12-21-2012 (WEDC) Minutes Minutes
Wylie Economic Development Corporation
Board of Directors Meeting
Friday, December 21, 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 6:30 a.m. Board Members present were:
Demond Dawkins, Todd Wintters, John Yeager, and Mitch Herzog.
WEDC staff present was Senior Assistant Gerry Harris.
Ex-officio members Mayor Eric Hogue and Mindy Manson were present.
CITIZEN PARTICIPATION
Lynn Grimes, 201 N. Ballard Ave, Ste 100, Wylie, Texas congratulated the WEDC on a very
successful 2012. President Marvin Fuller proceeded to Action Items.
ACTION ITEMS
ITEM NO. 1 — Consider and act upon approval of the November 16, 2012 Minutes of the
Wylie Economic Development Corporation (WEDC) Board of Directors Meeting.
MOTION: A motion was made by Mitch Herzog and seconded by John Yeager to
approve the November 16, 2012 Minutes of the Wylie Economic
Development Corporation. The WEDC Board voted 5 — FOR and 0 —
AGAINST in favor of the motion.
ITEM NO. 2 — Consider and act upon approval of the November 2012 WEDC Treasurer's
Report.
MOTION: A motion was made by John Yeager and seconded by Demond Dawkins to
approve the November 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 issues surrounding a Performance Agreement
between the WEDC and Gardner Regency,LLC.
Staff presented the Performance Agreement between the WEDC and Gardner Regency. Staff
reviewed that the WEDC is obligated to reimburse Gardner Regency, LLC for moving expenses
WEDC—Minutes
December 21, 2012
Page 2 of 5
in the amount of$254,357 payable in five equal and annual payment of $50,871.40. The first
installment was paid at the issuance of the Certificate of occupancy on 1-9-09 with the second,
third, and fourth payment issued in 2010, 2011, and 2012. The final payment was submitted for
the Board's approval.
As per the agreement, Savage must maintain a minimum of $4,051,443 in real and personal
property value and maintain at least 35 full-time employees. Savage was appraised at
$4,360,587 in 2012 and a quarterly tax report was provided verifying 44 employees.
The WEDC holds a note on the 3.87 acres sold to Gardner Regency in the amount of$421,443.
Should there be no Default of the Performance Agreement, the WEDC shall forgive all payments
associated with the Note over a seven year period in equal amounts beginning on the anniversary
date Savage received a certificate of occupancy. With no event of Default identified, Payment
#4 associated with the Note in the amount of$60,206.14 was recommended to be forgiven.
Staff recommended that the WEDC Board of Directors authorize payment #5 of$50,871.40 to
Gardner Regency, LLC for reimbursement of moving expenses. Staff further recommended that
the WEDC Board of Directors forgive Payment #4 associated with the Real Estate Lien Note in
the amount of$60,206.14.
MOTION: A motion was made by Demond Dawkins and seconded by Todd Wintters
to authorize staff to reimburse moving expenses in the amount of
$50,871.40 and to forgive Payment #4 associated with the Real Estate Lien
Note in the amount of$60,206.14. The WEDC Board voted 5 —FOR and 0
—AGAINST in favor of the motion.
ITEM NO. 4 — {Remove from Table} Consider and act upon WEDC Resolution 2012-
02(R) approving a program, the expenditure of funds, and a Loan Agreement between the
WEDC and The American National Bank of Texas in the amount of$1,400,000.
A motion was made by Mitch Herzog to remove consideration of Item No. 4 from the table.
Staff reminded the Board that they had tabled consideration of a Resolution approving a Loan
Agreement between the American National Bank of Texas and the WEDC in the amount of$1.4
mm. The item was tabled due to Council approval being delayed until 2013 to comply with State
law limiting bank qualified debt by municipalities to $10 mm in a calendar year. Within 2012,
$9.6 mm in bank qualified debt had been issued by the City of Wylie. Also, Council approval
and funding must take place within 60 days of WEDC approval. Staff anticipated taking this
item to Council on January 8, 2013 and executing all loan document by February 1, 2013.
Staff presented for Board review a Resolution approving a program of work, the expenditure of
funds, and a Loan Agreement between the WEDC and The American National Bank in the
amount of$1,400,000.
Staff recommended that the WEDC Board of Directors approve WEDC Resolution 2012-02(R).
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December 21, 2012
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MOTION: A motion was made by John Yeager and seconded by Todd Wintters to
approve WEDC Resolution 2012(R). The WEDC Board voted 5 —FOR and
0—AGAINST in favor of the motion.
ITEM NO 5 — Consider and act upon issues surrounding a Commercial Lease Agreement
between the WEDC and Ascend Custom Extrusions,L.L.C.
In regards to the debt incurred to construct the Ascend facility, staff reported that on October 17,
2012 the WEDC executed a Modification Agreement with American National Bank (ANB)
which adjusted the interest rate from 5.75% to 4.55% with no changes to the term. Resulting
changes to the debt service reduced the monthly payment from $40,681.80 to $36,828.67 with an
annual savings of $46,237.56. Within agenda items evaluating the loan modifications it was
discussed that the savings would be passed along to Ascend, however no formal action was
taken.
The Base Rent identified in the Lease was originally estimated at $40,856. During negotiations
in 2010 the Base Rent was understood and further documented to equal the debt service on
permanent financing. Upon reducing the permanent loan with Prepaid Rent remaining from
estimated constructions expenses assigned to Ascend/Highlander, the monthly debt service was
established at $40,681.80. A First Modification of Commercial Lease Agreement was also
executed on August 1, 2011 evidencing said change.
To formalize discussion held by the Board and remain consistent with the intent of the original
Lease Agreement, staff is requesting that the Board approve a monthly Base Rent of$36,828.67
which is equal to the monthly debt service on the modified note between the WEDC and ANB.
The draft of the Second Modification reflects a November 1, 2012 effective date. In error, staff
notified Ascend of an amended Base Rent without Board approval.
Staff recommended that the WEDC Board of Directors approve a Second Modification of
Commercial Lease Agreement between the WEDC and Ascend Custom Extrusion, LLC which
reduces the monthly Base Rent from$40,681.80 to $36,828.67.
MOTION: A motion was made by Mitch Herzog and seconded by John Yeager to
approve a Second Modification of Commercial Lease Agreement between
WEDC and Ascend Custom Extrusion, LLC to reduce the monthly Base
Rent from $40,681.80 to $36,828.67 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, Rental One, Collin county 50/3 Tax Abatement
Program, and regional housing starts.
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December 21, 2012
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Woodbridge Crossing
The Sales Tax Reimbursement Report was presented which identified all sales taxes generated
through September 2012 within Woodbridge Crossing for the City General, the WEDC, and the
4B. Staff reminded the Board that 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. Woodbridge Crossing is eligible for a maximum
$6 million in sales tax reimbursement through September 2021. $1,435,404 has been reimbursed
to date with net receipts of$816,210 after reimbursements.
Ascend Commercial Lease and Performance Agreement
The Ascend Custom Extrusion Critical Dates Analysis and Performance Agreement Monitoring
Procedures were presented. Payment #2 of the Economic Incentives has been funded with
Ascend meeting all Performance Obligations within the Agreement. Ascend is currently
operating 3 shifts in extrusion and packing, 2 shifts in shipping, and 1 ten hour shift in the paint
line. There are currently 163 Ascend personnel and 25 temps.
Rental One
Board members Wintters and Herzog toured the remodeled facility located at 1211 South State
Highway 78. Rental One committed to make the following improvements: upgrade exterior to
100% masonry, interior fire suppression system as required by the Wylie Fire Department,
upgrading 42,000 square feet of gravel storage area to concrete, remodel interior offices/
showroom, and construct an outdoor wash bay for equipment totaling $475,000. The WEDC has
committed to fund $16,250 upon inspection of improvements, issuance of a certificate of
occupancy, and confirmation of expenses totaling $475,000. Rental One representatives have
indicated that the required documentation will be delivered within the next 30 days.
Collin County 50/3 Tax Abatement Program
In researching a potential 5 year County tax abatement for a local company, staff became aware
of an abatement program offered by the County which provides a 3-year, 50% tax abatement to
new businesses to Collin County that have a value of at least $100,000 and create at least 5 jobs.
Unlike a typical tax abatement under which the municipality must create a Reinvestment
Zone and enter into an involved performance agreement, the 50/3 Program only requires
completion of a 3 page application with minimal reporting requirements.
After learning of the program, staff contacted Barco Pumps, PM Realty, B&B Theatre, and Clark
Street to make them aware of the opportunity. Barco has already submitted their application
with the other projects submitting the same in 2013.
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December 21, 2012
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Regional Housing Starts
Fourteen homes were permitted in Wylie for November 2012. Sachse, Lavon, and Murphy
permitted a combined twenty-nine homes over the same period.
No action was requested by staff for this item.
EXECUTIVE SESSION
The WEDC Board recessed into Closed Session at 6:50 a.m. in compliance with Section 551.001
et.seq. Texas Government Code to wit:
Recess into Closed Session 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).
• Request for Proposal -Project Detroit.
• Incentive Proposal - Project ATR.
• Request for assistance—The Shops of Northern Wylie
RECONVENE INTO OPEN MEETING
The WEDC Board of Directors reconvened into open session at 7:05 a.m. and took no action.
ADJOURNMENT
With no further business, President Fuller adjourned the WEDC Board meeting at 7:07 a.m.
vr
Marvin Fuller,President
ATTEST:
Samuel Satterwhite,Director