Loading...
Min - Economic Development Corporation - 2008 - 09/17 - RegularALLEN ECONOMIC DEVELOPMENT CORPORATION (AEDC) BOARD OF DIRECTORS REGULAR MEETING WEDNESDAY, SEPTEMBER 17, 2008 Board Kurt Kizer Tim Wood -Absent Carl Clemencich Gary Caplinger Maxine Sweet Staff Robert Winningham Jennifer Grimm Daniel Bowman Tracey Cline Guests Joe Gorrda Peter Vargas Joey Herald Bo Bass Rick Pickard Rick Pickard Jr. Sherrie Novotny Marc Robertson John Baumgartner Call to Order and Announce a Quorum Present. 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 6:17 p.m. on Wednesday, September 17, 2008 at the AEDC Office, Consent Aeenda On a motion by Maxine Sweet, seconded by Gary Caplinger, the Board voted unanimously to adopt the consent agenda as follows: 1. Approval of Minutes of the August 20, 2008 Regular Meeting 2. Approval of Economic Development Agreement with Rosewood Property Company 3. Approval of Economic Development Agreement with Piedmont Stacy Partners, L.P. 4. Ratify Payment of Second Installment of Economic Development Grant to Graphic Converting, Inc. The motion carred. 5. Consider and Take Action for the Retention and Expansion of Ari -Tex Daniel Bowman informed the Board that Ari -Tex is currently located at Rowlett Creek Plaza, near the southeast comer of Allen Drive and US 75. The company recently informed AEDC staff that they are considering the possibility of constructing a new 20,000-25,000 square foot corporate headquarters and service center facility on property they own at the southwest comer of Allentown Parkway and Greenville Avenue in Allen. AEDC Board ojDtrectors Regular Meeting September 17, 2008 - Page 2 1 Ari -Tex representatives appeared before the Board to present their project for consideration. Marc Robertson, consultant for Ari -Tex, told the Board that the company was founded in 1975 by Rick Pickard with just a few electrical contractors. In 1990, the company moved into 5,000 - square feet in the facility they currently occupy and began to work on contracting projects related to multi -family housing. Ari -Tex is one of three certified multifamily electrical contractors in Texas, although they also work on large custom homes and light commercial developments. The company's projected revenue for 2008 is $21 million. The average multi -family contract that the company undertakes is $250,000. The current strategic business plan for Ari -Tex includes continuing their growth in multi -family residential, expanding and growing their commercial division, and expanding and growing their multi -media division. The multi -media division will specialize in work related to media rooms in residential houses. It is expected that Rick Pickard will retire within the next 10 years and allow his children to take over the family business. The company has assessed their current real estate needs. In preparing for next generation's business, it has become clear that the leased facility in Allen does not support the size, the operational needs or the strategic business expansion plan of the company In particular, it does not support the multi -media division that the company would like to develop. The company has identified several real estate opportunities, including commercial properties they own in Plano, Allen, and on Preston Road north of 380. They have also identified a potential site in Frisco located less than one mile from the Dallas North Tollway. Ari -Tex will require a new office/warehouse facility to house their expanded business divisions. This facility will enable the company to expand their employee base to over 120 employees. The average 1 salary is currently $62,000. The company must ensure that the location selected for the facility is located strategically to service Collin County, as well as provide access to the entire DFW area. The company presented their proposed site plan for the Allen property. They plan to use 2.5 acres for their development and save the additional 2 acres they own for future development. It is possible that they may eventually develop an additional 20,000 -square feet of space parked for medical use. The proposed facility would be dressed -up architecturally and include a monument on the comer of the property. This facility will reflect the legacy of Rick Pickard, designed with upgraded architectural elements and extensive landscaping. It will have a Texas rural theme and a contemporary look. The company's lease at their current facility ends in August 2009 They plan to begin construction on the new facility in January 2009 and complete the building no later than September 2009. Ari -Tex would like to partner with a local city and plans to become civically involved in the city in which they locate. The employees would like to stay in Allen since the company is currently located here. They occupy 75% of the building at Rowlett Creek Plaza, along with a glass contractor, moving company, and a few small businesses. Pickard thinks that Ari -Tex may eventually be asked to leave the building, since a single landowner controls all of the land surrounding his facility and may want to partner with Gerald Chester, owner of the building, to develop the entire comer. I AFDC Board of Directors Regular Meeting September 17, 2008 - Page 3 1 Joey Herald, Allen City Councilmember, inquired as to how fast the company plans to grow. Robertson stated that 10% growth per year is estimated. The company's growth is mainly limited by their ability to find employees. Robert Winningham mentioned that the AEDC is partnering with the Allen Independent School District on a Career Tech Center that will focus on training high school students to provide necessary skills for future employment. The Career Tech Center may be able to assist Ari -Tex in finding employees. Robertson stated that the company will eventually build out the rest of their acreage at Allentown and Greenville or sell it to another developer. According to the current site plan, the company is over -parked on the property Robertson noted that Ari -Tex is willing to bring the architectural designs back to the AEDC Board for approval prior to receiving any incentive grant that may be approved by the Board. He stated that the company is requesting $150,000 from the Board to assist with infrastructure and relocation expenses. Peter Vargas, City Manager, inquired as to whether the company's current site plan will meet city requirements. Robertson stated that his civil engineer has confirmed that the facility will meet city requirements. They will make sure that there are adequate fire lanes. Kurt Kizer mentioned that the Board generally likes to help local Allen companies such as Ari - Tex. He also noted that the new site is a good location for the project. The AEDC sometimes structures incentive grants so that they are paid over several years, and Economic Development Agreements typically include clawback provisions and benchmarks that must be met by the company receiving the grant. Robertson stated that the company's employment and capital investment figures are achievable and conservative. The Board discussed the annual projected impact of the project of $97,000. Winningham also mentioned the impact of possibly having a higher and better use on the property on which the company's current facility is located. Winningham inquired about the company's sales tax impact. Pickard explained that the sales tax is typically paid to the city from which the products are shipped, which is not Allen in this case. The new multi -media division is expected to generate sales tax. Kurt Kizer suggested that the Board offer $150,000 grant, based upon the company maintaining a $2 million property value. Company representatives stated that 90 fulltime equivalent positions is a conservative estimate of the total employment that the company would maintain at the facility. On a motion by Carl Clemencich, seconded by Gary Caplinger, the Board unanimously approved an incentive grant in the amount of $150,000 to be paid to Ari -Tex on the following schedule: • $75,000 paid upon receipt of a certificate of occupancy • $75,000 paid upon one year anniversary of receipt of a certificate of occupancy The incentive grant to Ari -Tex is contingent upon the following: • AEDC Board approval of the site plan and architectural designs for the facility • Development of a facility with a minimum of 20,000 -square feet • Negotiated period for construction • Company must occupy the facility for a period of 5 years • Company must maintain a taxable value of $2 million in combined business personal property and real property for a period of 5 years • Company must maintain 90 fulltime equivalent (FTE) employees at the facility for a period of 5 years • Clawback provisions will he included in the Economic Development Agreement AFDC Board ojOmectors Regular Meeting September 17, 2008 - Page 4 The Executive Director of the AEDC was authorized to negotiate the Economic Development Agreement. 6. Convene into Closed Executive Session: The Board convened into closed executive session at 6:55 p.m. to deliberate commercial and financial information and economic incentives for the following: • Consider Incentives for the Recruitment of Project Stalled • Consider Incentives for the Recruitment of Project PDC2 • Approval of Amended and Restated Economic Development Agreement with Green Shield Financial, LLC • Discuss Execution of Economic Development Agreement with Coventry 11 DDR/Trademark Montgomery Farm, LP Reconvene in Open Session The Board reconvened into regular session at 9:21 p.m. 7 Actions Resulting from Executive Session On a motion by Maxine Sweet, seconded by Carl Clemencich, the Board unanimously approved a letter to be sent to representatives of Project Stalled indicating the following: • $10 — 12 million incentive grant is available from the AEDC to support Project Stalled • Incentive grant is available contingent upon the company constructing a data center in accordance with the specifications presented to the AEDC Board • Incentive grant is for the purpose of assisting with various infrastructure -related expenses On a motion by Carl Clemencich, seconded by Gary Caplinger, the Board unanimously approved paying up to $50,000 for an Oncor transmission study to assist with Project PDC2. 8. Consider and Take Action Regarding the Economic Development Agreement with Greenstreet Properties of Texas, LLC The Board discussed the early payment of a portion of the economic development grant to be provided to Greenstreet Properties per the Economic Development Agreement between the AEDC and Greenstreet Properties of Texas, LLC. Kurt Kizer mentioned that at a previous AEDC Board meeting, concerns had been raised regarding the need to have the plans for the additional Phase 11 retail development approved by the Planning Department and the need for a Master Parking Agreement to allow Strikz customers to share offsite parking with the adjacent Cinemark Theater. Robert Winningham stated that the early payment of the grant would be a show of good faith to Green Street for their effort, since they stepped in and helped improve Blue Star's retail development. Winningham also noted that parking requirements are not stated in the AEDC's agreement with Omen Street Peter Vargas noted that future agreements would need to require a Master Parking Agreement. Winningham concumd with Vargas on this issue. AEDC Board ofDtrectors Regular Meeting September 17, 2008 - Page 5 Mayor Terrell inquired as to whether the Planned Development (PD) for this development covers parking. Be Bass noted that the PD mentions the parking; however, Pete Smith, City Attorney, has stated that it is not specific enough. Cinemark has not been agreeable to sharing parking. Mayor Terrell stated that the incentive grant that Thomas Acevedo, Green Street, is requesting be paid early would likely serve as his equity money for his second phase of retail. If the AEDC does not approve the early payment of the grant, Green Street is unlikely to complete construction on any retail buildings in Allen in 2009 Bass noted that it does not matter if the grant is paid early without the parking issue being resolved because the City of Allen has leverage to ensure that a Master Parking Agreement is eventually executed. If the agreement is not executed, the city will not issue a building permit for the development. Bass assured the Board that the City would assist Green Street with its parking issue. Gary Caplinger stated that the early payment of the grant is a way to show the AEDC's appreciation to Acevedo for his work. Vargas noted that the city has told Acevedo that the parking agreement must be executed before he proceeds with construction or sells the property Bass noted that this is more of a procedural issue for the city. Acevedo will have the agreement in place before he proceeds with his first pad. On a motion by Maxine Sweet, seconded by Gary Caplinger, the AEDC Board approved payment of the first half of the second installment of the incentive grant to Green Street, with repayment provisions in the event that construction does not move forward in accordance with terms of the original economic development agreement. 9 Approval of AEDC Financial Reports Daniel Bowman presented the AEDC Financial Reports. On a motion by Carl Clemencich, seconded by Maxine Sweet, the Board unanimously approved the Financial Reports as submitted. 10. Administrative and Marketing Activities of the AEDC /Executive Director's Report Jennifer Grimm updated the Board on the marketing activities of the AEDC and invited Board members to attend the Panache event on November 8' Grimm also invited Board members to attend the Collin College fundraiser on February 28" The College is requesting that the AEDC sponsor the event at the $2,500 level. Maxine indicated that she and her husband may attend. Robert Winningham thanked Kurt Kizer for his recent presentation of the AEDC Annual Report to the Allen City Council meeting. He also thanked AEDC staff for preparing the presentation. 11. Scheduling of Next AEDC Board of Directors Meeting The next Board meeting was scheduled for Wednesday, October 15, 2008 at 6:00 p.m. 12. Convene into Closed Executive Session: Pursuant to Texas Government Code, Section 551.074, the Board convened into closed executive session at 9'43 p.m. for the annual performance review of the Executive Director/CEO. AFDC Board of Directors Regular Meeting September 17, 2008 - Page 6 Reconvene in Open Session The Board reconvened into regular session at 10:45 p.m. 13. Consider and Take Action Relating to the Annual Performance Review of the Executive Director/CEO The Board moved unanimously to raise the base salary of the AEDC Executive Director/CEO to $120,000, an increase of 7.14%, to be effective on September 6, 2008. The Board also approved a bonus of $17,500 for the AEDC Executive Director/CEO. 14. Adioum The meeting was officially adjourned at 10:48 p.m. These minutes approved this 15" day of October 2008. Kurt Kizer, P ident Carl Clemencich, Secretary I