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04-24-2008 (WEDC) Minutes Minutes Wylie Economic Development Corporation Board of Directors Meeting Thursday,April 24,2008—6:00 A.M. Inwood National Bank—Conference Room 200 South Highway 78—Wylie,Texas CALL TO ORDER Announce the presence of a Quorum President Fuller called the meeting to order at 6:00 a.m. Board Members present were: John Yeager, Mitch Herzog,and Chris Seely. Staff present was Executive Director Sam Satterwhite and Administrative Assistant Gerry Harris. Ex-Officio Board Member Mindy Manson was present. CITIZEN PARTICIPATION There being no citizen participation,President Fuller proceeded to Action Items. ACTION ITEMS ITEM NO. 1 — Consider and Act Upon Approval of the March 20, 2008 Minutes of the WEDC Board of Directors Meeting. MOTION: A motion was made by Mitch Herzog and seconded by John Yeager to approve the March 20, 2008 Minutes of the WEDC Board of Directors Meeting. The WEDC Board voted 4—FOR and 0—AGAINST in favor of the motion. ITEM NO. 2 — Consider and Act Upon Approval of the March 2008 WEDC Treasurer's Report. MOTION: A motion was made by Chris Seely and seconded by John Yeager to approve the March 2008 WEDC Treasurer's Report. The WEDC Board voted 4—FOR and 0—AGAINST in favor of the motion. ITEM NO. 3 —Consider and Act Upon Approval of a Budget Transfer for the WEDC FY 2007—2008 Budget. Staff presented budget transfers to Advertising ($2,000), Rental ($500), Audit and Legal Services ($10,000), and Longevity Pay ($20.00). To offset increased expenses, staff recommended that Communications be reduced by $500.00, Travel & Training be reduced by $8,000.00, Engineering-Architect be reduced by $2,000.00, Special Services be reduced by WEDC—Minutes April 24,2008 Page 2 of 6 $2,000.00 and Hospital & Life Insurance be reduced by $20.00. Using these accounts, staff avoided the use of the Incentives Account which has been customary practice. Staff recommended that the WEDC Board of Directors authorize a Budget Transfer Request in the amount of$12,520.00. MOTION: A motion was made by John Yeager and seconded by Chris Seely to approve a Budget Transfer in the amount of$12,520.00. The WEDC Board voted 4—FOR and 0—AGAINST in favor of the motion. ITEM NO. 4 — Consider and Act Upon Issues Surrounding a Contract for Sale of Real Estate Between the Kansas City Southern Railway company and the WEDC. Staff reviewed a real estate contract presented to the WEDC by the Kansas City Southern Railway Company (KCS) to formalize the purchase of a portion of Lot 16, Block A of Wylie Industrial Park. Staff estimated the area to be purchased at 0.3055 acre out of a 0.458 acre tract. The purchase price per the LOI and contract is$3.25 per square foot. WEDC Counsel(Mr. Randy Hullett) reviewed the documents and made the following comments pertaining to issues not typical to standard contracts. The cost of providing the survey is solely at the expense of the WEDC. The title policy is at the sole expense of the WEDC. Based upon experience in dealing with the KCS and discussions with KCS representative The Staubach Company,staff does not believe that these points are negotiable. Mr. Hullett would like for all proration's to be collected by the closing agent and remitted to the appropriate taxing jurisdiction. As the contract states currently, it does not specify who collects or remits any prorated taxes. Staff did not recommend the WEDC be overly concerned with this issue being that KCS is exempt from taxation as is common knowledge and further evidenced by Collin County Central Appraisal District showing a zero value. Additionally Mr. Hullett recommends that"the Buyer does not waive any exemption or other exception it or the Property may have from rollback taxes, pursuant to Section 23.55 (t) of the Texas Property Tax Code." While staff has presented this suggested change to KCS, it is believed to be a non-issue. Mr. Hullett also recommended that the WEDC agrees to add the following: "to the extent permitted by law, and without waiving any governmental immunities to which the [WEDC] is entitled by law" to indemnify KCS. Mr. Hullett recommended that language be deleted stating that "buyer expressly agrees to defend, indemnify and hold harmless seller and each other seller party against seller's or such other party's own negligence." Staff had not received a response from Staubach or KCS pertaining to the requested changes to the Contract for Sale of Real Estate. Staff recommended that the WEDC Board of Directors authorize the WEDC Executive Director to execute a Contract for Sale of Real Estate between the WEDC and KCS. WEDC—Minutes April 24,2008 Page 3 of 6 MOTION: A motion was made by Mitch Herzog and seconded by John Yeager to authorize the Executive Director to execute a Contract for Sale of Real Estate between the WEDC and KCS. The WEDC Board voted 4 - FOR and 0—AGAINST in favor of the motion. ITEM NO. 5 — Consider and Act Upon Issues Surrounding Redevelopment of Property Located at 902 West Kirby as it relates to Potential Infrastructure Assistance from the WEDC. Staff reviewed with the Board that on January 18, 2008,the Board authorized staff to expend up to $15,000 for the reimbursement of costs associated with the demolition of a facility located at 902 West Kirby. This project was presented to the WEDC by Henry S. Miller with the developer proposing a Popeye's and Burger King to be constructed on the site. In review, a 12,200 square foot facility is located on the site with approximately the same square footage in concrete parking. Aside from a ceiling on reimbursable costs, the WEDC qualified its participation in that the demolition must be complete no later than March 18, 2008. This performance measure was put in place to encourage a quick closing on the property. The developer(Sun Holdings, Inc.)will not close until June 30,2008. As well, demolition costs have increased by approximately 50%. Even though the redevelopment has not progressed as quickly as anticipated, staff commented that the project still has merit and the redevelopment goals of the WEDC will still be met. Staff recommended that the WEDC Board of Directors reauthorize the WEDC Executive Director to expend up to $15,000 as reimbursement for demolition costs associated with property located at 902 West Kirby while requiring a start date for demolition no later that July 31, 2008. MOTION: A motion was made by John Yeager and seconded by Mitch Herzog to reauthorize the WEDC Executive Director to expend up to $15,000 as reimbursement for demolition costs associated with property located at 902 West Kirby. The WEDC Board voted 4—FOR and 0—AGAINST in favor of the motion. ITEM NO.6—Consider and Act Upon Issues Surrounding the WEDC Annual Report. As the WEDC Board and City Council were informed, staff failed to complete the WEDC annual report by January 31S' as required within the By-laws. Staff discovered the oversight in March and informed the Council and Board of the same. Staff indicated that if approved by the WEDC Board of Directors,the report will be presented to the Wylie City Council on May 13, 2008. The report must include, but is not limited to, a review of all expenditures made by the Board, a review of accomplishments, and a review of other than direct economic development. Mr. Fuller requested that staff take whatever steps necessary to ensure that the report is completed on time. WEDC—Minutes April 24,2008 Page 4 of 6 Staff recommended that the WEDC Board of Directors accept the WEDC Annual Report as presented by staff and recommend it be presented to the Wylie City Council. MOTION: A motion was made by John Yeager and seconded by Chris Seely to accept the WEDC Annual Report as presented by staff and recommend it be presented to the Wylie City Council. The WEDC Board voted 4—FOR and 0—AGAINST in favor of the motion. ITEM NO.7—Staff Update: Review Staff Activities and Ongoing WEDC Projects. Woodbridge Crossing: The Groundbreaking ceremony for Woodbridge Crossing has been scheduled for April 30,2008 at 6:00 p.m. Please RSVP is you have not done so already. T J Maxx has entered into a Letter of Intent with Direct Development. This `Combo Store' will be a prototype new to this region which has clothing and home furnishings. Also, Michaels and Pets Mart are currently negotiating leases. Delta E (211 Industrial Court): Delta E gave their 30 day notice to vacate a WEDC facility on Industrial Court effective April 15. Interestingly enough, Delta E is relocating into a portion of the building owned by Grey's Auto Electric, also located on Industrial Court. Staff has already shown 211 Industrial Court to a local business looking to relocate their operations. ICSC: Staff continues to prepare for the International Council of Shopping Center Conference to be held May 18 — 21, 2008. Updated promotional materials are being developed (demographics and aerial) and will be completed no later than May 6a'. A new member to the Wylie team will be Councilman Goss. Previously committed attendees are Mitch Herzog, Chris Seely, and Mayor John Mondy. Staff had no recommendations for this item. EXECUTIVE SESSION The WEDC Board of Directors convened into Executive Session at 6:34 a.m. I. Consider and Act Upon Issues Surrounding a Performance Agreement Between the WEDC and Texas Spectrum Electronics as Authorized in Section 551.087 (Economic Development Negotiations) of the Local Government Code, Vernon's Texas Code Annotated (Open Meetings Act). II. Consider and Act Upon Issues Surrounding a Performance Agreement Between the WEDC and Nicon Construction Company as Authorized in Section 551.087 (Economic Development Negotiations) of the Local Government Code, Vernon's Texas Code Annotated(Open Meetings Act). WEDC—Minutes April 24,2008 Page 5 of 6 III. Consider and Act Upon Issues Surrounding a Performance Agreement and Real Estate Sales Contract Between Gardner Regency, LLC and the WEDC as Authorized in Section 551.087 (Economic Development Negotiations) of the Local Government Code, Vernon's Texas Code Annotated(Open Meetings Act). IV. Consider and Act Upon Issues Surrounding the Performance Agreement Between Direct Development and the WEDC as Authorized in Section 551.087 (Economic Development Negotiations) of the Local Government Code, Vernon's Texas Code Annotated (Open Meetings Act). V. Consider and Act Upon Issues Surrounding the Annual Performance Appraisal and Employment Agreement of the WEDC Executive Director as Authorized in Section 551.074 (Personnel Matters) of the Local Government Code, Vernon's Texas Code Annotated(Open Meetings Act). RECONVENE INTO OPEN MEETING The WEDC Board of Directors reconvened into open session at 7:27 a.m. Actions taken from Executive Session: I. In February 2007, staff was contacted by a Wylie resident contemplating relocating their company(Texas Spectrum Electronics—TSE) from Dallas to Wylie. At that time, TSE had 12 months remaining on their lease and was simply inquiring into possible incentives. On April 15, 2008, staff was contacted and informed that TSE was contemplating purchasing an existing building on Regency Drive. Currently located in 5,000 square feet,TSE is currently negotiation a contract to purchase a 7,500 square foot facility from Nicon Construction. TSE will be performing approximately$96,000 in renovations to the interior of the facility. Staff explained that WEDC assistance is primarily based upon new value. In this case, TSE may relocate to an existing facility which will not add a significant amount of new value to the tax roles. Furthermore, the $96,000 remodel will most likely not add dollar for dollar value to the tax roles. However,new value in personal property will be added as well as 11 - 13 employment opportunities to the Wylie workforce. While TSE is able to secure financing, a current pressing need is out-of-pocket dollars to be expended on the remodel. TSE President Michael Coots has reported TSE personal property values ranging from $233,640 to $432,965, over the past five years. Staff recommended that in developing an assistance package, a three year factor be utilized (based upon City and WISD tax rates) for a minimum appraised value of personal property of$350,000. This factor will create an incentive package valued at $22,292. Staff suggested that fifty percent of the package be funded at certificate of occupancy to assist with remodel costs and the remaining fifty percent could be funded at the end of the three year period, assuming the minimum person property value is maintained, or an average thereof, over the same period. WEDC—Minutes April 24,2008 Page 6 of 6 Mr. Fuller asked that the $350,000 minimum appraised value include gains in personal and real property values. MOTION: A motion was made by Mitch Herzog and seconded by Chris Seely to authorize the Executive Director to execute a Performance Agreement with Texas Spectrum Electronics with a potential value of$22,292. The WEDC Board voted 4—FOR and 0—AGAINST in favor of the motion. No further action was taken as a result of discussions held in Executive Session. ADJOURNMENT With no further business, President Marvin Fuller adjourned the WEDC Board meeting at 7:28 a.m. (//4 Atil/k. 24— Marvin Fuller, President ATTEST: Samuel D.R.Satterwhite Executive Director