09-19-2014 (WEDC) Minutes Minutes
Wylie Economic Development Corporation
Board of Directors Meeting
Friday, September 19, 2014 - 6:30 A.M.
WEDC Offices—Conference Room
250 South Highway 78—Wylie, Texas
CALL TO 0 ' PER
Announce the presence of a Quorum
President Marvin Fuller called the meeting to order at 6:30 a.m. Board Members present were
John Yeager, Mitch Herzog, Demond Dawkins and Todd Wintters.
Ex-officio member Jeff Butters,Assistant City Manager, arrived at 6:50 am.
WEDC staff present was Executive Director Sam Satterwhite, Gerry Harris and Angel Wygant
CITIZEN PARTICIPATION
With no citizen participation, Mr. Fuller proceeded to Action Items after Sam Satterwhite
expressed his thanks for 9 years of excellent service to Gerry Harris, who is retiring on
September 30,2014.
ACTION ITEMS
ITEM NO. 1 — Consider and act upon approval of the August 19, 2014 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 August 19, 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 August 2014 WEDC Treasurer's
Report.
MOTION: A motion was made by Todd Wintters and seconded by John Yeager to
approve the August 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 upon issues surrounding a Performance Agreement
between WEDC and B&B Theatres.
Staff reminded the Board that B&B Theatres Operating Company is in default of a Performance
Agreement and a Retail Development Agreement entered into with the WEDC and the City of
Wylie on December 9, 2011. The Agreements identify a requirement that B&B provide
documentation supporting a$10 mm appraised value for real and personal property.
WEDC—Minutes
September 19, 2014
Page 2 of 10
Collin County Central Appraisal District certified a cumulative appraised value for real and
personal property at $7,328.267. On August 26, 2014 B&B President Robert Bagby was notified
in writing of the default. Under the WEDC Performance Agreement, B&B President Robert
Bagby has until December 31, 2014 to cure the default or the 2014 grant and sales tax
reimbursement payments are void. B&B however is eligible to earn incentives in future years
should the performance measures be met.
The City of Wylie Retail Development Agreement only allows 30 days to cure. Unlike the
WEDC Performance Agreement, the City of Wylie Retail Development Agreement becomes null
and void should B&B not provide a cure within thirty days of being notified of a default. B&B
was in receipt of the default notification from the WEDC and the City of Wylie on September 2,
2014.
As reported in May 2014, B&B failed to meet the minimum valuation primarilydue to the real
property improvements being valued$4.2 mm opposed to the construction cost of$8.5 mm. Had
the minimum valuation been met, B&B would have been eligible for a $25,000 grant from the
WEDC and an estimated $20,000 sales tax rebate from the WEDC and City of Wylie. The net
result from the reduced appraisal will provide B&B with a property tax savings from the City
and WISD of$67,000.
B&B provided a written response to the default notification requesting that the WEDC agree to
fund a pro rata share of the incentive for Economic Incentive #2. The assessed value is
$7,328,267, or 73.28% of the required performance measure. The pro rata incentive amount
request for Economic Incentive#2 would be 73.28% of$25,000 or$18,320.
The Board discussed several possibilities which ranged from providing no incentive as called for
under the Agreement to potentially modifying the Performance Agreement all together. The
Board requested that staff evaluate the overall impact of the reduced valuation and default under
the City Retail Development Agreement as those issues may apply to an amended Agreement.
MOTION: A motion was made by Mitch Herzog and seconded by John Yeager to
Table consideration of this Item until the October Board Meeting. The
WEDC Board voted 5—FOR and 0—AGAINST in favor of the motion.
ITEM NO. 4 —Consider and act upon issues surrounding a Performance Agreement
between WEDC and Exco Extrusion Dies (Texas),Inca
Staff presented a Performance Agreement between WEDC and Exco Extrusion Dies (Texas),
Inc. as directed by the WEDC Board of Directors at the August 19, 2014 WEDC Board Meeting.
Due to Exco's need for additional square footage and challenges with the Commerce Street site,
staff was directed to draft a Performance Agreement utilizing the 3.2 acres owned by the WEDC
on Hensley Lane. As the incentive package was being,developed, the Board directed staff to
address the value differential between the Commerce Street site ($208,000) and the Hensley site
($350,000). To offset the increased value of the 3.2 acres, Relocation Expenses for.years 2 — 5
were reduced from$48,000 to $13,000, reducing the overall package by$140,000.
WEDC Minutes
September 19, 2014
Page 3of10
As the amended package was presented to Exco, it was determined that the Board and staff had
not factored in the,increased investment by Exco as the square footage increased from 25,000
square feet to 30,000 square feet. Using a conservative factor of$80 per square foot at 5,000
square feet ($400,000 capital outlay), staff determined the increased investment equated into an
additional $35,000 into the incentive package which was presented to Exco as $7,000 per year in
the funding of Relocation Expenses.
The final incentive package as presented and attached is valued at$517,000. Exco will enter into
Real Estate Lien Note for $350,000 which is eligible for forgiveness over 5 years should Exco
meet identified performance measures. Exco will also be eligible for Relocation Expenses
totaling$167,000 with Year 1 at$87,000 and Years 2—5 at$20,000.
The Year 1 incentive of$87,000 will be paid upon the issuance of a Certificate of Occupancy by
the City of Wylie for a facility of not less than 30,000 square-feet. Further, Exco must
commence construction on the improvements no later than March 1,2015 with the Certificate of
Occupancy issued no later than January 31, 2016. Year 2 —5 payments will be funded annually
along with the forgiveness of the Seller Note ($70,000 per year at 6% interest) so long as a
minimum value is certified by the Collin County Central Appraisal District (CCAD) of
$7,550,000.
Should the value be certified at less than $7,550,000 by the CCAD, the annual incentive
payments will be reduced by$1,500 for every$100,000 below the$7,550,000 threshold. Should
the valuation fall below $5,550,000, Exco will not be eligible for an incentive payment for that
particular year and the Seller Note will not be eligible for forgiveness. The valuation thresholds
were originally$7,000,000 and $5,000,000, but were increased to the above figures based upon
the increased value in land and the additional 5,000 square feet being constructed.
The Agreement shall become null and void should Exco incur bankruptcy, convey its interest in
the improvements to a third party without the express written consent of the WEDC, or become
delinquent in its payment of property taxes.
Staff recommended that the WEDC Board of Directors approve a Performance Agreement
between the WEDC and Exco Extrusion Dies (Texas), Inc. as presented.
MOTION: A motion was made by Todd Wintters and seconded by Demond Dawkins
to approve the Performance Agreement between WEDC and Exco Extrusion
Dies (Texas), Inc. The WEDC Board voted 5 FOR and 0 AGAINST in
favor of the motion.
ITEM NO. 5 — Consider and act upon issues surrounding a Real Estate Sales Contract
between the WEDC and Exco Extrusion Dies(Texas),Inc.
Staff presented a Real Estate Sales Contract between WEDC and Exco Extrusion Dies (Texas),
Inc. as directed by the WEDC Board of Directors at the August 19, 2014 WEDC Board Meeting.
WEDC—Minutes
September 19, 2014
Page 4 of 10
The Board reviewed a Real Estate Contract between the WEDC and Exco for the sale of 3.2
acres located on Hensley Lane. The WEDC will finance the purchase price of$350,000 to be
secured by a vendor's first lien and deed of trust bearing an annual interest rate of 6%. The first
of 5 payments will be due and payable twelve months from the issuance of a certificate of
occupancy by the City of Wylie. Principal and interest payments are subject to forgiveness
under the terms of the Performance Agreement.
Exco is required to begin construction of a minimum 30,000 square feet building no later than
March 1, 2015. Failure to meet this requirement gives the WEDC the option to reacquire the 3.2
acres.
Exco will have a sixty day Feasibility Period. Additionally, Exco will have one-hundred twenty
days from the effective date to acquire governmental approvals. Should those approvals not be
acquired, the Contract will be terminated. Closing will take place within 10 days of receipt of
governmental approvals.
Staff recommended that the WEDC Board of Directors approve a Real Estate Sales Contract
between the WEDC and Exco Extrusion Dies (Texas),Inc. as presented.
MOTION: A motion was made by Mitch Herzog and seconded by John Yeager to
approve the Real Estate Sales Contract between WEDC and Exco Extrusion
Dies (Texas), Inc. The WEDC Board voted 5 — FOR and 0 —AGAINST in
favor of the motion.
ITEM NO. 6—Consider and act upon issues surrounding development criteria for 1.6 acres
owned by the WEDC located at the intersection of Business Way and Commerce Street.
Staff informed the Board it had been approached by a company with a request to utilize the
vacant 1.6 acres owned by the WEDC on Commerce Street. As the WEDC learned from the
Exco project,the absolute maximum improvements the site can support is 25,000 square feet. At
that square footage though,there is very little room for maneuverability onsite.
The building size being proposed is 15,000 square feet. While the 10,000 square foot shortage
represents at least $800,000 in value, the smaller building allows for interior site maneuvering
and room for expansion.
Brick construction is also being proposed opposed to tilt wall construction based upon a
perceived cost savings. Staff personally prefers tilt wall construction which portrays a cleaner
commercial exterior,but it is only based upon personal preference.
Staff proposed multiple questions to the Board:
1. Is there a minimum square footage required to be constructed on the 1.6 aces;
2. Is any acceptable masonry product per the City of Wylie allowed;
3. Is the WEDC content with subdividing this site or should a more comprehensive
redevelopment plan be pursued which includes the 1 acre owned by the WEDC to the
WEDC—Minutes
September 19, 2014
Page 5 of 10
south and the 0.8356 acre adjacent and to the south owned by Richard Rigsbey and
occupied by Rich's Performance Muffler.
Should a more comprehensive redevelopment plan be pursued, additional uses would be
marketable including office development being that metal construction would be removed and
new office development would not be deterred by alternate construction standards.
Board members directed staff to approach Mr. Rigsbey to determine if his property could be
acquired. If the potential was there, possibly the WEDC would be more patient with the
redevelopment of the area and wait for a more comprehensive plan even including property to
the east. However, should Mr. Rigsbey's property not be available and no alternate site for
15,000 square foot project could be found, the Board did not want to lose the aforementioned
prospect. Further, the Board had no preference regarding brick vs. tilt wall construction.
No action was taken on this Item.
ITEM NO. 7 — Consider and act upon issues surrounding 2 Enrichment Grant
Applications
Staff presented an Enrichment Grant application from Donna Wesson, Co-Owner of Trendz n
Traditions for replacement of an awning located at 114 North Ballard.
Three bids for the contemplated work are as follows:
1. AAA Awning- $2,900.00
2. Sunshade Awning of Texas - $1,028.38
3. AWNPRO Shading Experts $1,125.80
Staff informed the Board it has inspected the physical condition of the awning and believes that
this request complies with the Program Guidelines for the Enrichment Grant Program established
by the WEDC Board of Directors.
Should the WEDC Board approve this Grant Application, staff will enter into a Letter of
Agreement with Ms. Wesson under which the Sunshade Awning of Texas quote will be an
exhibit and Ms. Wesson will be reimbursed for the contemplated work upon payment in full to
the contractor and submittal of all paid invoices totaling no less than $1,028.38. As per the
program guidelines, the WEDC will not dictate a contractor that must be used but will utilize the
low bid in the approval of a Grant amount.
Based upon previous Board discussions and a philosophy that grant recipient participate in the
improvements, staff recommended that the WEDC Board of Directors approve an Enrichment
Grant in the amount of$515 to Ms. Donna Wesson.
MOTION: A motion was made by Demond Dawkins and seconded by Mitch Herzog to
approve an Enrichment Grant for Ms. Donna Wesson in the amount of$515
following the expenditure of no less than $1,028.38 on the improvements
WEDC—Minutes
September 19, 2014
Page 6 of 10
specified in the application. The WEDC Board voted 5 — FOR and 0 —
AGAINST in favor of the motion.
Staff presented a second Enrichment Grant application from Ms. Pamela Wells for exterior
repairs for the Wylie Flower and Gift Shop located at 129 N. Ballard, Ave., Wylie, Texas.
Repairs include:
1. Repair bricks (shore up) on Wylie Flower Shop (hereinafter WFS) buildings 125, 127 ad 129
N. Ballard;
2. Repair bricks on well in front of 129 N. Ballard and place a screen below water level to catch
trash;
3. Repair all rotted wood on buildings (replace if necessary);
4. Repair and re-stain cedar on buildings;
5. Paint exterior trim& doors on WFS buildings and well;
6. Secure well cover for safety;
7. Paint or apply sealant to brick on WFS buildings; and
8. Plant St. Augustine grass on the north side of WFS buildings& Marble St.
Three bids for the contemplated work are as follows:
1. Select Builders - $129,690.00
2. Better Design Resources - $53,242.76
3. Taylor& Son- $59,905.00
Staff has discussed the contemplated repairs with Ms. Wells, inspected the physical condition of
the building and contemplated repairs and believes that this request complies with the Program
Guidelines of the Enrichment Grant Program.
Should the WEDC Board approve this Grant Application, staff will enter into a Letter of
Agreement with Ms. Wells under which the Better Design Resources proposal will be an exhibit
and Ms. Wells will be reimbursed for the contemplated work upon payment in full to the
contractor and submittal of all paid invoices in the full amount of the bid.
The wide disparity in the bids is based upon Select Builders ($129,690) opinion that a majority if
not all of the brick should be removed and then replaced with Better Design and Taylor & Sons
only addressing the most distressed areas.
Based upon previous Board discussions and a philosophy that grant recipients participate in the
improvements, staff recommended that the WEDC Board of Directors approve an Enrichment
Grant in the amount of$29,953 to Wylie Flower& Gift.
MOTION: A motion was made by Todd Winners and seconded by Demond Dawkins
to approve an Enrichment Grant for Ms. Pamela Wells in the amount of
$26,627 following the expenditure of no less than $53,242.76 on the
improvements specified in the application. WEDC Board voted 5 — FOR
and 0—AGAINST in favor of the motion.
WEDC—Minutes
September 19, 2014
Page 7 of 10
ITEM NO. 8 — Consider and act upon issues surrounding a WEDC FY 2013-14 Budget
Transfer.
Staff presented Budget Transfer Request EDC9-19-14 and reviewed the need for the budget
transfer.
The WEDC budgeted $20,000 for Engineering/Architectural expenses. To date, $22,647 has
been spent on land planning, surveying, and engineering services with an additional $3,750 in
anticipated expenses prior to September 30, 2014.
After acquiring the Buchanan property, WEDC assumed responsibility for insuring the property.
Staff has received quote for $5,716 of which $1,434.25 is due in September. Staff is currently
obtaining additional estimates with the goal of reducing this cost.
Staff proposes reducing Incentives by $6,500.00 to offset the increased expenses within the
Engineering/Architectural accounts, and an additional $1,500.00 to offset expenses for insurance.
Staff recommended that the WEDC Board of Directors Approve Budget Transfer Request
EDC9-19-14 in the amount of$8,000.00
MOTION: A motion was made by Todd Wintters and seconded by Demond Dawkins
to approve the Budget Transfer as identified. The WEDC Board voted 5 —
FOR and 0—AGAINST in favor of the motion.
DISCUSSION ITEMS
ITEM NO. 9 — Staff report review issues surrounding Performance Agreements between the
WEDC and: Woodbridge Crossing, Ascend Custom Extrusions, CSD Woodbridge, The Wedge,
Dank Real Estate, and Swimcat, 605 Commerce, thoroughfare impact fees, sporting events, and
regional housing starts.
Woodbridge Crossing
The Sales Tax Reimbursement Report was presented which identifies all sales taxes received
through September 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. Due to the default under the Amended and Restated Performance
Agreement, Woodbridge Crossing is only eligible to receive up to $6 million in sales tax
reimbursement through September 2021 opposed to the maximum reimbursement of$12 million
originally contemplated.
$2,414,296 has been reimbursed through August with net receipts of $1,559,379 after
reimbursements. As well, it is estimated that $2.5 mm has been paid in ad valorem taxes to the
City of Wylie (excluding the WISD).
WEDC—Minutes
September 19, 2014
Page 8 of 10
As shown on the Sales Tax Reimbursement Report, $108,382 was generated in sales tax in June
2014 versus $89,611 in June of 2013. This increase represents a 21% gain over 2013 receipts.
The Board will recall though that many businesses were not being tracked properly by the
Comptroller which was identified and corrected in February 2014.
Ascend Commercial Lease and Performance Agreement
The Ascend Custom Extrusion Critical Dates Analysis and Performance Agreement Monitoring
Procedures were presented. Payment #4 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 between the WEDC and ACE which was approved in December
2013 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 V2
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 2014. Quarterly payments will be made to Clark Street based upon
the data provided by the Comptroller.
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.
Also presented for the Board's review was a Sales Tax Reimbursement Report with receipts
increasing significantly with the inclusion of Kroger in the Area Report from the Comptroller.
The Wedge
The Wedge is scheduled to open its Wylie location on December 15th. A Certificate of
Occupancy is required by December 31st in order for the Wedge to receive the remaining
incentive of$137,500.
The Wedge is also scheduled to open their Alliance store the weekend of October 17th. The
WEDC Board along with the Wylie City Council will be invited to the event.
Dank Real Estate (Deanan Gourmet Popcorn)
Deanan is scheduled to receive a Certificate of Occupancy the week of October 13th.
WEDC Minutes
September 19,2014
Page 9 of 10
Swimcat(Jarrod Rush State Farm)
Swimcat is scheduled to receive a Certificate of Occupancy on or about November 1st.
605 Commerce
Pulliam Construction Management has estimated that it will cost approximately $58,000 to
renovate the 10,000 vacant square feet on Commerce to accommodate three offices, restroom,
electrical upgrades, and HVAC. Should a use be identified which would generate $5,000 per
month, it would have to be more intensive than warehousing for example and require additional
upgrades to the non-conforming structure such as masonry and a sprinkler system which would
be cost prohibitive.
Staff believes that based upon the cost of upgrading the facility, strictly warehousing uses should
be focused on to utilize the lease space.
Thoroughfare Impact Fees
The Impact Fee Advisory Committee met and formulated a recommendation to_Council which
will be made on October 14th. Council will have the opportunity to take action on the
recommendation, send back the recommendation to the Committee for further study, or develop
rates based upon their interpretation of the consultant's study.
The Committee will be recommending reducing the existing thoroughfare impact fees and
equalizing the rates in the west and east zones.
Sporting Events
Staff presented a spreadsheet identifying all Ranger games that have been used to date along
with the associated business purpose. In addition, Mavericks tickets for future use have been
added to the spreadsheet.
Regional Housing Starts
Nineteen homes were permitted in Wylie for August 2014. Sachse, Lavon, and Murphy
permitted a combined forty-six homes over the same period.
No action is requested by staff for this item.
EXECUTIVE.SESSION
Recess into Closed Session at 7:55 a.m. in compliance with Section 551.001, et.seq. Texas
Government Code, to wit:
WEDC—Minutes
September 19, 2014
Page 10 of 10
Section 551.087 (Economic Development) of the Local Government Code, Vernon's Texas
Code Annotated (Open Meetings Act).
• Project 2014-9a
• Project 2014-9b
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:
• Marble & Jackson
• Westgate Way & State Highway 78
• Alanis & State Highway 78
Section 551.074 (Personnel Matters) of the Local Government Code, Vernon's Texas Code
Annotated(Open Meetings Act).
• Performance Evaluation—WEDC Executive Director
RECONVENE INTO OPEN MEETING
The WEDC Board of Directors reconvened into open session at 9:02 a.m. and took the following
action:
Effective 10/1/14, the WEDC Board of Directors awarded the WEDC Executive Director 3.76%
salary increase and granted a performance bonus of$2,000 as authorized within the Employment
Agreement between the WEDC and Mr. Satterwhite.
The Board reiterated its appreciation to Gerry Harris for her excellent contribution to the WEDC
during her 9 year tenure and wished her well as she retires on October 1st.
JOU' ENT
With no further business,President Fuller adjourned the WEDC Board meeting at 9:05 a.m.
— - -
Marvin Fuller, President
ATTEST:
Samuel Satterwhite, Director