05-14-2014 (WEDC) Minutes Minutes
Wylie Economic Development Corporation
Board of Directors Meeting
Wednesday, May 14, 2014 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, Demond Dawkins, Todd Winners, and Mitch Herzog.
Ex-officio members Mayor Eric Hogue and Mindy Manson were present.
WEDC staff present was Executive Director Sam Satterwhite and Gerry Harris.
CITIZEN PARTICIPATION
With no citizen participation, Mr. Fuller proceeded to Action Items.
ACTION ITEMS
ITEM NO. 1 — Consider and act upon approval of the April 25, 2014 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 April 25, 2014 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 April 2014 WEDC Treasurer's
Report.
MOTION: A motion was made by Todd Winners and seconded by John Yeager to
approve the April 2014 WEDC Treasurer's Report. The WEDC Board voted
5 —FOR and 0—AGAINST in favor of the motion.
ITEM NO.3—Consider and act issues surrounding a WEDC Enrichment Grant Program.
Staff was unable to complete the final program guidelines and requested that the Board table
consideration of this issue until the next regular Board Meeting in June.
MOTION: A motion was made by Mitch Herzog and seconded by John Yeager to table
consideration of a WEDC Enrichment Grant Program until the next regular
Board Meeting in June. The WEDC Board voted 5 — FOR and 0 —
AGAINST in favor of the motion.
WEDC—Minutes
May 14, 2014
Page 2 of 5
ITEM NO. 4 — Consider and act upon issues surrounding a Performance Agreement
between the WEDC and B&B Theatres Operating Company, Inc.
Staff reminded the Board that the WEDC entered into a Performance Agreement with B & B
Theatres Operating Company with an incentive package designed to offset a contemplated $12
million investment. Following the issuance of a Certificate of Occupancy on 4-24-13 the
WEDC funded a $100,000 economic incentive as a reimbursement for the installation of
Qualified Infrastructure. B&B is eligible to receive an additional $500,000 over five years
through grants and sales tax reimbursements so long as there is no Event of Default. The grants
equal $25,000 annually from the WEDC and sales tax reimbursements from the WEDC (1/2
cent) and City of Wylie (1/2 cent). The City of Wylie incentive is governed by a Retail
Development Agreement approved by the City Council with similar performance measures and
default provisions.
Prior to 12-31-14, B&B must have provided documentation supporting a minimum $10 mm
appraised value for real and personal property. As performance measures were being designed
in 2011, B&B provided staff with cost/value estimates totaling $12 mm with the WEDC setting
the minimum threshold at $10 mm to allow for variances within the appraisal process. The
estimates provided in 2011 were Land - $1,500,000, Improvements - $8,500,000, and Personal
Property - $2,000,000,which totaled$12,000,000.
Prior to 12-31-15, B&B must provide documentation supporting a minimum $9.5 mm appraised
value for real and person property. In years 2016 — 2018, the valuation requirement is dropped
and B&B must only verify that five full-time and twenty part-time individuals are employed
locally.
Preliminary values released by the Appraisal District are Land — $1,783,739, Improvements -
$4,240,327, and Personal Property- $1,304,601 which totals $7,328,667. Should these values be
certified in September 2014, B&B will be in default of the Performance Agreement and Retail
Development Agreement. Upon Default, the Economic Incentives contemplated under the
Agreements will be voided. However, B&B will be eligible to receive incentives for future
periods should they comply with the terms and conditions of the Agreements.
Staff had no recommendation and sought Board direction prior to further communication with
B&B Theatre Operating Company.
The Board requested that staff contact the Appraisal District to inquire whether there is a
different appraisal process for movie theatres. Staff did ask if there was any support for
amending the Agreements. While there was no interest in modifying the Agreements, Board
Member Herzog noted that the dollar amount saved in property taxes due to the lower valuation
is almost equal to the potential loss of incentives and it is more than fair under the circumstances
that B&B has an opportunity to earn future incentives especially during the years where the
valuation requirement is dropped.
WEDC—Minutes
May 14, 2014
Page 3 of 5
MOTION: A motion was made by Mitch Herzog and seconded by Demond Dawkins to
table the issue until the valuation is certified. 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 WEDC and CSD Woodbridge, WEDC
property located at 2804 F.M. 544, Performance Agreement between the WEDC and EXCO
Tooling Solutions, extension of Woodbridge Parkway, and regional housing starts.
Woodbridge Crossing
The Sales Tax Reimbursement Report was presented which identified all sales taxes received
through April 2014 within Woodbridge Crossing for the City General Fund, the WEDC, and the
4B. As a reminder, the City and WEDC reimbursed 85% of all sales tax generated within
Woodbridge Crossing through September 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.
$2,154,904.09 has been reimbursed through February with net receipts of $1,286,683.24 after
reimbursements. An additional ±$130,000 will be funded in May. As well, $1.9 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 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.
The Performance Agreement summary outlining the incentives provided by the WEDC for the
2013 Ascend expansion was also presented. Payment #1 of 4 has been funded with Ascend
meeting all Performance Obligations within Section A of the attachment.
CSD Woodbridge Performance Agreement
On July 15, 2013 a certificate of occupancy (CO) was issued for Kroger Marketplace. Beginning
October 1, 2013 and ending October 1, 2023, Clark Street Development is eligible to receive a 1/2
cent sales tax reimbursement from the WEDC (City of Wylie not part of sales tax reimbursement
agreement). The WEDC has received two Comptroller monthly reports identifying two
businesses paying sales tax on a consistent basis. The first reimbursement was made to CSD
Woodbridge LLC in April. Quarterly payments will be made to Clark Street based upon the data
provided by the Comptrollers.
In addition to the $100,000 reimbursement incentive paid by the WEDC at CO, Clark Street is
eligible to receive cumulative incentives of$1,100,000 over the life of the Agreement.
WEDC—Minutes
May 14, 2014
Page 4 of 5
WEDC Property Located at 2804 F.M. 544
The tenant at 2804 F.M. 544 has failed to pay rent for the previous three months (March, April,
and May). Several attempts have been made to communicate with the tenant, beginning in
March, including a failed attempt to deliver a certified letter by the US Post Office. While the
tenant has recently initiated limited email communication, there has been no resolution of the
past due rent and no action by the tenant to vacate the premises. Therefore, staff has filed a
petition of eviction with the Collin County Justice of the Peace. A court date has been set for
May 20, 2014, at 9:00 A.M.
EXCO Tooling Solutions
The Feasibility Period within the Purchase Agreement expires on 6-22-14 and Exco has until 9-
22-14 to obtain governmental approvals (site plan, building permit, etc.). Closing is to occur no
later than 9-27-14.
Exco has held multiple discussions with Hill & Wilkinson and Pulliam Construction
Management. Staff believes Exco will choose a general contractor within the next two weeks.
A summary of obligations as outlined in the Performance Agreement has been provided for the
Board's review.
Woodbridge Parkway
To date $1.5 mm has been paid to Mario Sinacola out of a $4.2 mm contract to extend
Woodbridge Parkway. All of the piers are in place for bridge construction with project
completion on pace for October/November. The WEDC will make a single draw request to
American National Bank for ±$600,000 out of the $1.4 mm loan secured to participate in the
project. The WEDC commitment could increase by $300,000 depending on the outcome of
negotiations between Wylie and Sachse for the acquisition of right-of-way from Mr. Don
Herzog. The current position by both entities is that the City of Sachse will be responsible for
this expense with final comments expected by the Sachse City Attorney within the next month.
Regional Housing Starts
Ten homes were permitted in Wylie for April 2014. Sachse, Lavon and Murphy permitted a
combined twenty-three homes over the same period.
The Board noted the pending developments in Wylie that staff provided at the bottom of the
attachment.
No action was requested by staff for this item.
WEDC —Minutes
May 14, 2014
Page 5 of 5
EXECUTIVE SESSION
The WEDC Board recessed into Closed Session at 6:54 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 2014-5a
Section 551.072 (Real Estate) of the Local Government Code, Vernon's Texas Code Annotated
(Open Meetings Act). Consider the acquisition of properties located near the intersection of:
• Stone &Ballard
• Oak Street& Jackson Avenue
• Cooper& State Highway 78
• Country Club &F.M. 544
• F.M. 544 & State Highway 78
• Cooper&F.M. 544
• Steel Road&Hooper
Demond Dawkins departedfrom the meeting at 7:38 a.m.
RECONVENE INTO OPEN MEETING
The WEDC Board of Directors reconvened into open session at 8:11 a.m. and took no action.
ADJOU' ENT
With no further business, President Fuller adjourned the WEDC Board meeting at 8:11 a.m.
Marvin Fuller,President
ATTEST:
Samuel Satterwhite,Director