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HomeMy WebLinkAboutMin - Economic Development Corporation - 2007 - 07/18 - RegularALLEN ECONOMIC DEVELOPMENT CORPORATION (AEDC) BOARD OF DIRECTORS REGULAR MEETING Wednesday, July 18, 2007 Board Staff Guests Kurt Kizer Robert Winningham Peter Vargas Tim Wood Jennifer Grimm Kevin Hammeke Mark Pacheco Daniel Bowman David Hoover Maxine Sweet Tracey Cline Pete Smith Carl Clemencich Elizabeth Morris Call to Order and Announce a Ouorum 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 6:12 p.m. on Wednesday, July 18, 2007 at the AEDC Office. 1. Citizens' Comments Maxine Sweet informed the Board that the Allen Chamber of Commerce is now accepting applications for the 2007-2008 Leadership Allen Program. 2. Approval of Minutes of the lune 20.2007 Regular Meeting On a motion by Mark Pacheco, seconded by Tim Wood, the Board unanimously approved the minutes of the lune 20, 2007 Regular Meeting of the AEDC Board of Directors. 3. Approval of AEDC Financial Reports Daniel Bowman presented the AEDC Financial Reports. On a motion by Maxine Sweet, seconded by Carl Clemencich, the Board unanimously approved the AEDC Financial Reports as presented. 4. Consider and Take Action for Approval of a Resolution Authorizing City Staff, Bond Counsel. and Financial Advisor to Proceed with the Arrangements Relating to the Issuance of Sales Tax Revenue Bonds for the Multi-Pumose Events Center Kevin Hammeke, City of Allen Finance Director, appeared before the Board to request the approval of a resolution authorizing City staff, Bond Counsel, and Financial Advisor to proceed with the arrangements relating to the issuance of sales tax revenue bonds for the multi-purpose events center (Project G). It is anticipated that the AEDC will issue bonds with approximately $15 million in principal. Hammeke mentioned that the interest rate will not be known until the issuance is actually made in October 2007, although it is expected to be in the 4-4.5% range. Allen Economic Development Corporation Regular Meeting, July 18. 2007 - Page 2 The City of Allen recently had a bond rating meeting and is still awaiting results. Robert Winningham informed the Board that Peter Vargas, City Manager of Allen, has been heading up the "arena development team' for the recruitment of Project G. This team has been working diligently to determine which of the project's infrastructure costs will be financed by AEDC bonds. Vargas explained that the AEDC will finance costs related to the construction of roads primarily, with the City of Allen financing the parking garage. The resolution currently under consideration by the AEDC Board would allow city staff to proceed with paperwork required for the issuance of AEDC bonds. The AEDC Board will still have to give final approval at a later date before the bonds can be issued. It was also mentioned that an additional legal agreement will need to be executed between the City of Allen and the AEDC stating the terms of the AEDC's assistance with the project. Elizabeth Mortis, Insight Research Corporation, suggested that the City require the MG Herring Group and other developers of Allen projects to buy construction materials in Allen (for sales tax purposes). Vargas explained that such a requirement could be difficult to enforce. Carl Clemencich asked if there would be additional debt service costs beyond the $15 million. Hammeke confirmed that the AEDC's long-term liability, including both principal and debt service, would be approximately $28 million. On a motion by Mark Pacheco, seconded by Carl Clemencich, the Board unanimously approved a resolution authorizing City staff, Bond Counsel, and Financial Advisor to proceed with the arrangements relating to the issuance of sales tax revenue bonds for the multi-purpose events center (Project G). 5 Consider and Take Action for Approval of a Resolution Declaring Expectation to Reimburse Expenditures Related to the Multi -Purpose Events Center with Proceeds of Future Debt Kevin Hammeke requested approval of a resolution declaring the AEDC's expectation to reimburse expenditures related to the multi-purpose events center (Project G) with proceeds of future debt. Hammeke explained that an IRS regulation related to tax exempt bonds requires that the AEDC approve such a resolution in order to legally reimburse the City of Allen for any funds advanced by the City of Allen prior to the AEDC bond issuance to pay for infrastructure. It was noted that the amount stated in this resolution is higher than the actual anticipated bond issuance. On a motion by Maxine Sweet, seconded by Mark Pacheco, the Board unanimously approved a resolution declaring the AEDC's expectation to reimburse expenditures related to the multi-purpose events center (Project G) with proceeds of future debt. 6. Consider and Take Action for Approval of the AEDC Budget for Fiscal Year 2008 and Adiustments to the AEDC Budget for Fiscal Year 2007 AEDC staff presented the proposed AEDC Budget for Fiscal Year 2008 and adjustments to the AEDC Budget for Fiscal Year 2007 The following changes were noted: • Equipment (Technology) Replacement Account— $2,395 has been budgeted for Fiscal Year 2008 to cover the cost of maintaininglupdating AEDC technology Allen Economic Development Corporation Regular Meeting, July 18, 2007 - Page 3 • Post -Employment Funding Account — $295 is budgeted for Fiscal Year 2007 and Fiscal Year 2008 to cover potential post -employment expenses that may arise • Direct Grants Account— This account has increased to $8,054,939 to cover additional AEDC incentive grants expenses Robert Winningham noted that the AEDC's purchase of the `HIT' property impacted the Direct Grants Account budget for Fiscal Year 2007. It was also mentioned that the purchase of this property frees up land in Allen Station Business Park for a higher and better use. Jennifer Grimm explained that there may be a modest increase in the AEDC Rent Account for Fiscal Year 2008 to cover the increased cost of electricity for the AEDC office. Hammeke noted that AEDC revenues are expected to increase by approximately 7 7% for Fiscal Year 2008. This budget increase is based on research that takes into account such factors as per -capita increases in sales tax revenues, momentum indexes, etc. On a motion by Maxine Sweet, seconded by Carl Clemencich, the Board unanimously approved the AFDC Budget for Fiscal Year 2008 and adjustments to the AEDC Budget for Fiscal Year 2007 as presented, with an allowance for additional adjustments to the AEDC Rent Account to cover anticipated electricity expenses. 7. Presentation of the 2005-2006 AEDC Impact Analysis by Insight Research Corporation Elizabeth Mortis, Insight Research Corporation, appeared before the Board to present the 2005-2006 AEDC Impact Analysis that was recently completed by her firm. Insight Research has been tracking all AEDC projects since the AEDC's inception in 1992. Over the time period from 1992-2006, the AEDC has completed 58 transactions that have increased assessed value and created new employment positions. Insight Research has prepared two analyses: (1) AEDC Economic, Employment, and Tax hnpacts, and (2) AFDC Cost -Benefit Analysis. The first analysis yielded the following results for the period 1992- 2016: • AEDC projects will have increased regional income by approximately $29 billion • AEDC will have brought 8,624 direct employment positions to Allen • AEDC will have brought an additional 6,177 indirect employment positions to Allen • The indirect and direct employment positions brought to Allen by the AEDC will have created more than 250,000 "years of work" • AEDC projects will have created over $1.275 billion in direct and indirect tax benefits. It was noted that all of these project impacts have been tracked in terms of "constant dollars" in order to compensate for inflation. For calendaryear 2006, the total City of Allen commercial tax base was $1.173 billion, with the AEDC being involved with projects that made up $856 million (73%) of that amount. It was also noted that, of the total tax revenue produced by the City of Allen to all taxing entities, the State of Texas receives the largest portion of those taxes. The second analysis compares the benefits of AEDC projects with the City of Allen's public service costs that are required to support those projects. This analysis showed that for the period from 1992- 2016, the net benefit to the City of Allen from AEDC projects (once public service costs and AEDC incentives were deducted) is $168.71 million. Morris confirmed that this impact study assumes that the current AEDC projects will stay on the tax rolls (in some form) until 2016. Allen Economic Development Corporation Regular Meeting, July 18, 2007 - Page 4 Overall, the impact study showed that AEDC projects have assisted the City of Allen in lowering the tax rate by 27.2%, increasing its commercial tax base by 684%, and accelerating a 266% increase in the Allen employment base in the period from 1992-2006. Mortis explained that Insight Research is the largest group of consulting economists outside of Washington D.C. She complimented the AEDC on its good work in recruiting economic development projects to Allen over the past several years. 8 Administrative and Marketing Activities of the AEDC / Executive Director's Report Jennifer Grimm announced that Maxine Sweet and Carl Clemencich will be serving as judges for the upcoming AFDC Millennium Business Awards. AFDC staff recently taste -tested the food for the Millennium Business Awards Luncheon, which will be held on Friday, September 21, 2007 at the Allen Hilton Garden Inn. The AEDC is currently working with the Allen Chamber of Commerce to collect award nominations Robert Winningham updated the Board on AEDC projects, announcing that Project Twist -Off is finally moving forward. It has taken quite awhile to complete negotiations on this project, as there has been a tendency for deal points to change frequently. The partnership between the City of Allen and the AEDC has been a pivotal factor in the recruitment of Project Twist -Off. It is expected that Project Twist -Off representatives will begin working on site planning with the City of Allen for the project shortly. Winningham also noted that this project will add value to the City of Allen's 380 agreement that is proposed for Project G. El Project Twist -Off will be required to meet a series of benchmarks in their construction of the proposed facility The following timetable will go into effect once the 19.5 acre tract in Allen Station Business Park has been conveyed to Project Twist -Off. • Must begin construction on facility within 30 months • Must complete construction within 48 months • Must completely develop the entire property within 60 months While these dates will be used as legal benchmarks, it is expected that the company will begin moving dirt sooner than is indicated by these benchmarks. The AFDC is also working with Project Twist -Off to secure land for Project Remote and Project Golf in Allen Station Business Park. Winningham thanked the Board for their valuable input on Project Twist -Off. Peter Vargas explained that Project Twist -Off will be required to dedicate right -o8 -way for a road within 6 months of closing on the 19.5 acre tract. There is a good chance that there will only be one road running through Allen Station Business Park. Maxine Sweet inquired about the proposed drive-through bank tenant for the Duke Realty building at Bethany Drive and US 75. Winningham explained that the City, AEDC and Duke are working on the possibility of constructing a one-way bank drive-through lane near Central Park Drive. This would involve adding a curb -cut on Venture Drive Duke Realty is uncertain if the bank tenant will agree to this configuration. Daniel Bowman mentioned that Marcon Construction is not currently planning to request incentives from the AFDC to assist with construction of the third building in McDermott Business Park. A I Allen Economic Development Corporation Regular Meeting, Julv 18, 2007 - Page 5 Winningham indicated that Project Bond and Project Long Haul will probably be on the AEDC Board agenda for August. Project Tel -Drug is on hold for the time being. Grimm indicated that AEDC impact information from the Insight Research study will be included in an upcoming water bill insert that will be distributed to Allen residents. 9. Scheduling of Next AEDC Board of Directors Meeting The next Regular Board meeting was scheduled for Wednesday, August 15, 2007 at 6:00 p.m. 10. Adjourn. On a motion by Maxine Sweet, seconded by Carl Clemencich, the meeting was officially adjourned at 7:10 p.m. These minutes approved this 15" day of August, 2007 ,t Kurt Kizer, Ptesident a&�— Carl Clemencich, Secretary