01-09-2017 (WEDC) Agenda Packet NOTICE OF MEETING
Wylie EconomC io Re DevePoRloApT I o mentN
Special Meeting Agenda
January 9, 2017 —7:00 A.M.
WEDC Offices—Conference Room
250 South Highway 78 —Wylie, Texas
Marvin Fuller President
Todd Wintters Vice President
John Yeager Secretary
Demond Dawkins Treasurer
Bryan Brokaw Board Member
Mayor Eric Hogue Ex-Officio Member
Mindy Manson,City Manager Ex-Officio Member
Samuel Satterwhite Executive Director
Jason Greiner Assistant Director
Angel Wygant Senior Assistant
In accordance with Section 551.042 of the Texas Government Code, this agenda has been posted at the Wylie
Municipal Complex, distributed to the appropriate news media, and posted on the City Website:
www.wylietexas.gov within the required time frame.
CALL TO ORDER
Announce the presence of a Quorum.
CITIZEN PARTICIPATION
Residents may address the WEDC Board regarding an item that is or is not listed on the agenda. Residents must
provide their name and address. The WEDC Board requests that comments be limited to three (3) minutes. In
addition, the WEDC Board is not allowed to converse, deliberate or take action on any matter presented during
citizen participation.
ACTION ITEMS
I. Consider and act upon approval of the December 7, 2016 Minutes of the Wylie Economic
Development Corporation (WEDC) Board of Directors Meeting.
II. Consider and act upon an Amendment to a Performance Agreement between the WEDC
and REVA Hospitality Wylie, LLC.
DISCUSSION ITEMS
III. Discuss issues surrounding the WEDC 2016 Annual Report.
IV. Staff report: review issues surrounding Highway 78 WEDC Pad Sites and Promotional
Activities.
WEDC—Agenda
January 9, 2017
Page 2 of 2
EXECUTIVE SESSION
Recess into Closed Session 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:
• Highway 78 & Cooper
Section 551.087 (Economic Development) of the Local Government Code, Vernon's Texas
Code Annotated(Open Meetings Act).
• Project 2015-12a
• Project 2017-1a
RECONVENE INTO OPEN MEETING
ADJOURNMENT
CERTIFICATION
I certify that this Notice of Meeting was posted on this 5th day of January 2017 at 5:00 p.m.as required by law in
accordance with Section 551.042 of the Texas Government Code and that the appropriate news media was
contacted. As a courtesy, this agenda is also posted on the City of Wylie website: www.wylietexas.gov.
Carole Ehrlich,City Secretary Date Notice Removed
Minutes
Wylie Economic Development Corporation
Board of Directors Meeting
Wednesday, December 7, 2016—6:30 A.M.
WEDC Offices—Conference Room
250 South Highway 78—Wylie, Texas
1 AI I. TO ORi1F.R
Announce the presence of a Quorum
President Marvin Fuller called the meeting to order at 6:36 a.m. Board Members present were John
Yeager, Todd Wintters and Bryan Brokaw.
Ex-officio member Mayor Eric Hogue and City Manager Mindy Manson were present.
WEDC staff present was Executive Director Sam Satterwhite, Assistant Director Jason Greiner and
Senior Assistant Angel Wygant.
CITIZEN PARTICIPATION
With no citizen participation, President Fuller proceeded to Action Items.
ACTION ITEMS
ITEM NO. 1 — Consider and act upon approval of the November 18, 2016 Minutes of the Wylie
Economic Development Corporation (WEDC) Board of Directors Meeting.
Staff noted a correction to the November 18,2016 Minutes in the Citizen Participation section. The date
of the B&B Fun Run was incorrectly stated as November 9, 2016 and corrected to November 19, 2016.
MOTION: A motion was made by John Yeager and seconded by
Todd Wintters to approve the November 18, 2016 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 November 2016 Treasurers Report.
Staff reviewed key items within the November 2016 Treasurer's Report and noted that ACG Texas was
added to the Treasurers Report in October and inadvertently added again in November. This duplication
has been corrected.
MOTION: A motion was made by John Yeager and seconded by
Bryan Brokaw to approve the November 2016 Treasurers Report for the Wylie
Economic Development Corporation as amended. The WEDC Board voted 4 —
FOR and 0—AGAINST in favor of the motion.
WEDC—Minutes
December 7, 2016
Page 2 of 6
ITEM NO.3—Consider and act upon WEDC Resolution 2016-02 (R) approving Loan Documents
between the WEDC and Billy R. Jarrard, Jr. in the cumulative amount of $300,000 for the
acquisition of Lot 1, Railroad Industrial Park, an Addition of the City of Wylie, Collin County,
Texas, as recorded in Volume C, Page 748, of the Map Records of Collin County, pledging as
security the sales and use tax receipts the WEDC receives from the City of Wylie for repayment
of said Loan, and further authorizing Marvin Fuller to execute all documents necessary to
effectuate the Loan Documents.
Staff reminded the Board that the WEDC is under contract to purchase a 0.29-acre tract from Mr. Billy
Jarrard, Jr. for $300,000. Staff had originally negotiated a purchase price of$325,000 and an owner-
financed 10 year note at 4.25%. The survey came in at 2,365 square feet less than had been anticipated
with staff negotiating a $25,000 reduction in purchase price while allowing an increase in the interest
rate on the note to 4.5%. The only other issue which is out of the ordinary, but required by the Seller, is
a pre-payment penalty equal to the amount of the outstanding interest which would be paid over the life
of the note.
As a review, the acquisition of this tract was pursued by the WEDC so as to prevent haphazard
development of the lot located at the corner of Birmingham & 78. The adjacent tract to the Jarrard lot
is comprised of a 0.55-acre tract owned by Wylie Industrial Court Development, Ltd. and a 0.2-acre lot
owned by TxDOT fronting Hwy 78. Wylie Industrial Court has the sole right to purchase the TxDOT
right-of-way as the only adjacent property owner. While a combined tract of 0.75-acre is relatively
small, it can be developed and has been under contract in the past.
It was staff opinion that by combining the Jarrard lot with the adjacent 0.75-acre, more development
options will now exist in terms of the number of developers seeking out lots in excess of one acre, and
provide a building pad more efficiently oriented to Hwy 78. Being that Jarrard is taking the sales tax as
collateral,the WEDC will be able to sell the property without the lot being encumbered.
Closing on the tract is scheduled for December 28th. Prior to closing, the Wylie City Council must
approve the project and specifically the pledging of the 1/2 cent sales tax as collateral which is scheduled
for consideration on December 13, 2016. Also, required prior to closing will be the execution of the
Agreement by Jarrard subordinating his Note to all existing and future loans between the WEDC and
American National Bank.
Staff recommended that the WEDC Board of Directors approve WEDC Resolution 2016-02 (R)
approving Loan Documents between the WEDC and Billy R. Jarrard, Jr. in the cumulative amount of
$300,000 for the acquisition of Lot 1, Railroad Industrial Park, an Addition of the City of Wylie, Collin
County, Texas, as recorded in Volume C, Page 748 of the Map Records of Collin County, pledging as
security the sales and use tax receipts the WEDC receives from the City of Wylie for repayment of said
Loan and further authorizing Marvin Fuller to execute all documents necessary to effectuate the Loan
Documents.
The Board inquired about the status of the tenant in that building and staff explained that the tenant has
been informed of the sale of the property and will continue to lease on a month-to-month basis. Staff
also informed the Board that the property may close a few days early to accommodate holiday conflicts.
WEDC—Minutes
December 7, 2016
Page 3 of 6
MOTION: A motion was made by Todd Wintters and seconded by
John Yeager to approve WEDC Resolution 2016-02 (R) approving Loan
Documents between the WEDC and Billy R. Jarrard, Jr. in the cumulative amount
of$300,000 for the acquisition of Lot 1, Railroad Industrial Park, an Addition of
the City of Wylie, Collin County, Texas, as recorded in Volume C,Page 748 of the
Map Records of Collin County, pledging as security the sales and use tax receipts
the WEDC receives from the City of Wylie for repayment of said Loan and further
authorizing Marvin Fuller to execute all documents necessary to effectuate the Loan
Documents. The WEDC Board voted 4—FOR and 0 —AGAINST in favor of the
motion.
ITEM NO. 4 — Consider and act upon a Performance Agreement between the WEDC and Reva
Hospitality Wylie,LLC.
Reva Hospitality Wylie,LLC initially came to the WEDC in an attempt to evaluate options surrounding
the construction of a new hotel in Wylie. Following direction from the WEDC Board in Executive
Session, and an oral commitment by WEDC staff for assistance, Reva Hospitality Wylie entered into a
contract on the property.
Reva Hospitality Wylie plans to construct a$9.2 million dollar, four-story, 60,000 square foot, 98-room
hotel at the southwest corner of FM 544 and Sanden Blvd. The hotel will either be a Hampton Inn &
Suites or a Holiday Inn Express & Suites. Should the project move forward, construction will begin
within the first quarter of 2017 with a completion date of December 31, 2017.
Reva Hospitality Wylie requested that the WEDC provide economic assistance with qualified
infrastructure improvements for the project. The attached Agreement proposes a total maximum
incentive of$450,000 which is broken down as follows:
Incentive No. 1 $100,000
➢ Acquisition of title to the property by January 31, 2017
➢ Certificate of Occupancy by December 31, 2017
➢ Qualified infrastructure expenditures verified at no less than $450,000
Additional Incentives .._...,#WWY1WNkWeWM ........... . . up to $350,000
➢ Quarterly Reimbursement Incentives equal to 50% of the Local Hotel Occupancy Taxes
paid to the City of Wylie.
Should Reva Hospitality Wylie fail to obtain a permanent Certificate of Occupancy by December 31,
2017, but does obtain such Certificate of Occupancy by June 30, 2018, the Reimbursement Incentives
will be reduced by$100,000, making the total eligible Reimbursement Incentive $350,000. In the event
Company fails to obtain the permanent Certificate of Occupancy for the Improvements by June 30,2018,
or fails to meet the balance of the Performance Obligations,none of the Reimbursement Incentives shall
be paid to the Company and this Agreement shall terminate.
WEDC—Minutes
December 7, 2016
Page 4 of 6
Based upon a$4 million appraised valuation using an income approach and conservative sales estimates
from Reva Hospitality, the project's estimated return on investment is relatively short (approx. 18
months).
As an amendment to the Performance Agreement that was brought to staffs attention by WEDC counsel,
a requirement for Separated Building Materials Contracts was presented. As described by staff, these
types of contracts are negotiated by the owner/contractor to separate the building materials from the
labor within the construction contracts so that sales tax on those materials can be specifically identified
and local sales tax paid on the same to the local Wylie jurisdiction. While neither staff or Reva where
previously aware of this process, staff requested latitude from the Board to negotiate this language into
the final Performance Agreement. President Fuller and Wintters supported this amendment and asked
that this language be included in all future WEDC Agreements.
Staff recommended that the WEDC Board of Directors approve Performance Agreement as amended
between WEDC and Reva Hospitality Wylie, LLC providing for a maximum incentive of$450,000 and
further authorizing the WEDC Executive Director to execute said Agreement.
MOTION: A motion was made by Todd Wintters and seconded by
John Yeager to approve a Performance Agreement between WEDC and Reva
Hospitality Wylie,LLC providing for a maximum incentive of$450,000 and further
authorizing the WEDC Executive Director to execute said Agreement. The WEDC
Board voted 4—FOR and 0—AGAINST in favor of the motion.
DISCUSSION ITEMS
ITEM NO. 5 — Staff report: review issues surrounding WEDC Performance Agreement Summary,
W&M Activity Report,Dallas Whirlpools,Ltd,Performance Agreement with FLM Development,LLC.,
Highway 78 WEDC Pad Sites, WEDC Annual Report,B&B Theatres Operating Company Performance
Agreement, Promotional Activities, and regional housing starts.
WEDC Performance Agreement Summary
Attached for the Board's review was a summary of all outstanding Performance Agreements including:
ACG Texas LP, Ascend Custom Extrusion, All State Fire Equipment, B&B Theatres Operating
Company, Clark Street Development, Dank Real Estate, Exco Extrusion Dies, FLM Development,
Freudiger Holdings, Getset, KREA Acquisition, McClure Partners, Patna Properties, VIAA Properties,
Von Runnen Holdings, Wedge Corporation, Woodbridge Crossing, and Wylie Flower& Gift.
Woodbridge Crossi g
Attached for the Board's review was the Sales Tax Reimbursement Report which identifies all sales
taxes received through November 2016 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.
WEDC—Minutes
December 7, 2016
Page 5 of 6
$3,911,460.60 in reimbursement has been earned through November 2016 with net receipts of
$3,133,319.57 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,
$119,713.90 was generated in sales tax in September 2016 versus $108,521.03 in September 2015. This
represents 10.31%increase over 2015 receipts.
W&MActivity Report
Attached for the Board's review was a spreadsheet tracking all activities with W&M Environmental for
FY 2014-15 and FY 2015-16. W&M has prepared Phase I&II reports for Mann Made,K&M,Business
Way, 111 N. Ballard, 908 Kirby, 201 Industrial Court, is processing the VCP application for the
Commerce property, and processing the Municipal Setting Designation through the City.
Dallas Whirlpools, Ltd Property
Approximately 2 weeks past the original closing date, the WEDC finalized the purchased of 4.7 acres
from Dallas Whirlpool, Ltd. The primary delay was a result of an existing tenant and our requirement
that they execute an estoppel certificate indicating that there will be no future maintenance of the building
through the end of their lease which expires on 4-30-17. To secure the estoppel and subsequent amended
lease, the WEDC was required to forgo the collection of three month's rent, or $9,000.
Staff will be moving forward with demolition of the structure on the southeast corner of the site in late
December/early January along with some general clean-up of the property which will include high
weeds, chain-link fences, and various debris. A concept site plan is currently being prepared for the
WEDC & City properties which will include 2 pad sites fronting 544 with office/flex space to the north
and wrapping around to Commerce Street. Finally,the VCP and MSD applications have been amended
to include the 4.7 acre WEDC site.
Performance Agreement with FLM Development
Staff was contacted by FLM and informed that the 4,200-square foot office building contemplated in the
Performance Agreement approved on 11-18-16 was reduced to 3,800 square feet due to unforeseen site
restraints. Staff will be bringing the issue back to the WEDC Board in January to either amend the
Agreement or void the same in advance.
Highway 78 WEDC Pad Sites
Staff reported that CFA was nearing the end of their due diligence period which was scheduled to expire
on 12-26-16. Following expiration, a 90-day permitting period will begin within which the WEDC will
undertake site improvements including deceleration lanes, a mutual access drive, and median
improvements. CFA will close on the property approximately 15 days after completion of the
improvements which will be approximately 2 years from the date the project was first discussed with
CFA representatives at ICSC.
WEDC—Minutes
December 7, 2016
Page 6 of 6
WEDC Annual Report
With the December Board Meeting moved up, consideration of the Annual Report will be moved to
January with presenting of the same to the Wylie City Council on 1-24-17.
Promotional Activities
As reported regularly,the WEDC has a 1/4 interest in Maverick's Season tickets for the 2016-17 Season.
A spreadsheet tracking the use of those tickets was attached for the Board's review.
Regional Housing Starts
Eleven homes were permitted in Wylie for the month of November 2016. Sachse, Lavon, Murphy
permitted a combined eighteen over the same period. Monthly Inspiration permits are not reported until
the 10th of each month and are therefore not updated within this report.
No action was requested by staff for this item.
EXECUTIVE SESSION
Recessed into Closed Session at 7:41 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 2016-10a
• Project 2016-l Ob
• Project 2016-11 b
RECONVENE INTO OPEN MEETING
The WEDC Board of Directors reconvened into open session at 8:09 a.m. and took no action:
ADJOURNMENT
With no further business, President Fuller adjourned the WEDC Board meeting at 8:09 a.m.
Marvin Fuller,President
ATTEST:
Samuel Satterwhite, Director
Wylie Economic Development Corporation
MEMORANDUM
TO: WEDC Board of Directors
FROM: Samuel Satterwhite, Executive Directo/
SUBJECT: Reva Hospitality Performance Agreement
DATE: January 6, 2017
Issue
Consider and act upon an Amendment to a Performance Agreement between the WEDC and
REVA Hospitality Wylie, LLC.
Analysis
Due to the holidays and the Managing Member of Reva traveling out of the country unexpectedly,
the closing date under a Real Estate Contract to purchase 2.4 acres for the development of a
Holiday Inn Express & Suites was amended establishing a new closing date of February 1, 2017.
The existing Performance Agreement between the WEDC and Reva requires a closing date of
January 31, 2017 to qualify for Economic Assistance. While Reva has only requested a one day
extension to February 1, 2017, staff is recommending that the date by which Reva must acquire
title to the property be amended to February 10, 2017 to allow for other unanticipated issues. A
First Amendment to Performance Agreement is attached for the Board's review.
Recommendation
Staff recommends that the WEDC Board of Directors approve a First Amendment to Performance
Agreement extending the date by which Reva Hospitality Wylie, LLC must acquire title to
property in Wylie to February 10, 2017.
Attachments
First Amendment to Performance Agreement
FIRST AMENDMENT TO PERFORMANCE AGREEMENT
THIS FIRST AMENDMENT TO PERFORMANCE AGREEMENT(this "First Amendment"), is
entered into and is effective as of the 9th day of January, 2017 by and between WYLIE ECONOMIC
DEVELOPMENT CORPORATION, a Texas economic development corporation("WEDC"), and REVA
HOSPITALITY WYLIE LLC, a Texas limited liability company("Company").
WITNESSETH:
WHEREAS, WEDC Board of Directors approved that certain Performance Agreement between
WEDC and Company on December 17, 2016 to facilitate the development of a hotel located in Wylie
containing approximately 60,000 square feet and not less than 98 hotel rooms(the"Project"); and
WHEREAS, WEDC and Company desire to modify and amend the Agreement in certain
respects,as more particularly set forth in this First Amendment.
NOW, THEREFORE, in an effort to address unforeseen circumstances surrounding the purchase
of 2.4 acres located in Wylie, Texas required for the development of the Project, the WEDC and
Company covenant and agree as follows:
1. Defined Terms. Capitalized terms used but not defined in this First Amendment will
have the meanings given to them in the Agreement.
2. Modification to Performance Obligations. Notwithstanding anything to the contrary in
the Agreement, the date by which the Company must acquire title to the Property as defined in Section
2(a)is hereby extended until 5:00 p.m., Central Time, on February 10,2017.
3. Ratification. As expressly modified by this First Amendment, the Agreement is hereby
ratified and confirmed by WEDC and Company.
4. Counterparts; Transmission. This First Amendment may be executed in multiple
counterparts, each of which shall be deemed an original, and all of which shall constitute one and the
same agreement. Transmission of an executed signature page of this First Amendment by email will be
effective to create a binding agreement.
[Signatures appear on next page]
IN WITNESS WHEREOF, the parties hereto have executed this First Amendment the day and
year first above written.
WEDC.
Wylie Economic Development
Corporation, a Texas Corporation
By4�._..
Name:
Title:
COMPANY:
Reva Hospitality Wylie LLC., a Texas
Limited Liability Company
By:
Name:
Title:
Wylie Economic Development Corporation
INIMMINNIONIV
MEMORANDUM
TO: WEDC Board of Directors
FROM: Samuel Satterwhite, Executive Director,,,,,,'
SUBJECT: 2016 Annual Report
DATE: January 6, 2017
Issue
Discuss issues surrounding the WEDC 2016 Annual Report.
Analysis
Staff had hoped to complete the first draft of the 2016 Annual Report for the Board's review prior
to consideration at the WEDC Regular Meeting on January 20th. Unfortunately, staff was not able
to complete the first draft in a form that is ready to be distributed.
Staff will attempt to fmalize and distribute the draft well before the January 20th Board packet is
sent out so that Board Members will have ample time to review.
Recommendation
n/a
Wylie Economic Development Corporation
MEMORANDUM
TO: WEDC Board of Directors
FROM: Samuel Satterwhite, Executive Directo
e,cir 00/'
SUBJECT: Staff Report
DATE: January 6,2017
Issue
Staff report: review issues surrounding Highway 78 WEDC Pad Sites and Promotional Activities.
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.
Highway 78 WEDC Pad Sites
On 12-27-16 the 90-day Inspection Period was scheduled to expire on the Chick-fil-a (CFA)
Contract. Following the Inspection Period is a 90-day Permitting Period. Within the Permitting
Period CFA is required to make its Initial Submittal of plans 30 days after the expiration of the
Inspection Period giving the City 60 days to complete its review and issue permits.
CFA contacted staff on 12-21-16 and requested an additional 30 days for the Inspection Period
due to additional soil sampling recommended by the CFA environmental consultants.
Staff agreed to extend the expiration date of the Inspection Period but requested that the Permitting
Period begin as was originally agreed upon. CFA subsequently requested that the Initial Submittal
be moved from January 27th to February 27th which would require the City to complete approvals
in 30 days.
The final terms agreed upon are as follows:
• Inspection Period Expires 1-26-17
• Initial Submittal of Plans 2-10-17
• Permitting Period expires 3-27-17
Should the project not be fully permitted by 3-27-17 there is an automatic 30-day extension.
%,
J; I 3 6,2016
te 2 of
Promotional Activities
As reported regularly, the WEDC has a 1/4 interest :in Maverick's Season tickets for the 201647
Season. A spreadsheet tracking the use of those tickets is attached for the Board's review.
No ;1 01'0 0 is r..I 14"led by al 3 this $
Promotional Events Log
WEDC Promotional Activities
2016-17 Mavericks Tickets
Date Attendees
October 3, 2016 W&M Environmental (Pre-season)
October 28, 2016 Coventry Reserve -Auction Item (Pre-Season)
November 6, 2016 Jim Campbell - Chairman of the Board, Lone Star Circuits
November 18, 2016 Wylie Eye Center
December 27, 2016 United Commercial Realty