05-17-2013 (WEDC) Minutes Minutes
Wylie Economic Development Corporation
Board of Directors Meeting
Friday,May 17, 2013 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:
John Yeager, Todd Wintters,Demond Dawkins, and Mitch Herzog.
Ex-officio members Mayor Eric Hogue and Mindy Manson were present.
WEDC staff present was Executive Director Sam Satterwhite and Senior Assistant Gerry Harris.
CITIZEN PARTICIPATION
There being no citizen participation, President Marvin Fuller proceeded to Action Items.
ACTION ITEMS
ITEM NO. 1 — Consider and act upon approval of the April 19, 2013 Minutes of the Wylie
Economic Development Corporation (WEDC) Board of Directors Meeting.
MOTION: A motion was made by Mitch Herzog and seconded by Todd Wintters to
approve the April 19, 2013 Minutes of the Wylie Economic Development
Corporation. The WEDC Board voted 4—FOR and 0—AGAINST in favor
of the motion. John Yeager abstained from voting due to his absence from
the April 19, 2013 meeting.
ITEM NO. 2 — Consider and act upon approval of the April 2013 WEDC Treasurer's
Report.
MOTION: A motion was made by Todd Wintters and seconded by Demond Dawkins
to approve the April 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 the WEDC FY 2012 — 2013
Budget Transfer.
Staff reviewed that at the April 19, 2013 Board Meeting the Board directed staff to relocate
WEDC offices to the rear of the Lawyers Title building and secured an additional office for a
conference room. While an existing conference table will be utilized, the WEDC will be
purchasing six additional conference room chairs. Further, two lobby/guest chairs are required
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May 17, 2013
Page 2 of 6
to replace Chamber of Commerce furniture removed with their relocation. An additional $1,000
will be added to the current budget of$2,500 for Furniture& Fixtures.
Additional Rental Expense will be required due to the acquisition of an additional office space as
well. The current rent of$1,500 will increase to $1,850 effective June 1, 2013. An additional
$1,400 will be added to the current budget of$21,600 for Rental Expense.
Staff recommended that the WEDC board of Directors approve Budget Transfer Request EDC5-
9-13 in the amount of$2,400.
MOTION: A motion was made by Mitch Herzog and seconded by John Yeager to
approve Budget Transfer Request EDC5-9-13 in the amount of$2,400. The
WEDC Board voted 5 —FOR and 0—AGAINST in favor of the motion.
ITEM NO. 4 — Consider and act upon a Performance Agreement between the WEDC and
Sanden International, (U.S.A.),Inc.
Staff presented a draft version of the Performance Agreement between the WEDC and Sanden
International outlining the parameters by which Sanden could earn incentives up to a maximum
of$500,000. Sanden has reviewed the document and is prepared to execute the document with
no changes.
Incentive No. 1 provides $250,000 to Sanden should the new piston line be operational by 12-31-
13 and have hard costs associated with acquisition and installation of at least $24 mm. Upon
verification of compliance with the above terms, the WEDC will fund $100,000 as payment #1
and $37,500 thereafter for four additional years.
Incentive No. 2 will allow Sanden to earn up to $50,000 per year over a five year period
(maximum $250,000) and be structured as reimbursements for property taxes paid to the City of
Wylie. Similar to a tax abatement, the WEDC will reimburse Sanden 50% of property taxes paid
on all value in excess of$56,241,300 (existing 2012 value). For example only, should Sanden
have combined future value of real and personal Property of $66,241,300, the WEDC
reimbursement will be based upon $10 mm in increased value multiplied by the current tax rate
of$0.8889 per$100 value and dividing by 2 (50%)totaling a$44,445 reimbursement.
Should Sanden default under the terms of this Agreement, the WEDC will have no obligation to
fund any future incentive payment with a default identified as:
1. Minimum ad valorem value of$56,241,300 maintained during the life of the Agreement;
2. False statements made;
3. Sanden becomes insolvent;
4. Sanden fails to pay municipal payments of any kind;
5. Sanden files suit against the WEDC/City of Wylie; and
6. Piston line must remain operational (producing 'x' number of pistons/units per month).
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May 17, 2013
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Prior to final execution of the Agreement, Sanden must provide the WEDC with an itemized list
of real and personal improvements detailing specific equipment/improvements along with cost
estimates. Staff had requested this document from Sanden. Staff is also awaiting the number of
pistons to be manufactured monthly.
Staff recommended that the WEDC Board of Directors approve a Performance Agreement
between the WEDC and Sanden International (U.S.A.), Inc. subject to receipt of additional
documentation required.
President Fuller indicated that while the Board would like to move forward and approve the
document subject to receipt of further information, it would be best if the Board was able to
review cost projections and the commitment for number of pistons generated annually. All
Board members were in agreement.
No action was taken.
ITEM NO. 5 — Consider and act upon issues surrounding a Commercial Lease Agreement
between the WEDC and Ascend Custom Extrusions,LLC.
Staff reported being approached by representatives of Highlander and Ascend informing the
WEDC that Ascend will be adding 21,000 square feet to the existing 96,000 square foot WEDC-
owned facility and purchasing a new extrusion press. Parking improvements will also be made
to the northeast corner of the property directly behind Holland Hitch. Ascend has requested that
it be allowed to exercise the Purchase Option identified in the Commercial Lease Agreement
between the WEDC and Ascend.
Staff pointed out that Ascend is only allowed to exercise its Purchase Option at any time after the
beginning of the third year, but prior to the end of the tenth year of the Lease. The
commencement date of the Lease is July 1, 2011. As Ascend/Highlander does not want to
expand without having ownership of the real property, staff recommended that the Board
approve a request from Ascend to exercise the Purchase Option prior to time constraints
identified in the Lease.
Ascend anticipated securing a building permit from the City of Wylie on or about August 15,
2103. Ascend would like to begin excavation and soil preparation prior to an approved permit
but staff recommended denial of that request. Ascend will be financing the real property
purchase from the WEDC and cost of the expansion, therefore no work should be performed
prior to closing due to potential liens and title complications.
Staff noted that the WEDC is required to provide at its sole cost the title Policy insuring the
Purchase Option Property for the full Purchase which is approximately $22,000.
The Purchase Price identified within the Commercial Lease Agreement is equal to the
outstanding loan balance on the indebtedness the WEDC undertook to build the facility which is
$4,492,245 as of April 30, 2013.
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May 17, 2013
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Staff recommended that the Board of Directors approve a request from Ascend to exercise its
Purchase Option and authorize staff to prepare all documents necessary to effectuate the sale of
real property and associated improvements located at 1405 Martinez Lane.
MOTION: A motion was made by Mitch Herzog and seconded by Todd Wintters to
authorize staff to prepare all documents necessary to effectuate the sale of
real property and associated improvements located at 1405 Martinez Lane.
The WEDC Board voted 5—FOR and 0—AGAINST in favor of the motion.
ITEM NO. 6 — Staff Report: review issues surrounding an Amended and Restated
Performance Agreement between the WEDC and Woodbridge Crossing, Performance
Agreement between the WEDC and ACE, Performance Agreement between the WEDC and
B&B Theatres Operating Company, future meeting date and time of the WEDC Board of
Directors, ICSC 2013 Annual Conference, WEDC 2013 — 2014 Budget Process, and regional
housing starts.
Woodbridge Crossing
The Sales Tax Reimbursement Report was presented which identified all sales taxes received
through February 2013 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 October 2013 with the reimbursement percentage reduced
to 65% thereafter. Woodbridge Crossing is eligible for a maximum $6 million in sales tax
reimbursement through September 2021.
$1,708,034.80 has been reimbursed to date with net receipts of $971,235.47 after
reimbursements. As well, $1.4 mm has been paid in ad valorem taxes to the City of Wylie
(excluding the WISD).
Ascend Commercial Lease and Performance Agreement
The Ascend Custom Extrusion Critical Dates Analysis and Performance Agreement Monitoring
Procedures was presented. Payment #2 of 5 for the Economic Incentives has been funded with
Ascend meeting all Performance Obligations within Sections A and B of the Agreement.
B &B Theatres Operating Company Performance Agreement
With all performance requirements met, the WEDC has funded Economic Incentive No. 1
($100,000) associated with the Performance Agreement between the WEDC and B&B. The
Comptroller of Public Accounts has been provided with the necessary documentation authorizing
sales taxes generated at B&B to be released to the WEDC so that annual sales tax
reimbursements can be made equal to V2 cent from the WEDC and %2 cent from the City of
Wylie. Along with annual payments of$25,000 from the WEDC, the City and WEDC will issue
the sales tax reimbursements to B&B following certification of assessed valuation on or about
September 1, 2014. A detailed description of the incentive package was presented for the
Board's review.
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May 17, 2013
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Future Meeting date and time of the WEDC Board of Directors
Staff had briefly discussed options for changing the dates and times of the Regular Meeting of
the WEDC Board of Directors to possibly twice a month for a `lunch' meeting. After reviewing
the WEDC By-laws, Section 4.07 Meetings; Notice; Conduct states that "the President of the
Board shall set regular meeting dates and times at the beginning of his/her term."
The City Council will be appointing/reappointing Board Members to the WEDC on June 11,
2013. The Board will be electing officers at the June 21, 2013 meeting and in compliance with
the By-laws the President along with the Members can consider changing the Regular Meeting
date and time. Board members indicated that a `morning' meeting was preferred and that further
discussion would take place at the June 21st Board meeting.
A copy of the WEDC By-Laws was provided for the Board's review.
ICSC 2013 Annual Conference
Staff along with Mayor Hogue and Board Members Fuller and Herzog will be attending the 2013
ICSC Real Estate Convention May 19th—21st. It was reported that meetings would be held with
Clark Street and Direct Development for updates on real estate activity within their respective
centers along with individual retailers in hopes of generating additional interest in the Wylie
market. Staff also has scheduled meetings with Falcon Realty Advisors, Edge Realty, and The
Retail Connection to discuss specific restaurant concepts. Staff was also eager to attend a
presentation by the Institute of Real Estate Management discussing the impact of the entitlement
process and government incentives on retailers' evaluation and approval process.
WEDC 2013—2014 Budget Process
Staff will present the first draft of the FY 2013 — 2014 WEDC Budget at the June 21st Regular
Board Meeting. With possibly one Special Meeting required, staff will be seeking budget
approval in July or August.
Regional Housing Starts
Thirty-eight homes were permitted in Wylie for April 2013. Sachse, Lavon and Murphy
permitted a combined sixty homes over the same period.
Staff was encouraged about the activity in Lavon and hopes for sustained growth which will
greatly impact retail activity in Wylie. The Board will note the pending developments in Wylie
that staff provided at the bottom of the New Housing Report.
No action is requested by staff for this item.
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May 17, 2013
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EXECUTIVE SESSION
The WEDC Board recessed into Closed Session at 7:16 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).
• Project 2013-3
• Project 2013-5a
• Project 2013-5b
Section 551.072 (Real Estate) of the Local Government Code, Vernon's Texas Code Annotated
(Open Meetings Act).
• F.M. 544 and Regency
• State Highway 78 and Ballard
Board Member Demond Dawkins left the meeting at 8:13 a.m.
RECONVENE INTO OPEN MEETING
The WEDC Board of Directors reconvened into open session at 8:25 a.m. and took no action.
ADJOURNMENT
With no further business, President Fuller adjourned the WEDC Board meeting at 8:25 a.m.
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Marvin Fuller,President
ATTEST:
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Samuel Satterwhite,Director