Loading...
HomeMy WebLinkAboutMin - Economic Development Corporation - 2009 - 06/17 - RegularCII C ALLEN ECONOMIC DEVELOPMENT CORPORATION (AEDC) BOARD OF DIRECTORS REGULAR MEETING WEDNESDAY, JUNE 17, 2009 Board Tim Wood Gary Caplinger Carl Clemencich Maxine Sweet - Absent Staff Robert Winningham Jennifer Grimm Daniel Bowman Call to Order and Announce a Quorum Present Guests Pete Smith Peter Vargas Joey Herald Bo Bass Ross Obermeyer Mike Williams Steve Meier With a quorum of the Board present, the Regular Meeting of the Allen Economic Development Corporation (AEDC) was called to order by President Tim Wood at 6:02 p.m. on Wednesday, June 17, 2009 at the AEDC Office. 1. Approval of Minutes of the May 13 2009 Regular Meeting On a motion by Gary Caplinger, seconded by Carl Clemencich, the Board unanimously approved the minutes of the May 13, 2009 Regular Meeting as presented. 2. Convene into Closed Executive Session. The Board convened into closed executive session at 7:10 p.m. to deliberate commercial and financial information and economic incentives for the following: • Consider Incentives for the Recruitment of Project Remote • Consider Incentives for the Recruitment of Project Boss Reconvene in Open Session The Board reconvened into regular session at 740 p.m. 3. Actions Resulting from Executive Session No actions were taken. AEDC Board of Directors Regular Meeriag June 17 2009 - Page 2 4. Consider and Take Action to Provide Incentives for Project Main The Board discussed a project involving local investors that have an option to purchase a tract of land located at the northwest comer of Allen Drive and Main Street from the First Christian Church of Allen. The investors have been working with the City of Allen Planning and Engineering departments to develop a site plan that includes an 18,000 -square foot, two-story office building and a 2,800 -square foot, one-story office building. The project is located in the Allen Central Business District (CBD) Mike Williams and Steve Meier appeared before the Board to present the project Jennifer Grimm mentioned that Williams and Meier have undertaken several significant projects in the Allen CBD with a total combined taxable value of approximately $4 million. Meier noted that a church is currently located where Project Main is proposed for development. Meier and Williams desire to demolish the church in order to fully develop the proposed site and ensure that the development meets the City's current land design codes for the CBD. The investors are considering the options of either demolishing the church or leaving it in place. The investors are trying to work out the location of parking for the development and are considering having parallel parking on the street. Meier noted that the streetscape for the project was developed in conjunction with the City Planning Department. They currently 1 plan to build the project in phases, which would allow them to lease it up over time. Meier stated that the development of this project could help spur construction of additional downtown parking. Meier and Williams requested assistance from the AEDC Board to help with the removal of the church and construction of infrastructure. Such assistance was requested in order to ensure that the project has positive cash flow, enabling the investors to construct additional office/retail space on the property Williams noted that approximately $300,000 in value is associated with the church building. They would develop a two-story building in Phase 11 where the church is currently located. Tim Wood inquired as to whether the church building currently meets the City's parking requirements. Bo Bass explained that the church is considered a "legal existing non- conforming" facility that would not be required to conform with the current City parking requirements unless they were to undertake a major renovation. Church services are still being held at the facility Carl Clemencich inquired if the church would have to be torn down in order to develop the proposed site plan. Peter Vargas noted that the church must be demolished in order to develop the full wrap-around corner, but that three-quarters (3/4) of the proposed buildings could be developed with the church still in place. Meier noted that from a developer's point of view, there is some benefit to wrapping the development around the corner, but that benefit does not justify the cost. However, the full wrap-around development would benefit the City and its citizens. Meier considers this project a partnership between the City and the developer to beautify the CBD AFDC Boad of Directors Regula Meeting hale 17, 2009 - Page 3 Clemencich noted that the investors are requesting an initial $250,000 for infrastructure assistance and another $250,000 to recover the lost value of the church that is located on the tract. Meier agreed, also noting that $10,000 - $20,000 is the expected cost of demolishing the church. The investors are working with an interested buyer that might be willing to pay $300,000 to purchase the church. $250,000 is needed from the AEDC in order to keep rents for the development in a reasonable price range that would allow the space to fill up. They are anticipating rents of $18 - $20 per square foot. Even with the requested help from the AEDC, they are still on the high end of market rental rates in the CBD. Gary Caplinger noted that Phase I of the development involves only a portion of the 2 -story building on the hard corner, inquiring if the investors could guarantee the development of the Phase II budding if they received assistance from the AEDC. Williams noted that they would ensure the development of the remaining buildings, but such development would only occur after the development of Phase I The investors would have to wait one year before commencing construction on the development, since the landowner has required that the church remain on the property for that period of time. The landowner would allow the investors to pay for the land over the course of the one year period, with the requirement that the church be allowed to meet on the property free of charge for one year The investors must choose if they will commit to purchase the facility by the end of June 2009 Phase I would consist of 9,000 -square feet and Phase II would consist of an additional 9,000 -square feet. The investors would prefer to receive money from the AEDC now, as opposed to waiting one year Grimm noted that the church occupies approximately one-quarter (1/4) of the property Bo Bass noted that this project has been an evolutionary design, with an attractive look and high visibility from McDermott. This project would draw people into the CBD and public investment would help achieve the City's design objectives for the CBD Bass also noted that Meier and Williams have been very interactive since the first day of the project, and have worked to create the street -wall that the Planning Department requested. The City's plan is to have a street -wall all the way down Allen Drive. Wood noted that every project in the CBD seems to need public assistance. It does not appear that projects of this type will be economically viable in the CBD for at least 20 years. Wood also noted that the AEDC and the City have already put millions of dollars into assisting the development of the CBD Bass mentioned that City and AEDC may need to jumpstart most projects in the CBD. The City has developed buildings and infrastructure in the CBD in the past, but this project involves private sector investment and is therefore different. Clemencich stated that all development north of Allen Drive in the CBD will require significant public investment in infrastructure. Meier stated that downtown, and Main Street in particular, has been deteriorating. This 1 project gives other CBD businesses, such as Rodenbaugh's, a reason to stay in the CBD. It sends a message that things will improve in Downtown. Robert Winningham noted that this project sets the lone and standard for CBD development. It focuses on two blocks initially, with the hope that the development in the remainder of the CBD will eventually become AFDC Board of Directors Regidar Meenng Juae 17, 2009 - Page 4 market-driven. The AEDC is interested in the development of office space that could be marketed to smaller businesses. The AEDC Board and City Council will have a discussion in July about objectives and goals for the CBD. The CBD is an important part of Allen. The City Council and AEDC Board need to determine how CBD improvements will be funded. Pete Smith noted that 4A money cannot legally be used to reimburse a private entity for "loss of value," but it could arguably be used to assist with demolition. Caplinger inquired if the assistance could be given to the investors to reimburse for some other applicable expense, as opposed to reimbursing for `loss of value." Smith agreed that 4A funds could be expended for a variety of proposes if the project creates primary jobs; otherwise, 4A money can only be expended for infrastructure. Smith noted that the AEDC could give money to the City of Allen, and the City could then use money from the general fund through a 380 agreement to support the project. Caplinger stated that he believes the City owes it to the developments in the CBD to pay for infrastructure. Vargas noted that this is a good project that draws attention to the area. Williams and Meier are the only two individuals that have undertaken any significant projects in the CBD recently and City staff supports this current project Wood inquired at to whether the project should receive $500,000 from the AEDC. Vargas recommended that the City and AEDC complete a comprehensive economic plan that states what the City will do and what the AEDC will do to support the project, as well as the expected performance benchmarks for the investors. Williams noted that he has constructed eight or nine buildings in Allen and he never had a tenant committed before commencing construction on a project; however, he never completed a project without having a tenant. Wood stated that AEDC and City staff will meet and work out a comprehensive economic package Williams explained that they are required to commit to puichasing the land by June 30" Vargas noted that the City and AEDC would not have time to develop a comprehensive plan before June 30'" Williams noted that they could still make the project work with just the $250,000 grant from the AEDC and would still be able to constivct the Phase I development; however, the church would not be torn down The general consensus of the Board was to provide an initial $250,000 infrastructure grant, and wait to make a determination on the remaining $250,000 until a later date Winningham stated that AEDC staff will work out the payment terms for the grant. Williams stated that they will be in a worse financial position by tearing down the church even if the AEDC provides assistance, but they desire to do it anyway because it will improve the project. Vargas noted that the investors are not going to develop anything on the tract for at least one year, which gives the City and AEDC plenty of time to make a determination regarding the remaining $250,000. On a motion by Carl Clemencich, seconded by Gary Caplinger, the Board authorized the Executive Director of the AEDC to negotiate an Economic Development Agreement to provide a grant not to exceed $250,000 to reimburse Project Main for infrastructure costs related to the development. AFDC Bomd of Dueciors Regular Meeting June 17, 2009 - Page 5 5. Approval of AEDC Financial Reports Daniel Bowman presented the AEDC Financial Reports. On a motion by Gary Caplinger, seconded by Carl Clemencich, the Board unanimously approved the AEDC Financial Reports as presented. 6. Approval of the Allen Economic Development Corporation Budget for Fiscal Year 2010 and Admstments for Fiscal Year 2009 Robert Winningham and Daniel Bowman presented for AEDC Board review and approval the AEDC Budget for Fiscal Year 2010 and Adjustments to the AEDC Budgets for Fiscal Year 2009 Bowman noted a few significant items: • It is expected that the Allen Central Park Property Owner's Association will assume management of Allen Central Park as of July 1, 2009. Therefore, the AEDC is budgeting less in accounts such as Water, Electricity and Landscaping. • It is being requested that the Board increase the AEDC marketing budget by $60,000 for the current fiscal year and increase the AEDC marketing budget by $110,000 next fiscal year in order to provide the necessary funds to support strategic AEDC marketing initiatives. • The `Direct Grants' line item fluctuates each year based on the various projects approved by the AEDC Board. On a motion by Carl Clemencich, seconded by Gary Caplinger, the Board approved the Allen Economic Development Corporation Budget for Fiscal Year 2010 and Adjustments for Fiscal Year 2009. The Board requested that the AEDC marketing plan and its execution be discussed in depth at a future AEDC Board meeting. 7 Board Discussion Regarding the Joint Workshop Between the AEDC Board and the Allen City Council The Board discussed items that they would like to have included on the agenda for the July 28ih Joint Workshop between the AEDC Board and the Allen City Council. Robert Winningham and Peter Vargas plan to meet on July 13'" to review the proposed agenda. Carl Clemencich requested that an item related to the vision and direction of the City Council with regard to economic development be included on the agenda. For example, Clemencich would like to discuss how the Council prefers that the AEDC Board allocate funds to projects in the Allen Central Business District (CBD). Vargas suggested that the Board and Council discuss the types of development that the City would like to attract in the future. Winningham noted that this could include a discussion of a plan of action for the SH 121 corridor. AFDC Board of Dveclors Regula) Meeting June 17, 2009 - Page 6 1 Winningham mentioned that Allen is now limited on land and the AEDC does not need to pursue every project. The AEDC and City Council can afford to be very selective with regard to economic development projects. Winningham noted that the AEDC should be involved in filling up vacant office space. Eventually the AEDC will become more involved in redevelopment projects. The Board inquired if land use studies should be funded by the AEDC. Vargas indicated that he did not believe the AEDC should fund such studies. Clemencich inquired as to what City staff and Council see as the future of funding the AEDC, given the need to eventually fund mass transit. Vargas noted that the Council recently approved applying for a Job Access and Reverse Commute (IARC) grant for the purpose of developing new or expanded transportation services to connect job seekers with employment opportunities. Vargas also noted that the City continues to work with the local hotels and shopping centers to create a trolley system. Pete Smith indicated that the AEDC can provide funding to assist with light rail projects, but could not fund a trolley system. Hotel/Motel funds could be used to buy vehicles to transport hotel guests to amenities in the Allen area. Winningham noted that workforce issues and the AEDC partnership with the AISD on the Career and Technology Center would be good discussion topics for the meeting on July 28" The Board and Council could discuss their vision for Allen's workforce in the future. Winningham requested that AEDC Board members e-mail him any additional items for the Joint Workshop prior to July 13th 1 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 noted that the AEDC is currently in the process of designing new marketing materials. These materials include new folders and a new AEDC trade show booth. The AEDC booth will be ready for the NTCAR Expo in August. Grimm also noted that the AEDC will have a booth at the upcoming Allen USA Celebration and will be distributing sunscreen. The purpose of the booth is to educate citizens about the functions of the AEDC The booth will contain pictures of projects, a one -sheet flyer on AEDC activities, marketing materials and other such items. It is expected that the booth will be open from Noon until the evening on the day of the event, with an AEDC staff member present at the booth for that period to answer economic development -related questions Grimm encouraged Board members to attend the event and visit the booth. Bowman noted that the AEDC has received a number of data center inquiries since the recent announcement of Cisco's project in Allen AFDC Board of Directors Regular Meeting June 17 2009 - Page 7 9. AEDC Executive Director's Report Regarding Office Industrial Data Center, and Retail Projects, and Local Partnerships Winningham thanked the AEDC Board, City Council, AEDC staff and city staff for their work on the Cisco project, noting that the project was an excellent example of strong teamwork. This project was done the right way and only brought to the Board and Council when it was ready for final approval. Winningham anticipates that the Cisco project will potentially spur two or three more data center projects in Allen. It was also noted that Bradford is trying to recruit a church to locate into space at Twin Creeks Business Center. While the AEDC is not against churches, it is the opinion of AEDC staff that a church is not the best use for these office/showroom buildings. Winningham mentioned that the AEDC should have more control over the allowable uses in projects that receive AEDC funding in the future. Clemencich inquired as to the future of Sage Telecom in Allen, given that its lease ends in Fall 2009 Dan Bowman indicated that the AEDC is working with Sage to identify 30,000-sf of leasable space in Allen that would be suitable for its operations. The company desires to remain in Allen if possible. 1 10. Scheduling of Next AEDC Board of Directors Meeting The next Board meeting was scheduled for Wednesday, July 15, 2009 at 6:00 p.m. 1l Adjourn The meeting was officially adjourned on a motion by Gary Caplinger, seconded by Carl Clemencich, at 8:14 p.m. These minutes approved this l5'" day of July 2009 Tim Wood, President 0 Carl Clemencich, Secretary/Treasurer