08-15-2008 (WEDC) Minutes Minutes
Wylie Economic Development Corporation
Board of Directors Meeting
Friday,August 15, 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: Merrill
Young, Chris Seely, and Mitch Herzog. President Fuller announced that Mr. Yeager was
absence due to a recent medical procedure.
Staff present was Executive Director Sam Satterwhite and Administrative Assistant Gerry Harris.
Ex-Officio Board Members Mayor Eric Hogue and Mindy Manson were present.
CITIZEN PARTICIPATION
There being no citizen participation, President Fuller proceeded to Action Items.
ACTION ITEMS
ITEM NO. I. — Consider and Act Upon Approval of the July 18, 2008 Minutes of the
WEDC Board of Directors Meeting.
MOTION: A motion was made by Mitch Herzog and seconded by Merrill Young to
approve the July 18, 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 July, 2008 WEDC Treasurer's
Report,
MOTION: A motion was made by Merrill Young and seconded by Mitch Herzog to
approve the July 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 Issues Surrounding Approval of the FY 2008 20099 WEDC Budget.
Staff reviewed that although the WEDC Board had approved the FY 2008 — 2009 WEDC
Budget, after submitting the Budget to the City of Wylie Finance Department, the Finance
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August 15, 2008
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Department had several suggestions which require the Board to consider changes to the version
of the budget approved on July 1 th. Also there was an incorrect revenue projection previously
presented by staff that should be corrected prior to final approval by the Wylie City Council.
Staff had presented within a revenue line item, sales tax receipts for Woodbridge Crossing and
the Greenway Center. While these receipts should be tracked for planning purposes, being that
there are offsetting expenditures committed to via Sales Tax Reimbursement Agreements,
Finance suggested that those figures should not be made part of the projected revenue. Further,
it is prudent for the WEDC and City of Wylie to project identical sales tax receipts. Therefore,
those revenue figures have been removed from the WEDC Budget. As well, sales tax
reimbursements for Woodbridge Crossing were removed based upon sales tax not being received
from Woodbridge Crossing until October 1, 2009.
Staff also corrected a posting error within Debt Service. Staff had originally budgeted payments
to the City of Wylie (for the Global Innovation land purchase) within Debt Service. The City
currently codes those payments to account #59111 Transfer to General fund. The only other
change was an increase to Incentives resulting from an updated Beginning Fund Balance of
$456,221.
While the WEDC Budget will be presented to the City Council on August 12th, final approval
will not take place until September 9, 2008. Staff recommended that the WEDC Board of
Directors approve the amended FY 2008-2009 WEDC Budget as presented.
MOTION: A motion was made by Mitch Herzog and seconded by Chris Seely to
approve the FY 2008 — 2009 WEDC Budget as amended. The WEDC
Board voted 4—FOR and 0—AGAINST in favor of the motion.
ITEM NO. 4 — Consider and Act Upon Issues Surrounding an Incentive Agreement with
Extruders division of Atrium Companies,Inc.
Staff reviewed that in order for Extruders to be eligible for the 2008 incentive payment
associated with their paint line expansion, a minimum appraised value of$22,948,935 must be
present. Should the minimum appraised value exist at the site, the WEDC has committed to pay
$833 per every employee over and above a 420 employee benchmark, not to exceed 60
employees or$50,000.
Extruders has an existing appraised value of real and personal property of$23,167,337. Again as
with 2007, due to a downturn in the housing market and slow year in general as portrayed by
Extruders Management, the current number of employees is 382. Based upon the requirements
of the Incentive Agreement and the lack of any extenuating circumstances (other than the general
state of the economy), staff indicated that Extruders is in default per the terms of the Incentive
Agreement. The WEDC funded an $80,000 payment in 2005, a $50,000 payment in 2006, and
denied a$50,000 in 2007 due to non-attainment of the minimum 420 employee benchmark.
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August 15, 2008
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Staff recommended per the tears of the Incentive Agreement that the WEDC Board of Directors
deny payment to Extruders citing non-attainment of obligations as per the Incentive Agreement
between the WEDC and Extruders.
Board member Herzog indicated that the property value benchmark had been met and in his
opinion had greater importance to economic viability ofthe project than did the employment
figures. President Fuller, while not arguing the point, stated that all we have are the agreed upon
terms in the Agreement. After much discussion by the WEDC Board of Directors, the Board
agreed that there was no other alternative but to deny the final incentive installment due to the
non-attainment of the minimum benchmarks. The Board believed that the precedent was set in
2007 when the incentive was denied due to non-attainment of the minimum 420 employees and
must therefore be followed in the year 2008 for the same reason.
MOTION: A motion was made by Merrill Young and seconded by Chris Seely to deny
the final incentive payment to Extruders division of Atrium Companies.
The WEDC Board voted 4—FOR and 0—AGAINST in favor of the motion.
ITEM NO. 5 —Consider and Act Upon Issues Surrounding the Provision of Infrastructure
Assistance to a Commercial Development Located at the Northeast Corner of Hooper Road
and Hensley Lane.
As staff indicated at the July 18th WEDC Board meeting during Staff Update, the WEDC was
contacted by Dr. Lanman(Pediatric Associates of Wylie/P.A.W.) seven months ago inquiring as
to whether the WEDC would consider participating in the construction of a new office located on
Woodbridge Parkway at the intersection of Hensley and Hooper (northwest of Cooper Junior
High). P.A.W. intends to develop a 2.54 acre tract into a three phased development ent consisting of
a 7,000 square foot P.A.W. facility and two, one-acre tracts supporting ±5,500 square foot
office/medical facilities each. Phase I will have a construction cost of ±$1.6 million. Staff
initially indicated that the WEDC typically had not participated in office development, but that
did not preclude WEDC participation.
Staff identified that P.A.W. must bring water under four lanes of Woodbridge Parkway. The
public infrastructure extension to the P.A.W. property line has an estimated cost of$16,350 as
provided by Heimberger Associates
This will be the first commercial development in an area which has challenges with access,
roadway infrastructure, lack of a controlled intersection at Hooper and Hensley, and a great deal
of unknown in terms of surrounding commercial development. Aside from the ±$4 million in
new value from the three-phased office park, this development could also spur redevelopment of
property on the east side of Hooper north toward F.M. 544. For this reason in addition to the
immediate new value, staff recommended that the WEDC Board of Directors fund 100% of the
water line extension to the P.A.W. site. The Board agreed with staffs assessment of the P.A.W.
project.
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August 15, 2008
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MOTION: A motion was made by Merrill Young and seconded by Chris Seely to
approve the reimbursement of up to $16,350 toP.A.W. for costs associated
with the extension of a water line under Woodbridge Parkway. The WEDC
Board voted 4--FOR and 0—AGAINST in favor of the motion.
ITEM NO. — Consider and Act Upon issues Surrounding WEDC Assistance in the
Redevelopment of Commercial Property Located at 106 E.Brown.
MOTION: A motion was made by Mitch Herzog and seconded by Merrill Young to
remove the item from the table. The WEDC Board voted 4 — FOR and
AGAINST in favor of the motion.
As a review, over the past several months, City staff has continued to impress upon Mrs,
Reuthinger that her property located at the corner of Brown and Ballard must be brought up to
code or removed from the site. On July 25th, Dr. Steen was informed by Mrs. Reuthinger's
broker that the asking price was $80,000. On July 28t', Dr. Ken Steen made a second offer to
Mrs. Reuthinger of $50,000 for the lot (original offer was $ 0,0 . On August I firs.
Reuthinger indicated that she was declining his offer because she had found a Trust to "save her
house".
Staff and Dr. Steen believe the situation to be at an impasse based upon the existing conditions.
Dr. Steen must move forward as he is attempting to be in a new facility by January 2009. Per the
City of Wylie Downtown Historic Zoning District, the corner lot can be developed independent
of Dr. Steen's lot with no on-site parking required.
Dr. Steen came to the WEDC in June and requested assistance in demolishing the existing 1,287
square foot single family structure to construct a :i, 00 square foot facility for his chiropractic
physical therapy practice which is currently located at 520 W. Brown. The property falls within
the downtown historic zoning district and will have seven on-site parking spaces. Construction
cost has been estimated at $300,000. Dr. Steen originally indicated that the demolition had been
quoted at$4,000. Actual costs came in at , 0 . Demolition began on August t1i.
Staff recommended that the WEDC Board of Directors authorize the WEDC Executive Director
to execute a Performance Agreement with Dr. Ken Steen for assistance with the demolition of
property located at 106 B. Brown in the amount of$4,000.
The WEDC Board reminded staff that they had originally requested that Dr. Steen acquire both
properties in order for the WEDC to assist him in the demolition process. After much discussion
about the WEDC's role in redevelopment, President Fuller asked for a motion on the issue. The
Board did not respond with a motion and more discussion followed. Although the Board was
reluctant to assist in the demolition due to the fact that both properties had not been acquired, the
Board came to a consensus to assist in the amount of$4,000.
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August 15,2008
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MOTION: A motion was made by Merrill Young and seconded by Chris Seely to
approve assistance to Dr. Steen in an amount not to exceed $ ,o o for
reimbursement of demolition costs. The WEDC Board voted —FOR and
—AGAINST in favor of the motion.
ITEM NO. —Staff Update: Review Staff Activities and Ongoing WEDC Projects.
Multi Machine: Mr. Tony Linduff, President of Multi-Machine located on Business Way,
contacted staff and informed the WEDC that Mutli-Machine is experiencing exponential growth.
As of August 12th, Mr. Linduff will execute a 12-month lease of the Bottoms Technology facility
on Business Way which has 15,000 square feet. Multi-Machine will maintain its existing 13,500
square feet.
Mr. Linduff continued that should several multi-year contracts be awarded, Multi-Machine will
require 40,000 square feet under roof. Staff is currently determining options in addition to the
WEDC .2 acres on Hensley. As a brief history, the WEDC donated 1.1125 acres to Multi-
Machine in 2000 as part of a Performance Agreement.
Ferrell Tract: Mr. Terry Haines of Haines Company is attempting to assemble several tracts at
the southeast corner of Regency and F.M. 544 including the corner owned by Scott Goldenberg
and the adjacent tract owned by the Jacobs Family Trust. Mr. Haines inquired as to the status of
the Ferrell tract. Staff indicated that it is definitely for sale, but the WEDC would require
specific knowledge of the project. Staff further indicated to Mr. Haines that the WEDC would
be interested in Mr. Haines pursuing the purchase of the lot south and adjacent to the WEDC
tract.
13ayco Products: Bayco has approached the WEDC and requested a one year extension to its 5-
year agreement with the IV DC. Per Section 2 (g) of the Development Agreement, Bayco `shall
have paid property taxes for the previous five 5 years of the Agreement to the Wylie
Independent School District and the City of Wylie in an amount of not less than $657,000
provided however, the five year period above shall be extended at the sole discretion and
approval of the WEDC in the event the State legislatively lowers the cap on the tax rate which
Wylie and/or WISD may assess. . . .
In 2005, the WISD tax rate was $1. 17. Via structural changes to the public school finance
system by the Texas Legislature, the current WISD tax rate is $1.39. While Bayco continues to
meet its minimum valuation requirements of$ .4 million, it is projected that tax payments to the
City and WISD will only be±$600,000 at the end of the Agreement. For these reasons, staff will
be bringing to the Board in September an amended Development Agreement extending the term
from five years to six years.
Viewpoint Bank: As indicated previously, Viewpoint Bank will be developing a new location at
the southeast corner of F.M. 544 and Mereary Road. A site plan has been provided for your
information.
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August 15,2008
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Savage Precision FabricationInc.: Savage continues with its concrete pour and should
complete the foundation and all parking by August 18t'.
Deep Sea Aquatics: The WEDC has the potential to locate a 60,000 expansion for Deep Sea
Aquatics and potentially an additional 90,000 square feet for its primary distributor out of
Canada. Deep Sea is a specialty fish tank manufacturer out of Garland. Deep Sea has been
approached by the Hagen Corporation in Canada to develop two new fish tank lines: the first
line would be a high end line similar to Deep Sea's existing product with the second line being
an entry level tank similar to that found in Wal Mart. Hagen has already put in an order for 500
units for the high end line with negotiations on-going for the mass produced entry level line.
Burger King/Popeye : Demolition is complete at the Burger King location on F.M. 544. As
well, platting and site plan approval is complete. The WEDC will reimburse the Burger
King Popeye's holding company for demolition up to $15,000.
Cooper Drive: Intercom Demolition will complete the removal of all existing concrete on the
KCS site the week of August 1 ith. As indicated previously, the cost for the concrete removal is
$5,500.
EXECUTIVE SESSION
The WEDC Board of Directors convened into Executive Session at 7:07 a.m.
I. Consider and Act Upon Issues Surrounding the Purchase of Property Located Near the
Intersection of F.M. 544 and Springwell Parkway as Authorized in Section 551.072 (Real
Property) of the Local Government Code, Vernon's Texas Code Annotated (Open Meetings
Act).
RECONVENE INTO OPEN MEETING
The WEDC C Board of Directors reconvened into open session at 7:12 a.m.
ADJOURNMENT
With no further business, President Marvin Fuller adjourned the WEDC Board meeting at 7:12
a.m.
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August 15, 2008
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- --'A )dA,
Marvin Fuller, President
ATTEST:
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Samuel D, . Satterwhite
Executive Director