Min - Economic Development Corporation - 2004 - 11/16 - Special CalledALLEN ECONOMIC''DEVELOPMENr CORPORATION (AEDC)
BOARD OF DIRECTORS
SPECIAL CALLED MEETING
No 16,2004
Board
Staff
Guests
Kurt Kizer
Cliarisse Canfield
Kerry Craven
Tini Wood
Jennifer Grit-nin
John Gates
Ken bulk
Dan Bownian
Paid Chapnian
Maxine Sweet
Brint Landry
Carl Cleniencich - Absent
Danny Schoeniiig
Call to Order and Anrw-un e a uorurn Present
With quoruni of the Board present, the Special Called Meeting of the Allen Econornie Developnient
Corporation (AEDC) was called to order by President Kurt Kizer at 4.45 p.tit, onTuesday, Noveniber
16, 2004 at the AEDC Office. The following items were discussed:
Convene into Closed.Execiative Session.
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The Board converied into closed executive session at 4:46 pans. to deliberate coniniercial and fitiancial
inforrnation and econornic incentives for Project Flash to locate into 600 Millennium Drive.
Reconvene i1ito —&Yg
Re laar Session,
The Board reconvened into regular session at 5:09 p�jn,
Considerand take Action Reizardi Incentjyes SuplIpAJ11g, the RecruitnientoM
........ t --------- nojeqt Flash to Locate
. .............................. .................
into 600 Millennium Drive,
Project Flash, as fiber optic components company, is currently co-locatcd in as facility in Richardson.
The company that owns the building is planning to expand into the space currently occiipied by Project
Flash.
Flash is considering space in Allen in the FSI building and space in Calitoniia (close to their, corporate
headquarters). The conipany previously appeared before the el DC Board requesting incentives to
offset their relocation expenses. The AFDC provided incentives based on the co nipany purchasing the
building.
Due to the company's current financial position, purchasing the building is no longer atioption they
are considering. They have, however, secured a third party investor that will purchase the FSI building
and the other building in California to lease back to the company.
The company appeared before the AEDC Board to request that the previous incentives offered (based
on them purchasing the building) reniain the sarric with them now taking a long-terni lease in the
building. Project Flash will conirnit to a 15 -year lease with two 10 -year option renewals.
Allen Economic Development Corporation
Special Called Meeting, Novenibcr 16, 2004
Page 2
On a motion by Maxine Sweet, seconded by Ken Fulk, the Board approved continuation of the
incentive agreement as originally structured based oil tile company now conin-litting to a minimum of a
15 -year lease in lieu of purchasing the building. They must provide a copy of the lease to the AEDC,
'rhe incentives are structured as -
0 $300,000ul)ontlicisst,jaiiecofaCertificate ofOccupancy.
0 $300,000 on the first anniversary of the Certificate of Occupancy.
0 $300,000 on the second anniversary of the Certificate of Occupancy.
The incentives are contingent upon Project Flash leasing the facility for 15 years and maintaining 100
employees and $59 million in taxable blisines% personal property value for the first 10 -year period.
Consider and take Action Reaardingthcj'ax AbatementA.6 vreement with FS1,10ternational.
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The City of Allen, Collin County and CC CD previously approved a tax abatement for FSI
International. Wording in the contract states FS1 must maintain operations oil the property for 10 years
or until the taxing entities have received ad valorcin taxes from the site in an amount, equal to all ad
valorern taxes abated. Company officials, believe that they have fulfilled their requirement in Allen and
requested an official letter releasing them from any further obligations under the tax abatement
agreement.
FS1submilted financial calculations to support their clailn that they have paid an amount greater than
all the ad valorem taxes abated. 7' lie AEDC staffhas verified the information with records on file with
the Collin County "Tax Assessors Office and the Central Appraisal District ofCollin County.
Charisse visited with Jim Brazeal, former AEDC Chairman of the Board and Charter member, for his
recollection of the deal with FSL HQ recalls that the: AEDC did place wording that would allow FSI to
meet their commitment prior to the ten-year occupancy requirement as a wayto provide incentive for
the company to grow and increase their taxable value.
"Tire Board reviewed ail opinion from AED�C attorney Pete Smith stating that the wording of the tax
abatement agreement with FSI International indicates the company has nict all requirements specified
in, the contract and should be released from all obligations under the agreement.
On a motion by Ken Fulk, seconded by Thar Wood, the Board approved a reconuriendation, to the
taxing entities to release FSI International froln all obligations based oil thein having inel all
requirements specified in their tax abatement, contract.
Consider and take Action Regarding the Riglutof firstRe_
fus,a,LAgI:gq11p Allen
nu
Econot is DeveloninentComoration and FST filteniational,
The AEDC previous approved an Incentive Agreement with FSI International regarding the sale of
property in Millennium Technology Park. As part of the Incentive Agreement, the AEDC retained a
Right of First Refusal to safeguard the coninuillity should FST not fulfill its growth plan.
The Right of First Refusal (ROFR) gives the All'DC"
DC specific rights during the IAC time period,
which started oil February 28, 2002 and ends oil (lie I0 -year anniversary of the Certificate of
Occupancy (CO) for Phase I (February 28, 2007) OR when Allen has received ad valorem taxes from
the property in ail amount equal to call ad valorem taxes abated, whichever occurs first.
Allen Economic Development Corporation
Special Called Meeting, November 16, 2004
Page 3
The rights given the AEDC in the ROFR are as follows:
• If FS] offers the site or any portion for sale to a third party, FSI must notify the AEDC in
writing.
• AF.'DC has 30 days to consider the offer and either exercise the right to purchase the property
at the same terins offered by the third party or release the property,
1-0S1 currently owns a 172,619 SF building and approximately 18 acres, 'rhey have Rata offer pending
with Project Flash for purchase of the building and approximately 1.4 acres. FS1 would retain
ownership of the approximately 4 acres on the northwest corner of Century Parkway and Millennium
Drive.
Both FS1 International and Project Flash are requesting that the AEDC formally release FS1
International from the Right of First Refusal Agreernem so that the building can be sold. Based on
wording in the contract, FST company officials believe that they have ftilfilled their requirement ill
Allen, which would release them From all obligationsunder the ROM agreement.'I'lic Release would
apply to the entire property including the four acres remaining tinder FSFs ownership.
1°S1 submittedfinancial calculations to support their claim that they have paid an aniount greater than
all the ad valorem taxes abated. The AEDC staff has verified the information with records on rile with
the Collin County'"I'ax Assessors Office and the Central Appraisal District of Collin County.
On a inotion by Maxine Sweet, seconded by Ken Fulk, the Board authorized the President of tile
Board to draft a letter formally releasing FSI International Froin all obligatioiis based on theill having
met all requirements specified in their incentive agreement.
Adjourn.
On a motion by Ken Fulk, seconded by Maxine Sweet, the meeting was officially adjourtied at
5;29 pma.
"I'liese minutes approved this 19"' clay of January, 2005.
41,
Kurt 1izer, l4esi(lent e Fulk, Secretary