02-20-2015 (WEDC) Minutes Minutes
Wylie Economic Development Corporation
Board of Directors Meeting
Tuesday, February 20, 2015—6:30 A.M.
WEDC Offices—Conference Room
250 South Highway 78 Wylie,Texas
C# LTOO IER
Announce the presence of a Quorum
President Marvin Fuller called the meeting to order at 6:32 a.m. Board Members present were
John Yeager, Mitch Herzog, Demond Dawkins and Todd Wintters.
Ex-officio member City Manager Mindy Manson was present.
WEDC staff present was Executive Director Sam Satterwhite and Sr. Assistant Angel Wygant.
CITIZEN PARTICIPATION
With no citizen participation, Mr. Fuller proceeded to Action Items.
ACTION ITEMS
ITEM NO. 1 — Consider and act upon approval of the January 20, 2015 Minutes of the
Wylie Economic Development Corporation (WEDC) Board of Directors Meeting,
MOTION: A motion was made by Demond Dawkins and seconded by Todd Wintters
to approve the January 20, 2015 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 January 2015 WEDC Treasurer's
Report.
MOTION: A motion was made by Mitch Herzog and seconded by John Yeager to
approve the January 2015 WEDC Treasurer's Report. The WEDC Board
voted 5 FOR and 0—AGAINST in favor of the motion.
ITEM NO. 3 (Remove from Tablet Consider and act upon a Performance Agreement
between the WEDC and R.R. Maguire Management,Inc.
MOTION: A motion was made by Mitch Herzog and seconded by Todd Wintters to
remove this item from Table. The WEDC Board voted 5 — FOR and 0 --
AGAINST in favor of the motion.
Staff reminded the Board that Northeast Chiropractic and Aquatic Therapy (Dr. Ryan Maguire)
had approached WEDC in November 2013 with a request for assistance to relocate a pool
WEDC —Minutes
February 20, 2015
Page 2 of 8
utilized in its aquatic therapy services to an existing building at Stone and Ballard. Subsequently
the parties were unable to come to terms on a lease and Dr. Maguire identified a 7,600 square
foot building located at 101 S. Ballard owned by Billy Conkle. Dr. Maguire has partnered with
Anytime Fitness to lease the building and began remodeling efforts in March 2014.
Approximately six months ago Dr. Maguire severed ties with his general contractor and
undertook remodeling 101 S. Ballard and the construction of a 700 square foot building to house
the aquatic therapy operations. Staff presented photos of the structure being demolished for the
aquatic therapy room which was uninhabitable and a safety concern.
Upon completion, Dr. Maguire will expend $50,000 on the construction of the aquatic therapy
structure alone. Staff is recommending an incentive package of $20,000 which cannot be
justified utilizing a standard cost benefit analysis of appraised value generating `x' amount of
property taxes over a 3-5 year period as is the norm with typical EDC projects.
Total project costs contributing to staff recommendation were as follows:
Aquatic Therapy Building $50,000
Interior Remodel** 60.000
Elevator** 32,500
Total $142,500
**Costs represent 50% of the total investment.
Prior to the,project currently under construction, the 101 South Ballard building was a single use
structure with a second story only utilized for miscellaneous storage. The adjacent structure to
the east had no value and could not be utilized due to its dilapidated state. While the WEDC
typically does not fund remodeling efforts that have no significant net new value attached, the
investment by Dr. Maguire on the interior and the addition of an elevator in staffs opinion
cannot be ignored as to its impact on the ongoing marketability, use, and value of the building.
The elevator alone doubles the leasable office space in the building. Staff believes that the
project as a whole and its impact on Downtown Wylie warrants the Board to consider an
incentive that again cannot be judged on its return in property taxes.
As outlined in the attached Performance Agreement, staff proposed that upon receipt of a
Certificate of Occupancy (CO) for the Aquatic Therapy Building, a final CO for the building
housing Northeast Chiropractic and Anytime Fitness, and confirmation of expenses by R.R.
Maguire Management, Inc. in an amount not less than $142,500, the WEDC funds a one-time
incentive payment of$20,000 to R.R. Maguire Management, Inc.
Staff recommended that the WEDC Board of`Directors approve a Performance Agreement
between the WEDC and R.R. Maguire Management, Inc.as presented.
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February 20, 2015
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MOTION: A motion was made by Todd Winners and seconded by John Yeager to
approve the Performance Agreement between the WEDC and R.R. Maguire
Management,Inc. 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 the WEDC and Stephen Perkins, Inc.
Staff explained that this project is very similar, if not identical, in scope to the R.R. Maguire
issue. Mr. Stephen Perkins operates an Anytime Fitness facility at 101 S. Ballard, Suite A.
Anytime Fitness was previously located within Shafer Plaza with the relocation resulting in a
significant reduction in lease expense. Mr. Perkins has shared expenses equally with Dr.
Maguire save and except the construction and-finish out of a 700 square foot aqua therapy
building.
Project costs for Mr.Perkins are as follows:
Interior Remodel** $60,000
Elevator** 32,500
Total $92,500
**Costs represent 50% of the total investment.
In staffs opinion the same arguments apply from the Maguire issue in that you cannot establish
an incentive figure based solely on new value or added square footage. Working against Mr.
Perkins in this case is that no new structure is being built which reduces the potential incentive.
However, the installation of an elevator and significant finish out of a third or fourth generation
office building is still key to staffs recommendation in this case. The argument can actually be
made that the addition of an elevator to this building is equivalent to an expansion in that the
tenants have doubled the leasable square footage. Further and equally important, Anytime
Fitness is bringing approximately 1,000 individual visits per week to Downtown Wylie.
Granted, many of these visits may be duplicate, but the added activity no doubt impacts the
overall vitality and business activity within the downtown area.
As outlined in the attached Performance Agreement, staff proposed that upon receipt of a final
Certificate of Occupancy(CO) for the commercial structure located at 101 S. Ballard Suites A&
B, housing both Anytime Fitness and Northeast Rehab.and confirmation of expenses by Stephen
Perkins, Inc. in an amount not less than S92,500,the WEDC funds a one-time incentive payment
of$10,000 to Stephen Perkins,Inc.
Staff recommended that the WEDC Board of Directors approve a Performance Agreement
between the WEDC and Stephen Perkins, Inc. as presented.
Board Member Dawkins brought to Staffs attention, a typographic error on page 2 of 4 of the
Performance Agreement. Staff noted the correction to be made in the final version.
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February 20, 2015
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MOTION: A motion was made by Todd Wintters and seconded by John Yeager to
approve the Performance Agreement, as amended on page 2 of 4, between
the WEDC and Stephen Perkins, Inc. The WEDC Board voted 5 — FOR
and 0—AGAINST in favor of the motion.
ITEM NO. 5 — Consider and act upon an Agreement between the WEDC and The Retail
Coach, LLC for consulting services.
Staff reviewed a proposal from The Retail Coach to develop a Retail Economic Development
Plan for the Wylie community% Staff reviewed that the WEDC first hired The Retail Coach in
2007 to assist the City and WEDC in developing marketing materials for ICSC. While staff will
not attribute 100% of our success in securing Target that year to their services, staff was
confident that the Wylie team was fully prepared and presented professional and pertinent
materials which were beneficial to brokers, developers, and end users that the WEDC had direct
interaction with at ICSC including Direct Development and Target.
In 2008, 2009, and 2010 The Retail Coach provided a cursory update to our Retail Trade Area
demographics at no cost but did not perform an on-site evaluation of Wylie or the changes to the
region. In February 2011 the IATEDC entered into an agreement with the Retail Coach to develop
a Restaurant Recruitment Strategy for concepts which the WEDC identified via a wish-list which
netted quality contacts and follow up with Fuzzy's Taco, Rosa's, Wingstop, Venture
Commercial, Falcon Realty Advisors, John T. Evans, Anamia's Tex Mex, and Freebird's. The
mistake staff made at that time was not turning over 100% of the follow up with the above
concepts and other identified retailers to The Retail Coach staff. While the effort was there, it is
much more efficient and productive to turn this task over to full-time professionals to head-up
our restaurant recruitment strategy from beginning to end and maximize their relationships with
the brokerage community.
Wylie has changed significantly over the past several years and staff believes there is an almost
immediate opportunity to parlay our recent success with The Rock Wood Fired Kitchen into
other concepts which may have previously believed that daytime population, access, or other site
selection criteria where not at an adequate level to support an investment in Wylie.
WI-die staff will be involved in the process, The Retail Coach staff will be 100% responsible for
developing the marketing materials, identifying retailers/restaurants which will value and
succeed in the Wylie market, scheduling face-to-face meetings with the same, and following up
for a two year period.
As detailed in the presented proposal, retail analysis has progressed beyond identifying pure
demographics within a certain drive-time to include license plate analysis of existing shoppers
and psychographic data evaluating what typical families in the Wylie market spend their
disposable income on and targeting entities which are a match.
As shown on Page 11 of the proposal, the Project Fees equal S30,000 which establishes a two-
year service agreement and secures on-site assistance (scheduling and attending meetings) for
ICSC—National 2015 & 2016 as well as ICSC—Texas 2015 & 2016.
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February 20, 2015
Page 5 of 8
Staff recommended that the WEDC Board of Directors authorize the Executive Director to enter
into an Agreement with The Retail Coach in the amount of $30000 for the creation and
implementation of a Retail Economic Development Plan.
MOTION: A motion was made by Mitch Herzog and seconded by Todd Wintters to
approve the Agreement between WEDC and The Retail Coach,LLC. The
WEDC Board voted 5 —FOR and 0 AGAINST in favor of the motion.
DISCUSSION ITEMS
ITEM NO. 6 — Staff report` review issues surrounding Performance Agreements between the
WEDC and: Woodbridge Crossing, Ascend Custom Extrusions, CSD Woodbridge, All State
Fire,Exco Tooling Solutions,Jackson Street properties, ICSC 2015 National Conference,City of
Wylie 19 acres tract on F.M. 544, staff training, WEDC website and aerial update, sporting
events and regional housing starts.
Woodbridge Crossing
Attached for the Board's review was the Sales Tax Reimbursement Report which identifies all
sales taxes received through January 2015 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 as opposed to the maximum reimbursement of
$12 million originally contemplated.
$2,451,519 has been reimbursed through November 2014 with net receipts of$1598,509 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).
As shown on the Sales Tax Reimbursement Report, $124,878 was generated in sales tax in
November 2014 versus $80,120 in November of 2013. This increase represents a 56% 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
Attached for review were the Ascend Custom Extrusion Critical Dates Analysis and Performance
Agreement Monitoring Procedures. 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.
Also attached for review was the Performance Agreement between the WEDC and ACE which
was approved in December 2013. Payment#2 of 4 has been funded with Ascend meeting all
Performance Obligations within Section A of the attachment.
WEDC-Minutes
February 20,2015
Page 6 of 8
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 I, 2023, Clark Street Development is eligible to receive a Yz
cent sales tax reimbursement from the WEDC (City of Wylie not part of sales tax reimbursement
agreement). 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.
Along with a summary of the Performance Agreement, a Sales Tax Reimbursement Report was
included for the Board's review. The Board noted that the August receipts fell dramatically,
most likely due to Kroger not being included within the report. The only logical explanation for
the decrease is that Kroger must pay quarterly.
All-State Fire
While All-State has closed on its lot on Century Way, they are having significant difficulties in
obtaining financing without having to place more cash into the project. Central to their challenge
is that there are not any comparable sales in Wylie or the surrounding area to support the
financing teims of its primary lender. Bank of America, which is structuring a SBA loan for All
State.
There exists the real potential that All-State will sell its lot in Wylie and locate elsewhere. Staff
has discussed options which could benefit All-State including 100% of incentives payable upon
CO or possibly a loan subordinate to its lenders.
Exco Tooling Solutions
Exco has begun construction of its 30,000 square foot facility within Premier Business Park. All
indications point to an October completion date. Pulliam Construction Management is the
general contractor with many local subs having an opportunity to bid on the project.
As provided in the Summary of Performance Obligations, the WEDC will fund an $87,000
incentive upon issuance of a CO followed by four payments of$20,000 over the following four
years.
Jackson Street Properties
Staff met with D2 Investment and Adams Engineering to begin the process of master planning
the '1 acre owned by the WEDC on Jackson Street. Early indications lead to the thought that a
three story structure would be required to satisfy density requirements for a mixed use project
with multi-family and commercial uses.
Stark differences are found in the responses of each party looking at the project ranging from the
approach of studying the potential with land planners and architects to seeking out developers of
similar projects to determine if there is an immediate interest.
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February 20, 2015
Page 7 of 8
ICSC National Conference
The International Conference of Shopping Centers will be held this year on May 17 — 20, 2015.
Staff is already preparing for this event with a much needed update of'marketing materials, web
site, aerial photography, and potentially employing a consultant to assist with marketing Wylie to
new retail/restaurant concepts.
City of Wylie 19 Acre Tract at F M 544
Staff, along with the City of Wylie Director of Planning, presented to the Wylie City Council a
first draft of a concept plan developed by PBK Architects identifying the commercial potential
for City property located near the intersection of F.M. 544 and Sander' Boulevard. The key
concept presented was staffs belief that an anchor must be attracted to the property in the form
of either a hotel or a significant office complex to attract/support a mixed use development
comprised of multi-family, retail, restaurant, and professional services. Staff will present the
rendering at the Board meeting.
Staff.Training
Staff completed the first of six classes required for becoming a Certified Economic Developer by
the International Economic Development Council. The next class is scheduled for April 9 - 10,
2015 in Atlanta.
WEDC Website and Aerial Update
Staff has begun the process of updating aerial photography and a complete rebuild of our
website. Both tasks are scheduled for completion prior to ICSC.
Sporting Events
Staff attached a spreadsheet by which the use of Mavericks tickets are tracked.
Regional Housing Starts
Forty-six homes were permitted in Wylie for January 2015. Sachse, Lavon, and Murphy
permitted a combined twenty-one homes over the same period.
No action is requested by staff for this item.
EXECUTIVE SESSION
Recessed into Closed Session at 7:47 a.m. in compliance with Section 551.001, et.s•eq. Texas
Government Code, to wit:
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February 20, 2015
Page 8 of 8
Section 551.072 (Real Estate) of the Local Government Code, Vernon's Texas Code Annotated
(Open Meetings Act). Consider the sale or acquisition of properties located near the intersection
of:
• Industrial Court and Birmingham
• Ballard Street& Stone Rd.
• Cooper Drive & State Highway 78
Section 551.087 (Economic Development) of the Local Government Code, Vernon's Texas
Code Annotated(Open Meetings Act).
Ex-officio member Manson left the meeting at 8:41 a.m. Board Member Herzog left the meeting
at 8:41 a.m. due to a conflict of interest relating to project 2014-9b.
• Project 2014-9b
• Project 2015-2a
CO INTO OPEN MEETING
The WEDC Board of Directors reconvened into open session at 8:49 a.m. and took no action.
JOURNMENT
With no further business, President Fuller adjourned the WEDC Board meeting at 8:49 a.m.
Marvin Fuller,President
ATTEST:
Samuel Satte • hite,Director