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HomeMy WebLinkAboutMin - Economic Development Corporation - 2008 - 01/16 - RegularALLEN ECONOMIC DEVELOPMENT CORPORATION (AEDC) BOARD OF DIRECTORS REGULAR MEETING WEDNESDAY, JANUARY 16, 2008 Board Staff Guests Kurt Kizer Robert Winningham Kevin Hammeke Tim Wood Jennifer Grimm David Hoover Carl Clemencich Daniel Bowman Pete Smith Mark Pacheco Tracey Cline Julius Moore Maxine Sweet Call to Order and Announce a Ouomm 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 6:04 p.m. on Wednesday, January 16, 2008 at the AEDC Office. 1. Approval of Minutes of the December 19, 2007 Regular Meeting On a motion by Mark Pacheco, seconded by Maxine Sweet, the Board unanimously approved the Minutes of the December 19, 2007 Regular Meeting of the AEDC Board of Directors. 2. Approval of AEDC Financial Reports Daniel Bowman presented the AEDC Financial Reports. Carl Clemencich inquired as to whether the possibility of an economic recession would have an effect on the City of Allen's sales tax projections. Kevin Hammeke noted that the City would likely have to revise the sales tax projections downward should local economic conditions deteriorate. On a motion from Carl Clemencich, seconded by Mark Pacheco, the Board unanimously approved the Financial Reports as submitted. 3. Consider All Matters Incident and Related to Amending Certain Provisions of the Resolution Authorizing the Issuance of the "Allen Economic Development Corporation Sales Tax Revenue Bonds, Series 2007' Adopted on October 17, 2007, Including the Adoption of a Resolution Pertaining Thereto Kevin Hammeke appeared before the Board to request adoption of a resolution related to the Allen Economic Development Corporation Sales Tax Revenue Bonds, Series 2007 On October 17, 2007, the AEDC Board approved a resolution authorizing the issuance of approximately $15,490,000 in sales tax revenue bonds for the purpose of funding public infrastructure necessary for The Village at Allen development project and to pay for issuance costs associated with the bond issue. That resolution noted two insurance policies with XL Capital Assurance (XLCA). One relates to the surety policy for the bond reserve requirement. The other policy is the bond insurance policy related to the payment of the principal and interest on the bonds. AFDC Board of Directors Regular Meeting January 16, 2008 Page 2 Since the time the AEDC approved the resolution, the national mortgage crisis has negatively affected the company that had been approved to insure the AEDC bonds. As a result, Hammeke is recommending that the AEDC Board approve the incorporation of Assured Guaranty Corporation as the provider of the surety policy and the bond insurance. Hammeke noted that the overall savings resulting from using Assured Guaranty Corporation for both policies would be approximately 54,700. Hammeke noted that the MG Herring Group closed on the loan for their development yesterday. Given that information, Hammeke recently sent an e-mail to the Financial Advisor requesting that they move forward with issuing the bonds. On a motion by Maxine Sweet, seconded by Tim Wood, the Board unanimously adopted Resolution No. 1 -EDC -08, amending Resolution No. 3 -EDC -07 relating to the issuance of Allen Economic Development Corporation Sales Tax Revenue Bonds. 4. Convene into Closed Executive Session The Board convened into closed executive session at 6:26 p.m. to deliberate commercial and financial information and economic incentives for the recruitment of Project Eleven. Reconvene in Open Session The Board reconvened into regular session at 7:08 p.m. 5. Consider and Take Action for the Recruitment of Project Eleven The Board discussed the project and gave staff direction to negotiate an economic development agreement in accordance with the discussion in executive session. No action was taken on this item. Mark Pacheco abstained from discussion on this item. 6. Review and Discuss the Proposed 2008 City Council Strategic Plan Robert Winningham requested Board input regarding the issues that should be discussed at the upcoming Allen City Council Strategic Planning Session. Winningham noted that one of his priorities this year has been pushing for the inclusion of "capital investment" as an economic development goal in the strategic plan. David Hoover mentioned that he felt the strategic planning process was dysfunctional because the group that met initially to establish priorities was composed of approximately 25% fire and safety staff, which cause fire and safety issues to take priority. Hoover also noted that 1.2 — 1.3 million square feet of retail space, including 25-35 new restaurants, would be opening in Allen within the next 12 months. There is concern about finding enough employees to fill these service jobs. Hoover anticipates that this problem will impact the upcoming strategic planning session. Jennifer Grimm added to Hoover's comment, noting that she recently assisted Market Street Grocery with theirjob fair. The company only received 50 applicants initially, but needed to receive 1,000 applications to fill 500 positions. This highlights the employment problem that could potentially exist for many retailers that will open in Allen. AFDC Board ojDirectors Regular Meeting January 16, 2008 Page 3 Winningham addressed Goal Seven (7) in the City Council Strategic Plan, stating that the AEDC is working to keep Allen `top of mind" with real estate brokers. To this end, AEDC staff is attending real estate events and ratcheting up their marketing efforts. Winningham is considering having the AEDC become a member of Texas One in order to have a strong connection with the Governor's office. The AEDC has accomplished a lot over the last year in terms of new projects that bring investment and jobs to the community. Winningham noted that the strong partnership with the City of Allen has been very helpful in bringing these projects to Allen. Carl Clemencich mentioned that he would like Allen to have a brochure in the Texas Visitor's Bureau. 7 Consider and Take Action for Auuroval of AEDC Office Lease Robert Winningham updated the Board on the status of lease negotiations. Staff met with Tom Carter, Trademark Property Company, earlier this week. Carter offered to cap the AEDC's portion of the finish -out expense and also offered to pay $40 per square foot in tenant improvements (up from his previous offer of $30 per square foot). Carter also agreed to allow the Common Area Maintenance (CAM) charge to be based on the office building only (as opposed to the entire development). Duke Realty also came back and offered a significantly better deal than what they had previously proposed. They are now willing to lease the AEDC a space that is 3,125 usable square feet. Duke has also moved the AEDC office to the second floor of the building (on the north side), which gives the office a better view of the US 75 corridor that runs through Allen. Both the Trademark proposal and the Duke proposal include escalation clauses, although Duke's clause is very minimal when compared to the Trademark proposal. The Duke lease is less expensive than the Trademark lease in the amount of $5,000 per year. Duke Realty has offered twelve (12) reserved parking spaces to the AEDC, while Trademark has only offered four (4) spaces. Both of the proposed leases include free rent, with Duke offering two (2) months and Trademark offering five (5) months. Ultimately, Trademark has proposed a one -hundred and five (105) month lease and Duke is offering an eighty six (86) month lease. Winningham and Jennifer Grimm visited the Duke and the Trademark buildings. Winningham noted that the Duke space has a very professional and corporate "look and feel." On the other hand, the windows in the Trademark space have a view of apartments, which Winningham does not believe would give the space a professional and corporate "look and feel." Duke Realty still has a relocation clause included in their lease proposal, which allows Duke to relocate the AEDC into comparable space at Duke's expense. Mark Pacheco mentioned that he would like to see the wording of the relocation clause in Duke's proposal. Pacheco has never had a problem getting the relocation clause removed from lease agreements he has negotiated in the past. Grimm noted that Duke has assured the AEDC that the likelihood of relocation is minimal because the floor on which the AEDC is located is laid out for smaller office users. Pacheco requested that staff either have the relocation clause removed, or have it revised to require that the relocation be mutually agreed upon between the AEDC and Duke. Pete Smith recommended that the AEDC request a clause be included in the lease that allows the AEDC to get out of the lease after five (5) years. Smith also noted that the AEDC should amend the Master Lease Agreement with Duke Realty prior to executing a lease for the AEDC office. This would allow the space leased for the AEDC office to reduce the AEDC obligation under the master lease. AFDC Board of Directors Regular Meeting January 16, 2008 Page 4 Pacheco noted that being in a true class "A" office building, such as One Allen Center, is much better than being in a retail development. Winningham echoed that statement, noting that it is important that AEDC clients have good access to the AEDC office and adequate parking. 8. 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 Allen Chamber's "Heart of Allen" event on February 9' and the Collin County Community College District's "Collin Cabaret" event on February I e Grimm reported that new Allen aerial maps will be ready within four (4) weeks. She also mentioned that David Hoover had recently accompanied her in a meeting with representatives from Strikz and Coach Joe's restaurant. Hoover mentioned that the City can take care of the parking and signage requirements for Strikz. Strikz is considering the possibility of purchasing four (4) acres in the Green Street development for the construction of a 55,000 square foot facility Grimm noted that they are trying to connect Coach Joe's representatives with the MG Herring Group so they can discuss the possibility of locating the restaurant near the Allen Events Center in the Village at Allen development. Coach Joe's is a family-oriented restaurant. Hoover also mentioned that Susan Singer, Bradford Properties, is working with "The PODS People," a 50,000 square foot tenant that is interested in the Bradford project in Twin Creeks. The company would not generate significant taxable sales or capital investment. Hoover does not prefer to have this use in the Bradford project. Daniel Bowman noted that the AEDC recently paid a tax invoice for property that the AEDC purchased near the southwest corner of Bethany Drive and Greenville Avenue. The AEDC purchased the land in 2007 from a private company, which was liable for property taxes. At closing, the company reduced the AEDC's purchase price by the amount of the property taxes for the portion of the year that the property was owned by the company The recent tax payment by the AEDC simply represented the AEDC paying taxes on behalf of the company for the portion of the year the AEDC did not own the property. Winningham updated the Board on Project Tahoe, a $2.4 billion manufacturing campus that is considering Allen as a possible location. The company would put a heavy load on the Allen water and wastewater systems and may require millions of dollars in upgrades to the water and wastewater systems. In addition, North Texas Municipal Water District (NTM WD) may need to upgrade their system. The company is also a large user of electricity and gas. Carl Clemencich inquired about the underground electrical infrastructure for Project Tarheel. Winningham noted that Peter Vargas is working on that issue and will give AEDC staff feedback at a later date. 9. Scheduling of Next AEDC Board of Directors Meeting The next Board meeting was scheduled for Wednesday, February 20, 2008 at 6:00 p.m. L AEDC Board afDirectors Regular Meeting January 16, 1008 Page 5 12. Adioum On a motion by Maxine Sweet, seconded by Carl Clemencich, the meeting was officially adjourned at 7:58 p.m. These minutes approved this 20' day of February 2008. b- Kurt Kizer, Preside A I Carl Clemencich, Secretary ALLEN ECONOMIC DEVELOPMENT CORPORATION (AEDC) BOARD OF DIRECTORS REGULAR MEETING WEDNESDAY, NOVEMBER 19, 2008 Board Kurt Kizer Tim Wood Carl Clemencich Gary Caplinger Maxine Sveet -Absent Staff Robert Winningham Jennifer Grimm Daniel Bowman Guests Pete Smith Peter Vargas Joey Herald Bo Bass Lee Battle David Hicks Scott Turrentine Billy Wayne Turrentine Susie Cole Bill Cole Jim Pollard 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 6:08 p.m. on Wednesday, November 19, 2008 at the AEDC Office. Consent Aeenda On a motion by Tim Wood, seconded by Carl Clemencich, the Board voted unanimously to adopt the consent agenda as follows: 1. Approval of Minutes of the October 15, 2008 Regular Meeting 2. Approval of Economic Development Agreement with Ari -Tex Electric, Inc. The motion carried. 3. Consider and Take Action Reaardin¢ Twin Creeks Business Park Master Plan AEDC staff and City staff have been working with the owner of Twin Creeks Business Park and David Hicks, the owner's representative, to develop a new master land plan for the park. Twin Creeks Business Park is a 500 -acre commercial park located on the west side of US 75 new Exchange Parkway Hicks appeared before the Board to update them on the park and request assistance with the master plan. Twin Creeks was acquired in the 1960's by the investment entities that currently own the land. Hicks noted that when Planned Development (PD) 54 was put in place in 1992, the zoning reflected the needs of the Allen community at that point in time. However, Allen is now a more mature city and some of the uses that are identified by PD 54 have already been developed in other areas of Allen. AEDC Board of Directors Regular Meeting November 19, 1008 - Page 1 Much of Twin Creeks Business Park has evolved into a medical community, based largely on the success of Presbyterian Hospital Allen. The landowner views the park as an area of the Allen community that could satisfy the needs of senior citizens. The demographics of Allen are changing and more senior citizens are interested in moving to the City Hicks requested that the AFDC and the City of Allen Planning Department partner with the landowners to develop a new master plan for the park. This study would identify the best uses for the park. Hicks noted that funding the study would be an "act of development" that the landowners could not undertake. Hicks has received bids from several firms that are capable of completing the study and expects that the work would be billed on an hourly basis, with a total price not -to -exceed $30,000. Hicks requested that the AEDC fund the full cost of the study, with the AEDC being reimbursed for the cost of the study from the TIF fund associated with the business park. Kurt Kizer noted that the original discussions between the AEDC and Hicks had included a plan for the AEDC to bear half the cost of the study and the landowners to bear the other half. Hicks stated that he and the landowners recently talked with their advisors and were made aware of the need to have the AEDC fund the entire study up -front. Carl Clemencich inquired if this would be an economic study. Hicks replied that this is an architectural and land use planning exercise only They would bring in a firm that could look at potential uses from an objective standpoint. The study would include the Arts of Collin County site. They would also like to include the Kittyhawk airstrip, which the Twin Creeks landowners do not own, in order to determine the long-term land use goal for this adjacent area. Kurt Kizer inquired as to what would be included within the final study document. Hicks replied that the study would produce an aerial and a conceptual plan of what would develop in the business park over the next 10-15 years, as well as an analysis of the existing PD with recommendations for changes to the zoning. Gary Caplinger asked if the AEDC could use this study to assist in identifying and recruiting targeted users. Winningham confirmed that the AEDC would use the study in such a way Winningham asked if the City of Allen was planning to undertake a Comprehensive Plan update in the near future. Be Bass noted that the proposed land use study would be coupled with the Comprehensive Plan. Bass had previously understood that the landowner was only requesting that the AEDC fund 50 -percent of the study. The request for the AEDC to fund the entire study was a concern to Bass. Bass also stated that the study would give the AEDC and the City of Allen something to market to potential users. The existing PD for the park covers a large piece of land and has served its purpose. It is largely outdated. It would be good to take advantage of the 'cradle -to -grave' concept in recruiting targeted development to the park This would help the City keep citizens in Allen for their entire life. Bass also noted that it would be good to have an expert develop the proposed plan. Hicks mentioned that Presbyterian Hospital Allen and the Twin Creeks Village retail development have been the two main anchors for the business park over the last 20 years. These anchors have helped drive medical office development within the park. Senior housing, which would include smaller apartments and upscale amenities, could be developed south of Exchange Parkway. There is a need for the construction of trails to connect the ponds, the park medical developments, proposed housing, retail areas, and other such developments. AEDC Board of Directors Regular Meeting November 19, 2008 - Page 3 1 Hicks apologized for making the request to have the AEDC cover the entire cost of the study at the last minute. Winningham noted that Dal Briar, the landowner, has been a good citizen of Allen and previously donated land for the Arts of Collin County project. Bass noted that the City generally gets involved on the back -end of these projects. It would be unique for the city to get involved in the master planning process on the front-end. It would be beneficial to have a unified vision between the City and the landowner on the front-end. Caplinger agreed with Bass, noting that he preferred a 50/50 partnership between the AEDC and the landowners. Kizer expressed hesitancy to provide AEDC funding for this study because of the state of the economy, citing the recent financial troubles of Allen landowners such as General Growth Properties and DBSI. Kizer suggested that it might be better to wait to complete the study Winningham stated that when the economy is slower, it is usually a good time to plan for the next `up cycle' Other projects that were recently developed in Allen have had challenges, given the current state of the economy. It would be good to have direction regarding the type of uses that need to be included within Twin Creeks Business Park. Hicks updated the Board on development activity in the park, noting that the landowners are closing on several small tracts with medical office users that are planning to build immediately. They also have a letter -of -intent with a well known developer that has built in Allen before and is planning to develop senior housing. These are all projects that can get financed and built now, even with the poor economy. Hicks noted that the proposed land study would not include tracts that are already under contract. 1 Kizer stated that the AEDC does not get involved in residential projects. Hicks replied that it makes sense to land plan the entire area at once, including both residential and commercial tracts. Bass noted that this study would tie together the majority of the vacant land in Allen. The City is going to benefit from the study and from the landowner taking ownership of the study It makes good sense to plan in the bad economic times and execute in the good economic times. Clemencich inquired if this study would save money later in the Comprehensive Planning process. Bass noted that the Comprehensive Plan update is very different than this study, since it is done entirely in-house by City staff and is a broad, general plan for the City. The proposed study is much more specific than the Comprehensive Plan. Hicks noted that City staff may gain information from this study that would enhance the City's comprehensive plan. Kizer stated that the AEDC should offer to fund 50 -percent of the study. Clemencich noted that his initial inclination was to not fund any portion of the study, since it is a developer's cost that is incurred to protect their investment. However, to the extent that the study protects or enhances zoning for the park, Clemencich would be agreeable to funding a portion of the study. Hicks noted it is being proposed that the AEDC would be the client for the purpose of contracting for the study. Tim Wood inquired as to what would happen if the landowners do not agree with the plan that is developed. Hicks inquired if the AEDC would consider paying for the entire study up -front and allowing Dal Briar to reimburse the AEDC for 50 -percent of the cost of the study once it is completed. This was requested for tax reasons. Pete Smith, AEDC attorney, noted that the AEDC could legally receive such a contribution. Smith could not address whether the donor would receive a chantable deduction, as such advice should come from the landowner's tax advisor. AFDC Board of Directors Regular Meeting November 19. 1008 - Page 4 Peter Vargas recommended that the AEDC Board wait and have Dal Briar come back to the Board with a structured proposal before making a decision. Kizer agreed with Vargas, requesting that Hicks come back to the Board with a formal agreement. He requested that Hicks figure out the specific way that such a study could be funded in a manner that is mutually beneficial to the AEDC and Dal Briar. Hicks requested that the AEDC consider the original proposal, which called for the AEDC to fund half of the cost of the study up -front and Dal Briar to fund the other half of the cost of the study up -front. Dal Briar would not have any problem funding the study. There are several tracts in the park that are currently under contract. If the master land planning study is not completed, the individual developers of these small projects would be forced to complete small concept plans. It would make sense to do a single study on a larger scale. No motion was taken. Kizer noted that AEDC assistance with this study will be considered at a future Board meeting. 4. Presentation by Turrentine-Jackson-Morrow Regarding Ridgeview Memorial Park Turrentine-Jackson-Morrow is the owner of Ridgeview Memorial Park, a cemetery and funeral home located north of the Allen Premium Outlets near the southwest corner of Ridgeview Drive and US 75. The company originally opened the cemetery in Allen in 1973 and has been operating the facility continuously ever since that time. The Allen location is their headquarters facility, although they also own six other funeral homes, three other cemeteries and a life insurance company. Turrentine-Jackson-Morrow, representatives appeared before the Board to request assistance with the expansion of their existing facility. This project would increase the facility size by 16,000 square feet and add retail uses, including a flower and gift shop and a coffee bar. The company has been trying to get this project off the ground for many years now. The estimated cost of construction has increased over time They noted that Turrentine-Jackson-Morrow paid $150,000 to connect to the City of Allen sewer system in 1999 This was done because sewer service was not available to the cemetery site and the only option for connecting to the system involved constructing a pipeline from the cemetery to the Allen Premium Outlets. The sewer line constructed by the company was dedicated to the City. At the time, the company had the impression that they would be reimbursed for this cost as the rest of the surrounding land developed. Unfortunately, most of this land has not developed and the company was never reimbursed. The proposed project would greatly improve the property The company was prepared to put the project on hold, but decided instead to approach the AEDC for assistance with infrastructure. AEDC assistance would help ensure the project moves forward. They expect the on-site infrastructure costs to be $112,000. They also expect to pay the city a $25,000 road impact fee. Jim Pollard, the developer for the project, noted that the company's actions to construct the sewer line 2,000 feet offsite was above and beyond what should reasonably have been required of them. Pollard believes that Turrentine-Jackson-Morrow was never made whole. Robert Winningham inquired as to what would be included within the scope of the project. Pollard noted that they would be adding to the building itself, changing the entryway, adding masonry fencing and adding a pone-cochere. AFDC Board of Directors Regular Afeeting November 19, 2008 - Page 5 1 Company representatives mentioned that many oldie visitors to Ridgeview Memorial Park also shop and dine in Allen. Kurt Kizer stated that this is not the type of project that the AEDC Board would typically consider. Billy Wayne Turrentine thanked the Board for their consideration of this project, stating that he is proud to have his business in Allen. 5. Convene into Closed Executive Session: The Board convened into closed executive session at 7:08 p.m. to deliberate commercial and financial information and economic incentives for the following: • Consider Incentives for the Recruitment of Project Scoreboard • Consider Incentives for the Retention of a Local Business • Consider Economic Development Incentive Agreement with Experian Information Solutions, Inc. • Consider Incentives for the Expansion of Ridgeview Memorial Park Reconvene in Oven Session The Board reconvened into regular session at 8:26 p.m. 6. Actions Resulting from Executive Session No actions were taken. 7 Avuroval of AEDC Financial Reports Daniel Bowman presented the AEDC Financial Reports. Carl Clemencich asked Peter Vargas whether the AEDC and City of Allen sales tax projections have been adjusted recently. Vargas noted that the City reviews the sales tax receipts biweekly and have adjusted projections down by 2 percent. On a motion by Carl Clemencich, seconded by Tin Wood, the Board unanimously approved the Financial Reports as submitted. 8. Discuss Administrative and Marketing Activities of the AEDC and Upcoming Local Events Jennifer Grimm updated the Board on the marketing activities of the AEDC and invited Board members to attend the AEDC Holiday Party on December 0 from 4:00 — 6.00 p.m. Grimm is currently working on the year-end AEDC newsletter and assisting with press releases for RESQdebt and Experian. 9. AEDC Executive Director's Report Regarding Office, Industrial, Data Center. and Retail Proiects, Local Partnerships and the Corenet Conference in Orlando Robert Winningham updated the Board on various projects, noting that RESQdebt recently signed a lease on approximately 84,000 square feet of space in Allen. Winningham recognized Daniel Bowman for his work on the project. Jennifer Grimm noted that this new lease lowered Allen's office vacancy rate from 43 -percent to 35 -percent. AEDC Board of Directors Regular Meeting November 19, 1008 -Page 6 Winningham updated the Board on the recent Commol conference, noting that attendance was down due to the state of the economy DBSI and General Growth Properties have announced that they are or may soon be in bankruptcy. These types of announcements reflect the poor state of the economy. Winningham believes that Allen companies are doing relatively well compared to the rest of the economy AEDC staff is focusing on one the AEDC's main functions, business retention and expansion, to help ensure that AEDC assistance is available to local Allen companies that may be experiencing financial distress. Winningham mentioned that members of the real estate community are struggling, but he has heard positive reports on residential housing sales in Allen recently. Carl Clemencich inquired about the status of the Andrews Project. Bo Bass noted that the City has not heard anything in months. Winningham stated that he has spoken with company representatives recently and the project is moving forward, although they are currently preoccupied with the acquisition of a Fort Worth business. McKinney recently delayed the construction of the Star Center. In addition, construction of the O&S development at SH 121 and US 75 has completely stopped for the time being. It will be on the McKinney City Council agenda to reconsider providing $5 million in assistance for the development, although any such assistance would probably be accompanied by requirements that the developer must fulfill. Peter Vargas mentioned that McKinney did not view the Star Center as a key commercial project, but more as an amenity. It appears that the Allen Event Center may come in under cost, based on the lower cost of fuel and construction materials. 1 10. Scheduling of Next AEDC Board of Directors Meetina The next Board meeting was scheduled for Wednesday, December 17, 2008 at 6:00 p.m Il Adioum The meeting was officially adjourned on a motion by Carl Clemencich, seconded by Gary Caplinger, at 8:50 p.m. These minutes approved this 2l" day of January 2009 Kurt Kizer, President Carl Clemencich, Secretary