01-17-2014 (WEDC) Minutes Minutes
Wylie Economic Development Corporation
Board of Directors Meeting
Friday, January 17, 2014 6:30 A.M.
WEDC Offices—Conference Room
250 South Highway 78 —Wylie, Texas
CALL TOO ' PER
Announce the presence of a Quorum
President Marvin Fuller called the meeting to order 6:32 a.m. Board Members present were John
Yeager, Demond Dawkins, Todd Winners, and Mitch Herzog.
Ex-officio members Eric Hogue and Mindy Manson were present. Also present was Police
Chief John Duscio.
WEDC staff present was Executive Director Sam Satterwhite and Senior Assistant Gerry Harris.
CITIZEN PARTICIPATION
Lynn Grimes asked for an update on the issue of paving a lot belonging to the First Baptist
Church for the benefit of parking for the Wylie Downtown Merchants. Staff reported that there
has been no progress on the issue. Mr. Fuller proceeded to Action Items.
ACTION ITEMS
ITEM NO. 1 — Consider and act upon approval of the December 20, 2013 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 December 20, 2013 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 December WEDC Treasurer's
Report.
MOTION: A motion was made by John Yeager and seconded by Demond Dawkins to
approve the December 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 Exco Tooling Solutions, Inc.
Staff reported that Exco had provided comments to the first drafts of the Real Estate Sales
Contract and Performance Agreement after packets had been distributed to Board Members.
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January 17, 2014
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Staff indicated that a majority of the comments were general in nature and had little impact on
the intent of the Agreement. Exco had however asked that the feasibility period within the
Contract be extended to 180 days, the WEDC pay for an additional $2.5 mm title policy, and
remove the square footage requirements to qualify for Phase II incentives. Staff indicated that
the feasibility period could be extended but did not recommend approval of the other two
requests. Board Member Wintters was in agreement. Exco also requested that should the
valuation of Phase I fall below $7 mm they be allowed to collect a proportionate incentive.
Board member Dawkins also agreed with staff recommendations and suggested proportionately
funding the Phase I incentives so long as the valuation did not fall below$5 mm.
Staff had no formal recommendation and indicated that the Agreements would be brought back
before the Board following final negotiations of the presented points.
ITEM NO. 4—Consider and act upon issues surrounding the WEDC 2013 Annual Report.
As per the WEDC By-laws, the WEDC must present an annual report to the Wylie City Council
no later than January 31st of each year. The report must include,but is not limited to, a review of
all expenditures made by the Board, a review of accomplishments, and a review of other than
direct economic development. Staff presented the 2013 Annual Report to the Board stating his
belief that the Report met the intent of the requirements within the By-laws.
The report, in summary, follows:
The Wylie Economic Development Corporation (WEDC) continues to make financial reporting
and accountability a priority.
For the thirteenth consecutive fiscal year, WEDC sales tax receipts have increased over prior
year figures. Property valuation within Woodbridge Crossing rose by 13% in 2013 to $59.5
million.
The WEDC expended $824,530 on grants and engineering services directly attributed to
incentive packages.
The WEDC currently owns 34 acres of property with a cost basis of$4,281,503 (including the
23.8 acre Ascend tract). This accumulation of properties on Commerce Drive, Industrial Court,
Cooper Drive, and F.M 544 is a public effort to transition the above targeted areas from
industrial to a higher valued commercial/retail use.
The WEDC continues to support the Downtown Historic District through an advertising
program through which the WEDC matches the Merchants Association advertising efforts up to
a maximum $5,000 annually.
In 2013 construction was completed on the 175,000 square foot Kroger Marketplace anchored
Woodbridge Centre. Kroger Marketplace occupies 114,000 with lease shop space of 21,000
square feet. Also completed in 2013 was the 56,000 square foot B&B Theatre with a project
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January 17, 2014
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value of$12 million. With funding secured in 2012, construction began in 2013 for the extension
of Woodbridge Parkway.
Savage Precision is in the sixth year of its seven year Performance Agreement with the WEDC.
Savage continues to meet all performance requirements surrounding valuation and employment.
Ascend Custom Extrusion is currently in compliance with all performance measures within their
initial Performance Agreement with the WEDC. In 2013 the WEDC completed negotiations on 5
industrial projects totaling$26 million in investment and 45,000 square feet of new facilities.
While the WEDC will continue to seek out quality sit-down restaurants and encourage infill
within existing business parks, the WEDC must provide greater opportunities for industrial
development by acquiring new property suited for light industrial zoning and to encourage light
industrial/distribution uses within the 250 acre, Kansas City Southern (KCS) owned property on
State Highway 78. With the potential for up to 2.5 million square feet and hundreds of millions of
dollars in potential value at build-out, the WEDC needs to stay focused on the KCS site for the
next several years.
Staff recommended that the WEDC Board of Directors approve the WEDC Annual Report as
presented and also recommended that it be presented to the Wylie City Council on January 28,
2014.
MOTION: A motion was made by Mitch Herzog and seconded by John Yeager to
approve the WEDC 2013 Annual Report and recommend staff present the
same to the Wylie City Council on January 28th. The WEDC Board voted 5
—FOR and 0—AGAINST in favor of the motion.
DISCUSSION ITEMS
ITEM NO. 5 — 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, Kansas City Southern Railway Company, and regional
housing starts.
Woodbridge Crossing
The Sales Tax Reimbursement Report was presented which identified all sales taxes received
through September 2013 within Woodbridge Crossing for the City General Fund, the WEDC,
and the 4B Parks & Recreation Fund. As a reminder, the City and WEDC will be reimbursing
65% of all sales tax generated within Woodbridge Crossing until which time $6 mm is
reimbursed or September 2021, whichever occurs first.
$2,027,803.65 has been reimbursed to date with net receipts of $1,153,064.82 after
reimbursements. As well, $1.93 mm has been paid in ad valorem taxes to the City of Wylie
(excluding the WISD).
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January 17, 2014
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Staff reported to the Board that approximately seven businesses have not been tracked properly
within the Area Sales Tax Report provided by the State of Texas Comptroller of Public Accounts
for Woodbridge Crossing. In April 2013, Direct Development requested that several businesses
within Woodbridge Crossing be added to the Area Report so that the WEDC could properly
track the sales taxes being generated and subsequently reimbursed. The Comptroller has
acknowledged that they received the request but failed to add the businesses to the report which
has resulted in sales tax receipts being underreported. While the Comptroller has indicated in the
past that they would not retroactively add businesses to the tracking report because the developer
(Direct Development) fails to notify them of a new business, the Comptroller is 'going back' in
this case since their staff failed to process the request.
The end result for the WEDC and City of Wylie is that even though taxes were collected, the
liability goes back to a previous budget year. The WEDC should receive the updated report
within the next 30 days and be able to determine the budget impact which may well require a
budget amendment. Staff will work with the City Finance Department and bring the issue back
as an Agenda item upon receipt of all pertinent data.
Ascend Commercial Lease and Performance Agreement
The Ascend Custom Extrusion Critical Dates Analysis and Performance Agreement Monitoring
Procedures were presented. Payment #3 of 5 for the Economic Incentives has been funded with
Ascend meeting all Performance Obligations within Sections A and B of the attachment.
B &B Theatres Operating Company Performance Agreement
As per the attached B&B Theatre Performance Obligations, the WEDC will fund Incentive No. 2
of$25,000, plus sales tax reimbursements, following the certification by the Central Appraisal
District of a minimum appraised value of$10 mm on or about September 1, 2014.
WEDC Property Located at 605 Commerce Drive
Staff reported finalizing the remodeling bids to bring the vacant 10,000 square feet up to code
and planned to begin on or about February 1st.
The WEDC is under a month-to-month lease with Wheels Unlimited and Tri-Mark Catastrophe
Services for $1,400 and $750 per month respectively. The monthly lease rates were the amount
being charged prior to WEDC ownership. Both entities have been informed that the WEDC will
be evaluating the market rate for this space and that they will be given 60 days' notice should it
be determined that the lease rates will increase.
Wylie Ice Cream Holdings
Staff reported that the City of Wylie auditor inquired as to why the WEDC funded the Wylie Ice
Cream Holdings loan when the Performance Agreement required a certificate of occupancy (CO)
be issued by September 1, 2012 and the CO was not issued until October 25, 2012. Staff
summarized that the building permit was supposed to be issued on or about 4-1-12 as Wylie Ice
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January 17, 2014
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Cream was having difficulties with the SBA loan process and providing proper documentation to
the Texas Mezzanine Fund which was also participating in financing the project. The WEDC
was aware of the delays and was in direct contact with all three entities while monitoring the
construction progress. With the building approximately 75% complete on September 1 and
WEDC staff aware of the delays, there was no need or desire to declare Wylie Ice Cream
Holdings in Default.
While staff does not anticipate that this issue will be material in nature, it is best to be proactive
and better document WEDC activities so that there is no question by any individual or entity as
to whether WEDC actions are appropriate.
WEDC Commercial Leases on Industrial Court
Staff updated the Board on lease activity for WEDC facilities on Industrial Court.
State of Texas Economic Development Corporation Annual Report
Each year by February 1st, the WEDC is required to submit a report to the Texas Comptroller of
Public Accounts detailing revenue and expenses of the WEDC for the prior calendar year. The
WEDC submitted this report on January 15, 2014.
Savage Precision Fabrication
Staff reported that Lockheed Martin and Savage Precision Fabrication would host an F-35 Press
Event in Wylie on January 21st from 9:00 a.m. — 11:00 a.m. at the Savage Plant in Wylie.
Attending the event will be Mayor Hogue and members of the Wylie City Council, U. S.
Representative Pete Sessions, and State Representative Jodie Laubenberg. All Board members
were invited and encouraged to RSVP to Gerry Harris.
Regional Housing Starts
Twenty-three homes were permitted in Wylie for December 2013 which brought the 2013 total
to 236. Sachse, Lavon and Murphy permitted a combined thirty homes over the same period or
366 for 2013.
The Board will note the pending developments in Wylie that staff has provided at the bottom of
the attachment.
No action was requested by staff for this item.
EXECUTIVE SESSION
The WEDC Board recessed into Closed Session at 7:21 am. in compliance with Section 551.001
et.seq. Texas Government Code to wit:
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January 17, 2014
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Section 551.087 (Economic Development) of the Local Government Code, Vernon's Texas
Code Annotated(Open Meetings Act).
• Project 2013-5c
• Project 2013-9a
Section 551.072 (Real Estate) of the Local Government Code, Vernon's Texas Code Annotated
(Open Meetings Act). Consider the acquisition of property located near the intersection of:
• Ballard& Alanis
• Stone &Birmingham
• State Highway 78 & Ballard
• Cooper and State Highway 78
RECONVENE INTO OPEN MEETING
The WEDC Board of Directors reconvened into open session at 7:51 a.m. and took no action.
ADJOU MENT
With no further business, President Fuller adjourned the WEDC Board meeting at 7:51 a.m.
Marvin Fuller, President
ATTEST:
Samuel Satterwhite,Director