02-16-2007 (WEDC) Minutes Minutes
Wylie Economic Development Corporation
Board of Directors Meeting
Friday, February 16, 2007—6:00 A.M.
Inwood National Bank—Conference Room
200 South Hwy. 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: Gary Bartow,
Mitch Herzog, and Merrill Young.
Staff present was Executive Director Sam Satterwhite and Administrative Assistant Gerry Harris.
Ex-Officio Member/City Manager Mindy Manson was 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 January 18, 2007 Minutes of the Joint
Meeting of the Wylie City Council & Wylie Economic Development Corporation Board of
Directors Meeting.
MOTION: A motion was made by Gary Bartow and seconded by Mitch Herzog to approve
the January 18, 2007 Minutes of the Joint Meeting of the Wylie City Council &
Wylie Economic Development Corporation Board of Directors. The WEDC
Board voted 4—FOR and 0—AGAINST in favor of the motion.
ITEM NO. 2 — Consider and Act Upon the Minutes of the January 19, 2007 of the Wylie
Economic Development Board of Directors Meeting.
MOTION: A motion was made by Gary Bartow and seconded by Mitch Herzog to approve
the January 19, 2007 Minutes of the Wylie Economic Development Board of
Directors. The WEDC Board voted 4 — FOR and 0 — AGAINST in favor of the
motion.
ITEM NO. 3 —(MOTION TO REMOVE FROM THE TABLE): Consider and Act Upon Issues
Surrounding Approval of the December 2006 WEDC Treasurer's Report.
MOTION: A motion was made by Merrill Young and seconded by Gary Bartow to remove
the December 2007 Treasurer's Report from the table. The WEDC Board voted 4
—FOR and 0—AGAINST in favor of the motion.
WEDC—Minutes
February 16, 2007
Page 2 of 6
Staff informed the Board that the interest earnings had been posted to the December 2006 Revenue
and Expense Report. Furthermore, the Finance Department will begin immediately posting interest
earnings monthly and has committed to posting those figures by the 20th of each month. President
Fuller directed staff to request that Finance post the interest figures prior to monthly WEDC Meetings
so that the Financials being considered will be accurate and reduce the opportunity for tabling
consideration of the same.
Staff also indicated that the Finance Department has identified that $265,000 which exists within the
WEDC Fund Balance represents past inventory values which have since been dedicated to the City of
Wylie. The error most likely took place when Hensley was constructed. The Finance Department has
presented this information to the Auditors for their removal from the WEDC Fund Balance
Finally, Staff presented that the Notes Payable entry to the Balance Sheet which had presented passage
of this item had been made. Therefore, staff recommended that the December 2006 Treasurer's
Report be approved.
MOTION: A motion was made by Mitch Herzog and seconded by Merrill Young to approve
the December 2006 Treasurer's Report. The WEDC Board voted 4 —FOR and 0
—AGAINST in favor of the motion.
ITEM NO. 4 — Consider and Act Upon Issues Surrounding Approval of the January 2007
WEDC Treasurer's Report.
MOTION: A motion was made by Merrill Young and seconded by Gary Bartow to approve
the January 2007 WEDC Treasurer's Report. The WEDC Board voted 4 — FOR
and 0—AGAINST in favor of the motion.
ITEM NO. 5 — Consider and Act Upon Issues Surrounding a Real Estate Contract and
Development Agreement Between the WEDC and JTM Technologies.
Staff presented a Real Estate Sales Contract and Performance Agreement associated with the
expansion of JTM Technologies. The project parameters presented via the above documents were as
follows:
> Contract executed on or about February 28, 2007 for the sale of 2.01 acres from the WEDC to
JTM;
o Purchase price=$197,000 ($2.25/square foot);
o WEDC takes note for$166,850; and
o Cash at closing= $30,150.
> Closing takes place on or before April 28, 2007.
> JTM must receive building permit no later than June 30, 2007.
> JTM must complete the improvements (20,050 square feet) on the site by April 30, 2008.
> One-third of the note shall be forgiven by the WEDC so long as a certificate of occupancy is
issued by April 30, 2008.
WEDC—Minutes
February 16, 2007
Page 3 of 6
> One-third of the note shall be forgiven by the WEDC so long as the improvements on the site
are valued at no less than $1.2 million by the Collin County Central Appraisal District on
January 1, 2009.
> One-third of the note shall be forgiven by the WEDC so long as the improvements on the site
are valued at no less than $1.2 million by the Collin County Central Appraisal District on
January 1, 2010.
> The WEDC has the Option to purchase the property from JTM up and until April 30, 2008
should JTM not be in compliance with Section 1 and Section 3 of the Performance Agreement.
Staff indicated that based upon a total project value of $1,397,000, JTM will generate $101,011 in
property taxes to the City of Wylie and Wylie ISD over a three year period. The only change staff
requested is for the building permit issuance date to be moved from June 30, 2007 to July 31, 2007 to
allow JTM more flexibility in the construction process. Finally, staff emphasized that the WEDC will
be subordinating its note to the construction loan to be held by Chase.
President Fuller commented that the WEDC should not execute a subordination agreement until after a
building permit is issued. Other than the change to the permitting date and subordination, President
Fuller was pleased with the outcome of the JTM project. Board Member Herzog commented that this
is a prime example of WEDC assistance to small business which is so vital to the overall economic
viability of the community.
MOTION: A motion was made by Merrill Young and seconded by Gary Bartow to approve
a Real Estate Sales Contract and Performance Agreement between the WEDC
and JTM Technologies with amendments to the building permit issuance date
and subordination to the construction loan as well as authorizing President
Fuller to execute all documentation necessary to effectuate the Agreements.
The WEDC Board voted 4—FOR and 0—AGAINST in favor of the motion.
ITEM NO. 6 — Consider and Act Upon Issues Surrounding an Economic Development
Agreement Between the WEDC and Sawtech, Inc.
Staff presented an Economic Development Agreement which formalizes a Letter of Intent between the
WEDC and Sawtech, Inc. Providing high-precision dicing and scribing services to the semi-conductor
industry, Sawtech will be employing approximately 12 employees at their Wylie location.
Sawtech is constructing a 7,500 square foot manufacturing facility located at 2805 Capital Street in
Regency business Park and is committed to increasing the valuation of the site by$1,050,000. With a
total package value of$74,415, the incentives will be funded in three equal installments over a three
year period. Installment One will be funded following receipt of a Certificate of Occupancy from the
City of Wylie for a 7,500 square foot facility with identifiable construction costs of $525,000.
Installment Two is funded no earlier that October 1, 2008 after receiving evidence supporting
increased real property values of$525,000 and a minimum personal property valuation of $500,000.
Installment Three is identical to Installment Two being funded no earlier than October 1, 2009. Based
upon $1,025,000 in new value, Sawtech will generate $24,695.12 annually to the City of Wylie and
Wylie ISD.
WEDC—Minutes
February 16, 2007
Page 4 of 6
Staff recommended that the WEDC Board of Directors approve an Economic Development
Agreement between Sawtech, Inc. and the WEDC.
MOTION: A motion was made by Mitch Herzog and seconded by Merrill Young to approve
the Economic Development Agreement between Sawtech, Inc. and the WEDC
further authorizing President Fuller to execute said Agreement. The WEDC
Board voted 4—FOR and 0—AGAINST in favor of the motion.
ITEM NO. 7 — Consider and Act Upon Issues Surrounding an Incentive Agreement between
Southern Fastening Systems, Inc. and the WEDC.
In review staff presented to the Board that the WEDC entered into an Economic Development
Incentive Agreement with Southern Fastening Systems on March 26, 2002. On November 15, 2002,
the WEDC funded a $90,000 grant (Payment #1 to Southern as per Section 1 a of the Agreement.
Furthermore, Section 1 a states that "beginning on the first anniversary of the payment of the initial
grant, WEDC agrees that additional cash grants, subject to the following conditions precedent, of
$50,000 each for years 2, 3, 4, and 5 will be paid to Southern by WEDC following annual
confirmation by the Collin County Appraisal District that a minimum of$7.25 million in appraised
value exists at the site, and that the District confirm in writing that all ad valorem taxes on the property
for the applicable year have been paid."
As evidenced by the cancelled check to Kenneth Maun, staff is comfortable that Southern has met its
obligations for the payment of prior year taxes. However, the 2007 Collin CAD Property Information
indicates that Southern will not meet its benchmarks for the fifth and final installment of$50,000. The
Collin County Central Appraisal District has valued real and personal property improvements at a total
of$5,825,411. With a benchmark of$7.25 million, Southern is in default of the Agreement which
requires staff to recommend denial of the fifth payment. Southern represented that the primary change
from the previous year is a $1.3 million reduction in inventory. This reduction in inventory is a result
of the cost of zinc increasing from 58¢/lb. to $2.88/lb. since June of 2006. Southern is attempting to
offset this increase by developing a relationship with a distribution plant in Monterrey, Mexico which
has a 2 week delivery time opposed to their China manufacturers which are 90 days.
While President Fuller acknowledged the obvious default, he urged Board members to consider the
intangibles Southern has provided over the past five years. Aside from consistent participation in
numerous civic organizations and charitable events, President Fuller reminded the Board that Southern
was instrumental in acquiring additional land for the Bayco project. Board member Herzog also
agreed that Southern is one of the finest companies in Wylie and that consideration should be made
outside the parameters of the original agreement. Mr. Herzog also commented that he would not be so
quick to consider reshaping the Incentive Agreement had Southern not been a positive contributor to
the community.
Staff suggested that the Board partially fund the final installment recommending a percentage
approach. For example, Southern has met 80.35% of their valuation obligation under the Incentive
Agreement. Therefore, $40,175 could hypothetically be funded.
WEDC—Minutes
February 16,2007
Page 5 of 6
MOTION: A motion was made by Mitch Herzog and seconded by Gary Bartow to pay
Southern Fastening Systems an incentive payment of$40,175. The WEDC Board
voted 4—FOR, and 0—AGAINST in favor of the motion.
ITEM NO. 8 — Consider and Act Upon Issues Surrounding Paving Improvements to Martinez
Lane.
Staff presented bids from Jackson Construction, Tri-Con Services, and Calhar Construction. Tri-Con
Services was the low bidder at $421,953. Staff also presented the Board with a Cash Flow Analysis
which supports the WEDC's ability to fund this project out of cash reserves.
Also presented is the draft of the Premier South Final Plat. The plat consists of three lots. Lot 1 is
2.009 acres and is earmarked for JTM Technologies. Lot 2 consists of 16.996 acres and represents all
remaining property west of the center line of the creek. Lot 3 consists of 5.959 acres east of the center
line of the creek and has been proposed to be donated to the City of Wylie as an Open Space and
Utility Easement. If accepted by the Parks Board and approved via the plat, the easement donation
will be in lieu of$25,000 in parkland dedication fees. Staff will be presenting this issue to the Parks
Board for final consideration on February 26th.
The Board believed that while remote, there may be some future use of Lot 3. Staff indicated that
should the Board want to retain ownership of Lot 3, the $25,000 parkland dedication fee would be due
and payable prior to the final plat being approved. The Board believed the potential for future use
outweighed the $25,000 fee and further commented that the $25,000 is going toward a public use
which in the end supports economic development
Staff recommended that the WEDC Board of Directors authorize the WEDC President to execute a
contract between the WEDC and Tri-Con Services for the reconstruction of Martinez Lane in the
amount of$425,953. Staff also recommended that the WEDC Board of Directors fund the Martinez
Lane paving improvement out of WEDC cash reserves.
MOTION: A motion was made by Gary Bartow and seconded by Mitch Herzog to authorize
WEDC President to enter into a contract on behalf of the WEDC with Tri-Con
Services in the amount of $425,953 for the construction of Martinez Lane, plat
Premier South into two lots opposed to three lots as presented, and fund the
improvements to Martinez out of WEDC cash reserves. The WEDC Board voted 4
—FOR and 0 -AGAINST in favor of the motion.
EXECUTIVE SESSION
The WEDC Board of Directors convened into Executive Session at 7:25 a.m.
u I. Convene into Executive Session to Consider and Act Upon Issues
Surrounding the Purchase of 5.0 Acres Located Near the Intersection of F.M.
544 and State Highway 78 as Authorized in Section 551.072 (Real Property)
WEDC—Minutes
February 16, 2007
Page 6 of 6
of the Local Government Code, Vernon's Texas Annotated (Open Meetings
Act).
II. Convene into Executive Session to Hold Deliberations Regarding Economic
Development Negotiations (offer of financial incentives to "Project 95K") as
Authorized in Section 551.087 (Economic Development Negotiations) of the
Local Government Code,Vernon's Texas Annotated (Open Meetings Act).
III. Consider and Act Upon Issues Surrounding the Purchase of 3.2 Acres
Located Near the Intersection of Hensley and Sanden Boulevard as
Authorized 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 8:15 a.m. No action was taken as a
result of discussions held in Executive Session.
Note: Board Member Merrill Young departed at 7:45 a.m.
Board Member Gary Bartow departed at 8:15 a.m.
ADJOURNMENT
Due to the lack of a Quorum, President Fuller adjourned the WEDC Board meeting at 8:15 a.m.
Y-(71/tuinik• , tcuez,
Marvin Fuller, President
ATTEST:
Samuel D.R. Satterwhite
Executive Director