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06-15-2006 (WEDC) Minutes • Wylie EconomicO R DPOeve RlopATIOmentN C Minutes Wylie Economic Development Corporation Board of Directors Meeting Thursday, June 15, 2006 —6:00 P.M. Inwood National Bank— Conference Room 200 South Hwy. 78 —Wylie, Texas CALL TO ORDER Announce the presence of a Quorum. President Fuller called the meeting to order at 6:00 p.m. Board Members present were: Gary Bartow, Merrill Young, Mitch Herzog, and John Yeager. Staff present was Executive Director Sam Satterwhite and Administrative Assistant Gerry Harris. Ex-Officio Member/City Manager was not present. CITIZEN PARTICIPATION There being no citizen participation, President Fuller proceeded to Discussion Items. DISCUSSION ITEMS ITEM NO. 1 — Discuss Issues Surrounding the Development of a Strategic Plan. Staff indicated to the Board that four firms had been contacted and interviewed to potentially provide strategic planning services to the WEDC and City of Wylie. The Board directed staff to prepare a request for proposal to be reviewed by the Board and City Council prior to being sent out for a response. President Fuller directed staff to contact the City of Wylie to discuss the potential for sharing the cost of the hiring of a third party to prepare a strategic plan. WEDC —Minutes June 15, 2006 Page 2 of 6 ITEM NO. 2 — Discuss Issues Surrounding WEDC Legal Services. Staff reviewed that four different attorneys had been interviewed in the potential search for new WEDC counsel. Staff recommended that should the WEDC Board desire to continue searching for new counsel, Mr. Mark Houser had considerable experience representing EDC's and had on staff one of the most knowledgeable EDC's attorneys in the state (Mr. Jeff Moore). President Fuller, while undecided on the need for a new attorney, requested that Mr. Houser and Mr. Moore, meet with the Board at the next regularly scheduled Board meeting. ITEM NO. 3 — Discuss Issues Surrounding the WEDC FY 2006 — 2007 Budget. Staff presented the Board with FY 2005 — 2006 Budget for their review. President Fuller requested that the first budget discussions be held on June 22, 2006 in order for a final WEDC budget to be presented to Council by the end of July. Staff commented that prior to budget discussions, budget transfers would be presented to the Board for unbudgeted to date and for the balance of the fiscal year. The majority of budget transfers were characterized as being related to the Hughes purchase, relocation of WEDC offices, new WEDC personnel, and the potential purchase of a lot on Cooper Drive. ACTION ITEMS ITEM NO. 1 — Consider and Act Upon Approval of the May 25, 2006 Minutes of the WEDC Board of Directors Meeting. The following language was added to Action Item No. 2, amending the minutes as presented: "President Fuller directed staff to investigate why interest cannot be recorded monthly opposed to quarterly, present the forgiveness schedules for Bayco and Lone Star Circuits at a future Board Meeting, and to ensure that adequate detail is provided within the Executive Director Expense Report so that the business purpose served is clearly identifiable. President Fuller also posed the question to the Board as to the need for independent accounting services so that the WEDC can be in more control regarding the timely recording of entries/corrections to the WEDC financial statements. Also, President Fuller directed staff to pursue cost participation from the City of Wylie in the amount of $2,500 for the Collin College Plain and Fancy Ball." MOTION: A motion was made by Merrill Young and seconded by John Yeager to approve the May 25, 2006 Minutes of the WEDC Board of Directors Meeting as amended.. The WEDC Board voted 5 — FOR and 0 —AGAINST in favor of the motion. WEDC—Minutes June 15, 2006 Page 3 of 6 ITEM NO. 2 — Consider and Act Upon Approval of the May 2006 WEDC Treasurer's Report. Staff reported that Finance staff indicated that the WEDC Balance Sheet would be complete in no later sixty days. President Fuller again questioned the status of the potential City cost participation of $2,500 for the Collin College Plain and Fancy Ball. Also, the Board directed staff to initiate the training necessary to become a Certified Public Investment Officer. President Fuller directed staff to reiterate to Council that the reason that the WEDC financial statements are being tabled for the second month in a row is that the Balance Sheet is not correct and that WEDC and City staff are working to make the proper corrections. MOTION: A motion was made by Merrill Young and seconded by John Yeager to table the May 2006 Treasurer's Report. The WEDC Board voted 5 — FOR and 0 —AGAINST in favor of the motion. ITEM NO. 3 — Consider and Act Upon Issues Surrounding the Physical Location of WEDC Offices. On May 25, the WEDC Board of Directors authorized staff to negotiate a lease with Mr. Bob Heath for office space within the building currently occupied by Keller Williams on Ballard Street. Staff indicated that on June 2, 2006, following initial discussions with Mr. Heath surrounding the lease, staff was contacted by Mr. Baron Cook to discuss potential office in the Chamber office. Mr. Cook indicated additional office space had recently become available within the Chamber offices. Staff reviewed that aside from not having to spend up to $15,000 to renovate the Heath building, staff has identified several advantages to the Commonwealth location: • Better drive-up appeal; • Co-existence with Chamber and title company; • Positive working environment for administrative assistant when Executive Director is out of the office; • Potential to occupy more of the building as Commonwealth relocates within the next 18 months; and • Reduced potential for ADA conflicts. Staff presented the financial impact of monthly rent at $900, utilities $190, cleaning $20, and phone approximately $300 for 2 lines plus an interne line. MOTION: A motion was made by Mitch Herzog and seconded by Merrill Young authorizing the WEDC Executive Director to negotiate a lease with Mr. Baron Cook for office facilities located at 108 WEDC—Minutes June 15, 2006 Page 4 of 6 West Marble. The WEDC Board voted 5 — FOR and 0 AGAINST in favor of the motion. ITEM NO. 4 — Consider and Act Upon Issues Surrounding a Real Estate Sales Contract Between James L. Hughes and the Wylie Economic Development Corporation. Staff indicated that the expiration of the Feasibility Period will expire on June 28, 2006. The special Warranty Deed with Vendor's Lien, Real Estate Lien Note, Deed of Trust, and Release was presented to the Board for their review. As a review, staff indicated that one building located on the property remains vacant while the other 5,000 square foot facility is currently being rented for $2,000 per month. The debt service on the purchase will be $3,774.70 monthly and require $102,000 to be paid at closing, plus customary closing costs. Staff requested that the Board authorize President Fuller to execute all documents necessary to close on the purchase and authorize the payment of$102,000 at closing. MOTION: A motion was made by John Yeager and seconded by Gary Bartow authorizing President Marvin Fuller to execute all documentation necessary to effectuate the purchase of Lots 6 & 7 of the Railroad Industrial Park Addition and that certain 0.184 acre adjacent to the aforementioned and fronting State Highway 78, and authorize payment of $102,000 in addition to all applicable closing costs to satisfy all cash monies due at closing. The WEDC Board voted 5 FOR — and 0 AGAINST in favor of the motion. ITEM NO. 5 — Consider and Act Upon Issues Surrounding a Commercial Lease Between the WEDC and Lighthearted Home. Staff presented the potential to lease one of the Hughes buildings to a local company — Lighthearted Home. Lighthearted Home manufactures hand painted picture frames sold in high-end children's stores. Assuming the WEDC closes on the Hughes tract, staff proposed a lease of $2,600 per month with $500 per month escrowed for Lighthearted Home to utilize in the construction of a new building within the next three years. Board member Bartow was in support of the business incubator concept but questioned the WEDC subsidizing the lease on the front end (citing the lease rate was approximately $2.00 per square foot below market) and providing economic assistance on the back end. Staff commented that the building is to be leased 'as-is' which will reduce WEDC expenses. Furthermore, the goal is not to maximize profit, but to service debt, pay the taxes, and provide an opportunity for a small business to grow their business while earning equity for the future. WEDC—Minutes June 15, 2006 Page 5 of 6 Again, Mr. Bartow agreed with the concept but instructed staff to tailor the lease to where WEDC expenses are minimized. Staff indicated that the .lease/assistance package would be brought back for Board approval. MOTION: A motion was made by Gary Bartow and seconded by Merrill Young authorizing the WEDC Executive Director to negotiate a lease/assistance package between the WEDC and Lighthearted Home for WEDC property located on Industrial Court (Hughes tract). The WEDC Board voted 5 FOR — and 0 AGAINST in favor of the motion. ITEM NO. 6 — Consider and Act Upon Issues Surrounding a Loan Agreement Between the WEDC and Brad D. Jacoby and Catherine G. Jacoby. The WEDC entered into a Loan Agreement with Brad and Catherine Jacoby (Lone Star) on October 30, 2000. The Agreement called for the conveyance of 13.523 acres of property within Premier Business Park to Lone Star. Lone Star constructed a 104,062 square foot manufacturing facility located at the northeast corner of Premier and entered into a note for $589,062. The note is payable in 4 equal payments of$110,353.25 and a final payment of$147,649. Payments 1 & 2 have been forgiven per the Loan Agreement. Payment 3 ($110,353.25) should have been forgiven in April of 2005. Payment 4 ($110,353.25) should have been forgiven in April of 2006. Lone Star has not been in default during the life of the Loan Agreement. As per the Loan Agreement,the WEDC is required to forgive all principal and interests payments associated with the $589,062 note being that Lone Star is not in Default. President Fuller directed staff to not let Payment 5 go beyond April of 2007. President Fuller also directed staff to continue discussions with Mr. Jacoby regarding the terms of forgiveness surrounding Payment 5. MOTION: A motion was made by Merrill Young and seconded by John Yeager forgiving principal and interest payments associated with Payments 3 and 4 under the Loan Agreement between Brad and Catherine Jacoby and the WEDC. The WEDC Board voted 5 FOR— and 0 AGAINST in favor of the motion. EXECUTIVE SESSION The WEDC Board of Directors convened into Executive Session at 8:02 p.m. ITEM NO. 1 — Convene into Executive Session to Hold Deliberations Regarding Real Property (Purchase of Real Property by the WEDC Located WEDC—Minutes June 15, 2006 Page 6 of 6 at 707 Cooper Drive and Property Located Near the F.M. 544/F.M. 1378 Intersection) as Authorized in Section 551.072 of the Local Government Code, Vernon's Texas Code Annotated (Open Meetings Act). Staff indicated that there was no new information to be discussed regarding the purchase of property located near the intersection of F.M. 544 and F.M. 1378. That being the case, President Fuller did not ask Mr. Herzog to leave the meeting based upon a conflict of interest surrounding the site. RECONVENE INTO OPEN MEETING The WEDC Board of Directors reconvened into open session at 8:06 p.m. No action was taken as a result of discussions held in Executive Session. ADJOURNMENT With no further business, President Fuller adjourned the WEDC Board meeting at 8:07 p.m. Consensus of the WEDC Board was to adjourn. V(4,1 r G�/�U VIA Marvin Fuller, President ATTEST: Samuel D.R. Satterwhite Executive Director