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08-19-2011 (WEDC) Minutes Minutes Wylie Economic Development Corporation Board of Directors Meeting Friday, August 19, 2011 —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 6:35 a.m. Board Members present were: Mitch Herzog, John Yeager, and Todd Wintters. Board Member Chris Seely arrived at 6:36 a.m. WEDC staff present was Executive Director Sam Satterwhite and Administrative Assistant Gerry Harris. Ex-officio members Mayor Eric Hogue and Mindy Manson were present. CITIZEN PARTICIPATION Lynn Grimes with the Wylie Art Gallery, 201 N. Ballard Ave., Wylie, TX, came forward as a downtown merchant saying that the idea to create parking spaces in the downtown area was a brilliant idea as there is a great need for additional parking. She stated that she had great faith in the Board that they would move forward with the plan. President Fuller proceeded to Action Items. ACTION ITEMS ITEM NO. 1 — Consider and act upon approval of the July 29, 2011 Minutes of the WEDC Board of Directors Meeting. MOTION: A motion was made by Mitch Herzog and seconded by John Yeager to approve the July 29, 2011 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 issues surrounding the construction of a 96,000 square foot industrial facility at 1405 Martinez Lane. Staff reported that a final certificate of occupancy has not been issued as of yet as the City of Wylie is waiting for the final installation of all Ascend equipment. Installation of the paint line should be complete by September 2nd with the CO issued shortly thereafter. Ascend began extruding product samples on August 12`11 and distributing the same to customers across the country. Ascent representatives are currently in South Korea inspecting a press which is scheduled to be purchased and operational by April 2012. WEDC—Minutes August 19, 2011 Page 2 of 7 Staff also reported that based upon the WEDC debt reduction payment of S48,715.35 to ANB, the final loan amount for the Ascend project is $4,872,233.65. Monthly debt service/lease payment is S40,682. In addition, Ascend is paying monthly avoided tax payments of$14,428.54. From 7-1-11 to 12-31-11, Ascend will be making avoided tax payments for the City of S25,542.20 and the WISD of$46,600.50. The avoided tax payment is based upon a real property `taxable value' less the estimated leasehold tax. The `taxable value' of $6,171,170 is based upon a negotiated land value of $900,000 and construction costs of $5,271,170. Staff had anticipated making monthly or quarterly payments to the City of Wylie and Wylie ISD for the avoided taxes. However, staff decided that a single payment should be processed on February 1st Should payments be made monthly or quarterly and the tax assessor amends its interpretation of the tax code pertaining to tax exempt real property of 4A Corporations, the WEDC could potentially be in a position of requesting a refund from the City and WISD with real property tax payments being made directly to the tax assessor. President Fuller requested that staff look at the Lease Agreement with Ascend and determine that in the event the tax assessor amends its interpretation of the tax code pertaining to tax exempt real property of 4A Corporations, Ascend is aware that they are responsible for all taxes including County and CCCCD. No action was requested by staff for this item. ITEM NO. 3 — Consider and act upon approval of the July 2011 WEDC Treasurer's Report. Staff reported that the July Treasurer's report included the 5th and 6th Draw Request from Hill & Wilkinson in the amount of$1,046,406. August sales tax receipts were reported at 8.96% up. Staff reported no irregularities in the July Treasurer's Report. MOTION: A motion was made by Mitch Herzog and seconded by John Yeager to approve the July 2011 WEDC Treasurer's Report. The WEDC Board voted 5 —FOR and 0—AGAINST in favor of the motion. ITEM NO. 4 — Consider and act upon issues surrounding the FY 2011-2012 WEDC Budget. Staff reported that since Board approval of the FY 2011 — 2012 Budget on July 15th and presentation of same to Council on July 26`h, there had been minor modifications to the budget with staff seeking the Board's ratification of the amendments. The 'Sick Leave Buy Back' program was eliminated from the City budget with an impact of $1,989 to the WEDC budget. Group Hospitalization & Life Insurance was adjusted resulting in a $1,066 decrease in personnel expenses. The debt service budget was reduced to reflect permanent financing payments for Ascend. Finally, staff failed to account for a rent modification WEDC —Minutes August 19, 2011 Page 3 of 7 in the WEDC lease accounting for a $5,000 expense reduction. Staff reported that all reduced expenses have flowed into the Incentive budget with a $716,232 `Future Projects' line item. Staff recommended that the WEDC Board of Directors approve the FY 2011 — 2012 Budget as amended. MOTION: A motion was made by Chris Seely and seconded by Mitch Herzog to approve the FY 2011 — 2012 Budget as amended. The WEDC Board voted 5 —FOR and 0—AGAINST in favor of the motion. ITEM NO. 5 — Consider and act upon issues surrounding the extension of a sewer line to serve commercial property located near the intersection of Westgate Way and F.M. 544. Staff received a proposal from RLK Engineering to design approximately 3,200 linear feet of sanitary sewer along the north right-of-way line extending from Muddy Creek to the eastern boundary of property owned by American Restoration. Staff indicated that there are currently 4 properties which are not served by sewer within the proposed design: City of Wylie — 19 acres, James Blakey—9 acres, American Restoration— 12 acres, and Sal Del Ray(Benson)— 10 acres. The total fee on the proposal was $14,500 including topographical surveying, easement documents, construction documents, and construction administration (if needed). The WEDC had budgeted $16,100 for the project. Staff had presented the proposal to the City Engineer who reviewed the fees and indicated that the $14,500 is at or below market value for a job of this size. Mr. Holsted also indicated that RLK had completed several projects for the City and that he had never had an issue with the quality of their work. Based upon estimates provided by Helmberger Associates, construction of this sewer line extension is estimated at $165,000 which RLK confirmed was a good estimate. Staff reported that RLK did not base this fee on a percentage of construction cost but an estimated number of sheets required. Staff indicated to the Board that it was his opinion that construction of the sewer line should begin as soon as possible. With proposed activity at the southwest corner of Sanden and 544, City Council future consideration of allowing commercial development on its 19 acres at the northeast corner of Sanden and 544, commercial/light industrial activity on the American Restoration site, and increased commercial activity on the Benson tract, staff argued that a $165,000 investment in infrastructure could be a catalyst in the competitive arena of site selection. President Fuller directed staff to ask RLK about all variations on the design, but encouraged staff to begin the planning process now. MOTION: A motion was made by Todd Wintters and seconded by Mitch Herzog to approve the approval for engineering services with RLK to design a sewer WEDC—Minutes August 19, 2011 Page 4 of 7 line on F.M. 544 consisting of ±3,200 linear feet extending from Muddy Creek to the general vicinity of Westgate Way. The WEDC Board voted 5 — FOR and 0—AGAINST in favor of the motion. ITEM NO. 6 — Consider and act upon issues surrounding the construction of public parking on property owned by the First Baptist Church of Wylie. Staff reported that while presenting this project to Council on August 9th, there was excellent dialogue between staff, WEDC President Fuller, and Council. Council comments ranged from support for increased business parking to concern over using public monies for private property improvements. There was also concern that the City/WEDC would not have control over the future use of the property for public parking as well as concern for how the WEDC would be reimbursed should FBC sell the property or change its use from public parking. Staff had presented a concept of the FBC reimbursing the WEDC 100% of the cost if the property should sell or the use changes within 10 years. Staff further proposed a 50% - 75% reimbursement at any time after the 10-year period. Council commented that a long term lease may be more appealing and would satisfy some of the public/private concerns. Staff discussed a long term lease with FBC representatives with no immediate concern over a 30 — 50 year lease. Depending on the ultimate design of the parking, staff would still want reimbursement options to be addressed, but after a certain period of time the public use/benefit would outweigh the depreciated cost. There were also questions from the Council surrounding cost with staff estimating $40,000 for improvements. To address those questions from an authoritative source, the City of Wylie Engineer provided a potential design and cost estimate which was projected to be $38,625. With the proposed design, FBC would lose approximately 4 parking spaces due to the egress into their parking lot. Staff reported that there had been a meeting with Oncor representatives at the site to discuss potential utility relocations should traffic exit via City right-of-way running north and south adjacent to the Boyd and Conkle properties. Oncor representatives agreed to look into the costs associated with utility relocation. Staff also mentioned one option that may not be as cost prohibitive, but would likely have design challenges. In an effort to retain the 4 existing FBC spaces and have traffic exit to Oak Street, the `alley' could be routed between the existing poles and the easternmost Boyd building. With only 15 feet between the Oncor pole and the Boyd building, staff reported that the option will be subject to existing design standards and possible alternatives to the same. The WEDC Board directed staff to continue with the project and pursue all designs and costs associated with each design. MOTION: A motion was made by Todd Wintters and seconded by Chris Seely to pursue all design and cost options surrounding the construction of public WEDC —Minutes August 19, 2011 Page 5 of 7 parking on property owned by the First Baptist Church. The WEDC Board voted 5 —FOR and 0—AGAINST in favor of the motion. ITEM NO. 7 —Consider and act upon issues surrounding the election of WEDC officers. Each July/August following the selection of WEDC Board members by the Wylie City Council, the WEDC elects officers for the upcoming year. Staff presented for review Section V — Officers of the WEDC By-laws. On August 20, 2010, the WEDC Board of Directors elected the current officers. Vice President Herzog offered his opinion that Marvin Fuller had done an outstanding job as President and that he would prefer that Mr. Fuller retain his position on the Board and that the other officers remain the same as well. With that said the Board elected the following officers: Marvin Fuller President Mitch Herzog Vice President John Yeager Secretary Chris Seely Treasurer MOTION: A motion was made by Todd Wintters and seconded by Mitch Herzog to retain the current officers for the upcoming year. The WEDC Board voted 5 —FOR and 0—AGAINST in favor of the motion. DISCUSSION ITEMS ITEM NO. 8 - Staff Report: review issues surrounding an Amended and Restated Performance Agreement between the WEDC and Woodbridge Crossing, Commercial Lease/Performance Agreement between the WEDC and Ascend Custom Extrusion, City of Wylie 19-acre tract, Applebee's, No-Parking Ordinance, TEDC Annual Conference, and regional housing starts. Woodbridge Crossing Woodbridge Crossing was reported to be in compliance with all terms of the Amended and Restated Performance Agreement. A Sales Tax Reimbursement Report was presented which identified all sales taxes generated through May 2011 within Woodbridge Crossing for the City General Fund, the WEDC, and the 4B. As a reminder, the City and WEDC will be reimbursing 85% of all sales tax generated within Woodbridge Crossing through September 2013. Beginning October 2013, 65°A.of all sales taxes generated will be reimbursed. The next performance measure due requires a cumulative 385,118 square feet to be constructed by September 1, 2013. There is currently 314,652 square feet in place within Woodbridge Crossing, 3,500 square feet under construction for an AT&T corporate retail store & Eyemaster's. Reportedly Ross and Rack Room are out to bid. Also the Rosa's Café site plan (7,000 sq. ft.); to be located next to Viewpoint, was formally approved by the Planning & Zoning Commission. No approval is required by the Wylie City Council. WEDC—Minutes August 19, 2011 Page 6 of 7 A summary of Direct Developments' Performance Obligations was presented for the Board's review. Ascend Commercial Lease and Performance Agreement An Ascend Custom Extrusion Critical Dates Analysis and Performance Agreement Monitoring Procedures was presented which will be an on-going item within the staff report for the life of the project. Payment #1 of the Economic Incentives was funded with Ascend meeting all current Performance Obligations. City of Wylie 19-acre Commercial Tract Staff had planned on taking promotion of City owned property for commercial uses to the City Council on August 231-d but plans on moving the issue to the September 26th agenda. Applebee's Applebee's took to real estate committee a site at the southwest corner of 544 and Sanden. Staff had presented two sites near the intersection of 544 and Westgate to Applebee's — the 1.15 acre post office site with frontage on 544 and the Benson tract. Both sites have an asking price above Applebee's requirements, but staff did indicate that public assistance could offset increased land cost. No-Parking Ordinance The City Council approved a no-parking ordinance at its regular meeting on August 9`h. There was no discussion as the item was placed upon the consent agenda. TEDC Annual Conference The Texas Economic Development Council is holding its annual conference October 5 — 7 at the Renaissance Worthington Hotel in Fort Worth. A draft agenda was presented for the event. Regional Housing Starts Twenty homes were permitted in Wylie for July 2011. Sachse, Lavon and Murphy permitted a combined nineteen homes over the same period. No action is requested by staff for this item. EXECUTIVE SESSION The WEDC Board recessed into Closed Session at 7:51 a.m. in compliance with Section 551.001, et.seq. Texas Government Code to wit: WEDC —Minutes August 19, 2011 Page 7 of 7 Section 551.071 (Consultation with Attorney) of the Local Government Code, Vernon's Texas Code Annotated(Open Meetings Act). • Receive legal advice concerning Cause No. 366-01521-2011 in the 366th Judicial District in the case styled Wylie Economic Development Corporation vs. Sanden International (U.S.A.), Inc. Section 551.087 (Economic Development) of the Local Government Code, Vernon's Texas Code Annotated (Open Meetings Act). • Consider issues surrounding Clark Street Development. • Consider issues surrounding Multi-Machining. Board Member Todd Wintters announced he had a conflict of interest and left the room at 8:07 a.m. He returned to the room at 8:30 a.m. An Affidavit Stating Conflict of Interest will be placed on file with the original minutes. • Consider issues surrounding B&B Theatre. • Consider issues surrounding Medical uses considering a site near the intersection of F.M. 544 and Sanden Blvd. RECONVENE INTO OPEN MEETING The WEDC Board of Directors reconvened into open session at 8:45 a.m. ADJOURNMENT With no further business, President Fuller adjourned the WEDC Board meeting at 8:45 a.m. (4-17/A Marvin Fuller, President ATTEST: Samuel D.R. Satterwhite Executive Director