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HomeMy WebLinkAboutMin - Economic Development Corporation - 2005 - 01/19 - RegularALLEN ECONOMIC DEVELOPMENT CORPORATION (AFDC) BOARD OF DIRECTORS REGULAR MEETING January 19, 2005 Board Staff Guests Kurt Kizer Charisse Canfield Dave Noble Tim Wood Jennifer Grimm Bruce Heller Ken Fulk Dan Bowman Maxine Sweet Carl Clemencich Call to Order and Announce a Ommun Present. With 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 6:09 p.m. on Wednesday, January 19, 2005 at the AEDC Office. The following items were discussed: Approve Minutes of the November 16 2004 Special Called Meeting of the AEDC Board of Directors The minutes of the November 16, 2004 Special Called Meeting of the AEDC Board of Directors were approved as submitted on a motion by Maxine Sweet, seconded by Ken Fulk. Approve Minutes of the November 17 2004 Regular Meeting of the AFDC Board of Directors The minutes of the November 17, 2004 Regular Meeting of the AEDC Board of Directors were approved as submitted on a motion by Tim Wood, seconded by Maxine Sweet. Consider and take Action Regarding an Incentive Payment for Crow Family Holdines for Buildings Located in Allen Station Business Park. In 2000, Trammell Crow started the development of Allen Station Business Park located on the north side of Exchange Parkway, just east of US 75. Two buildings were constructed, simultaneously, for the fust phase of the project. The use of incentives played an important role in Trammell Crow's decision to develop the park; namely because of the extensive infrastructure and drainage costs associated with the site. As incentive, the company received a 40%, 10 -year tax abatement on the buildings and the AEDC offered $285,000 for the first building and then $85,000 each for the second, third and fourth buildings. The incentives were based on Trammell Crow initially constructing two approximately 100,000 SF buildings with a value of $4 million each on the local tax rolls (following the issuance of a certificate of occupancy). Dave Noble, Trammell Crow, appeared before the Board to request payment of the incentive grant for the fust two buildings. The reason for the request is that both buildings now have certificates of occupancy issued which will trigger the Appraisal District's higher valuation of the buildings to $4 million each (the buildings are currently valued at approximately $2.3 million and $2.6 million). With this higher valuation, Trammell Crow has met the requirements of their incentive contract. Allen Economic Development Corporation Regular Meeting, January 19, 2005 Page 2 On a motion by Ken Fulk, seconded by Carl Clemencich, the Board approved the payment of incentives as outlined in the incentive contract based upon Trammell Crow having met the conditions of the contract. Convene into Closed Executive Session. The Board convened into closed executive session at 6:20 p.m. to deliberate commercial and financial information and economic incentives for the development of The Corporate Center in Twin Creeks Business Park. The Board also deliberated the sale of property owned by the AEDC in Millennium Corporate Center to Project Apple and commercial and financial information and economic incentives for Project Apple. Reconvene into Regular Session The Board reconvened into regular session at 7:05 p.m. Consider and take Action for the Aporoval of Incentives in Support of the Development of The Corporate Center in Twin Creeks Business Park Brace Heller, JaRyCo Development, presented plans to the AFDC Board for the development of The Corporate Center at the January AEDC Board Meeting. The project would be located at the SEC comer of Watters Road and Raintree Circle and will accommodate several officettech buildings. The first building would consist of approximately 22,000 SF As incentive, the AEDC Board previously agreed to an 18 -month master lease on 80% of the square footage in the fust building to be constricted in the development (not to exceed 17,600 SF), with any space leased by a third party in the building to be credited first toward the AEDC's master lease. The space would have a master lease rate of $12.50/square foot. Heller appeared before the Board to ask for the space leased by a third parties to be prorated. This will greatly enhance the project with investors in the following ways: • It makes the project more appealing for JaRyCo to approach investors. For example: If the building was not prorated, all third party leases would be applied towards the AEDC portion and the investors would still be obligated for their entire portion. By prorating the space, the investors will see their space being leased in addition to the AEDC master lease which gives a lower vacancy rate and better income stream. • With the investors then secured because they can see a quicker return on their investment (due to the prorating of space) the project will be able to start sooner than otherwise. • The master lease for the AEDC space is based on a rental rate that does not include maintenance costs, which JaRyCo will still have to pay. The prorating of space provides a way to cover some of these expenses. In any event, the AEDC's lease commitment would end when a total of 17,600 SF is leased in the entire building. Allen Economic Development Corporation Regular Meeting, January 19, 2005 Page 3 On a motion by Ken Fulk, seconded by Tim Wood, the Board approved an 18 -month Master Lease for 80% of the leawable space on the initial 22,000 square foot building at a rate of $12.50 per square foot, with space leased by third parties being prorated with 80% going towards the AEDC Master Lease and 20% towards the remaining JaRyCo lease space. This Master Lease is contingent upon the Board's approval of the final architectural, landscaping, lighting and site plan. The Board authorized the President of the AFDC Board to execute the contract with JaRyCo. Consider and take Action Regarding the Sale of Property Owned by the AEDC and Incentives Supporting the Development of an Office Budding in Millennium Corporate Center for Project Apple Project Apple originally approached the AEDC and other Collin County communities for sites that would be suitable for the construction of a 100,000 SF, multi -story office building. The AEDC was diligent in working with the company on a variety of sites and developed a sales contract on a five - acre site in Millennium Corporate Center. The requirements for the site continued to change and the contract was never ratified by the company's Board. Recently, Mayor Steve Terrell, Ken Fulk, Kurt Kizer and Charisse Canfield met with the company's Site Selection Committee to determine the exact requirements for a site. Following subsequent conversations, it was determined that while the Site Selection Committee outlined obstacles to the Millennium Corporate Center site (including adequate access and being too far south) there may be other members of the company's Board who would give serious consideration to the site if the AEDC offered the land free. The AEDC Board discussed the limited amount of prime real estate fronting US 75 that is available in Allen and the close proximity of another Project Apple facility to Allen. In discussing the fact that the project would not create any additional taxable revenue for the City of Allen, the project did have value serving as a catalyst that could potentially spur development within the park. On a motion by Ken Fulk, seconded by Maxine Sweet, the Board approved offering approximately 5 acres in Millennium Corporate Center for $3.00/square foot to Project Apple and authorized the President to send a letter to the company outlining the offer. The offer is available for 90 days (from the date the President sends the letter) or until another offer is made to purchase the property from another user and it is in the best interest of the City of Allen to accept such an offer. Approve a Recommendation for the Acknowledgment and Consent to Assignment of Tax Abatement Agreement from AT&T Wireless Services. Inc to New Cingular Wireless Headquarters LLC for the Building Located at 800 Venture Drive AT&T Wireless recently merged with Cingular Wireless. As a result, the legal entity AT&T Wireless no longer exists and the contractual obligations of AT&T Wireless are being transferred to Cingular Wireless. AT&T Wireless Services and New Cingular Headquarters LLC are requesting an assignment of the tax abatement signed December 2, 1999 for the wireless data center located at 800 Venture Drive to New Cingular Headquarters LLC. Allen Economic Development Corporation Regular Meeting, January 19, 2005 Page 4 On a motion by Ken Falk, seconded by Tim Wood, the Board approved a recommendation to the City of Allen, Collin County and CCCCD for assignment of the tax abatement signed December 2, 1999 on 800 Venture Drive to New Cingular Wireless LLC. Approve the Acknowledgment and Consent to Assimment of Economic Incentive Agreement from AT&T Wireless Services Inc to New Cingular Wireless Headquarters LLC for the Building Located at 800 Venture Drive. Due to the recent merger of AT&T Wireless and Cingular Wireless, both AT&T Wireless Services and New Cingular Headquarters LLC are requesting an assignment of the incentive contract signed March 15, 2000 for the wireless data center located at 800 Venture Drive to New Cingular Headquarters LLC. On a motion by Carl Clemencich, seconded by Ken Falk, the Board approved the assignment of the incentive agreement signed March 15, 2000 for the wireless data center located at 800 Venture Drive to New Cingular Headquarters LLC. Approval of AEDC Financial Reports Dan Bowman presented the AEDC financial reports and distributed the updated AEDC Payback Analysis. On a motion by Tim Wood, seconded by Carl Clemencich, the Board approved the AEDC Financial Reports as presented. Discuss Administrative and Marketing Activities of the AEDC Jennifer Grimm updated the Board on marketing activities of the AEDC and invited Board members to attend the AEDC Allies Day on May 2, 2005. AEDC sponsorship of the Plain and Fancy Ball, a CCCCD event, was discussed. The general consensus of the Board was to sponsor the event at the $2,500 level, which is similar to the level of sponsorship done by AEDC in the past. The Board was updated on other development activities. Scheduling of Next AEDC Board of Directors Meeting The next Board meeting was scheduled for Wednesday, February 16, 2005 at 6:00 p.m. Ad oum. On a motion by Maxine Sweet, seconded by Ken Falk, the meeting was officially adjourned at 8:01 P.M. These minutes approved this 16� day of February, 2005. b — � /r V& Kurt Kizer, President Ken Falk, Secreta