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HomeMy WebLinkAboutMin - Economic Development Corporation - 2007 - 09/19 - RegularI ALLEN ECONOMIC DEVELOPMENT CORPORATION (AEDC) BOARD OF DIRECTORS REGULAR MEETING Wednesday, September 19, 2007 Board Staff Guests Kurt Kizer Robert Winningham Peter Vargas Tim Wood Jennifer Grimm David Hoover Mark Pacheco Daniel Bowman Pete Smith Maxine Sweet Kevin Hammeke Carl Clemencich - Absent Jeremy Hersom 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 6:05 p.m. on Wednesday, September 19, 2007 at the AEDC Office. 1. Citizens' Comments Jeremy Hersom with the Anna Economic Development Corporation introduced himself to the Board. He attended the AEDC Board meeting to obtain more information on the topic of taxation of Goods - in -Transit. 2. Approval of Minutes of the August 15, 2007 Regular Meeting On a motion by Tim Wood, seconded by Mark Pacheco, the Board unanimously approved the minutes of the August 15, 2007 Regular Meeting of the AEDC Board of Directors. 3._ Approval of AEDC Financial Reports Daniel Bowman presented the AEDC Financial Reports. Kevin Hammeke mentioned that approximately $30,000 in AEDC funds have been expended from the Fiscal Year 2007 Budget to pay for ramp reversals associated with the Multi -Purpose Events Center project. Hammeke also commented on AEDC sales tax projections, noting that Fiscal Year 2008 sales tar projections are 7% above projections for Fiscal Year2007 Peter Vargas stated that the City of Allen relies more heavily on property taxes than sales taxes, since the sales tax is a more volatile revenue source. On a motion by Mark Pacheco, seconded by Maxine Sweet, the Board unanimously approved the AEDC Financial Reports as presented. Allen Economic Development Corporation Regular Meeting, September 19, 2007 - Page 2 4. Consider and Take Action for Aooroval of a Project Management and Funding Agreement between the City of Allen and the Allen Economic Development Corporation The City of Allen and the AFDC are currently in the process of completing an agreement with the MGHerring Group for the recruitment of a Multi -Purpose Events Center that will host a Central Hockey League (CHL) hockey team and special events. This agreement will provide for an approximately $25 million loan from the MGHerring Group for the construction of the Multi -Purpose Events Center, as well as an approximately $15 million grant from the AEDC to assist with infrastructure associated with the facility AFDC funds would assist primarily with mads and other such infrastructure related to the development. City Manager Peter Vargas presented the Project Management and Funding Agreement, a separate agreement that has been drafted for the purpose of documenting the flow of funds from the AEDC to the City of Allen. The agreement states the AEDC's intention to issue $15 million in debt and allow the City of Allen to manage these funds. Vargas mentioned that the one remaining negotiating point with the MGHerring Group involves the donation of land for the construction of the Multi -Purpose Events Center. This issue should be resolved shortly and will not affect the Project Management and Funding Agreement. Vargas also noted that the terms of the agreement with the MGHerring Group have been designed in a very unique way, involving a large number of parties, the use of a loan from the MGHerring Group, and other such factors. Vargas expects that the agreements related to the Multi -Purpose Events Center will be brought before the Allen City Council for consideration at their September 25, 2007 meeting. Pete Smith, AEDC Attorney, noted that even if these agreements are approved, there still remain several conditions that will need to be met in order for City, AEDC and ACDC funds to be expended for the project. Smith also noted that the agreements meet the requirements of state law for economic development projects. It was mentioned that the MGHerring Group has executed a contract with the John Q. Hammonds Group to develop a Marriott Courtyard hotel with 20,000 -square feet of conference center space. Mark Pacheco made several inquiries regarding the terms of the Project Management and Funding Agreement. The agreement requires that the parking structure contain 2,050 parking spaces instead of the 2,300 that had previously been discussed. Vargas stated that a new study by a consultant led the MGHerring Group and City Staff to determine that only 2,050 spaces are necessary. In addition, the current Project Management and Funding Agreement states that the MGHerring Group will own the Inge marquee sign that advertises center events; however, the agreement does not require that the MGHerring Group maintain the sign in the future. Vargas stated that fume agreements will require that the sign be maintained. Vargas noted that the office/retail tenants in the development will have access to the parking garage until 6:00 p.m. on days that the Multi -Purpose Events Center is hosting events. On a motion by Maxine Sweet, seconded by Tim Wood, the Board approved the Project Management and Funding Agreement as presented. 0 Allen Economic Development Corporation Regular Meeting, September 19, 2007 - Page 3 5. Consider and Take Action on a Recommendation to the Allen City Council for Revision of the City of Allen Tac Abatement Guidelines The State of Texas requires municipalities that offer tax abatements to review their tax abatement policies every two years. The City of Allen Tar Abatement Policy that is currently in effect was originally implemented in 1992 and has not been revised since that time. Robert Winningham distributed a copy of the City of Allen Tax Abatement Guidelines that incorporates proposed revisions for the Board's consideration. Winningham mentioned that feedback from City Manager Peter Vargas has been incorporated into the proposed revisions. Peter Vargas stated that the City of Allen should be selective in determining the types of projects that will receive tax abatement. He also noted that the tax abatement guidelines should allow the City flexibility in structuring abatement agreements. Vargas does not support abating taxes at a rate greater than 50%, since the City will need to be guaranteed sufficient tax revenue to cover the cost of supplying city services to new facilities. Winningham agreed with Vargas on these issues. The guidelines under consideration are general guidelines with which all City of Allen tax abatement agreements must comply. Winningham noted that the AEDC Board is not able to approve tax abatements, but only makes recommendations to the Allen City Council regarding abatements. Pete Smith, AEDC attorney, mentioned that State of Texas now requires that the AEDC tax abatement application form include a question regarding whether the company plans to hire undocumented workers. Kevin Hammeke asked if 40-50% tax abatement rates are consistent with what other cities in the Dallas -Fort Worth area are offering. Winningham confirmed that Allen's rates are competitive. Mark Pacheco requested additional time to review the proposed revisions to the tax abatement guidelines. No action was taken on this item. 6 Consider and Take Action on a Recommendation to the Allen City Council for Approval of a Resolution Providing for the Taxation of Goods -In -Transit as Defined by Tax Code, Section 11.253 The 80th Texas Legislature enacted House Bill 621 to take effect on January 1, 2008, which exempts from taxation certain tangible personal property held temporarily at a location that is not owned by the owner of the goods for assembling, storing, manufacturing, processing or fabricating purposes. Previously such properly was automatically subject to local taxation. Pete Smith, AEDC attorney, noted that this tax exemption is similar to the exemption for Freeport goods, but it does not include the requirement that the goods be transported out of the State of Texas within 175 days. Smith noted that the City of Allen may choose to opt out of the local exemption for Goods -in -Transit by holding a public hearing and adopting a resolution to continue taxing such goods. The City can choose to opt in or opt out of this exemption on an annual basis. Winningham stated that it is staffs recommendation to not exempt these goods from taxation. The exemption is not of much use to the City of Allen as there are few heavy manufacturers located within the city Winningham also noted that the City of Allen can always choose to opt in for the exemption next year if the City chooses. 0 E I Allen Economic Development Corporation Regular Meeting, September 19, 2007 - Page a On a motion by Maxine Sweet, seconded by Mark Pacheco, the Board approved a recommendation to the Allen City Council for approval of a resolution providing for the taxation of Goods -In -Transit as defined by Tax Code, Section 11 253 7 Administrative and Marketing Activities of the AEDC /Executive Director's Report Jennifer Grimm updated the Board on the marketing activities of the AFDC and mentioned that AFDC staff attended the CREW golf tournament. The AFDC is hosting the 2007 Millennium Business Awards Luncheon on Friday, September 21" and it is expected that 160 people will be in attendance. Robert Winningham noted that there will be an item on the agenda for the next Allen City Council meeting to authorize the City Manager to swap approximately 19.5 acres owned by the City of Allen in Allen Station Business Park for approximately 23 acres owned by the AFDC near Bethany Drive and Greenville Avenue. Winningham also mentioned that Steve Massey, City of Allen Community Services Director, has requested that the AEDC support a proposal by the North Texas Municipal Water District to tap into the lower Bois d'arc Creek resevoir as a new water source for north Texas. The general consensus of the Board was to support this proposal. AEDC staff met with a tenant that is interested in leasing 9,000 square feet at One Allen Center and has requested AFDC incentives. Winningham also mentioned that AFDC staff attended the recent NTCAR Expo and Data Center Work Conference & Expo. Grimm noted that AEDC staff continues to negotiate the new AEDC office lease with Trademark. The lease still needs to receive final approval from the AFDC Board before it is executed. The current AFDC lease was extended through April of 2008. Hoover mentioned that no new tenants have been signed in the Stu Creek commercial development (owned by Green Street Properties), but the developer has started working on the next two buildings in the development. Winningham noted that Walmart is still working on plans for their building and will likely begin construction in February or March of 2008 and be open by October 2008. 8 Scheduling of Next AEDC Board of Directors Meeting. The next Regular Board meeting was scheduled for Wednesday, October 17, 2007 at 6:00 p.m. 9 Adioum. On a motion by Maxine Sweet, seconded by Tim Wood, the meeting was officially adjourned at 7:03 p.m. These minutes approved this 176 day of October, 2007 Kurt Kizer, President Carl Clemencich, Secretary