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10-22-2010 (WEDC) Minutes Minutes Wylie Economic Development Corporation Board of Directors Meeting Friday, October 22, 2010 — 6:30 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 6:30 a.m. Board Members present were: John Yeager, Mitch Herzog, Todd Wintters, and Chris Seely. WEDC staff present was Executive Director Sam Satterwhite. Ex-officio member Mayor Eric Hoguc arrived at 6:38 and departed at 7A7 and ex-officio member Mindy Manson was present. Also present was Assistant City Manager Jeff Butters, 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 17, 2010 Minutes of the WEDC Board of Directors Meeting. MOTION: A motion was made by Mitch Herzog and seconded by John Yeager to approve the September 17, 2010 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 2010 WEDC Treasurer's Report. MOTION: A motion was made by Chris Seely and seconded by Mitch Herzog to approve the September 2010 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 WEDC Budget Transfer for FY 2009 — 2010. Staff explained that a miscalculation of Debt Service due to the payoffs of the Bowland/Anderson and the CapitalOne loans attributed to the Debt Service account ending the year with a deficit of S1,530.95. As well, higher than expected copier expense explains the deficit in the Rental Account (S300). Although, the Chamber reimburses the WEDC for half of the expenses, the accounting system will not allow that money to be deposited there. Reimbursed funds appear in the Miscellaneous Income Account. WEDC — Minutes October 22, 2010 Page 2 of 6 The Audit and Legal Account shortage is due to an unusual amount of legal activity during the month of September ($2,000). These activities include the purchase of SAF-Holland property, performance and lease agreements pertaining to Project 95K, performance agreement with the Sooner Group, and legal advice on Project CRI. All funds will be transferred from the Travel & Training Account. Staff recommended that the WEDC Board of Directors approve the Budget Transfer Request ED10-22-10 in the amount of$3,831.00. MOTION: A motion was made by John Yeager and seconded by Chris Seely to approve the budget transfer of $3,831 from Travel & Training to Debt Service, Rental, and Audit & Legal. The WEDC Board voted 5 — FOR and 0 — AGAINST in favor of the motion. ITEM NO. 4 — Consider and act upon issues surrounding the selection of a general contractor associated with Project 95K. On September 20, 2010 the WEDC distributed a Request for Qualification to general contractors desiring to undertake a design/build project for a 100,000 square foot industrial project. REQ's were distributed to Spring Valley Construction, Raymond Construction, Rogers O'Brien Construction, Byrne Construction Services, and Hill & Wilkinson. With REQ's due on October 1, 2010, a committee composed of Todd Wintters, Mitch Herzog, and the WEDC Executive Director met to narrow the responses down to two firms which were interviewed on October 12`h. The firms interviewed were Raymond Construction and Hill & Wilkinson. Joining, the above individuals for the interview was the equity partner of Project 95K along with Mr. Tommy Pulliam who has an extensive background in construction and was asked by staff to attend and evaluate the applicants. After evaluating the qualifications presented and a cursory review of costs proposed by both presenters, the firm of Hill & Wilkinson was believed by the panel to have the most experience and was deemed most capable of completing this project in the time flame required. Board members Herzog and Wintters both commented that Hill & Wilkinson presented themselves professionally and gave the interview panel a great level of comfort that quality and cost effectiveness would be met. Staff reminded the Board that the above firms had not bid for the job, but submitted qualifications. WEDC Counsel Mr. Bob Roeder, with final approval of the Board, will negotiate profit and general conditions via AIA Agreements. Profit is simply a percentage of the construction cost which is the contractor's fee. General Conditions are the contractor's overhead on the job (i.e. foretnan's salary, rental of construction trailer, temporary electricity to the site, port-a-lets, etc.) The construction cost is a function of the bid awarded for each area of construction (i.e. concrete, electrical, finish out, etc.'). Bids will be evaluated by Hill & Wilkinson's estimator and presented to the WEDC for approval. Staff had hoped that AIA documents would be complete prior to the meeting, but the attorneys for each organization could not agree to terms. The Board instructed staff to inform Hill & WEDC — Minutes October 22, 2010 Page 3 of 6 Wilkinson that their finn has been chosen to complete construction of the facility required for Project 95k further instructing staff to complete the AIA Agreements between the WEDC and Hill & Wilkinson. MOTION: A motion was made by Todd Winners and seconded by John Yeager to table consideration of AlA Agreements between the WEDC and Hill & Wilkinson. The WEDC Board voted 5 — FOR and 0 — AGAINST in favor of the motion. ITEM NO. 5 — Consider and act upon issues surrounding the selection of a construction manager associated with Project 95k. During the planning and construction process for Project 95k, the WEDC will need to review plans, bids, change orders, draw requests, and somewhat oversee construction. Even though staff is 100% confident in the general contractor chosen, Staff believed it is in the WEDC's best interest to have a third party (construction manager) assist in these efforts. It is not the staff time that is at issue, but the expertise and knowledge required performing these tasks. While the City Manager generously offered the services of the City of Wylie Construction Manager, staff had reservations as it relates to availability of time when it comes to this position. With the Municipal Complex nearing completion in January, the City of Wylie Construction Manager will spend a significant amount of time finalizing construction and a great deal of time thereafter coordinating punch lists. Haying already discussed this issue with 95k's equity partner, they are in agreement that this expenditure is warranted. Staff evaluated three firms for this position: MI. Gray Partnerships, Pulliam Construction Management, and The Ratliff Group. Staff found all three firms to be of comparable ability. ML Gray's fee is $64,000 for 8 months (flat rate). Pulliam Construction is S75 per hour (estimate 15 hours per week for 8 months = $36,000). The Ratcliff Group bid 2% of construction cost or $100,000. Staff provided qualifications for ML Gray and Pulliam Construction Management. Because of the cost, qualifications were not requested from The Ratliff Group. Staff recommended that Pulliam Construction Management be hired to oversee this project as a Construction Manager. Mr. Pulliam's experience with Fluor Daniels and Texas Instruments alone qualify him for this job. Also, Mr. Pulliam is willing to work on an hourly basis allowing the WEDC to set a `not to exceed' figure and furthermore is 40% less than ML Gray. Project 95k's equity partner understands clearly that this will be part of the cost of construction and will ultimately be their financial responsibility which will be detailed in the Performance Agreement. The equity partner's comment was, with staff in full agreement, that if the cost was $64,000 the service may not be worth it. Staff recommended that the WEDC Board of Directors authorize the Executive Director to enter into an agreement with Pulliam Construction Management for Construction Management services associated with Project 95k for an amount not to exceed S36,000. WEDC — Minutes October 22, 2010 Page 4 of 6 MOTION: A motion was made by Chris Seely and seconded by Mitch Herzog to authorize the Executive Director to enter into an agreement with Pulliam Construction Management not to exceed $36,000. The WEDC Board voted 5 — FOR and 0 — AGAINST in favor of the motion. ITEM NO. 6 — Consider and act upon issues surrounding the purchase of property from SAF-Holland USA, Inc. Staff provided an update on the status of the purchase of 1.33 acres from Holland USA. Issues discussed involved platting, a Phase I analysis, surveying, a partial release from Holland's lender, future set back requirements, a title commitment, an escrow agreement, and future impact fees. Anticipating the receipt of the partial release from Holland's lender and platting to be approved by Council on 11-9-10, staff anticipated closing on the purchase shortly thereafter. Staff had no recommendation for the WEDC Board of Directors at this time. DISCUSSION ITEMS As a reminder to Board members, the Board may not discuss an item which is not specifically identified on the agenda. Only those items listed above can be discussed. Should any Board member wish an item to be placed on the agenda at any time prior to a Board meeting, please contact the WEDC President or staff. Wood()ridze Crossing Woodbridge Crossing is currently in compliance with all terms of the Amended and Restated Performance Agreement. Attached for your review is the Sales Tax Reimbursement Report which identifies all sales taxes generated and reimbursed through August 2010 within Woodbridge Crossing for the City General Fund, the WEDC, and the 4B Corporation. As a reminder, the City and WEDC will be reimbursing 85% of all sales taxes generated within Woodbridge Crossing through September 2013. Beginning October 2013, 65% of all sales taxes generated will be reimbursed. The next performance measure of 64,000 square feet of lease space constructed on the in-line lots adjacent to Target between McCreary and Springwell shall be completed no later than May 1, 2011. There is currently 81,000 square feet under construction slated to be completed by March, 2011. A 'critical dates analysis' has been attached for your review. Assuming conservative sales tax generated in September, Target is estimated to have approximately S51 million in sales over the last twelve month period. Donation of Commercial Pro er The WEDC has been approached by First Baptist Church Wylie (FBC) representatives inquiring as to the potential for a partnership to provide additional parking for FBC and downtown Wylie. WEDC — Minutes October 22, 2010 Page 5 of 6 FBC currently owns an approximate 9,600 square foot parcel with frontage on II allard Street located to the south and adjacent of Boyd Studios. FBC has proposed to donate the property to the WEDC in exchange for the WEDC paving the property for FBC use. Staff estimated that 28 parking spaces could be located on the site with a cost of approximately 836,000. Staff also envisions a sign on the site indicating 'Downtown Parking' and a parking agreement between FBC and the WEDC. The focus for the WEDC with this concept is to (a) acquire a parcel which could be combined with, property to the south for redevelopment and (b) provide overflow parking for downtown events. There would be no restrictions associated with the proposed conveyance/sale as to the WEDC's future use of this property. The Board showed interest in this project and directed staff to provide further information at a future Board meeting. WEDC Business Resource Center WEDC Counsel had advised staff in the past that an interlocal agreement between the City and the WEDC would be required to fund a WEDC Business Resource Center within the Smith Public Library. Mr. Randy Hullett with Abernathy, Roeder, Boyd & Joplin has now advised staff that the purchase of WEDC owned furniture, computer equipment/programs, and printed materials can be a function of the WEDC budget and that no interlocal agreement is required. Being that the WEDC Board and the Wylie City Council approved this expenditure in the FY 2010 — 2011 budget, no further action is required. Staff will however be drafting a 'letter of understanding' to the City Manager and Library Director stating that the property will be owned by the WEDC and maintained by the City of Wylie. Further, staff will indicate that the WEDC has no future budgetary allowance for additional equipment/materials. Regional Housing Starts While housing, starts are down this month for the entire region, Wylie is still on pace to exceed 300 new homes permitted in 2010 which would exceed 2009 by 17%. Eleven homes have been perinitted in October as of the EXECUTIVE SESSION Recess into Closed Session in compliance with Section 551.001, et.seq. Texas Government Code, to wit: Section 551.087 (Economic Development Negotiations) of the Local Government Code, Vernon's Texas Code Annotated (Open Meetings Act). • Deliberate commercial or financial information that the WEDC has received from a business prospect and deliberate the offering of incentives to a business prospect (Project 95k). WEDC —Minutes October 22, 2010 Page 6 of 6 • Deliberate commercial or financial information and that the WEDC has received from a business prospect and deliberate the offering of incentives to a business prospect located near the intersection of State Highway 78 and FM 544. RECONVENE INTO OPEN MEETING The WEDC Board of Directors reconvened into open session at 8:21 a.m. MOTION: A motion was made by Mitch Herzog and seconded by Todd Wintters authorizing staff to negotiate an incentive package between the WEDC and The Sooner Group in an amount not to exceed $314,615. The WEDC Board voted 5 — FOR and 0— AGAINST in favor of the motion. ADJOURNMENT With no further business, President.Fuller adjourned the WEDC Board meeting at 8:22 a.m. ,-;;;;;/- Marvin Fuller, President ATTEST: Samuel D.R. Satterwhite Executive Director