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Min - Economic Development Corporation - 2006 - 08/16 - RegularALLEN ECONOMIC DEVELOPMENT CORPORATION (AEDC) BOARD OF DIRECTORS REGULAR MEETING August 16, 2006 Board Staff Guests Kurt Kizer Charisse Bodisch Mark Stahl Tim Wood Jennifer Gomm Bruce Heller Carl Clemencich Dan Bowman Tom Carter Mark Pacheco Mike Junket Maxine Sweet Callto Order and Announce a 0irmum Present Willi a quorum of the Board present, the Regular Meeting of the Allen Economic Development Corporation (AFDC) was called to order by President Kurt Kizer at 5:41 p in. on Wednesday, August 16, 2006 at the AEDC Office. The following items were discussed: Approve Minutes of the July 19, 2006 Regular Meeting of the AEDC Board of Directors On a motion by Maxine Sweet, seconded by Mark Pacheco, the minutes of the July 19, 2006 Regular Meeting of the AEDC Board of Directors were approved with the following revisions: • Under the items relating to the consideration of approval of the landscaping, lighting and site plans for an office/tech building in Twin Creeks Business Park, the consideration of approval of the landscaping, lighting and site plans for a medical rehabilitation center in Twin Creeks Business Park and the consideration of approval of the architectural design and lighting, landscaping and site plans for One Allen Center in Allen Central Park, wording in the minutes was changed to state that Mark Pacheco abstained from discussion and voting on these items. • Under the item relating to the reconsideration of incentives for Contemporary Tide, wording was changed to state that if the company fails to make a payment on any of the required dates according to the payment plan, they will be required to immediately repay the entire $44,787 grant less any amount they have already repaid. Consider and Approve the Assignment of an Economic Development Agreement from R-75. L P to Rocovich Family L.L.C. for the Building Located at 1301 Central Expressway South Mark Stahl, representing Cornerstone Development, appeared before the Board to request the assignment of the Economic Development Agreement (executed on April 28, 2005 between the AEDC and R-75, L.P.) to Rocovich Family L.L.C. The agreement provided $150,000 in infrastructure assistance to support the development of a 50,000 square foot, two-story office building located at 1301 Central Expressway South. Allen Economic Development Corporation Regular Meeting, August 16, 2006 Page 2 Rocovich Family L.L.C. is a family limited partnership that is currently planning to purchase the building located at 1301 Central Expressway South. The company has investment properties in California, with four land holdings in excess of 100 acres each. They are currently in the process of purchasing several buildings in the Dallas -Fort Worth area and plan to purchase the building at 1301 Central Expressway South with cash within the next 30 days. Cornerstone Development will have an agreement with Rocovich Family L.L.C. to continue to manage the property and do the leasing for the building. Rocovich Family L.L.C. has a history of holding their properties for an extended period of time and has indicated that they would likely retain ownership of the building for 10-20 years. The company is also considering purchasing the second building that is currently under construction adjacent to the building at 1301 Central Expressway South. Stahl informed the Board that Rocovich Family L.L.C. has been made aware that the benefits of the incentive grant and tax abatement on the building must be passed through to the tenants. On a motion by Carl Clemencich, seconded by Maxine Sweet, the Board approved the assignment of the Economic Development Agreement (executed on April 28, 2005) from R-75, L.P to Rocovich Family L.L.C. for the building located at 1301 Central Expressway South. Consider and Approve a Recommendation for the Assigmnent of Tax Abatement from R-75 L.P. to Rocovich Family L.L.C. for the Building Located at 1301 Central Exoresswav South Mark Stab], representing Cornerstone Development, appeared before the Board to request the assignment of the Tax Abatement Agreement (executed on July 26, 2005 with R-75, L.P.) to Rocovich Family L.L.C. The agreement provided a 50%, 10 year tax abatement on the building to support the development of a 50,000 square foot, two-story office building located at 1301 Central Expressway South. On a motion by Mark Pacheco, seconded by Tim Wood, the Board approved a recommendation to the City of Allen for the assignment of the Tax Abatement Agreement (executed on July 26, 2005) from R-75, L.P. to Rocovich Family L.L.C. for the building located at 1301 Central Expressway South. The agreement specifies that the City of Allen may approve the assignment on behalf of all the participating taxing entities. Discuss and take Action for the Reconsideration of Incentives for Twin Creeks Medical Center Two. L.P. Bruce Heller, JaRyCo Development, appeared before the Board to request that the Economic Development Agreement, executed April 7, 2005 in support of the development of Twin Creeks Medical Center Two in Twin Creeks Business Park, be amended to extend the deadline for meeting the required minimum taxable value from January 1, 2006 to January 1, 2007. Heller also requested that the agreement be modified to change the required date for receiving a certificate of completion. The AEDC previously provided $75,000 in infrastructure assistance for the project conditional on the company obtaining a certificate of completion by October 31, 2005 and having a minimum taxable value of $5 million on January 1, 2006. Allen Economic Development Corporation Regular Meeting, August 16, 2006 Page 3 Heller explained that the building value for Twin Creeks Medical Center Two was only $2,216,615 for tax year 2006 according to the Collin County Central Appraisal District This building has a lower valuation because it is currently only 25% leased. It has been difficult to lease medical office space in the Allen area. The Medical Center of McKinney has been very aggressive in the recruitment of doctors to fill medical office space, which has provided a great deal of competition for Allen medical office developments. Heller also explained that the building did not receive a certificate of completion until December 16, 2006 because there was a delay in receiving the lobby stairs from a vendor. He assured the Board that the building will meet the required taxable value of $5 million for tax year 2007. On a motion by Maxine Sweet, seconded by Tim Wood, the Board approved amending the Economic Development Agreement executed April 7, 2005 between the AEDC and Twin Creeks Medical Center Two, L.P., extending the deadline for meeting the required minimum taxable value of $5 million from January 1, 2006 to January 1, 2007 and changing the required date for receiving a certificate of completion from October 31, 2005 to December 31, 2005. Mark Pacheco abstained from discussion and voting on this item. Consider Approval of Modificatioms and Exhibits to the Amended and Restated Economic Development Agreement Between the AEDC and Montgomery Farm Garden District Ltd and Coventry B DDR/Tmdemark Momgomery Farm L.P. Tom Carter, Trademark Property Company, appeared before the AEDC Board to request approval of changes to the AEDC incentive agreement for the mixed-use retail project located at the southwest comer of US 75 and Bethany Drive and approval of exhibits associated with the agreement. The AEDC Board previously approved changes to the agreement and assignment of die agreement to Trademark pending final approval of the exhibits. Carter requested that the wording in the contract be changed to allow the tax generation and the infrastructure costs from Retail Phase 1, Retail Phase 1I and the Green Mixed -Use Zone to be used in assessing calculations for the incentive payments. It is the desmc of the company to ultimately own all of these parcels. Carter also presented the exhibits to be attached to the contract for Board approval. Carter informed the Board that Trademark is under contract to close on Retail Phase II by October 31, 2006. On a motion by Carl Clemencich, seconded by Maxine Sweet, the Board approved the changes to the AEDC incentive agreement for the mixed-use retail project located at the southwest comer of US 75 and Bethany Drive and the exhibits associated with the agreement as presented. The Amended AEDC incentive agreement will be presented to the Allen City Council along with the Allen Community Development agreement and T.I.F. agreement for final approval. Convene into Closed Executive Session. The Board convened into closed executive session at 6:20 p.m. to consider incentives supporting development in Watters Creek at Montgomery Farm at the southwest comer Bethany Drive and US 75. Allen Economic Development Corporation Regular Meeting, August 16, 2006 Page 4 Reconvene into Reitular Session The Board reconvened into regular session at 6:52 p.m. Consider Approval of Incentives Supporting Development in Watters Creek at Montgomery Farm ad the Southwest Comer of Bethany Drive and US 75 Tom Carter, Trademark Property Company, appeared before the AEDC Board to request AEDC assistance in the recruitment of a name -brand upscale grocery store anchor to the mixed-use retail project located at the southwest comer of US 75 and Bethany Drive. Carter explained that the grocer is considering pulling out of their lease in the development because their budding is over budget. Trademark has directly contributed funds to mitigate the overage and plans to work with their contractors to reduce the budget overage. Trademark is requesting that the AFDC provide $250,000 to secure the grocer in the development. Carter has been informed that the company is not likely to pull out of their lease if they receive the additional $250,000 from fire AEDC. He assured the Board that the grocery store to be recruited would be a name brand store and that Trademark would not request additional incentives for this project from the City, AFDC or ACDC in the future. On a motion by Mark Pacheco, seconded by Tim Wood, the Board approved: • Forgiving the amount that would be owed by Trademark for the previous construction of Bethany Drive (valued at $100,000). If the name -brand grocer does not occupy and open the store in the development, Trademark would immediately owe the amount for the previous construction of Bethany Drive. • Providing a $150,000 incentive grant payable upon the name -brand grocer securing a certificate of occupancy and opening for business to the public in the development. Payment of the grant is also contingent upon the submission of qualified receipts for infrastructure expenses associated with the development. Assurance was made that the infrastructure expenses submitted for this incentive will not be duplicated in submissions for other AEDC incentives. The Board authorized the president of the AFDC Board to negotiate and execute the contract. Approval of AEDC Financial Repprts. Dan Bowman presented the AEDC financial reports. On a motion by Tim Wood, seconded by Maxine Sweet, the Board approved the AEDC financial reports as presented. Discuss Administrative and Marketing Activities of the AFDC. Jennifer Grimm updated the Board on marketing activities and distributed a list of upcoming events that Board members are invited to attend These events included the Star Creek Amenity Grand Opening on August 22, the Atlas Copco Open House and Ribbon Cutting on August 23, the Reception for Charisse Bodisch on August 25, the Reception for Dr. Ken Helvey on August 31, the Hampton Inn Ribbon Cutting and Opening Party on September 7, the Luncheon Honoring Dr. Jenny Preston on Allen Economic Development Corporation Regular Meeting, August 16, 2006 Page 5 September 8, the NTCAR Expo on September 14, the CREW Classic Golf Tournament on September 18, the AEDC Millennium Business Awards on September 19, the Celebration of Enterprise Expo on September 27 and the AFDC Allies Day Tour and Golf Tournament on October 2. Cbarisse updated the Board on the status of various projects. Scheduling of Next AEDC Board of Directors Meeting. The next Regular Board meeting was scheduled fm September 20, 2006 at 6:00 p.m. A joint meeting between the AEDC Board and the Allen City Council is scheduled for September 19, 2006 at 6:00 p.m. A iourn. On a motion by Mark Pacheco, seconded by Carl Clemenmcb, the meeting was officially adjourned at 7:00 p.m. These minutes approved this 20" day of September, 2006. K rtKizer,Lait Carl Clemencich, Secretary