11-17-2011 (WEDC) Minutes Minutes
Wylie Economic Development Corporation
Board of Directors Meeting
Thursday,November 17, 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 6:32 a.m. Board Members present were:
Mitch Herzog, John Yeager, and Todd Wintters.
WEDC staff present was Executive Director Sam Satterwhite and Senior Assistant Gerry Harris.
Ex-officio members Mayor Eric Hogue and 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 October 21, 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 October 21, 2011 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 October 2011 WEDC Treasurer's
Report.
MOTION: A motion was made by John Yeager and seconded by Todd Winders to
approve the October 2011 WEDC Treasurer's Report. The WEDC Board
voted 4—FOR and 0—AGAINST in favor of the motion.
ITEM NO. 3 — Consider and act upon approval of a Performance Agreement between the
WEDC and B & B Theatres Operating Company, Inc.
Staff presented a Performance Agreement between the WEDC and B & B Theatres Operating
Company, Inc. The Agreement proposed guaranteed funding of $225,000, assuming all
performance measures are met, along with reimbursement of sales taxes generated by B & B
Theatres through 12/13/17. The Performance Measures proposed were:
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November 17, 2011
Page 2 of 8
a. Confirm total project cost of$12,000,000 including but not limited to land acquisition,
real property construction, and personal property acquisition/installation; and
b. Confirmation of qualified infrastructure cost of at least $600,000 relating to parking and
site preparation; and
c. Acquisition of the land no later than 12/31/11; and
d. Completion of the real property improvements and issuance of Certificate of Occupancy
no later than 12/31/12; and
e. Minimum appraised value of$10,000,000 established no later than 12/31/13.
Upon issuance of a certificate of occupancy, the WEDC would fund Economic Incentive
Number 1 of$100,000. Beginning January 1, 2013 through December 31, 2017 the WEDC will
begin tracking sales taxes generated by B & B and reimburse B & B on December of each year
those sales taxes generated by the WEDC V2 cent sales tax. Additionally in December of each
year beginning in 2013, the WEDC will fund a Performance Incentive of $25,000. The
aforementioned funds, combined with an amount equal to sales taxes generated by the City of
Wylie on an additional '/2 cent, will be capped at$600,000
Staff presented a Cost/Benefit Analysis that assumed 10 acres of land valued at $1.3 mm, FF&E
valued at$2 mm, and real property improvements of$8.7 million.
While staff and B & B had agreed on the terms in concept, there were several items of which
were still being negotiated. Staff noted that the minimum valuation benchmark was a concern
and was awaiting a counter proposal on the issue.
B & B received all approvals required from the Planning & Zoning Commission and Wylie City
Council relating to site plan and zoning requirements. Staff intends to submit a Performance
Agreement and Retail Development Agreement to the Wylie City Council on December 13th
Being that B & B was not prepared to approve this Agreement as presented, the WEDC will be
required to hold a special meeting during the first week of December.
Staff recommended that the WEDC Board of Directors table this item until which time staff is
prepared to present a final draft.
MOTION: A motion was made by Todd Wintters and seconded by Mitch Herzog to
table the issue of the Performance Agreement between the WEDC and B &
B Theatres Operating Company Inc. until the next Regular Meeting. The
WEDC Board voted 4—FOR and 0—AGAINST in favor of the motion.
ITEM NO. 4— Consider and act upon a formal recommendation to the Wylie City Council
regarding a Retail Development Agreement between the City of Wylie and B & B Theatres
Operating Company, Inc.
Staff presented a Retail Development Agreement between the City of Wylie and B & B Theatres
Operating Company, Inc. As addressed in the previous agenda item, the City of Wylie will be
committing (1/2 cent or 50%) of the sales tax attributed to General Fund sales tax receipts under
similar terms of the WEDC Performance Agreement. The only difference between the City and
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November 17, 2011
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WEDC Agreements is that the City is not required per Chapter 380 of the Local Government
Code to attribute its incentive to qualified infrastructure.
At which time when the negotiations are finalized, staff will request that the WEDC Board of
Directors make a formal recommendation to the Wylie City Council as to the merits of the Retail
Development Agreement.
Staff recommended that the WEDC Board of Directors table this item until the next Regular
Board Meeting.
MOTION: A motion was made by Todd Wintters and seconded by Mitch Herzog to
table the issue of the Retail Development Agreement between the City of
Wylie and B & B Theatres Operating Company Inc. until the next Regular
Meeting. The WEDC Board voted 4 — FOR and 0 —AGAINST in favor of
the motion.
ITEM NO. 5 — Consider and act upon approval of a Performance Agreement and Real
Estate Sales Contract between the WEDC and Multi Machining Company,Inc.
Staff presented the final version of a Performance Agreement between the WEDC and Multi
Machining. In addition a Real Estate Sales Contract was also provided.
Staff reminded the WEDC Board that the WEDC Board had proposed selling Mr. Linduff 3.2
acres for the construction of a 61,152 square foot manufacturing facility with a combined real
and personal property value of$4.25 mm. The WEDC further proposed to provide forgiveness
terms for the purchase price of the property ($439,133) in addition to cash incentives of
$158,856 over a four year period.
Mr. Linduff had received a quote from his contractor of $3.75 mm and is in the process of
reengineering the project down to $3.5 mm. Staff conveyed to Mr. Linduff that the WEDC is not
interested in purchasing one of his existing properties on Business Way. Mr. Linduff has
indicated that his lender is ready to move forward. However, Mr. Linduff is now concerned that
a potential federal reduction in defense spending could impact his long range business model.
Board Member Herzog expressed a great deal of respect for Mr. Linduffs' careful consideration
of this financial commitment.
While Mr. Linduff seemed to be hesitating on moving forward, he still maintained his desire to
complete the project. Staff commented to Mr. Linduff that a mutual goal should be established
to determine a final direction by January 2012.
Staff recommended that the WEDC Board of Directors table this item until which time staff is
prepared to present final draft(s).
MOTION: A motion was made by Mitch Herzog and seconded by John Yeager to table
the approval of a Performance Agreement and Real Estate Sales Contract
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November 17, 2011
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until the January 2012 Regular Meeting. The WEDC Board voted 4 —FOR
and 0—AGAINST in favor of the motion.
ITEM NO. 6 — Consider and act upon approval of a Performance Agreement between the
WEDC and PM Realty Group.
Staff presented the first draft of a Performance Agreement between the WEDC and PM Realty
Group. Mr. Kerry Burden indicated that he would not have comments back to the WEDC until
11-18-11. The two primary issues at stake are the construction of the median accessing the PM
Realty site and the burial of overhead utilities.
Staff reported that a proposal had been received from J. Volk Consulting for project
coordination, field surveying/data collection, preparation of construction plans, and construction
services. Staff had requested two quotes based upon (1) design of a west bound turn bay and (2)
design of east and west bound turn bays. The two separate quotes were provided so that the
Board could consider any efficiency of design and construction to benefit the City of Wylie 19
acres.
A construction estimate for a west bound turn bay and median opening had been provided at
$63,304. Staff had anticipated± $55,000. When questioned on this cost estimate, J. Volk Vice
President Matt Atkins responded that when this project is competitively bid, we will probably
see an estimate closer to our expectations. Staff represented that City Engineer Chris Hoisted is
reviewing the proposal.
Staff has yet to receive a final cost estimate from Oncor and the status of any financial assistance
for the burial of overhead utilities. As Oncor continues to refine their estimate, cost projections
continue to climb. With an original estimate of$217,000, Oncor did not take into account that
the infrastructure on 544 is a primary feeder line which is more costly to bury. The new
"ballpark estimate" (Oncor's quote) is $289,200 from the intersection of 544 and Sanden west to
Muddy Creek. It will be an additional $75,000 to bury the line from Sanden/544 south to the
Bayco property line.
Staff reemphasized that there is as of yet no response from Mr. Barry Young as to the potential
for financial assistance from Oncor. The assistance being contemplated is a three year payout of
costs associated with the burial and potential cost sharing. Discussions are moving slowly due to
Oncor's current practice of not providing assistance to any community. Mr. Young has
commented that Oncor is only considering this assistance due to Wylie's cooperation in allowing
the transmission station on State Highway 78 to be constructed. Mr. Young is confident that
design and construction of the improvements can be complete by the second quarter of 2012, but
time is still of the essence with PM Realty proposing to break ground on January 1, 2012.
With costs continuing to rise on this project, the WEDC may have to consider only burying the
overhead lines in front of PM Realty property. Staff is continuing to pursue complete burial, but
will not be able to make a recommendation until which time Oncor makes a final determination
on participation.
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November 17, 2011
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Staff hoped to have all necessary information available during the first week of December for
final consideration prior to the December 13, 2011 Wylie City Council meeting. Staff
recommended that the Board of Directors table this item until which time staff is prepared to
present final draft of the Performance Agreement and a final proposal from Oncor.
Note: Board Member Mitch Herzog did not participate in the discussion due to his company's
interest in the property.
MOTION: A motion was made by Todd Wintters and seconded by John Yeager to table
the approval of a Performance Agreement until the next Regular Meeting.
The WEDC Board voted 3 —FOR and 0—AGAINST in favor of the motion
with Mr. Herzog abstaining.
ITEM NO. 7— Consider and act upon a formal recommendation to the Wylie City Council
regarding an Impact Fee Agreement between the City of Wylie and PM Realty Group.
Staff reported that in addition to the previously discussed Performance Agreement, the Wylie
City Council will be considering an Impact Fee Agreement between the City and PM Realty.
The Impact Fee Agreement contemplates crediting the $230,185 in thoroughfare impact fees due
by $190,185. PM Realty will be paying $40,000 in thoroughfare impact fees along with all
applicable water and sewer impact fees and permit fees.
Staff recommended that the WEDC Board of Directors table this item until which time staff is
prepared to present a final draft of the Impact Fee Agreement and make formal recommendation
to the Wylie City Council on the matter.
Note: Board Member Mitch Herzog did not participate in the discussion due to his company
interest in the property.
MOTION: A motion was made by Todd Wintters and seconded by John Yeager to table
the approval of a formal recommendation to the Wylie City Council
regarding an Impact Fee Agreement between the City of Wylie and PM
Realty Group until the next Regular Board Meeting. The WEDC Board
voted 3 — FOR and 0 — AGAINST in favor of the motion with Mr. Herzog
abstaining.
DISCIJSSION 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, Applebee's, City of Wylie 19-
acre tract/sewer line extension, WEDC Invitational, and regional housing starts.
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November 17, 2011
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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 August 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% of all sales taxes generated will be reimbursed.
Direct Development is currently in compliance with all terms under the Performance Agreement
with the next performance measure of a cumulative 385,118 square feet due by September 1,
2013. There is currently 318,152 square feet in place within Woodbridge Crossing. Staff
confirmed that Ross has signed its lease with Direct Development and that Rack Room is soon to
follow (a Ross site plan and elevation is attached). Also, Direct Development has made
significant progress in obtaining Target's approval for Rosa's Café. Rosa's is currently
redrawing their site plan to satisfy Target's concerns over ingress into their pad. Direct
Development anticipates Rosa's closing on the site in January 2012.
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 were presented. Payment #1 of the Economic Incentives has been funded with
Ascend meeting all Performance Obligations within Section A of the attachment. A final
Certificate of Occupancy was issued on September 23rd with Ascend being fully operational with
their paint line and press.
Staff anticipated making ACE's avoided tax payments to the City of Wylie and WISD in
January.
Applebee's
Applebee's has submitted letters of intent on three properties in Wylie that staff is aware of. All
offers were made on properties along F.M. 544. Unfortunately, Applebee's continues to
generate significant activity in the area with no meaningful progress.
City of Wylie 19-acre Tract/Sewer Line Extension
Staff anticipated presenting Bond Counsel's findings to the Wylie City Council in December.
Staff has reduced its request of Bond Counsel from a formal opinion letter to an informal memo
representing their opinion on utilization of the 19-acre tract for commercial uses. Staff still
awaits their response. Staff is aware that the December Council agenda is already full with the
City Manager possibly requesting that this item be presented in January.
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November 17, 2011
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WEDC Invitational
The WEDC Invitational was held on November 9th and was a great success. Seventy-six invitees
confirmed their attendance with not one individual cancelling. In attendance were
representatives from PM Realty, Direct Development, Greenway Investments, Henry S. Miller,
City of Wylie Council and staff, J. Volk Consulting, Richard Parker Real Estate, McCalla
Architects, Lawyers Title, K. Hovnanian Homes, Holland Hitch, Southern Fastening Systems,
Ace Custom Extrusions, American National Bank, Wylie ISD, Lutz Woodworks, Regency
Centers, Abernathy & Roeder, Quik Trip, FEC Electric Cooperative, Intercon Demolition,
American Restoration, Hardesty Real Estate, General Transformer Corporation, Raymond
Construction, The Wylie News, RLK Engineering, Teague Nall & Perkins, Wylie Education
Foundation, and Richardson Regional Medical Center. A sampling of post tournament emails
was provided for the Board's review.
Regional Housing Starts
Sixteen homes were permitted in Wylie for October 2011. Sachse, Lavon and Murphy permitted
a combined fifteen homes over the same period.
No action is requested by staff for this item.
EXECUTIVE SESSION
The WEDC Board recessed into Closed Session at 7:36 a.m. in compliance with Section
551.001, et.seq. Texas Government Code to wit:
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 551.072 (Real Estate) of the Local Government Code, Vernon's Texas Code Annotated
(Open Meetings Act).
• Consider issues surrounding the sale of WEDC property located near the intersection of
Cooper Drive and State Highway 78.
• Consider issues surrounding the purchase of property located near the intersection of
Cooper Drive and State Highway 78.
Section 551.087 (Economic Development) of the Local Government Code, Vernon's Texas
Code Annotated(Open Meetings Act).
• Consider issues surrounding JTM Technologies.
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November 17, 2011
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• Consider issues surrounding Clark Street Development.
City Manager Mindy Manson left the meeting at 7:45 a.m. Mayor Eric Hogue left the meeting at
7:50 a.m. Board Member Todd Wintters left the meeting at 8:07 a.m.
RECONVENE INTO OPEN MEETING
The WEDC Board of Directors reconvened into open session at 8:37a.m.
ADJOURNMENT
With no further business, President Fuller adjourned the WEDC Board meeting at 8:38 a.m.
Marvin Fuller,President
ATTEST:
Samuel Satterwhite
Executive Director