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10-17-2008 (WEDC) Minutes Minutes Wylie Economic Development Corporation Board of Directors Meeting Friday, October 17, 2008 — 6:00 A.M. Inwood National Bank — Conference Room 200 South Highway 78 — Wylie, Texas CALL TO ORDER Announce the presence of a Quorum President Fuller called the meeting to order at 6:00 a.m. Board Members present were: John Yeager, Mitch Herzog, Chris Seely, and Men-ill Young. WEDC staff present was Executive Director Sam Satterwhite and Administrative Assistant Gerry Harris. Ex-Officio Board Members Mayor Eric Hogue and City Manager Mindy Manson were 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 September 19, 2008 Minutes of the WEDC Board of Directors Meeting. MOTION: A motion was made by Chris Seely and seconded by Mitch Herzog to approve the September 19, 2008 Minutes of the WEDC Board of Directors Meeting. The WEDC Board voted 5 — FOR and 0 — AGAINST in favor of the motion. ITEM NO. 2 — Consider and Act Upon Approval of the September, 2008 WEDC Treasurer's Report. MOTION: A motion was made by Mitch Herzog and seconded by John Yeager to approve the September, 2008 WEDC Treasurer's Report. 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 Sawtech, Inc. Staff presented that after receiving their Certificate of Occupancy on 2/14/07, Sawtech completed construction of their 7,500 square foot facility contemplated in the Performance Agreement between the WEDC and Sawtech. As per Section 1 (b) & 2, Sawtech must maintain WEDC—Minutes October 17, 2008 Page 2 of 5 a real property value of$525,000 higher than their Benchmark Value of$85,319 ($610,319) and a minimum personal property value of$500,000 for a total valuation of$1,110,319. Staff reviewed that Sawtech had been contacted in July, 2008 with their CPA being informed that their valuations constituted an Event of Default as per the Performance Agreement. At that time, Sawtech's real property was appraised at $582,011 with personal property at $509,947. Sawtech contacted the Central Appraisal District having their valuations increased to $602,211 (real) and $509,947 (personal) for a combined valuation of$1,111,958. In addressing the above event of default, Sawtech mistakenly increased their real property value enough to meet the total valuation and not the separate real and personal property values as called for in the Agreement. As per the Collin CAD Property Information reports, Sawtech falls short of meeting their real property valuation minimum by $8,108 or 1.3%. Staff reminded the Board that another WEDC project was denied the funding of incentive payments for failure to meet minimum benchmarks. However, staff believes Installment Two of $24,805 should be funded based upon the current valuations meeting the combined value of the real and personal benchmark in addition to the shortfall being such a minor amount below the minimum benchmark. Staff further believes that 100% of the intent of the Performance Agreement has been met. Board member Herzog agreed with staff and further directed staff to contact Sawtech and provide clarification that the benchmarks are separate for real and personal property. Staff recommended that the WEDC Board of Directors approve the funding of Installment Two to Sawtech Corporation, Inc. in the amount of$24,805. MOTION: A motion was made by John Yeager and seconded by Mitch Herzog to approve the funding of Installment Two to Sawtech Corporation in the amount of$24,805. The WEDC Board voted 5 — FOR and 0 — AGAINST in favor of the motion. ITEM NO. 4 — Consider and Act Upon Issues Surrounding a Request for Assistance from Nicom Construction, Inc. Nicom Construction is currently completing a 6,000 square foot building for HR Classic Cars within Regency Business Park at the corner of Regency and Capital. HR Classic Cars is currently leasing a WEDC facility while their new facility is being completed. Nicom's original delivery date was August l', but was delayed due to unforeseen site work. The revised delivery date was October 201h, Nicom was completing utility connections and discovered that there was not a sewer line extension as indicated on the as-built City plans for Regency Business Park. In addition to further delaying the completion of the HR facility (estimated to now be 11-15-08), Nicom is now faced with an additional $13,930 cost for boring under Regency and extending sewer service. Nicom has approached the WEDC inquiring as to the potential for financial assistance. Nicom's position is that had accurate information been provided via the as-builts for Regency, Nicom would have bid the project differently. WEDC staff, nor Engineering, can determine how WEDC —Minutes October 17, 2008 Page 3 of 5 the as-built plans for Regency were inaccurate. Staff indicated that water and sewer infrastructure was placed within Regency in the 1980's. While staff would like to be of assistance to Nicom based upon the significant redevelopment which Nicom has completed within Regency, this request cannot be justified in staffs opinion. The assistance in extending utilities will not be a significant factor in determining whether the project is completed. Staff believes this issue is between Nicom and HR Classic Cars. Any assistance will only lessen the financial burden placed upon the developer. For this reason staff must recommend denial. Mr. Fuller asked how this problem affected the other businesses on the same side of the street. He then asked that the issue be tabled until the next meeting and directed staff to research the issue. MOTION: A motion was made by Mitch Herzog and seconded by Merrill Young to table the item until the November meeting. The WEDC Board voted 5 - FOR and 0—AGAINST in favor of the motion. ITEM NO. 5 — Discuss Issues Surrounding an Ad Valorem Tax Abatement & Sales Tax Reimbursement Agreement between the City of Wylie, WEDC, Greenway-Springs, Ltd., Greenway-Columbia, L.P., and Greenway-Wylie, L.P. Greenway has approached the WEDC to initiate discussions surrounding the existing Ad Valorem Tax Abatement & Sales Tax Reimbursement Agreement between the City of Wylie, WEDC, Greenway-Springs, Ltd., Greenway-Columbia, L.P., and Greenway-Wylie, L.P. Greenway is under contract with a user which intends to purchase the Carlisle property, demolish the existing facility, and develop a use which would be a significant sales tax generator. The two issues at hand are assignment and default provisions. Assignment is addressed in Section 12 (k) indicating that the Agreement shall not be assigned without the prior written consent of the WEDC and City, which consent shall not be unreasonably withheld. In review, the Greenway Springs property is impacted by a landfill which must be remediated prior to development. The abated taxes and reimbursed sales taxes from the three Greenway tracts will be 'reimbursing' Greenway Springs up to an identified amount for those costs associated with the remediation. Following assignment and prior to closing with the third party, a second assignment au'eement will executed between Greenway and the third party user assigning all benefits of the Agreement to Greenway Springs. The second question is how the City/WEDC will address a default by the third party. Hypothetically, the third party user/land owner could default on payment of its property taxes and Greenway would be liable for repayment of abated/reimbursed taxes. The question is not how to soften the terms of the Default and Recapture Provisions (Section 7), but how does the City of Wylie and WEDC hold Greenway liable for the actions of a third party. Randy Hullett is conceptually addressing that question now with feedback anticipated prior to the Board meeting. WEDC — Minutes October 17, 2008 Page 4 of 5 While staff has not read the terms of the contract with the third party, it has been indicated by Greenway that due diligence for the sale of the Carlisle tract could take up to one year. This item was posted as a discussion item only which allows for no action to be taken. ITEM NO. 6— Staff Update: Review Staff Activities and Ongoing WEDC Projects. Marketing: Staff continues to pursue the development of WEDC marketing materials and updating the WEDC website. Staff anticipates printing of the WEDC brochure to begin by 10- 29-08 with the WEDC website updated by December 23, 2008. Richardson Regional: Representing the WEDC at the Richardson Regional Gala on November 1st will be Mayor Eric Hogue and his wife Tammy along with Mayor Pro Tern Byboth and his wife Brenda. WEDC Invitational: The WEDC will be holding its 3'd annual WEDC Invitational on November 4th at Woodbridge Golf Club. Staff anticipates 60 participants with approximately 75 individuals invited for dinner. Board members are encouraged to consider any individuals or entities which may need to be invited, but left off the guest list. Please feel free to forward staff any suggestions via email. Pediatric Associates of Wylie (P.A.W.); P.A.W. will be holding its groundbreaking ceremony on November 3, 2008 at its new location near the intersection of Hooper and Woodbridge Parkway. The event will begin at 11:30 a.m. with all WEDC Board members encouraged to attend. P.A.W. will be relocating its offices from Ballard Street to a new 7,000 square foot facility. Premier Business Park Signage: While continuing to work to attract Ardetech Industries to the WEDC 3.2 acre tract within Premier Business Park, staff has placed a sign on the site promoting the property for new industrial development with the potential availability of incentives. WEDC Annual Report: In November, staff will begin drafting the 2008 WEDC Annual Report. Per the WEDC By-laws, the report must be presented to Council no later than January 31, 2009. Staff has attached the 2007 Annual Report for the Board's review and will present the first draft to the Board on November 21, 2008. Steen Chiropractic: Dr. Ken Steen will be submitting plans to the City of Wylie by 10-17-08 for the construction of a 1,941 square foot structure to house his chiropractic and physical therapy operations to be located at 100 E. Brown. Staff has attached an elevation drawing for the Board's review. City Council Work Session: Staff attended a work session held by the City Council to discuss the merits of term limits for boards and commissions and/or expanding the number of members on boards. The issue was initiated by Mayor Pro Tern Byboth based upon the fact that the City is having to turn away many qualified individuals because there is a lack of opportunities for them to participate. While a majority of the Council and staff supported term limits for board and commissions, staff spoke against these limitations based upon losing qualified and experienced WEDC — Minutes October 17, 2008 Page 5 of 5 members and more importantly, the ability of the City Council to remove those individuals that are not performing up to a certain standard or not participating in an acceptable manner. While there was much discussion on the item, there was no consensus with the Council deciding to discuss the matter again at a later date. EXECUTIVE SESSION The WEDC Board of Directors convened into Executive Session at 6:48 a.m. I. Consider and Act Upon Issues Surrounding the Provision of Economic Assistance to Ardetech Industries, Inc. as Authorized in Section 551.087 (Economic Development Negotiations) of the Local Government Code, Vernon's Texas Code Annotated (Open Meetings Act). II. Consider and Act Upon Issues Surrounding the Provision of Economic Assistance and the Purchase of Real Property for Project 2019 as Authorized in Section 551.087 (Economic Development Negotiations) and in Section 551.072 (Real Property) 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 7:45 a.m. ADJOURNMENT With no further business, President Marvin Fuller adjourned the WEDC Board meeting at 7:45 a.m. 77 / Marvin Fuller, President ATTEST: ,„— Samuel D.R. Satterwhite Executive Director