Min - Economic Development Corporation - 2013 - 12/04 - RegularALLEN ECONOMIC DEVELOPMENT CORPORATION (AEI)C)
BOARD OF DIRECTORS
REGULAR MEETING'
WEDNESDAY, DECEMBER 4,2013
Board
Scott Sutherland
Michael Schaeffer
Greg Kennedy
Joey Herald -Ala sent,
.teff') urkhardt
550 ff
Flan -y Whale a,
Dan Bowman
John, Scriven
Rete Smith
Call to Order and Announce a Quorun1,.P,rese.1.1.t
Guests
Peter Vargas
Bo Bass
Elise Back
Jim Gandy
Ben Appleby
Ron Bagwill
Greg Griser
With, a quorurn of the Board present with members Scott Sutherland, Greg Kennedy, Michael
Schaeffer and JeffBarkhardt in attendance, the Regular Meeting ofthe All.en Econornic Development
Corporation (AEDQ Board of Directors was called to Ordei- by President Scott Sutherland at 6:00
pmi� on Wednesday, December 4, 2013 at the AEDC Office.
I. Approval of the Minutes of the November f) 2.0......1... _3,—jmjq a-1-r-d—ipS
On a motion by Greg Kenfledy, seconded by Michael Schaeffer, the Board unanimously approved the
Mimites of the November 6, 2013 Regular Board Meeting as presented.
2, Election of AEDC Board Officers(t(L
. .... . PL �veJan�uau
Mr. Sutherland inquired ifthe Board had any comments or discussion points regarding the election of
AEDC Board Officers, Mr. Kennedy stated there was nca slate so everyone would have to be
nominated individually. Mr. Smith noted officers could be elected individually or move that certain
Board Members be elected to certain positions
On as inotion. by Greg Kennedy, seconded by Jeff Burkhardt, the Board unani'mously approved the
election ol-Scott Sutherland as AEDC Board President, Michael Schaeffier as AEDC` Board Vice
President and Greg Kennedy as Secretary(I'reasurer effective January 1, 2014.
3. App il, of EL�()iioiiiig.Develoi)ineiit,.A with CVE'Technoloav Groun, Inc,
LQvL_ —9[9020L
On a n -munition by Greg Kennedy, seconded by Michael Schaeffer, the Board -unanimously approved tile
Econornic Development Agreement with C Technologies Group, Inc. as presented,
A EDCAfeeting Minutes
Decemho-4, 2013 - Page 2
�Q �
14) te Center LP
4. Apm with Watter Srk
Mr, Whalen informed the Board that Bruce Heller signed the ED Agreenient for an incentive of
$115,000 which is half the development infi,astructune amount previously presented to the Board.
-Mr, Smith noted there was, one ditference in tile ED Agreement; Mr. Whalen stated the building size
would be 18,000 rather than 20,000 square feet arid construction would start in January instead of
December,
Mr, Bowman commented that there is $2.7 million tbr capital improvei'llents, which includes $1
million for tenant improvements. As the building is completed and, time incentive is received, receipts
for $1 .7 million of construction will be provided, Within 18 months of completing tile building ami
additional investment of $1 million will be spent with receipts tunied in to the AFDC,
Mr. Sutherland asked if the incentive payment will be made after $2.7 Million is spent. Mr. Bowman
stated the payinent will be made for reirnbursernerit of infi-astructure which will be spent up fi-ont; the
ED Agreement has a claw back provision if tile additional SI inillion is not invested. Mr. Snlith said
the AEDC will make the payment thirty days after the final inspection of the building by the city.
On a motion by Michael Schaeffer, seconded by Jeff Burkhardt, the Board unanimously approved the
Economic Developirient Agreement with Watters Corporate Center LP as presented.
5. Fri,s,co EDDC EB -5 Presentatio,fl-and Reauest foTAffilliate Partner
Mr, Whalen introduced Jim Gandy, President of the Frisco EDC and Elise Back, Manager of
Economic Development tbr the Frisco EDC, AEDC prepared to complete an application for an EB -5
Regional Center and discovered Frisco had already established an E13-5 Regional Center, that serves
Collin, Dallas and Denton counties,
Ms. Back provided a presentation detailing the EB -5 Program. The EB -5 program was created in
19,90 to promote job creation and encourage foreign investment in the US. A f6reign investor must
invest $1 trullion and create 10 permanent US jobs in exchange for a green card. Most investors just
want to loan developers money rather than take an equity position,
The time period fbi,- loan payback, ranges from a i-ninimurn of five years to arnaximurn of seven years,
Investors must submit a business plan arid an economic impact analysis stating the jobs will be
created at the end of two years, fhe timcliric to approve and complete the Eli® process is about one
year.
Frisco Texas International Development Center (FTIDG), a Regional E13-5 Center, was approved on
August 1, 2013 and is eligible to receive irrmugrant investor capital. 'Three FT,11 C Board Members,
along with Mr, Gandy and?v1s, Back oversee the program, There: are 430 Regional Centers In the US;
about 95 -percent are managed by third party vendors such as law firms, 'The City of Dallas created
an EB -,5 Regional Centel- in 2008 which is managed by Civita&
The top 5 investor markets in 2012 were China, South Korea, Taiwan, Iran and Venezuela with more
than 3,000 investors approvedibr investment in the US. It is anticipated that over $2 billion will be
added to the US economy in 201.3. Countries that approached the FTIDC include Germany, Russia,
ALTDC Meeting Mhnftc?.v
Decernhei-4, 2013 - Page 3
Mexico and China. Projects for a medical facility in Mesquite and hotels in Piano and The Colony
are currently in progress with the FTIDC,
F'TID�C has developed a process lbr evaluating projects, assessing investments and working with
developers and businesses. FA IDC only wants to consider prQjects valued at more than $ 10 million,
The F'11DC has drafted a resolution and, an affiliate agreement for affiliate partner's that should be
available for review in the next few weeks. A non -circum vent clause will be pail of the agreement
and allows a city to retain a project it submits. Mr, Whalen stated the city attorney Will review the
agreement, Mr. Gandy said the A,EDC Board and City of Allen can approve the EB -5 Agreement,
but it is not necessary for both of them to approve it.
6. Convene into Closed, Execut n: Pursuant A�, 'overnment C
n 55 1_081
slu: . . ........... ... .. . ........... ....
Deli eration of Ecoi mi D velopingn! Nggoliat.ions: To Deliberat4� -Ei ancial
11-1-1-1111---- —1111Q—U�_ -g-1-1-1- - --l-1-111--- - ...... — er
In Ln Lat i o
fo r .K1_qnd,Econo,rnic In forthe Follow'
- — ------- - -
,Consider Sale of Land and Other Incentives to Support the Development of AllenPlace
Office Center
b. Consider Incentives toSup�p�oro the Recruitment of Project Home Run
Reconvene into Open Session
The Board reconvened into regular session at 7:34 p.m.
7. Acti Ila R 51
-bm.ExsLqpfive,5ession
No action taken
S. Awproval Qf the AEDC Financial
Greg Kennedy presented the AEDC Financial Reports. Mr. Kennedy pointed out that 5102, 51.41
was not lost in the month of October, it is a result ofnot showing any recorded revenue for the inonth.
On the revenue side, the sales tax dollars in tl,,ie amount of $6,50,000 were received in 2013. This
money is In the bank, so revenue is actually ahead of the budget ainount of $643,0,00f . There was a
one-tinic credit 16r as duplicate payment of Saicsforce.corn.
On the expense side, the Full-'I"ime Salaries were under budget because the first paycheck in October
included as week of September salaries. For the Dues &, Subscription line itein, $12,380 was for the
Allen Central Park Property Owners Association dues, Rentals/Leasing payments were doubled up,
and the Marketing expense was $30,000 which was primarily related to the Texas Stampede evelit.
The Marketing line item, was over by about $3,000, but some of this expense was pulled in from the
prior month and recorded in October,
An economic grant payment for $30,000wags paid toTrintas, Tile only item that was forecast to
change on the budget vers -us the actual is the marketing expense which has been reduced by about 23 -
percent Jroni $320,000 to around $247,000,
A EDC Afeefing XfOmfes
Deceni&,O, 2013 - Page 4
In tenris of payout in the month of December for the Monthly Cash Balance, the $2.2 million, to Ciscc
will not be paid,; it is being held on the books. The largest payment should be for Frontier in the
arnount of S300,000. 'rurrentine-Jackson has a $50,000 payment and Standex a payi-nent of" 34, 00.
The $2.7 million in pending projects, can be reduced down by $2.2 rnillion,. The cash balance running
through December 2013 will 'be close to $9.6 million. Mr. Sutherland asked if payments have been
made to TUITentine-Jackson, Mr. Bowman stated there is only one incentive for Turrent ine-J ackson,
but ort is unclear if the company will submit a request Ibr the payment,,
The Sales Tax Analysis shows, trending a little ahead for the current fiscal year and for time prior
month of the prior year. There were no substantial changes to the Balance Sheet fbr the month of
October,
Mr, Sutherland understands that the $2.2 million incentive for Cisco will come off the Monthly Cash
Balance Sheet, Mr, Bowman noted that there is one snore year leftto meet the terms of the agreement
based on a r(,-)Iling four year average; therefore payment of this grant to Cisco will not be determined
until the end of 2014, Mr. Kennedy said the plan is to keep moving the grant forward until it has
been determined that Cisco has not met tile requirements in the agreement, Mr. Schaeffer commented
that the Board doesn't believe Cisco will hit the numbers; Mr, Bownian agreed that it would be very,
very difficult for Cisco to counter balance all the previous years of lower values.
Mr. Schaeffer requested an explanation regarding time $55,000 to 60,000 marketing expense for last
trionth. Mr. Kennedy stated this line item showed it, was over tioni the prior year, but if S0111C Ofthe
line itenis were backed out the actual expense would have been in-line with the budget for the year,
Mr. Kennedy noted it was about $56,00 ; Mr. Whalen shared it came in about $28,000 under budget.
On a motion by Michael Schaeffer, seconded by JeffBurkhardt, the Board unanimously approved the
AEDC Financial Reports as presented.
9. Review of AEDCMarketinL, Budget f-br Fiscal Year 2014
Mr. Whalen presented a hard copy ofthe Marketing Budget for fiscal 'Year 2014 because a few
numbers were changed. Mr. Whalen said the marketing budget is, equally aggressive as it was in the
past concerning the internalniarket. The national outreach focus has been, reduced with regional
activities being as, aggressive as last year. DiSCLISSion followed on several key items; the plan will be
reworked and presented to the, AEDC Board at as later date for approval,
10. UMaIe oil AEDC Board Planning Retreat —Fb uqU �L QJA
e r ,
Mr. Kennedy said there was an initial conference call with Mr. Whalen an(] the moderator. Mr.
VVbalcii and Mr, Wagoner will develop ail outline that will be presented to the Board. Input will be
provided by time Board regarding the outline: and it will be modified. Mr. Kennedy is proposing that
the Board prepare as plan projected Out two to three years. Mr. Kennedy recommends the Board lead
the strategic plan Ibr the AE C:' which can be presented to the City Council,
The retreat is scheduled fbr February 8"', but Mr. Kennedy said dinner the night before may need to
be rescheduled for another date, Mr. Burkhardt suggested staggering the activities six nflonihs apart.
Mr. Smith stated a meeting notice does not need tmm be posted for a Board dhincr.
AFDC Ueeling Alinules
Decentbei-4, 2013 - Page 5
1. AEDC,* Fl c prolinu Administrative and Marketin A
11 rt Reg ..gtivitics of the AFDC
ILpqg.g
Loc,al Events, Office, Industrial, Data Cent(z land Business Retention Projects
flarry Whalen updated the Board on office, industrial, and retail projects. Mr. Whalen stated part of
the year in review can include a list of the ox)mpanies and, pr(�jects that the AEDC has worked with
during the year. The majority oCprojects are either inactive or still in the evaluation stage. Nine -
Band Brewing is ready to break ground before the end of the year. There are no projects in progress
that need any inirriediate attention fi-om the Board.
12. Qel!��ITle2stMcetjng
_Qate Jan r .1 _2014
The next AEDC Board meeting is scheduled for Wednesday, January 15, 2014 at 6:00 prn,
13, (.o nv ne i Jpsed Executive,,, ion, Pursuant to'Texm
_Qr t tnt CU)cg,-5eetion 55J,,074
RoE Personnel Matters. Discussion of the Duties and Reso s
P-01ilities of the Executive Director
Reconvene into Open Session
The Board reconvened intoe regular session at 9:34 pm.
14. &I -ions Resutting from Executive Session
No action taken
1
diouri
On a motion by Greg Kennedy, seconded by Michael Schaeffer, the meeting was adJourned at
9:35 p.m,
These Minutes approved this 15"' day of January, 2014.
... ........
Scott Sutherland, President ael Schaeffer, Vice, President