06-26-2007 (WEDC) Minutes Minutes
Wylie Economic Development Corporation
Board of Directors Meeting
Tuesday, June 26, 2007—6:00 A.M.
Inwood National Bank—Conference Room
200 South Highway 78 —Wylie, Texas
CALL TO ORDER
Announce the presence of a Quorum.
President Fuller called the meeting to order at 6:02 a.m. Board Members present were:
Mitch Herzog, John Yeager, Merrill Young, and Chris Seely arriving at 6:08 a.m.
Staff present was Executive Director Sam Satterwhite and Administrative Assistant Gerry
Harris.
Ex-Officio Member, City Manager Mindy Manson was present.
Randy Helmberger of Helmberger Associates arrived at 7:55.
CITIZEN PARTICIPATION
There being no citizen participation, President Fuller proceeded to Executive Session.
EXECUTIVE SESSION
The WEDC Board of Directors convened into Executive Session at 6:05 a.m.
I. Consider and Act Upon Issues Surrounding the Purchase of Property Located Near the
Intersection of Jackson and Marble as Authorized in Section 551.072 (Real Property) of
the Local Government Code, Vernon's Texas Code Annotated(Open Meetings Act).
II. Consider and Act Upon Issues Surrounding the Purchase of Property Located Near the
Intersection of Industrial Court and Birmingham Street as Authorized in Section
551.072 (Real Property) of the Local Government Code, Vernon's Texas Code
Annotated (Open Meetings Act).
III. Consider and Act Upon Issues Surrounding the Purchase of Property Located Near the
Intersection of Cooper Drive and F.M. 544 as Authorized in Section 551.072 (Real
Property) of the Local Government Code, Vernon's Texas Code Annotated (Open
Meetings Act).
WEDC—Minutes
June 26, 2007
Page 2 of 8
IV. Consider and Act Upon Issues Surrounding the Development of Sites within Premier
Plaza as Authorized in Section 551.087 (Economic Development Negotiations) of the
Local Government Code, Vernon's Texas Annotated (Open Meetings Act).
V. Presentation of Discussions Held with Direct Development, Target, Shafer Properties,
and Starbucks at the International Conference of Shopping Centers (ICSC) Held in Las
Vegas, Nevada May 19 — 23, 2007 as Authorized in Section 551.087 (Economic
Development Negotiations) of the Local Government Code, Vernon's Texas Annotated
(Open Meetings Act).
VI. Consider and Act Upon Issues Surrounding Negotiations with Shafer Properties as
Authorized in Section 551.087 (Economic Development Negotiations) of the Local
Government Code,Vernon's Texas Annotated(Open Meetings Act).
VII. Consider and Act Upon Issues Surrounding Personnel Matters (Evaluation of the
WEDC Executive Director) as Authorized in Section 551.074 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 7:55 a.m.
Addressing Executive Session Item No. IV, staff reviewed discussions held with Shafer
Properties and Starbucks at the ICSC Conference in Las Vegas. At the time, it was staff's
impression that the two parties were at an impasse on pricing. At ICSC, Mr. Yeager, Mr.
Herzog, and Mayor Monday supported staff presenting the option to Shafer for final
assistance in an effort to facilitate execution of the lease.
Staff presented a Letter Agreement which was designed to assist Shafer Property in the
attraction of a Starbucks Corporation concept to the vacant structure located within Shafer
Plaza. Per the Agreement, the WEDC is committing to fund $9,386.75 in fees should Shafer
(a)provide documentation evidencing a ten (10) year commercial lease between Shafer Plaza
XXXIX, Ltd. and Starbucks Corporation, (b) ensure that Starbucks receives a certificate of
occupancy (CO) from the City of Wylie prior to October 26, 2007, and (c) reimburse the
WEDC should Starbucks vacate the facility anytime prior to thirty-six (36) months following
the issuance of the CO.
Mr. Herzog indicated that the WEDC should do everything possible to facilitate the
occupancy of the empty building in Shafer Plaza. He continued in stating that a new building
being vacant for 18 months, no matter the circumstances, projects a negative image on the
Wylie economy.
WEDC—Minutes
June 26, 2007
Page 3 of 8
MOTION: A motion was made by Mitch Herzog and seconded by John Yeager
to approve a Letter Agreement between the WEDC and Shafer
Properties in the amount of$9,386.75. The WEDC Board voted 5 —
FOR and 0—AGAINST in favor of the motion.
ACTION ITEMS
ITEM NO. 1 — Consider and Act Upon Approval of the May 16, 2007 Minutes of the
WEDC Board of Directors Meeting.
MOTION: A motion was made by Merrill Young and seconded by John Yeager
to approve the May 16, 2007 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 Issues Surrounding Approval of the May 2007
WEDC Treasurer's Report.
MOTION: A motion was made by Merrill Young and seconded by John Yeager
to approve the May 2007 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 Paving Improvements to
Martinez Lane.
Staff presented the Board with Payment Request No. 3 which represents completion of the
project less $25,129.85 in retainage. Staff, with the assistance of Randy Helmberger of
Helmberger Associates, presented that there was an increase in quantities adjacent to the
Holland Hitch docking area due to field changes. The field changes addressed proper
drainage which resulted in a $31,495 increase in the contract amount. Staff was part of this
decision in the field and approved the changes based upon input from Helmberger Associates
and the City of Wylie Engineering Department.
Staff also updated the Board on utility relocation issues. Staff indicated that the original
route for relocating the overhead utilities must be moved further east to avoid a sewer line.
With the final project costs to be presented at the July Board Meeting, staff reminded the
Board that $59,956 has already been reserved to relocate the lines.
MOTION: A motion was made by Mitch Herzog and seconded by Chris Seely
to ratify Payment Request #3 for Tri-Con Services in the amount of
$188,707.84. The WEDC Board voted 5 — FOR and 0 — AGAINST
in favor of the motion.
WEDC—Minutes
June 26, 2007
Page 4 of 8
ITEM NO. 4 — Consider and Act Upon Issues Surrounding a Performance Agreement
Between the WEDC and BBV Texas Development,LLC.
Staff presented a Performance Agreement between the WEDC and BBV Texas
Development, LLC (Garnet Hill/Prusak). Per the proposed Agreement, the WEDC will be
providing $96,000 over the next three years as a reimbursement of development costs
associated with a 60,000 square foot skilled nursing home facility. Required within the
Agreement, Garnet Hill must maintain a minimum taxable value of at least $7,000,000 and
create at least eighty(80) full and part-time employment opportunities to qualify for a portion
of the reimbursement.
The first payment of$32,000 will be made upon issuance of a certificate of occupancy (CO)
by the City of Wylie which must be issued no later than August 1, 2008. A preceding
requirement will be the issuance of a building permit no later than August 1, 2007.
Payments two and three of $32,000 each will be made twelve and twenty-four months
respectively from the CO issuance date. BBV is required to provide documentation
supporting an appraised real property valuation of no less than $7,000,000, the prior year
property taxes being paid, and minimum job creation identified above. Staff recommended
approval.
The Board was supportive of the project and was pleased with the quality facility being
proposed. Board member Young commented that while not a typical project, WEDC funds
used to attract this project are well spent in providing citizens with well rounded services
other than those provided in the ever expanding retail and commercial development.
MOTION: A motion was made by Merrill Young and seconded by John Yeager
to approve the Performance Agreement between the WEDC and
BBV Texas Development, LLC. The WEDC Board voted 5 — FOR
and 0—AGAINST in favor of the motion.
ITEM NO. 5 — Consider and Act Upon Issues Surrounding the Purchase of±3.2 Acres
From Global Innovation, Inc.
Staff informed the Board that the Wylie City Council will be considering a note between the
WEDC and City of Wylie so that the WEDC may purchase a 3.206 acre site within Premier
Business Park from Global Innovation for $155,000. Following approval from Council on
June 26, 2007, the WEDC is scheduled to close on June 27`h.
Prior to closing, Global must secure partial releases from Brad Jacoby and Amegy Bank as
listed in Schedule C, 5 (a) and 5 (b). As well, the WEDC must execute a release of the
Vendor's Lien identified in Schedule C, 5 (c) in which the WEDC secured the Performance
Agreement between the WEDC and Brad Jacoby for the construction of the Best Circuit
Boards project. The remaining principal remaining on the $589,062 lien is $147,648 which
WEDC—Minutes
June 26, 2007
Page 5 of 8
was negotiated to be released in the Real Estate Sales Contract. Also negotiated within the
Real Estate Sales contract was the WEDC funding of all closing costs.
Staff recommended final approval of the purchase of 3.2 acres from Global Innovation.
President Fuller indicated that following closing, staff could now begin discussing the
utilization of the site with Pella Corporation.
MOTION: A motion was made by Mitch Herzog and seconded by Merrill
Young to approve the expenditure of$155,000 plus closing costs to
purchase 3.2 acres from Global Innovation further authorizing
President Fuller to execute all documentation necessary to effectuate
the same. The WEDC Board voted 5 — FOR and 0 —AGAINST in
favor of the motion.
ITEM NO. 6— Consider and Act Upon Issues Surrounding a Promissory Note Between
the WEDC and the City of Wylie.
Staff presented a Promissory Note between the WEDC and City of Wylie in the amount of
$155,000 to purchase 3.2 acres from Global Innovation. The terms of the note are 24 months
at 5.20% with monthly payments of$6,813.96. The Wylie City Council was presented with
this concept in April and will be considering the same issue at their Regular Meeting on June
26`h.
After reviewing the default language in the note which states that "if Maker (WEDC) defaults
in the payment of the note or in the performance of any obligation in any instrument securing
or collateral to it, and default continues after Payee gives Maker notice of the default and the
time which it must be cured, the Payee (City of Wylie) has the right of intercept on
the sale taxes remitted by the state to the WEDC. The intercept will be accomplished by an
internal transfer from the WEDC sales tax revenue account to the General Fund of the
Payee, " Mr. Fuller asked that language be included stating that the City of Wylie
acknowledges the existing pledge of sales tax receipts which was required to finance the
purchase of Premier Plaza.
MOTION: A motion was made by Chris Seely and seconded by John Yeager to
approve the Promissory Note between the WEDC and City of Wylie
in the amount of$155,000 and further authorize President Fuller to
execute all documentation necessary to effectuate the same. The
WEDC Board voted 5 — FOR and 0 _ AGAINST in favor of the
motion.
WEDC—Minutes
June 26, 2007
Page 6 of 8
ITEM NO. 7 — Consider and Act Upon Issues Surrounding a WEDC FY 2006 — 2007
Budget Transfer Request.
Staff presented Budget Transfer Request ED6-26-07 increasing cost centers in the following
areas: Food Supplies - $1,000, Utilities - $1,200, Dues & Subscriptions - $1,360, and Streets
& Alleys - $322,454. As well, staff originally submitted a decrease to the Debt Service cost
center of $44,235 and the Incentive cost center of $281,779. However, at the time staff
prepared the memo, the 3 months of debt service to the City of Wylie was not accounted for.
The debt service to the City of Wylie for the remainder of the fiscal year amounted to
$20,442. Therefore, the final reduction for Incentives was $302,221 and Debt Service was
$23,793. Total budget transfers equaled$326,014.
MOTION: A motion was made by Mitch Herzog and seconded by Merrill
Young to approve Budget Transfer Request ED6-26-07 in the
amount of $326,014. The WEDC Board voted 5 — FOR and 0 —
AGAINST in favor of the motion.
ITEM NO. 8— Consider and Act Upon Issues Surrounding the WEDC FY 2007 — 2008
Budget.
Staff presented to the Board the first draft of the WEDC FY 2007—2008 Budget. Beginning
with revenues, based upon receipts to date and projections through year-end, FY 2006—2007
sales tax receipts are estimated at $1,173,662. Providing for a conservative 10% growth rate,
FY 2007 —2008 sales tax revenue is estimated at $1,300,000 for the WEDC. Interest income
had been estimated at $9,000 with rental income from the Hughes buildings remaining static
at $62,400. A key component of the WEDC Budget is the fund balance remaining at the end
of the fiscal year. Staff has estimated that there will be $318,034 remaining. Total funds
available to spend in FY 2007—2008 equal $1,689,434.
Staff recommended that the Administrative Assistant salary be increased by$3,640 annually.
In analyzing comparable position within the City of Wylie with equal levels of responsibility
and tenure, WEDC Executive Director indicated that this increase is commensurate with
current productivity and value to the organization. The Board agreed with staff's
recommendation. Addressing the Executive Director's salary and as a result of the
evaluation of the Executive Director in Executive Session, the Board directed staff to
increase the Executive Director's salary by $3,600 annually in addition to a bonus of$6,000
which would be formally addressed at the July Board Meeting.
New to the WEDC budget is a cell phone allowance which has been recommended to the
City of Wylie by the Internal Revenue Service. The City of Wylie cell phone policy will
provide each employee a certain amount of funds to secure a cell phone which will be owned
by them personally. The IRS has recommended this direction due to personal use of most
phones. The WEDC currently funds a PDA and cell phone for the Executive Director and a
WEDC—Minutes
June 26, 2007
Page 7 of 8
cell phone for the Administrative Assistant. The allowance for both the Executive Director
and Administrative Assistant is $2,976 annually.
As a continuation of the WEDC effort in 2007, staff proposed that funding be approved to
support the City of Wylie in their promotion of the Panda Cup. The proposed funds ($1,200)
will be utilized for a kick-off dinner for local and regional allies.
Within the Incentive cost center, final payments will be made to Extruders from the original
expansion and the expansion of its paint line. The first payment will be made to BBV Texas
Development (Garnet Hill/Prusak) and the second of three payments will be made to Saw-
Tech. Future Projects ($101,421) represents all monies remaining for unidentified incentive
programs. This amount is much less than in prior years based upon the proposal of$575,000
toward the purchase of land and facilities and$177,014 in 'new' debt service.
Within Debt Service, the City of Wylie/Global Innovation line item is tied to the Promissory
Note between the City of Wylie and WEDC. The debt service for Global, Industrial Court
and Office are associated with 24 month notes. Shorter term notes are being proposed by
staff in an effort to limit long term debt. The Hughes note has 9 years remaining. The
Birmingham note has 1.6 years remaining. The Martinez/Ferrell note has 8.4 years
remaining. The Hughes and Martinez notes, having the longest terms remaining, represent
$172,300 annually.
Staff has proposed the WEDC budget for regular season and playoff tickets which the
WEDC funded for the 2007 Mavericks and Stars seasons. Staff presented that the regular
season line item reflects a credit for unused 2007 playoff tickets. Also, the $5,716 for
playoff tickets is a maximum figure based upon both the Stars and Mavericks making the
playoffs and participating in each round. There are no new events proposed. General Funds
was reduced from $10,000 to $5,000, as was most miscellaneous items within the budget, to
offset increases in Land and Debt Service.
Staff proposes a continued presence at the ICSC National conference and the Texas
conference held in San Antonio. Based upon most of the larger retail tracts being under
contract by developers such as Direct Development, Regency Centers, and the Hunt
Development group, staff believes efforts in 2008 will be focused on the attraction of end
users to Wylie.
Industrial Court, Cooper Drive, and Office are issues which were addressed in Executive
Session. Staff indicated that should the WEDC Board of Directors decide to not pursue any
or all of the listed land acquisitions, the associated funds will be reallocated to `Future
Projects' within Incentives. Staff proposed being aggressive with more cash down on these
purchases to reduce the long term debt held by the WEDC. The total Land budget presented
was $575,000.
WEDC—Minutes
June 26, 2007
Page 8 of 8
As a whole, the Board approved of programs presented by staff. However, President Fuller
disagreed with staffs position on debt service. President Fuller believed that the term of any
note should match the term of the program. For example, the purchase of property for
redevelopment on Industrial Court should have a longer term being that the current use will
not change for 3 — 5 years. Additionally, should the WEDC Board approve of the purchase
of a building for its permanent offices; the note should be no shorter than 10 years. Mr.
Fuller believed that the WEDC must maintain as much cash as possible to be able to react to
industrial projects. The Board instructed staff to make appropriate changes to Debt Service
and Land and bring back the budget in July.
MOTION: A motion was made by John Yeager and seconded by Merrill Young
to table consideration of the FY 2007— 2008 Budget until July. The
WEDC Board voted 5 — FOR and 0 — AGAINST in favor of the
motion.
ADJOURNMENT
With no further business, President Marvin Fuller adjourned the WEDC Board meeting at
9:14 a.m.
Marvin Fuller, President
ATTEST:
Samuel D.R. Satterwhite
Executive Director