07-15-2015 (WEDC) Minutes Minutes
Wylie Economic Development Corporation
Board of Directors Meeting
July 15, 2015 —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 at 6:33 a.m. Board Members present were
John Yeager, Demond Dawkins and Todd Wintters.
Ex-officio members Eric Hogue, Mayor and Mindy Manson, City Manager were present.
WEDC staff present was Executive Director Sam Satterwhite and Sr. Assistant Angel Wygant.
CITIZEN PARTICIPATION
Lynn Grimes informed the board that RaceTrac continues to do well with strong sales. The
minion Fun Run fundraiser for the Christian Care Center was a success with 300 runners
participating. She thanked the WEDC Board for their ongoing support and Mr. Fuller thanked
Mrs. Grimes for her support for Wylie and for the WEDC Board.
With no further citizen participation, Mr. Fuller proceeded to Action Items.
ACTION ITEMS
ITEM NO. 1 — Consider and act upon approval of the June 18, 2015 Minutes of the Wylie
Economic Development Corporation (WEDC)Board of Directors Meeting.
Staff noted that Within Item No. 4 Sholz was spelled incorrectly.
MOTION: A motion was made by John Yeager and seconded by
Todd Wintters to approve the June 18, 2015 Minutes of the Wylie Economic
Development Corporation as amended. The WEDC Board voted 4 — FOR
and 0—AGAINST in favor of the motion.
ITEM NO. 2 — Consider and act upon approval of the June 2015 WEDC Treasurer's
Report.
MOTION: A motion was made by Todd Wintters and seconded by Demond Dawkins
to approve the June 2015 WEDC Treasurer's Report. The WEDC Board
voted 4—FOR and 0—AGAINST in favor of the motion.
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July 15, 2015
Page 2 of 11
ITEM NO. 3—Consider and act upon issues surrounding the election of WEDC officers.
On June 9, 2015 the Wylie City Council appointed Mr. Demond Dawkins and Mr. John Yeager
to new three year terms as Members of the Wylie Economic Development Corporation Board of
Directors. The appointees were sworn in by City Secretary Carole Ehrlich.
On an annual basis and following the selection of WEDC Board Members by the Wylie City
Council, the WEDC elects officers for the upcoming year. Provided for review was Section V—
Officers of the WEDC By-laws. Section V provides for the selection of Officers and the duties
of the same.
In 2014 the WEDC Board of Directors elected the current officers:
Marvin Fuller President
Mitch Herzog Vice President
John Yeager ................... . Secretary
Todd Wintters Treasurer
Board Member Wintters expressed the Board's thanks to President Marvin Fuller for the
outstanding leadership he provided during the preceding year and asked if he would be willing to
serve another year as President. President Fuller thanked the Board and stated that he was
willing to serve another year if that was the desire of the remaining Board Members. He asked
the remaining officers if they were willing to serve another year in their current positions. All
current officers were willing.
MOTION: A motion was made by Todd Wintters and seconded by John Yeager to
elect the slate of officers including Marvin Fuller as President, Mitch
Herzog as Vice President, John Yeager as Secretary, and Todd Wintters as
Treasurer. The WEDC Board voted 4 — FOR and 0 — AGAINST in favor
of the motion.
ITEM NO. 4 — Consider and act upon the establishment of a Regular Meeting date and
time for the WEDC Board of Directors for 2015-2016.
Section 4.07 of the WEDC By-laws states that the President of the Board shall set a regular
meeting date and time at the beginning of his/her term. With officers elected via the last Action
Item,the WEDC President is required to establish the Regular Meeting date/time.
President Fuller asked the WEDC Board Members if the current Regular Meeting time/dates, the
third Friday of each month at 6:30 a.m., was still convenient for all Board Members or if there
needed to be a change. All Board Members preferred to keep the date/time the same.
MOTION: A motion was made by Todd Wintters and seconded by John Yeager to set
the Regular Meeting date/time for the 2015-2016 WEDC Board Meetings
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July 15, 2015
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as the third Friday of each month at 6:30 a.m. The WEDC Board voted 4
—FOR and 0—AGAINST in favor of the motion.
ITEM NO. 5 — {REMOVE FROM TABLE} Consider and act upon issues surrounding a
Performance Agreement between the WEDC and KREA Acquisitions,LLC.
MOTION: A motion was made by Todd Winners and seconded by John Yeager to
remove this item from Table. The WEDC Board voted 4 — FOR and 0 —
AGAINST in favor of the motion.
Staff informed the Board that La Quinta representatives met with City staff to discuss site
planning, platting, construction standards and the permitting process. As is typical the topic of
fees came up and KREA was informed that Thoroughfare Impact Fees would be $54,000 and
Fire and Development Fees would be $33,750. Staff has since determined that total fees will be
as follows:
Thoroughfare Impact(75 rooms) $54,000
Building Permit(75 rooms) 18,750
Water Impact(3' compound) 13,963
Sewer Impact(3' compound) 13,172
Water Impact(1' landscaping meter) 6,207
Fire Development (75 rooms) 33,750
Fire Plan Review(per sq ft) 896
Trade Permits
Mechanical 100
Electrical 100
Plumbing 100
Water Tap Fee 2,500
Sewer Tap Fee 3,000
Fire Sprinkler Overhead Permit (per sq ft) 672
Fire Sprinkler Underground Permit 250
Fire Alarm Installation Permit 150
Total: $147,610
Mr. Parbhu requested that WEDC staff approach the City Manager and request a reduction in the
fees. Staff explained that the WEDC preferred to coordinate all incentives, which a reduction in
fees would be such, and proposed an alternative to Mr. Parbhu. With no change to the
cumulative incentive being offered of$600,000, staff suggested a $100,000 payment to KREA at
issuance of CO by the City with the maximum future incentive of$500,000 during the life of the
Agreement.
Staff reviewed the changes that have occurred since the June meeting of the WEDC Board which
impact this project:
WEDC—Minutes
July 15, 2015
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1. The project square footage has increased from 40,000 square feet to 44,800 square feet;
2. The structure has increased from three (3)to four (4) stories;
3. The minimum number of rooms has been increased from seventy (70) to seventy (75)
rooms;
4. The number of years KREA is eligible to receive reimbursement based on Hotel & Motel
Occupancy Tax has been reduced from eight (8)to seven(7) years; and
5. KREA has requested an extension of time allowed to complete the project from December
31, 2016 to March 31, 2017.
Staff commented that he was comfortable with the structural change to the funding structure
being that the scope of the project has been increased to the benefit of Wylie, the total incentive
outlay remains unchanged, and there will be no reduction in fees paid to the City of Wylie. Staff
informed the Board that all changes had been made to the Performance Agreement which was
attached for the Board's review.
Staff recommended that the WEDC Board of Directors approve a Performance Agreement
between the WEDC and KREA Acquisitions, LLC.
MOTION: A motion was made by Demond Dawkins and seconded by John Yeager to
approve the Performance Agreement as presented between the WEDC and
KREA Acquisitions LLC. The WEDC Board voted 4 — FOR and 0 —
AGAINST in favor of the motion.
ITEM NO. 6 — Consider and act upon issues surrounding the FY 2015-2016 WEDC
Budget.
Staff informed the Board that upon approval of the Budget, staff is prepared to present the same
to the Wylie City Council at its Budget Work Session on July 16, 2015. The attached budget
was consistent with two previously presented documents with several exceptions as outlined
below:
Incentives
Assuming approval of the previous Action Item, a$100,000 payment is budgeted to KREA to be
paid upon completion of the improvements contemplated within the Performance Agreement.
While KREA is not required to complete the improvements until March 2017, the developer
believes a July 2016 opening is possible. Further, with the Start Date beginning 6 months after
CO, all monies budgeted for Hotel &Motel Occupancy Tax reimbursement have been removed.
An item that was to be discussed in Executive Session, Project HR moving costs of$338,000,
was included within the budget. Staff believed this was a"not to exceed" figure.
s
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July 15, 2015
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Community Development
While the budget amount remained in the budget, staff recommended the discontinuation of the
WEDC Invitational golf tournament. A more Broker/Developer focused event will be
contemplated and discussed at a later Board Meeting.
Dues
With the hiring of a 'Vice President' level employee, staff is planning on being more strategic
with its time and focusing on prospect recruitment. As a tool to do so, staff requested the Board
consider membership at Prestonwood Country Club which is part of Club Corp. Prestonwood
has 2 clubhouse facilities in North Dallas and as a part of Club Corp there are more than a dozen
other clubs in the metroplex that a member can access. The one-time initiation fee is $3,000
with annual dues of$6,900.
The existing membership at Woodbridge G.C. would be maintained and be in the name of the
new WEDC Vice President.
Within Dues as well, membership with the Texas Economic Development Council for the new
VP is included.
Other Financing—Woodbridge Parkway
As discussed several times in Staff Reports, the WEDC has retained $559,567 out of the original
loan from ANB to be used for final payment to the contractor and the outstanding issue of
compensating a property owner for land which became part of the flood plain due to the
development of the roadway. The City Engineer believes the issue to be resolved and anticipates
utilizing the remaining WEDC funds within the current fiscal year. Therefore, the expense of
$559,567 has been removed from the FY 2015-2016 budget in addition to the Fund Balance
being reduced by an equal amount.
Staff recommended that the WEDC Board of Directors approve the FY 2015-2016 Budget as
presented.
After discussion of the various items, it was decided to Table Final Budget approval until the
next Regular Meeting but give approval for the budget to be presented to the Wylie City Council
at its Budget Work Session on July 16, 2015.
MOTION: A motion was made by Todd Wintters and seconded by John Yeager to
approve presentation of the Budget to Wylie City Council at its Budget
Work Session on July 16, 2015 and to table Final Budget approval until the
next Regular Meeting, or any Special Called Meeting held prior to that
date. The WEDC Board voted 4 — FOR and 0 —AGAINST in favor of the
motion.
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July 15, 2015
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ITEM NO. 7 — Consider and act upon the purchase of property located at 106 N.
Birmingham.
The WEDC entered into a Real Estate Sales Contract to purchase 0.21 acre located at 106 N.
Birmingham from Cora Aline Jones. With a landscaping company to the north and a dilapidated
house to the south, the property and building located thereon currently are utilized by K&M
Automotive. The WEDC has agreed to pay $190,000 for the property with a 90 day Feasibility
Period expiring on August 26, 2015. Closing shall take place 30 days after the end of the
Feasibility Period.
To date, the WEDC has determined through a Phase I Environmental Audit and a Limited Phase
II that the property is free from any environmental contaminants exceeding allowable levels
established by the Texas Council on Environmental Quality and the Environmental Protection
Agency. Soil and foundation core samples were taken by Whitehead & Mueller confirming the
findings and will be made available to all future buyers and financial entities contemplating the
acquisition of this property.
At closing, the contract calls for the Seller to deliver the property free from all personal
belongings. Staff of course will inspect the property prior to closing to confirm all vehicles and
debris have been removed from the property.
Also attached for the Board's review was the Commitment Letter from American National Bank
to lend the WEDC $185,000 at 4% interest on a 48 month maturity. While staff would normally
present a 60 month note, it was staffs intention to request of the Board in the next Action Item
that the WEDC payoff the Hobart Loan which has a 5% rate and 3.5 years remaining. The 6
month increase in term is offset by the 1%reduction in interest.
Staff further recommended that the WEDC put a total of 10% down on this purchase therefore
bringing $14,000 to closing along with the $5,000 in earnest money already deposited with
Lawyers Title. President Fuller, with Board support, believed that it was in the WEDC's best
interest to borrow$185,000 for this project with WEDC presence in this area short lived.
Staff recommended that the WEDC Board of Directors approve the purchase of property located
at 106 N. Birmingham and further authorize American National Bank to develop a Loan
Agreement and other documentation necessary for the WEDC to borrow $185,000 to finance
said purchase.
MOTION: A motion was made by Todd Wintters and seconded by John Yeager to
approve the purchase of property located at 106 N. Birmingham and
further authorize American National Bank to develop a Loan Agreement
and other documentation necessary for the WEDC to borrow $185,000 to
finance said purchase. The WEDC Board voted 4 — FOR and 0 —
AGAINST in favor of the motion.
WEDC—Minutes
July 15, 2015
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ITEM NO. 8 — Consider and act upon issues surrounding the refinancing of an existing
note with Hobart Industries.
Staff explained that American National Bank had verbally indicated that the Hobart Note could
be packaged with the Jones Note under the same terms. As cited previously, the remaining term
would be increased by 6 months but the interest rate would be reduced a full percentage point
(from 5%to 4%).
Staff recommended that the WEDC Board of Directors authorize American National Bank to
package the ±$215,000 associated with the Hobart Industries Note along with the $185,000 note
being developed to purchase the Jones tract.
MOTION: A motion was made by Demond Dawkins and seconded by John Yeager to
authorize American National Bank to package the ±$215,000 associated
with the payoff of the Hobart Industries Note along with the $185,000 note
being developed to purchase the Jones tract. The WEDC Board voted 4 —
FOR and 0—AGAINST in favor of the motion.
ITEM NO. 9 — Consider and act upon amending a Performance Agreement between the
WEDC and Stephen Perkins,Inc.
Staff reminded the Board that on February 20, 2015 the WEDC entered into an agreement with
Stephen Perkins, Inc. to facilitate the renovation of a building located at 101 S. Ballard in
Downtown Wylie. With an estimated project cost of$92,500, the WEDC agreed to reimburse
Perkins $10,000. Board support for the project stemmed from the significant upgrade to the
building and the addition of an elevator servicing the second story and in a sense doubling the
usable square footage of the building.
Mr. Perkins has encountered one set back after another with this project with the most recent
involving the elevator company abandoning the job and a death in the family. Unfortunately,
Mr. Perkins was supposed to complete the project by July 1, 2015. While staff should have been
monitoring the progress and impending deadline more closely, Mr. Perkins has some
responsibility for the missed deadline as well. Regardless, Mr. Perkins will be receiving a CO
within approximately 2 weeks with staff recommending the deadline for CO be extended to
August 7, 2015.
Staff recommended that the WEDC Board of Directors approve an amendment to the
Performance Agreement between the WEDC and Stephen Perkins, Inc. extending the deadline
for CO to August 7, 2015.
WEDC—Minutes
July 15, 2015
Page 8 of 11
MOTION: A motion was made by Todd Wintters and seconded by Demond Dawkins
to approve an amendment to the Performance Agreement between the
WEDC and Stephen Perkins, Inc. extending the deadline for CO to August
7, 2015. The WEDC Board voted 4 —FOR and 0 —AGAINST in favor of
the motion.
ITEM NO. 10 — Consider and act upon amending a Performance Agreement between the
WEDC and R.R. Maguire Management,Inc.
As with Item No. 9, staff reminded the Board that on February 20, 2015 the WEDC entered into
an agreement with R. R. Maguire Management, Inc. to facilitate the renovation of a building
located at 101 S. Ballard in Downtown Wylie. With an estimated project cost of$142,500, the
WEDC agreed to reimburse Maguire $20,000. Board support for the project stemmed from the
significant upgrade to the building. Additionally, Maguire demolished a dilapidated structure
and built a new 700 square foot structure to house an aquatic therapy pool.
Similar to Perkins, Mr. Maguire has encountered one set back after another with this project with
the most recent involving the elevator company abandoning the job. Mr. Maguire was supposed
to complete the project by July 1, 2015 as well with staff recommending the deadline for CO be
extended to August 7, 2015.
Staff recommended that the WEDC Board of Directors approve an amendment to the
Performance Agreement between the WEDC and R. R. Maguire Management, Inc. extending the
deadline for CO to August 7, 2015.
MOTION: A motion was made by Todd Wintters and seconded by John Yeager to
approve an amendment to the Performance Agreement between the
WEDC and R. R. Maguire Management, Inc. extending the deadline for
CO to August 7, 2015. The WEDC Board voted 4 — FOR and 0 —
AGAINST in favor of the motion.
DISCUSSION ITEMS
ITEM NO. 11 — Staff report: review issues surrounding Performance Agreements between the
WEDC and: Woodbridge Crossing, Ascend Custom Extrusions, CSD Woodbridge, Exco
Tooling Solutions, and regional housing starts.
Analysis
As a reminder to Board members, the Board may not discuss an item which is not specifically
identified on the agenda. Only those items listed above can be discussed. Should any Board
member want an issue be placed on the agenda at any time prior to a Board meeting, please
contact the WEDC President or staff.
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July 15, 2015
Page 9 of 11
Woodbrid: c Crossing
Attached for the Board's review was the Sales Tax Reimbursement Report which identifies all
sales taxes received through June 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.
$2,899,925 in reimbursements have been earned through June 2015 with net receipts of
$1,984,072 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, $94,313.63 was generated in sales tax in
April 2015 versus $85,673.03 in April 2014. This increase represents a 10% gain over 2014
receipts.
Ascend Commercial Lease and Performance Agreement
Attached for review was 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 summary of a second 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.
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'/2
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 a $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 is included for the Board's review.
WEDC—Minutes
July 15, 2015
Page 10 of 11
Exco Tooling Solutions
Exco has begun construction of its 30,000 square foot facility within Premier Business Park.
While the Performance Agreement calls for a January 31, 2016 CO, Exco believes a December
31, 2015 CO is attainable even with all the rain. 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.
Regional Housing Starts
Fifty-seven homes were permitted in Wylie for June 2015. Sachse, Lavon, and Murphy permitted
a combined fifty homes over the same period.
No action is requested by staff for this item.
EXECUTIVE SESSION
Recessed into Closed Session at 7:21 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 2015-2a
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:
• Cooper Drive and State Highway 78
RECONVENE INTO OPEN MEETING
The WEDC Board of Directors reconvened into open session at 7:55 a.m. and took no action.
WEDC — Minutes
July 15, 2015
Page I 1 of 11
ADJOURNMENT
With no further business, President Fuller adjourned the WEDC Board meeting at 7:55 a.m.
?
Marvin Fuller,President
ATTEST:
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Samuel Satterwhite,Director