03-23-2012 (WEDC) Minutes•
Minutes
Wylie Economic Development Corporation
Board of Directors Meeting
Friday, March 23, 2012 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 6:30 a.m. Board Members present were:
Chris Seely, Mitch Herzog, John Yeager and Todd Wintters.
WEDC staff present was Executive Director Sam Satterwhite and Senior Assistant Gerry Harris.
Ex-officio members Eric Hogue and Mindy Manson were present. Mayor Hogue departed the
meeting at 9:07 a.m.
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 March 9, 2012 Minutes of the
WEDC Board of Directors Meeting.
MOTION: A motion was made by Mitch Herzog and seconded by John Yeager to
approve the March 9, 2012 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 February 2012 WEDC Treasurer's
Report.
MOTION: A motion was made by John Yeager and seconded by Todd Wintters to
approve the February 2012 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 a WEDC Budget Transfer for FY 2011-2012.
Staff reported that the Audit & Legal Services Account for FY 2011-2012 has a current balance
of$1,360.85. In anticipation of further legal expenses, staff is requesting a Budget transfer in the
amount of$40,000. Staff indicated that the FY 2011-2012 Legal & Audit account began with
$22,750. On January 20, 2012 staff requested a Budget Transfer in the amount of$20,000 which
increased the budget to $42,750. Staff summarized that to date Sanden has attributed $30,000 to
the total expenses with$11,000 attributed to other projects.
WEDC—Minutes
March 23, 2012
Page 2 of 7
Staff recommended a $40,000 transfer from the Land Account which will leave a balance of
$349,000 in Land.
MOTION: A motion was made by Mitch Herzog and seconded by Todd Wintters to
approve a WEDC Budget Transfer for FY 2011-2012 in the amount of
$40,000. The WEDC Board voted 5 —FOR and 0—AGAINST in favor of
the motion.
ITEM NO. 4 —Consider and act upon an Interlocal Agreement for Administrative Services
by and between the City of Wylie, Texas and the Wylie Economic Development
Corporation.
The WEDC entered into an Interlocal Agreement with the City of Wylie in October 2006 after
the WEDC relocated from City Hall to the location at 108 Marble. The term of that Agreement
was five years with the current Agreement expiring in October 2011.
After consulting with the new purchasing agent, Glenna Hayes, staff discovered that WEDC
properties with real property improvements are not protected under the City's insurance policy
with the Texas Municipal League Intergovernmental Risk Pool as staff previously understood
them to be. Mr. Butters added to the Interlocal Agreement so that the WEDC would have access
to insurance and benefits per Local Government Code Sec.501.067. After detailed information
on WEDC facilities has been submitted to the TML Intergovernmental Risk Pool, Ms. Hayes
will inform the WEDC as to the cost for insuring the same.
Mr. Butters recommended that the term "Administrative Services" be removed from the title of
the Agreement and that the effective date should be changed to March 27, 2012 — March 27,
2017,which will allow Mr. Butters to present it to the Wylie City Council on March 27, 2012 for
their approval.
Staff recommended that the WEDC Board of Directors approve the Interlocal Agreement
between the City of Wylie, Texas and the WEDC.
MOTION: A motion was made by Todd Wintters and seconded by John Yeager to
approve the Interlocal Agreement between the City of Wylie, Texas and
the WEDC. The WEDC Board voted 5 —FOR and 0—AGAINST in favor
of the motion.
ITEM NO. 5—Consider and act upon issues surrounding WEDC funding of infrastructure
improvements associated with the extension of Woodbridge Parkway in the amount of $2
million.
The WEDC's current commitment is to be responsible for the debt associated with the extension
of Woodbridge Parkway. As presented to the Board, the WEDC and the City of Wylie are
negotiating an Interlocal Agreement under which the City of Wylie will reimburse the WEDC up
to $1 million of the project cost via thoroughfare impact fees collected in the west zone.
WEDC—Minutes
March 23, 2012
Page 3 of 7
City and WEDC staff had anticipated that approximately $700,000 would be collected from
thoroughfare impact fees from Kroger and B&B theatre at or about the same time as the debt
would be secured for Woodbridge Parkway. Of that $700,000 it was believed that $350,000
could be used for Woodbridge Parkway and $350,000 would be used to reimburse Mr. Don
Herzog for improvements made to the existing section of Woodbridge Parkway south of 544 as
required by a preexisting Impact Fee Reimbursement Agreement between the City and Herzog.
As currently required by the Agreement, Herzog receives 50% of the thoroughfare Impact fees
collected in the west zone and the City is allowed to use the remaining 50% for other projects.
The WEDC had anticipated utilizing the remaining 50% for the debt associated with the
extension of Woodbridge Parkway.
After reading the Herzog Agreement and conferring with the City Attorney, the City is required
to reimburse Herzog 100% (not 50%) of the thoroughfare impact fees collected on property he
owns, or that has been recently conveyed to a third party, along Woodbridge Parkway. The end
result is that $2 million may have to be financed opposed to the anticipated $1.65 million.
Fortunately, when staff was preparing earlier debt service analysis, $2 million in debt was used
for cash flow purposes.
The City Manager indicated that bond funds may be identified from the savings on existing road
projects which could be used toward Woodbridge Parkway debt service with the balance of the
$1 million City of Wylie commitment paid via thoroughfare impact fees. The City Manager
committed to begin a dialogue with the City Council to address this issue.
Staff determined that there is a level of interest from other banks in financing the Woodbridge
Parkway improvements which would require refinancing the existing Ascend debt. Staff
assumed the Board would want a bid process established under which multiple entities would
have opportunity to bid on the debt.
Staff had no recommendation.
MOTION: A motion was made by Todd Wintters and seconded by John Yeager to table
the issue until the next regular WEDC Board Meeting. The WEDC Board
voted 5 —FOR and 0—AGAINST in favor of the motion.
DISCUSSION ITEMS
ITEM NO. 6 — 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 ACE, WEI)C lease facilities on Industrial Court, WISD 1.5
acre tract, City of Wylie 19-acre tract, PM Realty/Oncor, Clark Street, Wylie Ice Cream
Holdings, LLC, and regional housing starts.
Woodbridge Crossing
Woodbridge Crossing is currently in compliance with all terms of the Amended and Restated
Performance Agreement. The Sales Tax Reimbursement Report was presented which identified
all sales taxes generated through January 2012 within Woodbridge Crossing for the City General
WEDC—Minutes
March 23, 2012
Page 4 of 7
Fund, the WEDC, and the 4B. 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. For the most recent quarter ending December
2011, the decrease in percentage reimbursed would equate to an additional $13,874 to the
WEDC and $27,747 to the City of Wylie General Fund.
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. Ross, Rack
Room, and Rue 21 are currently under construction and will result in approximately 40,000
square feet. Direct Development has indicated that Target and Kohl's have approved the site
plan for Rosa's Café which will result in an additional 6,940 square feet and a cumulative
365,092 square feet within Woodbridge Crossing
A summary of Direct Developments' Performance Obligations was presented for the Board's
review.
Ascend Commercial Lease and Performance Agreement
The Ascend Custom Extrusion Critical Dates Analysis and Performance Agreement Monitoring
Procedures was 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 23ra
The second extrusion press which has been delivered and installed will be fully operational on or
about April 20th
Currently operating two, ten hour shifts, Ascend employees 91 with 115 anticipated after the
second press becomes fully operational. Fully audited financials for 2011 will be available
within the next 2 weeks. Finally, sales and profit figures are well ahead of projections with an
expansion projected within five to seven years.
WEDC lease facilities on Industrial Court
207 and 212 Industrial Court are currently occupied. However, Taylor & Son plan to vacate 212
in June. 210 and 211 Industrial Court are vacant. Staff will have a 'for lease' sign up the week
of March 26th
WISD 1.5 acre Tract
A survey and appraisal has been completed on WISD property with frontage on 544 bounded by
Muddy Creek and property owned by the Scholz/Parker group. The WISD will be advertising
the property for public auction in the Wylie News for the next two weeks. While staff had not
received a copy of the survey as of yet, the Superintendent indicated that the site is ±2.5 acres.
Staff assumed the added area must encompass the creek, but will not be certain until a survey has
been reviewed.
WEDC—Minutes
March 23, 2012
Page 5 of 7
City of Wylie 19-acre tract
In discussing this property with the Director of Planning and the need to develop viable
commercial options, the vision was conceived for a `restaurant-row' environment with an
emphasis on open space. So much discussion was previously focused on changing the use from
open space to commercial that the obvious concept of combining the two was overlooked. While
the potential for a linear park along the railroad tracks may be viable, possibly just having
increased open space ratios would be create an appealing environment. Another possibility
could be connecting the City of Wylie property with a tunnel under the tracks which could link
the commercial and open space uses.
Tentatively on April 24th, Renae 011ie will lead a work session of the Council and WEDC to
discuss the potential for the site along with the need to bring in an outside consultant to assist
with the process. Staff's assumption is that an outside consultant will be utilized in the future.
PM Realty/Oncor
Staff understood that Tenet has not signed its lease with PM Realty. However, PM has indicated
that they are supposed to release the architect and engineer to design the project on March 22nd—
a commitment they would not enter into unless the project is moving forward. Closing date on
the Scholz/Parker tract is scheduled for May 13th. As a reminder, as soon PM releases their
architect and engineer,the WEDC will begin to design the median improvements.
Oncor has yet to approve the capital expenditure for the overhead burial. Mr. Barry Young has
indicated that we should have an update by March 23th. The WEDC is not waiting on an
indication that Oncor will perform the work, but on whether Oncor will participate in the
expense. Staff is confident Mr. Young is doing everything he can; he is just faced with many
layers of bureaucracy and a corporate culture that has not participated in many of these projects
in the last 15 years.
Clark Street
Clark Street has closed with Herzog and Kroger has purchased their site from Clark Street. The
Kroger Real Estate representative continues to maintain a start date for construction of July
2012. Clark Street has indicated to staff however that there are several unanticipated
deceleration lanes, among other development issues, which are presenting budgetary challenges
in the amount of$500,000. Staff believed Clark Street was attempting to reopen the incentive
discussions.
Wylie Ice Cream Holdings, LLC
The WEDC and DQ have executed all documents necessary to effectuate the loan between the
two parties. As directed by the Board, staff did confirm that Mr. Bobby Glass is 100% owner of
Wylie Ice Cream Holdings prior to execution of the loan documents.
WEDC—Minutes
March 23, 2012
Page 6 of 7
As of 3-20-12, DQ submitted its final site plan application to the Planning Department which
will go to the Planning & Zoning Commission on April 17th. DQ plans on being under
construction on or about May 14, 2012.
Regional Housing Starts
Twenty-two homes were permitted in Wylie for February 2012. Sachse, Lavon and Murphy
permitted a combined twenty-seven homes over the same period.
No action was requested by staff for this item.
EXECUTIVE SESSION
The WEDC Board recessed into Closed Session at 7:39 a.m. in compliance with Section 551.001
et.seq. Texas Government Code to wit:
Section 551.087 (Economic Development) of the Local Government Code, Vernon's Texas
Code Annotated(Open Meetings Act).
• Consider a request for assistance for the redevelopment of property owned by Chemical
Recycling, Inc.
• Consider a request for assistance by Project R-1 to participate in real property
improvements to a facility located at 1211 State Highway 78.
• Consider a request for assistance from Project Warranty utilizing WEDC property located
at 2804 W. F.M. 544 to develop a new commercial facility.
• Consider a request for assistance from ATR.
Section 551.072 (Real Estate) of the Local Government Code, Vernon's Texas Code Annotated
(Open Meetings Act).
• Consider the sale of WEDC property located at the intersection of Cooper Drive and F.M.
544.
• Consider issues surrounding the purchase of property located on Cooper Drive from Duel
Products.
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.
WEDC—Minutes
March 23, 2012
Page 7 of 7
RECONVENE INTO OPEN MEETING
The WEDC Board of Directors reconvened into open session at 9:23 a.m. and took the following
action:
MOTION: A motion was made by Mitch Herzog and seconded by John Yeager to deny
a request for assistance for the redevelopment of property owned by
Chemical Recycling, Inc. The WEDC Board voted 5 — FOR and 0 —
AGAINST in favor of the motion.
MOTION: A motion was made by Mitch Herzog and seconded by Chris Seely to
approve a request for assistance by Rental One in the amount of $16,250
with approval of WEDC committee (Mitch Herzog and Todd Wintters) of
building design, proof of expenditures (±$475,000), and Certificate of
Occupancy. 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 9:25 a.m.
"- -(.71/1 a4V1/1/1
Marvin Fuller,President
ATTEST:
Samuel Satterwhite,Director