12-18-2015 (WEDC) Minutes Minutes
Wylie Economic Development Corporation
Board of Directors Meeting
Friday, December 18, 2015 —6:30 A.M.
WEDC Offices—Conference Room
250 South Highway 78 —Wylie, Texas
CALL TO 0 ' I ER
Announce the presence of a Quorum
President Marvin Fuller called the meeting to order at 6:34 a.m. Board Members present were
Mitch Herzog, John Yeager, 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
Lynn Grimes was in attendance and expressed holiday greeting to the Board. With no further
citizen participation, Mr. Fuller proceeded to Action Items.
ACTION ITEMS
ITEM NO. 1 — Consider and act upon approval of the December 8, 2015 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 December 8, 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 December 8, 2015 Minutes of the
Special Joint Work Session of the WEDC Board of Directors and Wylie City Council.
MOTION: A motion was made by John Yeager and seconded by
Demond Dawkins to approve the December 8, 2015 Minutes of the Special
Joint Work Session of the WEDC Board of Directors and Wylie City
Council. The WEDC Board voted 5 — FOR and 0 —AGAINST in favor of
the motion.
ITEM NO. 3 — Consider and act upon approval of the November 2015 WEDC Treasurer's
Report.
MOTION: A motion was made by Mitch Herzog and seconded by John Yeager to
approve the November 2015 WEDC Treasurer's report. The WEDC Board
voted 5 —FOR and 0—AGAINST in favor of the motion.
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December 18, 2015
Page 2 of 7
ITEM NO. 4 — Consider and act upon a Performance Agreement between the WEDC and
the Wedge Corporation.
Staff reviewed the terms of the attached Performance Agreement and reminded the Board that
the WEDC funded a $275,000 loan (economic assistance) for the construction of qualified
infrastructure for The Wedge Corporation located at 2600 West FM 544. As per Section II (c) of
the Agreement, a $91,666.67 credit toward the repayment of said loan will be approved by the
WEDC Board of Directors so long as The Wedge has continuously occupied and operated the
facility located at 2600 West FM 544. The WEDC was in receipt of a letter from The Wedge
owner Don Bellis confirming continuous occupancy and operation.
Real property improvements at 2600 West FM 544 are valued at $L5 mm with personal property
valued at $418,000. In developing the Performance Agreement, the WEDC had estimated that
real and personal property improvements would equal $1.75 mm.
MOTION: A motion was made by Demond Dawkins and seconded by Todd Wintters
to approve a $91,666.67 credit toward a loan between the WEDC and The
Wedge Corporation. The WEDC Board voted 5 —FOR and 0—AGAINST
in favor of the motion.
ITEM NO. 5 — Consider and act upon issues surrounding a Performance Agreement
between the WEDC and Gardner Regency,LLC.
Staff reviewed the terms of the attached Performance Agreement which obligated the WEDC to
reimburse Savage (Gardner Regency, LLC) for moving expenses in the amount of $254,357.
The grant was payable in five equal and annual payments of$50,871.40. The first installment
was paid at the issuance of the certificate of occupancy on 1-9-09, with the fifth and final
payment paid on 1-3-13.
The WEDC holds a note on the 3.87 acres sold to Gardner Regency in the amount of$421,443.
Should there be no Default as identified within Sections 3 and 4 of the Performance Agreement,
the WEDC shall forgive all payments associated with the Note over a seven year period in equal
amounts beginning on the anniversary date Savage receives a certificate of occupancy. No event
of Default has been identified as the cumulative appraised value equals $4.63 mm and Savage
having 42 employees which exceed the required 35 called for in the Agreement.
With no event of Default existing, staff recommended that the WEDC Board of Directors forgive
the Final Payment (Payment #7) associated with the Real Estate Lien Note in the amount of
$60,206.16.
MOTION: A motion was made by Mitch Herzog and seconded by John Yeager to
approved the Final Payment (Payment #7) associated with the Real Estate
Lien Note in the amount of $60,206.16. The WEDC Board voted 5 —
FOR and 0—AGAINST in favor of the motion.
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December 18, 2015
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ITEM NO. 6 — Consider and act upon a Performance Agreement between the WEDC and
Freudiger Holdings, LLC.
Staff requested that this item be tabled until the next Regularly Scheduled Meeting of the WEDC
Board in January 2016.
MOTION: A motion was made by Todd Wintters and seconded by John Yeager to
table discussion of this issue until the next Regularly Scheduled Meeting
of the WEDC Board in January 2016. The WEDC Board voted 5 —FOR
and 0—AGAINST in favor of the motion.
ITEM NO. 7 — Consider and act upon issues surrounding the redevelopment of WEDC
properties located on Industrial Court and Cooper Drive.
Staff reviewed a spreadsheet of all properties within the redevelopment zone identifying lease
expiration, square footage, lease income, and for analysis only, appraised value. The proposed
buyer of the Buchanan property has executed a letter of intent and has committed to providing
the WEDC with a contract by the end of December. Assuming two weeks for review and
finalizing comments between attorneys, staff believes it is realistic to be under contract by
January 22, 2016. The engineer for the buyer has indicated that it will take 4 months for design
and approvals. Therefore, all things being equal, the WEDC will need to begin median and
access improvements no earlier than May 23, 2016.
Staff continued that even with the Cazad lease expiring on April 30, 2016, demolition can begin
on or about April 1, 2016 and start with the Buchanan (Exco) building. It has been estimated
that demolition will take approximately 60 days. Exco and Mann Made will not be an issue in
terms of the tenants vacating the premises with move out dates expected to be February 1st and
March 1st respectively.
While staff recommended giving notice for all tenants on Industrial Court to vacate no later than
April 30, 2016, Board President Fuller commented that several tenants will need as much time as
possible to locate an appropriate site and an additional 30 days to vacate does not seem to
complicate the redevelopment process. Staff suggested to send out notices to vacate on
December 18th with the move out date being May 31, 2016. Staff continued that should the real
estate transaction for the Exco site encounter complications in February or as late as March, the
Board can make the decision at that time to suspend the demolition which could impact the need
for companies to vacate WEDC buildings.
Staff is finalizing demolition proposals to distribute and is requesting that all bids be returned on
or about January 22nd. It is being requested that the bids identify costs associated with the 1.53
acre tract called out in the Letter of Intent for the Exco property. In speaking with the
prospective buyers, language is being placed within the contract which calls for the
reimbursement of those identified costs should the WEDC undertake demolition prior to closing.
Staff recommended that the WEDC Board of Directors authorize termination of leases on
Industrial Court with a notice to vacate on or before May 31, 2016.
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December 18,2015
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MOTION: A motion was made by John Yeager and seconded by Mitch Herzog to
terminate the leases along Industrial Court effective May 31, 2016. The
WEDC Board voted 5 —FOR and 0—AGAINST in favor of the.motion.
DISCUSSION ITEMS
ITEM NO. 8 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, B&B Operating Company, Inc.,
proposed mixed-use development on Jackson Street, redevelopment of 801 S. State Highway 78,
remodeling of 710 Business Way, 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 September 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.
$3,210,867.71 in reimbursement has been earned through November 2015 with net receipts of
$2,396,798.83 after reimbursements. As well, it is estimated that $3.5 min has been paid in ad
valorem taxes to the City of Wylie (excluding the WISD).
As-shown on the Sales Tax Reimbursement Report, $108,521.03 was generated in sales tax in
September 2015 versus $117,148.19 in September 2014. This increase represents an 11% 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
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December 18,2015
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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.
Exco Tooling Solutions
Exco has begun construction of its 30,000 square foot facility within Premier Business Park. All
indications point to a Final CO being issued by January 15, 2016. 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 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 mid-February, well before the August 1, 2016
deadline as required within their Performance Agreement.
B&B Theatres Operating Company, Inc.
B&B qualified for the third incentive payment of$25,000 plus sales tax reimbursements equal to
those monies generated from the %2 cent WEDC sales tax. B&B qualified for the incentive under
the First Amendment to the Performance Agreement which restructured the incentive program
by voiding City of Wylie participation equivalent to an additional 1/2 cent sales tax
reimbursement. The restructuring was the result of a default by B&B under the original
Performance Agreement related to the required appraised value of B&B real and personal
property. Staff will bring this issue to the Board in January for formal consideration and
approval.
Proposed Mixed-use development on Jackson Street
Being that a more comprehensive evaluation of the entire Ballard/Jackson Street area was the
direction given at the Joint Work Session, the City Manager has directed Renae' 011ie to develop
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December 18, 2015
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a Request for Qualifications from planning firms with experience in land planning, traffic
studies, downtown redevelopment, and possibly even open space/parks.
Redevelopment of 801 S. State Highway 78
Via a local real estate broker, the City Manager and staff met with an investment group that has
the 'Wylie Community Hospital' site under contract. Following closure of the Hospital in the
mid 1990's, Presbyterian attempted to operate the facility along with a bariatric hospital. The
hospital facility has been vacant for 10 years with the adjacent multi-story office building going
underutilized at best with only one doctor remaining in the offices.
The site is made up of 21 acres with approximately 10 acres in the floodplain. The hospital is
comprised of 47,000 square feet with the medical office building at 21,000 square feet.
The investment group has no specific plans for the hospital and will most likely update the office
space and lease it out for general office use. The 21 day due diligence period expires on
December 21st with a required closing by the end of the year. Hopefully a change in ownership
will at least create activity and would have to result in upgrading the property so that it can start
generating income.
Remodeling of 710 Business Way
There have been continued challenges with establishing permanent power at 710 Business Way,
but Oncor could be complete with their work as soon as December 16th. Should that be the case,
Able Machinery Movers will begin as scheduled on December 21st. Able anticipates being done
moving and Mann Made being operational on or about January 18, 2016.
Sporting Tickets
Attached for the Board's review was a WEDC Promotional Activities spreadsheet which
documents the use of Dallas Mavericks tickets.
Regional Housing Starts
Thirty-three homes were permitted in Wylie for November 2015. Sachse, Lavon, and Murphy
permitted a combined thirty homes over the same period.
No action is 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:
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December 18, 2015
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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
' CONVENE INTO OPEN MEETING
The WEDC Board of Directors reconvened into open session at 7:54 a.m. and took no action.
I JOU MENT
With no further business, President Fuller adjourned the WEDC Board meeting at 7:54 a.m.
Marvin Fuller,President
ATTEST:
Samuel Satterwhite,Director