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Min - Economic Development Corporation - 2006 - 02/15 - RegularALLEN ECONOMIC DEVELOPMENT CORPORATION (AEDC) Board Kurt Kizer Tim Wood Ken Fulk Maxine Sweet Carl Clemencich REGULAR MEETING February 15, 2006 Staff Charisse Bodisch Jennifer Grimm Dan Bowman Call to Order and Announced Quorum Present Guests Daniel Spika Ian Hale Bob Faisal Mike Villalobos Eric Benavides Robert Boss Matt Bmmlett With a quorum of the Board present, the Regular Meeting of the Allen Economic Development Corporation (AEDC) was called to order by President Kurt Kizer at 6:02 p.m. on Wednesday, February 15, 2006 at the AEDC Office. The following items were discussed: Approve Minutes of the January 18, 2006 Regular Meeting of the AEDC Board of Directors The minutes of the January 18, 2006 Regular Meeting of the AEDC Board of Directors were approved as submitted on a motion by Ken Folk, seconded by Maxine Sweet. Convene into Closed Executive Session. The Board convened into closed executive session at 6:05 p.m. to deliberate commercial and financial information and economic incentives for the following: • The recruitment of Project Simon to Allen. • Development of McDermott Business Pat Phase Il in Allen's Central Business District. • Development of McDermott Square in Allen's Central Business District. • The Retention of HIT Entertainment in Allen Reconvene into Regular Session The Board reconvened into regular session at 8:18 p.m. Consider Approval of Incentives Supporting the Recruitment of Project Simon to Allen. Project Simon is an international supplier of drilling equipment with a facility in Garland. The company is expanding and is considering taking approximately 80,000 square feet of space at 815 Enterprise Boulevard in Allen. They would continue to maintain their operations in Garland. Allen Economic Development Corporation Regular Meeting, February 15, 2006 Page 2 Bob Fassl with Project Simon appeared before the Board to request incentives from the AEDC to offset relocation costs. Through this expansion they plan to double the size of the company. Fassl projected that approximately half of the existing employees involved in distribution operations at the Garland facility would transfer to the Allen facility, with the remaining employees being hired in the Allen area. The company plans to make a location decision before the end of February and have the facility operational in May 2006. The company would sign an initial 5 -year lease with up to two 5 -year options. The Board took into consideration that 815 Enterprise Boulevard has been unoccupied since 1999. On a motion by Maxine Sweet, seconded by Tim Wood, the Board approved an $80,000 incentive grant to offset moving costs (not including payments to internal company employees) incurred by Project Simon for which qualified receipts are provided. The incentive is payable upon the issuance of a certificate of occupancy and is contingent upon the company signing a 5 -year lease on approximately 80,000 square feet of space in 815 Enterprise Boulevard, maintaining a minimum taxable value of $1,000,000 in business personal property and 30 fulltime employees for the 5 -year term of the lease. The Board authorized the president of the AEDC Board to negotiate and execute the contract. Consider Approval of Development Scenarios Supporting the Construction of an Office Building in McDermott Business Park Phase 11 in Allen's Central Business District Mike V illalobos, PRO Capital, appeared before the Board to request incentives from the AEDC to offset infrastructure costs associated with the development of Phase 11 of McDermott Business Park. The company has to solve unanticipated drainage issues associated with the site, including grading the property to redirect the flow of water and prevent flooding of a nearby residential neighborhood. These improvements have increased their costs. Phase B will consist of a 5,400 square foot building with a taxable value of approximately $485,000, constructed in the same architectural style as the first building in the park. PRG already has tenants interested in leasing space in the second building. On a motion by Maxine Sweet, seconded by Ken Fulk, the Board approved up to $50,000 in infrastructure assistance to be paid in a single lump sum upon the issuance of the first certificate of occupancy for the building and contingent upon the submittal of qualifying infrastructure receipts for expenses incurred by PRG Capital. The Board authorized the president of the AEDC Board to negotiate and execute the contract. Consider Approval of Development Spenarms Supporting the Co structio r of Office Retail and Restaurant Space in McDermott Square in Allen's Central Business District. A developer is planning to construct three 2 -story buildings containing a combination of office, retail and restaurant space on appm mmitely 4.2 acres at the southwest comer of McDermott Drive and Cedar Drive in Allen's Central Business District. Plans include approximately 42,320 square feet of office space, 46,343 square feet of retail space and 13,916 square feet of restaurant space. Allen Economic Development Corporation Regular Meeting, February 15, 2006 Page 3 Eric Benavides, the developer, appeared before the Board to request infrastructure assistance from the AEDC to offset development costs. The mixed-use commercial development will target upscale, locally -operated boutiques and offices and have a pedestrian friendly "downtown" feel. The City Planning Department has reviewed the developer's plans and is in favor of the project. On a motion by Maxine Sweet, seconded by Carl Clemencich, the Board approved providing up to $200,000 in assistance to offset infrastructure costs incurred by the company for which receipts are provided, to be paid on the following schedule: • $100,000 paid upon receipt of a certificate of completion on the final building • $100,000 paid upon the first anniversary of the certificate of completion on the final building Payment of incentives is contingent upon the company maintaining a taxable value of $9,000,000 on the buildings and zero employees for the first 2 years of full valuation. The Board authorized the president of the AEDC Board to negotiate and execute the contract. Reg ousrder Incentives for the Retention of HIT Entertainment in Allen HIT Entertainment, an audio-visual entertainment company currently located in Allen, was recently acquired by an investment company that has outsourced some of its operations. The company has released approximately 70 employees and is considering selling the Allen facility. They currently have approximately 65 employees remaining. Robert Boss, HIT Entertainment, appeared before the Board to update the AEDC Board on their plans regarding the Allen facility. With the potential sale of the building, HIT is considering its options including subleasing space in the existing building or leasing space elsewhere in Allen. The company desires to stay in Allen, since most of their employees live in the area. The Board recommended that Charisse get an opinion from the AEDC attorney regarding calling the company into default. Approval of a Corporate Resolution Supporting the Sale of AFDC -Owned Land in Millennium Comorate Center. The AEDC Board provided an incentive package to Duke Realty to support the development of a six - story, 120,000-140,000 square foot Class A office building in Millennium Corporate Center. To facilitate the closing on the property in Millennium Corporate Center with Duke Realty and in accordance with contractual requirements, the title company requires a Corporate Resolution authorizing Kurt Kizer, AEDC President, to execute the sale on behalf of the Allen Economic Development Corporation. On a motion by Maxine Sweet, seconded by Ken Folk, the Board approved a Corporate Resolution authorizing Kurt Kizer, AEDC President, to execute the sale of 7 447 acres of AEDC-owned land in Millennium Corporate Center to Duke Realty on behalf of the Allen Economic Development Corporation. Allen Economic Development Corporation Regular Meeting, February 15, 2006 Page 4 Approval of AEDC Financial Reports Dan Bowman presented the AEDC financial reports. On a motion by Ken Fulk, seconded by Tim Wood, the Board approved the AEDC financial reports as presented. Discuss Administrative and Marketing Activities of the AEDC Jennifer Grimm updated the Board on the marketing activities of the AEDC. Maxine Sweet updated the Board on the possibility of Experian relocating a portion of their Allen operations to McKinney. The company is aware that if Allen is no longer the location of their primary data center, AEDC incentives would be discontinued. They don't anticipate anything happening for another year or more. Charisse distributed an economic development study done by the Perryman Group and updated the Board on the status of various AEDC projects. The AEDC is facilitating a meeting between City of Allen, AEDC and Blue Star Development representatives on February 21" to discuss the StarCmek development. The AEDC is scheduling a meeting on March 13" or 10 with City of Allen, Allen Chamber of Commerce, AEDC and Telecom Corridor representatives to discuss Allen's participation in the Telecom Corridor. The AEDC will host a series of meetings on March 21" where General Growth Properties will update City Council, City Staff, AEDC Board members and AEDC staff on their project. The Allen City Council and the AEDC will hold a joint meeting on March 28' to discuss strategic objectives as outlined in the City of Allen Strategic Plan. The tax abatement for Duke Realty will be considered for approval by both the Collin County Commissioners Court and the Collin County Community College District Board of Trustees on February 281" Scheduling of Next AEDC Board of Directors Meeting The next Regular Board meeting was scheduled for March 15, 2006 at 6:00 p.m. Adjourn On a motion by Maxine Sweet, seconded by Tim Wood, the meeting was officially adjourned at 9.20 p.m. These minutes approved this 15' day of March, 2006. i Kurt Kizer, Pidsident Keh Fulk, Secretary