC and Extruders division
of Atrium Companies. The WEDC Board voted 4 — FOR and 0 —
AGAINST in favor of the motion.
ITEM NO. 10—Consider and Act Upon Issues Surrounding Sawtech Corporation.
Staff indicated that the WEDC was contacted by a representative of Sawtech Corporation
inquiring as to the potential for economic assistance in the relocation of Sawtech from a
leased facility in Garland to Wylie. Sawtech currently occupies 3,500 square feet and is
considering constructing an 8,000 square foot facility at 2805 Capital Street within
Regency Business Park.
Staff reported that Sawtech has been in business since 1995 and currently has 8
employees. Sawtech is a precision dicing company that provides precision dicing for the
electronic and semiconductor industry. Land costs have been identified at $100,000.
Estimated construction costs are $550,000 with Sawtech having a minimum personal
property value of$500,000. Utilizing $500,000 in personal property as a conservative
benchmark and based upon the most recent purchase of$300,000 in equipment, personal
property will most likely be valued at $800,000 - $1,000,000. Sawtech sales for the year
ended 2005 were$797,882.
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July 20, 2006
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Staff proposed that the WEDC present to Sawtech a Letter of Intent with a value of
$75,600 payable over a 3 year period based upon the issuance of a certificate of
occupancy and a Year 2 & 3 valuation of no less than $1,050,000 exclusive of preexisting
land costs. Legal documents can be created and approved following confirmation of
financing and execution of a Letter of Intent.
President Fuller indicated that this project presents no risk to the WEDC because the
concept presented by staff is performance based prior to any funds being expended by the
WEDC. Mayor Mondy inquired as to whether this type of company is a good fit within
Regency based upon the proposed sports complex. President Fuller responded that this
project is to be located among several newly constructed facilities on Capital Street.
Furthermore, Capital is one street north of the boundary of the proposed sports complex.
MOTION: A motion was made by Gary Bartow and seconded by Mitch
Herzog authorizing the WEDC Executive Director to enter into a
Letter of Intent with Sawtech Corporation. The WEDC Board
voted—4 FOR and 0—AGAINST in favor of the motion.
President Fuller chose to enter into Executive Session prior to consideration of Item
No. XI.
ITEM NO. 11 — Consider and Act Upon Issues Surrounding the WEDC FY 2006 —
2007 Budget.
Based upon feedback from the previous budget presentation, staff presented an amended
FY 2006 — 2007 WEDC Budget. The budget is based upon $1,136,130 in sales tax
revenue, a beginning fund balance of$555,233, interest earnings of$22,500 and rental
income of$63,840. Expenses are budgeted equal to projected revenues at $1,777,703.
Of the total expenditures being presented, 71% of funds are budgeted for direct business
incentives and expenditures supporting business development programs (i.e.
demolition/excavation, incentives, debt service, engineering, land, capital outlay, and
infrastructure).
Personnel services are budgeted at $206,351. The primary change to this budget category
is the inclusion of a full-time administrative assistant. Ms. Harris is currently classified
as a Secretary I according to the City of Wylie as per the matching job duties within the
job classification profile. A Secretary I performs clerical and administrative duties in
conjunction with a second administrative assistant within a department. The current
Salary for a Secretary I is $28,132. The job classification which more accurately matches
the current duties of Ms. Harris is an Administrative Secretary which performs the job
functions with no additional clerical assistance. Staff is proposed the reclassification of
Ms. Harris to an Administrative Secretary effective 10-1-06. The salary range for an
Administrative Secretary is $32,182 - $37,398. Staff proposes starting the position out at
$32,182.
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July 20, 2006
Page 8 of 10
Within special services, staff has budgeted $65,000 for strategic planning services. With
the response to the RFP for strategic planning services due on August 4th, the WEDC will
have a more accurate figure to include in the budget. Staff presented that the City
Manager commented that the City is willing to consider participating monetarily in the
study based upon the inclusion of a retail component. Staff maintained its position of
100% WEDC funding. Also within special services, staff has budgeted $18,300 for
demolition/excavation. This amount represents funds necessary to remove facilities from
the Ferrell and Perry properties should the Board chose to take that route.
Of the $554,683 budgeted for incentives, $416,649 is set aside for unidentified projects.
Debt service is budgeted at $294,249 with the recommendation of incurring pre approved
debt in the amount of $366,000 for infrastructure improvements on Martinez. Within
advertising, $20,000 has been identified for promotional materials. Staff presented that
the development of promotional materials is one of the top priorities of WEDC staff
following the relocation of WEDC offices. Board member Bartow agreed with staff.
Staff also proposed $60,000 for the relocation of overhead lines on Martinez and $90,072
to fund 100% of the Martinez expansion
The Board directed staff to make the following changes:
1. Increase the Executive Directors salary by$4,800;
2. Increase Special Services (demolition) by $9,150 in the event a third demolition
project presents itself;
3. Increase Special Services (misc.)by$5,000;
4. Increase Advertising(misc.)by$4,000;
5. Establish an "Allies Day" in which the entire business community is brought
together to promote services offered by the WEDC, potential new business
enterprises, and a thank you to the businesses that continue to support Wylie.
Additionally, the brokerage community and business support services industry
will also be encouraged to attend. The Board allocated $8,000 for Allies Day;
6. Within Community Development, the Board added $12,000 specifically for
sporting events. The Board believed that it is important to entertain qualified
prospects in a manner deserving of a top decision maker in a company;
7. Within Travel &Training, the Board increased Prospect Recruitment by$4,000;
8. Within Engineering — Architect, the Board increased miscellaneous engineering
by$4,750; and
9. The Board increased Furniture & Fixtures by $5,000 to allow for adequate
funding to establish a first-class office environment.
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July 20, 2006
Page 9 of 10
MOTION: A motion was made by Gary Bartow and seconded by Mitch
Herzog to approve the WEDC FY 2006 — 2007 Budget as
amended. 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 8:10 p.m.
Board member Herzog identified a conflict of interest surrounding Item No. 1 and chose
to remove himself from the meeting.
ITEM NO. 1 — Convene into Executive Session to Hold Deliberations Regarding
Real Property (Purchase of Real Property by the WEDC Located Near the
Intersection of F.M. 544 and F.M. 1378) as Authorized in Section 551.072 of the
Local Government Code, Vernon's Texas code Annotated (Open Meeting Act).
Mitch Herzog stepped out of the meeting.
ITEM NO. 2 — Convene into Executive Session to Hold Deliberations Regarding
Real Property (Purchase of Real Property by the WEDC Located on Cooper Drive)
as Authorized in Section 551.072 of the Local Government code, Vernon's Texas
Code Annotated (Open Meeting Act). Mayor Mondy stepped out of the meeting.
ITEM NO. 3 — Convene into Executive Session to Hold Deliberations Regarding
Real Property (Letter of Intent from Crossroads Management, Inc. to Purchase the
Ferrell Site) as Authorized in Section 551.072 of the Local Government Code,
Vernon's Texas Code Annotated (Open Meetings Act).
ITEM NO. 4 — Convene into Executive Session to Hold Deliberations Regarding
Personnel Matters (Evaluation of the Executive Director) as Authorized in Section
551.074 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 9:31 p.m.
MOTION: A motion was made by Merrill Young and seconded by Gary
Bartow declining the offer from Crossroads Management to
purchase WEDC property located near the intersection of F.M. 544
and Regency Drive. The WEDC Board voted — 4 FOR and 0 —
AGAINST in favor of the motion.
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July 20, 2006
Page 10 of 10
ADJOURNMENT
With no further business, President Fuller adjourned the WEDC Board meeting at 10:01
p.m. Consensus of the WEDC Board was to adjourn.
Marvin Fuller, President
ATTEST:
Samuel D.R. Satterwhite
Executive Director