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HomeMy WebLinkAboutMin - Economic Development Corporation - 2009 - 10/21 - RegularI I ALLEN ECONOMIC DEVELOPMENT CORPORATION (AEDC) BOARD OF DIRECTORS REGULAR MEETING WEDNESDAY, OCTOBER 21, 2009 Board Tim Wood Carl Clemencich Susan Bartlemay- Absent Gary Caplinger Maxine Sweet Staff Robert Winningham Daniel Bowman Call to Order and Announce a Quorum Present Guests Pete Smith Peter Vargas Bo Bass Dale Henning Michael Griffin Ed Coury Steve Carter Chase MacLeod Gary Riggs 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 6:10 p m. on Wednesday, October 21, 2009 at the AEDC Office. 1. Approval of Minutes of the September 16 1009 Regular Meeting On a motion by Carl Clemencich, seconded by Gary Caplinger, the Board unanimously approved the Minutes of the September 16, 2009 Regular Meeting as presented 2 Discussion of AEDC Impact Study by Insight Research Corporation Robert Winningham presented the AEDC Impact Study, prepared by Insight Research Corporation. The following findings from the study were noted: • The 16 -year cumulative economic impact of AEDC projects on the regional economy is $17.97 billion • 61% of the new jobs that have been created in Allen since 1993 were a direct result of AEDC projects • The assessed value of AEDC projects in 2008 was $1.164 billion, which is equivalent to 70.7% of the total commercial property tax base in Allen • The 16 -year cumulative tax revenues to local taxing entities resulting from AEDC projects is $719.1 million Winningham noted that in the future, AEDC staff would request that the company completing the impact analysis break out the economic impact for each individual year, instead of primarily focusing on cumulative numbers. October 21, 2009 - Page 2 3. Consider Recommendation to Allen City Council for Nomination of Jack Henry and Associates for Enterorise Project Designation Under the State of Texas Enterprise Zone Program Daniel Bowman updated the Board on Jack Henry and Associates, explaining that the company has requested that the AEDC Board support its request to the State of Texas for funds from the Texas Enterprise Zone Program. The company is seeking a business retention incentive that would allow it to receive up to $2,500 per employment positron retained over a five-year period. Bowman noted that the Enterprise Zone retention incentive does not include the requirement that the retained employees meet the "economically disadvantaged" status. Rather, the company must simply commit to making a minimum investment of $5 million at the facility and maintaining their existing 400 employment positions for a period of five years. Jack Henry is willing to commit to doing both. The first step in the process of obtaining this designation is to have the City Council pass an ordinance designating the company as an Enterprise Project and stating the types of incentives that the City and AEDC have available for economic development. The next step is for the company to send an application for consideration and approval by State officials. The retention incentive functions as follows. 1 Year 1 is considered the "Certification Period" for employment. During this period the comptroller measures the number of employment positions, as well as the number of individual employees that turnover. The number of employment positions maintained during that period becomes the certified number that must be maintained for the 5 -year period. • The employees that do not turnover during the certification period will receive the employment reimbursement each year for the next five years regardless of future turnover. • Those positions that turnover during the first year should have 35 -percent new hires that meet "economically disadvantaged" status. However, if they don't meet the 35% benchmark, they still receive a prorated reimbursement. Steve Carter with Grant Thornton explained that Jack Henry and Associates is not seeking to establish an actual Enterprise Zone. The Texas Enterprise Zone Program has changed in past years and is now being used by upscale Texas communities such as Roundrock. Bowman noted that the Allen City Council could consider approval of the ordinance in November, which would afford the company the opportunity to submit the application to the State prior to the December 1, 2009 deadline. On a motion by Maxine Sweet, seconded by Gary Caplinger, the Board unanimously approved a recommendation to the Allen City Council for approval of an ordinance creating an Enterprise Zone Project designation for Jack Henry and Associates. October 21, 2009 - Page 3 4. Convene into Closed Executive Session: The Board convened into closed executive session at 6:25 p.m. to deliberate commercial and financial information and economic incentives for the following: • Consider Incentives for the Recruitment of Project Smart • Consider Incentives for the Recruitment of Project Champion • Consider Incentives for the Recruitment of Project RG • Consider Incentives for the Retention or Expansion of Local Company Reconvene in Open Session The Board reconvened into regular session at 8:33 p.m 5. Actions Resulting from Executive Session No action taken. 6. Consider Issues Related to the Initial AEDC Incentive Payment to Coventry II DDR/Trademark Montgomery Farm L P and Consider Approval of the First Amendment 1 to Amended and Restated Econormc Development Agreement with Covent_ II DDR/Trademark Montgomery Farm L.P. Winningham updated the Board on the status of the initial AEDC incentive payment to Trademark. The AEDC Economic Development Agreement with Trademark Properties provides a $4,635,000 grant to reimburse the developer for infrastructure expenses related to the Watters Creek at Montgomery Farm development. The grant is to be paid over time in the amount of one-half (1/2) of the total AEDC sales tax receipts. Payment of the total $4,635,000 incentive grant is based on the company constructing Retail Phase I, Retail Phase II and Retail Phase III on the property at the southwest comer of Bethany Drive and US 75. Winningham noted that the AEDC agreement also requires that the company construct parking garages containing a minimum of 1,667 spaces While the company has met the square footage, taxable value and infrastructure investment benchmarks stated in the agreement, the company has only constructed 1,410 parking spaces. Trademark representatives have indicated to City and AEDC staff that the company does not intend to complete construction of an additional parking garage. Without construction of the additional garage, the company will likely not meet the 1,667 parking space requirement. The Board generally agreed that Trademark has constructed the ietail development in accordance with the economic development agreement and should receive the incentive payment despite the lower number of parking spaces constructed. On a motion by Maxine Sweet, seconded by Gary Caplinger, the Board unanimously approved the First Amendment to Amended and Restated Economic Development Agreement with Coventry II DDR/Trademark Montgomery Farm L P to eliminate the parking space requirement Octobe, 21, 2009 - Page 4 ' 7 Consider Approval of Economic Development Agreement with Halo Group Inc Winningham noted that the AEDC Board previously offered Halo Group Inc. a $150,000 grant to support the company with a 16,000-sf expansion at One Allen Center to Allen Central Park The lease negotiations took longer than expected and Halo Group Inc. was not able to execute their lease until September 14, 2009. Bowman mentioned that the Board originally required that the company lease the 16,000-sf on the 5th floor for 60 months; however, the company has requested that the Board accept a 58 -month lease. Overall, the company has extended their various leases in the building for a cumulative total of 73 5 months, in order to make them all coterminous. On a motion by Carl Clemencich, seconded by Gary Caplinger, the Board approved the Economic Development Agreement with Halo Group Inc. as presented. Maxine Sweet abstained from voting on this item 8. Approval of AEDC Financial Reports Daniel Bowman presented the AEDC Financial Reports. On a motion by Carl Clemencich, seconded by Gary Caplinger, the Board unanimously approved the AEDC Financial Reports as presented 9 Discuss Administrative and Marketing Activities of the AEDC and Uncoming Local Events Robert Winningham updated the Board on the marketing activities of the AEDC. Winningham recently attended the CoreNet Expo and met with various national site selectors. Many of these meetings were set up by Linda Bums, a consultant that specializes in economic development prospect recruitment. Daniel Bowman noted that AEDC staff attended the AFCOM Data Center World Conference and made many beneficial contacts. Staff is in the process of pursuing several leads from the conference. Bowman mentioned that the AEDC will be looking into other data center conferences such as those hosted by Tier 1, Data Center Dynamics and Gartner. The AEDC Holiday Open House will be held on December 10, 2009 Gary Caplinger requested that AEDC staff make sure that the event will not conflict with holiday events being hosted by other Allen organizations. December 11, 2009 is the date for the City of Allen Boards and Commissions Dinner. Maxine Sweet asked that RSVP information be included for all events that are stated in the AEDC weekly and monthly staff reports. Carl Clemencich requested that AEDC staff provide quarterly updates on commercial vacancy in Allen. October 21, 2009 - Page 5 10. AEDC Executive Director's Report Reizarding Office Industrial Data Center, and Retail Protects. and Local Partnerships Robert Winningham updated the Board on the status of various AEDC projects. Bowman noted that AEDC staff has proceeded with the law suit against Celerity, Inc. to recover AEDC grant funds. It was also noted that AEDC staff met with a group interested in creating a business incubator in Allen. 11. Scheduling of Next AEDC Board of Directors Meetin The next Regular Board meeting was scheduled for Wednesday, November 18, 2009 at 6:00 p.m. 12 Adiourn The meeting was officially adjourned on a motion by Maxine Sweet, seconded by Gary Caplinger, at 8:55 p.m. These minutes approved this 181h day of November 2009 1 1 Tim Wood, President Carl Clemencich, Secretaryfrreasurer I�