11-20-2015 (WEDC) Minutes Minutes
Wylie Economic Development Corporation
Board of Directors Meeting
Friday,November 20,2015—6:30 A.M.
WEDC Offices—Conference Room
250 South Highway 78—Wylie,Texas
CALL TO ORDER
Announce the presence of a Ouorum
Vice President Mitch Herzog called the meeting to order at 6:30 a.m. Board Members present
were Demond Dawkins and Todd Wintters.
Ex-officio members Mayor Eric Hogue and City Manager Mindy Manson were present.
WEDC staff present was Executive Director Sam Satterwhite and Sr.Assistant Angel Wygant.
CITIZEN PARTICIPATION
Lynn Grimes was in attendance and reminded the Board about the upcoming Wylie Arts Festival
on December 5th. She encouraged the Board to attend and thanked them for their support. With
no further citizen participation,Mr. Herzog proceeded to Action Items.
ACTION ITEMS
ITEM NO. 1 — Consider and act upon approval of the October 16, 2015 Minutes of the
Wylie Economic Development Corporation (WEDC)Board of Directors Meeting.
MOTION: A motion was made by Todd Wintters and seconded by
Demond Dawkins to approve the October 16, 2015 Minutes of the Wylie
Economic Development Corporation as amended. The WEDC Board voted
3—FOR and 0—AGAINST in favor of the motion.
ITEM NO. 2 — Consider and act upon approval of the October 2015 WEDC Treasurer's
Report.
MOTION: A motion was made by Todd Wintters and seconded by Demond Dawkins
to approve the October 2015 WEDC Treasurer's report. The WEDC Board
voted 3—FOR and 0—AGAINST in favor of the motion.
ITEM NO. 3 — Consider and act upon a First Modification to Loan Documents between
The American National Bank of Texas and the WEDC.
Staff reminded the Board that on September 23, 2015 the WEDC executed Loan Documents
associated with the borrowing of $1,685,000 to fund the purchase of the Linduff property on
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November 20, 2015
Page 2 of 6
Business Way and the Edge property on State Highway 78. At the time the Loan Documents
were drafted and subsequently approved, the WEDC was going to fund both the acquisition and
sale simultaneously and perform the modifications to the Linduff property post-closing. Under
that described structure, The American National Bank of Texas (ANB) was going to fund the
loan upon execution of the Loan Documents.
As the project was renegotiated during the closing weeks prior to WEDC/Edge approval, the
WEDC closed on the Linduff property but will not close on the Edge property until on or about
March 21, 2016. Staff requested of ANB to only draw down on the purchase of the Linduff
property and fund the remaining$750,000 at a later date so that interest would not accrue.
Presented for the Board's review was a modification to the Loan Documents clarifying the
WEDC loan as a 'draw note' and that interest will only accrue on the current principal balance of
the loan, which may change from time to time,up to the maximum amount of$1,685,000.
Staff recommended that the WEDC Board of Directors approve a First Modification to Loan
Documents between The American National Bank of Texas and the Wylie Economic
Development Corporation.
MOTION: A motion was made by Demond Dawkins and seconded by Todd Wintters
to approve a First Modification to Loan Documents between The American
National Bank of Texas and the Wylie Economic Development Corporation.
The WEDC Board voted 3—FOR and 0—AGAINST in favor of the motion.
ITEM NO. 4 — Consider and act upon ratification of a Commercial Contract between the
WEDC and McClure Partners,LLC.
Staff reviewed a Commercial Contract for the purchase of a 1.433 acre lot (Ferrell Property)
from the WEDC by McClure Partners, LLC for $250,000. The Contract calls for McClure to
simultaneously close on the adjacent 0.69 acre Jacobs tract and 1.66 acre Goldenberg tract,
remove all improvements on the three properties including the Goldenberg building and the
Jacobs billboard, and construct median improvements to be located near the northwest corner of
the Ferrell property. Finally, the WEDC has committed to participate financially in median
improvements for a turn bay into property on the north side of F.M. 544.
Staff recommended that the WEDC Board ratify a Commercial Contract between WEDC and
McClure Partners,LLC.
MOTION: A motion was made by Demond Dawkins and seconded by Todd Wintters
to ratify a Commercial Contract between WEDC and McClure Partners,
LLC. The WEDC Board voted 3 —FOR and 0 — AGAINST in favor of
the motion.
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November 20, 2015
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ITEM NO. 5 — Consider and act upon issues surrounding a Performance Agreement
between the WEDC and Patna Properties,LLC.
Staff explained that Dr. Tanvir Ahmad has purchased a 0.57 acre lot near the intersection of F.M.
544 & State Highway 78 (fronting Kirby behind Exxon). Dr. Ahmad intends to construct a
4,283 square foot office building within which he will utilize 3,100 square feet for his medical
practice. The remaining 1,183 square feet will not be finished out until a tenant is identified. Dr.
Ahmad had previously inquired as to any available assistance from the WEDC.
Dr. Ahmad has a construction budget of $700,000 ($163.44 psf). Pulliam Construction
Management has been working with Dr. Ahmad to develop construction plans and a construction
budget. Should the project move forward, construction will begin within the first quarter of 2016
with an estimated completion date within the third quarter of 2016.
In developing an incentive package to present to the Board, staff is hesitant to utilize a $163.44
psf appraised value being that medical construction costs may not translate into appraised value.
Also, a more conservative psf cost/value requirement will reduce the opportunity for there to be a
default within the Performance Agreement. Therefore, staff is utilizing a $130 psf valuation
requirement. Further, staff typically utilizes a 3 year factor when developing an incentive based
upon the amount of new property taxes that will be generated over that period of time. However,
similar to the Tony Snider project, additional credit is warranted in the form of a 4 year factor for
creating value on a property with marginal access and visibility.
Using a 'new value' assumption of$557,000 generating$7,500 per year in property taxes to the
City of Wylie (86.89 cents) and the WISD I&S (47 cents), a 4 year factor creates a total package
valued at $30,000. Within the attached Performance Agreement, staff proposed to fund $20,000
at CO and the remaining $10,000 upon a certified valuation of $707,000 ($557,000 new value
plus existing$150,000 in real property).
Staff recommended that the WEDC Board of Directors approve a Performance Agreement
between the WEDC and Patna Properties,LLC as presented.
MOTION: A motion was made by Todd Wintters and seconded by Demond Dawkins
to approve a Performance Agreement between the WEDC and Patna
Properties, LLC. The WEDC Board voted 3—FOR and 0—AGAINST in
favor of the motion.
ITEM NO. 6 — Consider and act upon issues surrounding the redevelopment of WEDC
properties located on Industrial Court and Cooper Drive.
Staff made an oral presentation surrounding proposed infrastructure improvements impacting the
Exco/Mann Made properties which may require demolition of WEDC buildings located on
Industrial Court.
Staff made no recommendations and the WEDC Board took no action on this item.
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November 20, 2015
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DISCUSSION ITEMS
ITEM NO. 7 — Staff report: review issues surrounding Performance Agreements between the
WEDC and: Woodbridge Crossing, Ascend Custom Extrusions, CSD Woodbridge, Exco
Tooling Solutions, Von Runnen Holdings, All State Fire, WEDC Staffing, 106 N. Birmingham
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 August 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.
$3,157,963.71 in reimbursement has been earned through October 2015 with net receipts of
$2,341,181.81 after reimbursements. As well, it is estimated that $3.5 mm has been paid in ad
valorem taxes to the City of Wylie(excluding the WISD).
As shown on the Sales Tax Reimbursement Report, $104,666.76 was generated in sales tax in
August 2015 versus $93,677.52 in August 2014. This increase represents a 12% gain over 2014
receipts.
Ascend Commercial Lease and Performance Agreement
Attached for the Board's 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 the Board's 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'/a
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,
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November 20, 2015
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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.
Exco Tooling Solutions
Exco has begun construction of its 30,000 square foot facility within Premier Business Park. All
indications point to a temporary CO being issued by November 30, 2015 and Final CO is
anticipated by December 31, 2015. 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.
Von Runnen Holdings
Von Runnen Holdings has encountered no significant delays in their construction schedule and
anticipates a Certificate of Occupancy (CO) being issued no later than January 1, 2016 as
required by the WEDC Performance Agreement. Upon issuance of a CO and confirmation of
$1.25 mm in construction costs, the WEDC will issue Incentive Payment No. 1 of$20,000. Two
additional payments of$10,000 each will be issued over the following two years.
All State Fire Equipment
All State Fire Equipment was issued a building permit on July 2, 2015 and held their Ground-
Breaking ceremony on September 18, 2015. Work is progressing well and ASFE appears to be
on track to receive a Certificate of Occupancy by the August 1, 2016 as required in their
Performance Agreement.
WEDC Staffing
Staff is preparing to interview four individuals for the Assistant Director position the week of
December 7th. While response to the job posting did not result in as strong a candidate pool as
staff desired, there are at least two qualified candidates that are being interviewed and two
additional individuals who warrant an additional look. Should the pool be narrowed to a single
or even two candidates, staff will involve a Board Member in a second interview. However, if
none of the candidates present a quality option for the WEDC, staff will discontinue the process
and start over.
106 N. Birmingham
Staff continues to discuss options with local developers for redevelopment of the K&M property.
Preliminary discussions have resulted in demolishing the building not being a preference at least
with Mr. Bob Heath and Mr. Gary Taylor. Both individuals are however developing their plans
for redevelopment in writing which will be presented to the Board for its review.
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November 20, 2015
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Regional Housing Starts
Thirty-two homes were permitted in Wylie for October 2015. Sachse, Lavon, and Murphy
permitted a combined Thirty-six homes over the same period.
No action was requested by staff for this item.
EXECUTIVE SESSION
Recessed into Closed Session at 7:34 a.m. in compliance with Section 551.001, et.seq. Texas
Government Code, to wit:
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& State Highway
• Ballard Street and Oak Street
RECONVENE INTO OPEN MEETING
The WEDC Board of Directors reconvened into open session at 7:54 a.m. and took no action..
ADJOURNMENT
With no further business, Vice President Herzog adjourned the WEDC Board meeting at 7:54
a.m.
7
i;"
Marvin Fuller,President
ATTEST:
Samuel Satterwhite,Director