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HomeMy WebLinkAboutMin - Economic Development Corporation - 2011 - 05/18 - RegularALLEN ECONOMIC DEVELOPMENT CORPORATION (AEDC) BOARD OF DIRECTORS REGULAR MEETING WEDNESDAY, MAY 18, 2011 Board Tim Wood Susan Bartlemay Carl Clemencich Gary Caplinger Scott Sutherland Staff Robert Winningham Daniel Bowman Ryan Shook Pete Smith Guests Peter Vargas Lee Battle Joey Herald Bo Bass Sami Simula Srivasta Ramanathan Ken Helvey Scott Brie George Wang 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 Tim Wood at 6:07 p.m. on Wednesday, May 18, 2011 at the AEDC Office. 1. Presentation of the Texas Economic Development Council (TEDC) Economic Excellence Award to the AEDC Board Robert Winningham presented the 2010 Texas Economic Development Council Award to the Board. Winningham noted that this prestigious distinction is awarded to economic development agencies in the State of Texas that meet high standards of excellence in a variety of operational categories. Winningham also noted that the objective of the Economic Excellence Program is to encourage professional staff and board member leadership and development. Recipients of the award are selected based on evidence that members of the ED agency have met a desired threshold of professionalism and economic development training participation in the past year. This is the third consecutive year that the AEDC has received the Economic Excellence Award. 2. Update on the AISD Career -Tech Center and other AISD Related Items by Dr. Ken Helvey, Superintendent of Schools Dr. Ken Helvey, AISD Superintendent of Schools, updated the Board on the AISD Career - Tech Center and other AISD related items. Helvey spoke on current issues related to funding, growth and projects which the AISD is undertaking. He noted that the AISD currently has 19,000 students enrolled and will grow to approximately 21,000 students when Allen reaches its maximum population. AFDC Meeting Minutes Mar 18. 2011 - Page 2 Helvey explained that the AISD has encountered financial problems due in a large part to a reduction in property taxes in 2006 and the economic downturn. Helvey indicated that the budget issues can be resolved by either raising taxes or decreasing operational costs in the school district, or both. He anticipates an increase in taxes, payroll reductions and potential layoffs as probable solutions to the budget dilemma. Carl Clemencich inquired about the additional funds that would be received if the school district raises taxes. Helvey noted that a small portion of the funds would go to the State, but the majority would be retained locally in the school district. Helvey stated that Allen ranks high in the efficient use of funding per student due to its utilization of large campuses to consolidate resources. Clemencich inquired if smaller school districts may be forced to consolidate due to the statewide budget shortfall. Helvey explained that many districts are facing these types of difficult decisions, but Allen is fairing much better. Helvey stated that the school district anticipates 2 to 3 -percent growth in class sizes in the next year, with a new grade population of 1,450-1,550 students in the incoming classes. The school district has many exciting projects in the works including the new football stadium, career -tech center, a dual credit clinical rotation program, and a new performing arts center with phenomenal amenities. Helvey also noted that the construction of the new performing arts center allows younger students to utilize already existing facilities to a greater degree. Helvey thanked the AEDC Board and Staff, as well as the City staff, for the continued successful partnership that benefits all of Allen's citizens. 3. Approval of Minutes of the April 20. 2011 Regular Meeting On a motion by Susan Bartlemay, seconded by Carl Clemencich, the Board unanimously approved the Minutes of the April 20, 2011 Regular Meeting as presented. 4. Consider Approval of Economic Development Agreement with Frontier Communications Corporation Robert Winningham presented the Economic Development Agreement between Frontier Communications Corporation and the AEDC for Board consideration. Winningham noted that the company is planning to consolidate several back office operations in the Dallas -Fort Worth Area and create a new customer service facility in Allen. The total employment at the new facility will be between 600 — 800. The company has executed a Letter of Intent to occupy approximately 84,000-sf of space at 805 Central Expressway South (the former Sage Telecom Building) AEDC staff and the AEDC attorney drafted the Economic Development Agreement based on terms previously approved by the Board. The agreement states that the AEDC will provide an $800,000 grant to the company on the following payment schedule: • $250,000 paid upon the receipt of a Certificate of Occupancy, assuming the company has created a minimum of 400jobs in Allen AEDC Meeting Minutes Mac 18, 2011 - Page 3 • $250,000 paid upon the second anniversary of the company's receipt of a Certificate of Occupancy, assuming the company has created a minimum of 600 jobs in Allen • $300,000 Paid upon the third anniversary of the company's receipt of a Certificate of Occupancy, assuming the company has maintained a minimum of 600jobs in Allen Winningham noted that the company must meet the following requirements as a condition of receiving the incentive grant: • Company will execute a 10 -year lease for a minimum of 80,000-sf of space in Allen. It is permissible that the lease include a clause that allows the company to pay a penalty fee in order to terminate the lease at the end of the seventh year. • Company will employ a minimum of 600 employees • Company will offer a comprehensive benefits and insurance coverage package to its employees • Company will invest a minimum of $2.900,000 in improvements to the building • Company will invest $1,200,000 in furniture, fixtures and equipment to be located at the building AEDC staff indicated that the company may request a relatively small decrease in the number of employment positions that must be created prior to the payment of the first installment of the grant. The general consensus of the Board was that such terms were within the authority of the Executive Director to negotiate, based on the Board's prior authorization. The Board generally agreed that the current draft of the agreement incorporates all of the terms previously approved by the Board. 5. Consider Recommendation to Allen City Council for Nomination of Frontier Communications Corporation for Enterprise Project Desumation Under the State of Texas Enterprise Zone Program Daniel Bowman requested that the Board approve a recommendation to the Allen City Council for the nomination of Frontier Communications Corporation for an Enterprise Project designation under the State of Texas Enterprise Zone Program. This designation would allow the company to apply for up to $2,500 per employee in sales tax reimbursements from the State of Texas. Bowman explained that in 2009, the Allen City Council passed an ordinance electing to participate in the Texas Enterprise Zone Program. The ordinance also designated Jack Henry & Associates as an Enterprise Zone Project. Since the local incentives outlined in the previous ordinance have not changed, the Governor's Office has indicated that the Allen City Council would simply need to pass a resolution in order to nominate Frontier Communications for this designation The company is still required to apply to the State of Texas for this designation and must receive state approval before they receive any sales tax reimbursement from the State. AEDCMeetieg Minutes Mae 18, 2011 - Page 4 On a motion by Susan Bartlemay, seconded by Carl Clemencich, the Board unanimously approved a recommendation to the Allen City Council for nomination of Frontier Communications Corporation for Enterprise Project Designation under the State of Texas Enterprise Zone Program. 6. Convene into Closed Executive Session The Board convened into closed executive session at 7.10 p.m. to deliberate real property, commercial and financial information and economic incentives for the following: • Consider Incentives for the Recruitment of Project Semiconductor • Discussion of Incentives for CresaPartners Projects Reconvene into Open Session: The Board reconvened into regular session at 8:27 p.m. 7 Actions Resulting from Executive Session No actions were taken. 8. Review the Allen Economic Development Corporation's Preliminary Budget for Fiscal Year 2012 and Adjustments for Fiscal Year 2011 Daniel Bowman presented the preliminary budget for Fiscal Year 2012 and adjustments for Fiscal Year2011 Bowman noted that the AEDC Board typically reviews the proposed preliminary AEDC Budget at the May Board meeting each year. Bowman explained that the AEDC will be increasing the budget by $1.3 million in Fiscal Year 2012 mainly because of an increase in Economic Development Incentive Grant payments. Bowman stated that the adjustments to the AEDC Operating Budget were minor, with decreases in the postage and freight, office supplies, and professional services accounts. Bowman also noted that certain personnel -related budget items have not yet been generated by the City Finance Department, and that staff will work with Finance to determine these numbers and present them to the Board at the June meeting. 9 Approval of AEDC Financial Reports Daniel Bowman presented the AEDC financial reports. It is anticipated that the AEDC will make incentive grant payments to Trademark, Photronics, and Turrentine-Jackson-Morrow in the near future. Bowman noted that sales tax revenue for the current Fiscal Year is 8 -percent more than budgeted, and has shown a 3 -percent increase from the prior year. On a motion by Carl Clemencich, seconded by Susan Bartlemay. the Board unanimously approved the AEDC Financial Reports as presented. AFDC Meeting Minutes Mav 18, 2011 - Page 5 10. Discussion of AEDC Board Candidate Oualificanons to Provide Feedback to the Allen City Council Nominating Committee Robert Winningham indicated that the City Council has requested that the AEDC Board provide input on qualifications for future nominees to the AEDC Board. It has been requested that each AEDC Board member complete the attached Board Evaluation Form and return it to Chairman Tim Wood. 11. Discuss Administrative and Marketing Activities of the AEDC Upconnng Events and Local Partnerships Robert Winningham updated the Board on administrative and marketing activities of the AEDC, upcoming events and local partnerships. Winningham noted that Allen has experienced significant office leasing activity. Winningham also noted that Andrews Distribution has added additional square footage to the previously built 310,000 -square feet. It was mentioned that Daniel Bowman will be representing the AEDC at the 21" Century Data Center Symposium on Thursday, May 181h Winningham mentioned that he and Bo Bass will be traveling to Las Vegas for the ICSC tradeshow, and Daniel Bowman will be traveling to the IMN Data Center Forum in Chicago the week of May 23rd Winningham noted that the TEDC Sales Tax Workshop will be held in Mesquite on June 241` Peter Vargas indicated that this is the only Sales Tax Workshop session to be held this year in the Dallas -Fort Worth area. 12. AEDC Executive Director's Report Regarding Office, Industrial, and Retail Projects No additional projects were mentioned. 13. Determine Next Meeting Date The next AEDC Board meeting was scheduled for Wednesday, June 15, 2011 at 6:00 p.m. 14. Adjourn The meeting was officially adjourned on a motion by Susan Bartlemay, seconded by Gary Caplinger, at 8:55 p.m. These Minutes approved this 15's day of June 2011 Tim Wood, President lemencich, Secretary/Treatstrifer