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HomeMy WebLinkAboutMin - Economic Development Corporation - 2011 - 11/16 - RegularI ALLEN ECONOMIC DEVELOPMENT CORPORATION (AEDC) BOARD OF DIRECTORS REGULAR MEETING WEDNESDAY, NOVEMBER 16, 2011 Board Tim Wood Susan Bartlemay Carl Clemencich - Absent Gary Caplinger Scott Sutherland - Absent Staff Daniel Bowman Garrett Weaver Kevin Laughlin Call to Order and Announce a Ouomm Present Guests Peter Vargas Bo Bass Joey Herald Trey Billings Thu Billings Tim Brightman Diane Kozak Aaron De Los Santos 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 6:05 p.m. on Wednesday, November 16, 2011 at the AEDC Office. I. Recognition of the Relocation of Billings Productions to Allen Dan Bowman introduced Trey Billings, Thu Billings and Tim Brightman of Billings Productions to the Board and recognized the company for its relocation to Allen Station Business Park. Bowman noted the relocation will create 40jobs in Allen. Bowman also added that Billings Productions is a leader in dinosaur animatronics production in North America and could potentially expand their presence in Allen in the future. Bowman presented a plaque to Trey Billings and Tim Brightman in commemoration of their Allen operation. 2. Approval of the Minutes of the October 19, 2011 Regular Meeting On a motion by Susan Bartlemay, seconded by Gary Caplinger, the Board unanimously approved the Minutes of the October 19, 2011 Regular Meeting as presented. 3. Election of Officers of the AEDC Board of Directors The Board deferred the Election of Officers of the AEDC Board of Directors to the next scheduled Board Meeting. AFDC Meeting Maiees November 16, 2071 - Page 2 4. Consider Issues Related to the Economic Development Agreement with KONE Inc 1 Dan Bowman updated the Board regarding the compliance of KONE, Inc. with the terms and conditions of their Economic Development Agreement. Bowman noted that KONE is approximately $500,000 short of the required taxable value of $6,000,000 stated in the agreement with the AEDC. Bowman added that KONE currently employs 93 individuals in Allen, surpassing their required employment of 72 employees. KONE has also been actively involved in the community, participating in efforts such as Allen Community Outreach and Allen USA. Bowman noted that KONE underestimated the scheduled depreciation on their taxable assets and recommended that the Board evaluate KONE's compliance with the agreement next year. Susan Bardemay questioned if the company was close enough to their taxable value requirement to justify waiving the requirement for Tax Year 2011. Bowman stated that the AEDC wants KONE to succeed in Allen and indicated that the company has substantially complied with the terms of its agreement. Tim Wood noted that the AEDC has waived such requirements in the past. Bowman added that JaRyCo was recently required to repay a portion of their grant. Bartlemay stated that companies need to be held accountable for their obligations. Bowman stated that AEDC Staff will track KONE's taxable value for 2012. No action was taken to declare KONE, Inc. in default of their taxable value requirement. 5. Consider Issues Related to the Economic Development Agreement with Advanced Optical Components — A Finisar Division Dan Bowman updated the Board regarding the compliance of Advanced Optical Components, a division of Finisar, with the terms and conditions of their Economic Development Agreement. Bowman noted that the taxable value of the company's business personal property for Tax Year 2011 was $5,010,826, which is $889,174 short of their requirement of $5.900,000. Bowman noted that the company purchased approximately $4,000,000 worth of equipment in 2011 which should put the company well over the $5,900,000 requirement for 2012. Susan Bartlemay stressed that companies should be held accountable for adhering to the terms of their agreements. Bowman agreed and added that AEDC Staff will continue to monitor the company to ensure that they follow through with their commitment to Allen. After deliberation, no action was taken to declare Finisar in default of their taxable value requirement. 6. Consider Approval of the Economic Development Agreement with Greenling Inc Dan Bowman announced that Greenling, Inc. had successfully negotiated a lease at 25 Prestige Circle and is prepared to proceed with the project in Allen. Bowman outlined the details of the Economic Development Agreement, noting that the AEDC will provide an annual grant of $40,000 for the duration of the company's 5 -year agreement. The company must invest $500,000 in improvements to the building over the course of the lease, $200,000 of which must be invested up front. Tim Wood noted that if the company does not meet the employment requirement for a specific year, then no grant will be provided by the AEDC. Susan Bartlemay questioned allowing other AFDC Meeting Minutes November 16, 2011 - Page 3 company's employment numbers to count toward Greenling's employment requirement. 1 Bowman explained that other companies must occupy additional space on Prestige Circle in order for the additional employment to count towards Greenling's employment requirement. Bartlemay indicated that this is a unique idea and if it proves successful, additional mcubator- type businesses should be considered by the Board. On a motion by Gary Caplinger, seconded by Susan Bartlemay, the Board unanimously approved the Economic Development Agreement with Greenling, Inc. as presented. 7 Consider a Recommendation to the Allen Citv Council Regarding the Reauest for Consent to Assignment of Amended and Restated Tax Abatement Agreement with Duke Realtv Limited Partnership Daniel Bowman presented the Consent to Assignment of an Amended and Restated Tax Abatement Agreement with Duke Realty Limited Partnership. Bowman noted that Duke Realty is selling One Allen Center to the Blackstone Group (d.b.a. BRE/COH TX LLC) as part of a $1.07 billion real estate package. Blackstone requested that the City of Allen approve the assignment of the Amended and Restated Tax Abatement Agreement to BRE/COH TX LLC. Bowman noted that if the agreement is approved, the Blackstone Group will receive the benefit of the 50% tax abatement and will be required to maintain compliance with the terms and conditions of the agreement. Bowman also added that Blackstone must maintain $12,000,000 in taxable value for the remaining term of the agreement. On a motion by Susan Bartlemay, seconded by Gary Caplinger, the Board unanimously approved a recommendation to the Allen City Council for approval of the Consent to the Assignment of Amended and Restated Tax Abatement Agreement with Duke Realty Limited Partnership. g. Consider Request for Consent to Assignment of Economic Development Agreement with Duke Realty Limited Partnership Daniel Bowman presented the Consent to Assignment of Economic Development Agreement with Duke Realty Limited Partnership. As part of the sale of the $1.07 billion real estate package by Duke Realty, the Blackstone Group has requested that the AEDC approve the assignment of the Economic Development Agreement to BRE/COH TX LLC, a corporation that is wholly owned by the Blackstone Group. Bowman noted that if the agreement is assigned, Blackstone would be required to maintain compliance with the terms and conditions outlined in the agreement. Bowman recommended that the Economic Development Agreement be assigned to the Blackstone Group. On a motion by Gary Caplinger, seconded by Susan Bartlemay, the Board unanimously approved the Consent to the Assignment of the Economic Development Agreement with Duke Realty Limited Partnership. AFDC Meeting Minutes November 16, 2011 - Page 4 9 Discussion of Customized AEDC Impact Model Daniel Bowman gave a presentation on the customized AEDC impact model developed by Impact DataSource. Bowman outlined the various features of the model and described how the software can be used by the AEDC Board and Staff to provide a more accurate evaluation of a given project. Bowman explained that the model analyzes economic variables such as commercial property taxes, commercial sales taxes, employment impacts and a variety of local revenue sources. Bowman provided a synopsis of an example report detailing how the model calculates taxes paid to each taxing entity broken down by source, property taxes by entity, sales taxes to the City, AFDC and ACDC, employment impacts, as well as tax abatements and incentive paybacks. Tim Wood questioned if the model accounts for the cost of providing City services in its impact analysis. Bowman stated that impact models in the past have not factored in such costs. It could be considered in the future. The Board provided feedback on the customized AEDC Impact Model and requested that information on the model be provided to Board members that were not in attendance at the meeting. 10. Convene into Closed Executive Session The Board convened into closed executive session at 6:40 p.m. to deliberate real property, commercial and financial information and economic incentives for the following: • Economic Development Agreement with Riggs & Williams, L.P., d/b/a Gary Riggs Interiors. L.P Reconvene into Open Session: The Board convened into regular session at 6:50 p.m. 11. Actions Resulting from Executive Session No actions were taken. 12. Approval of AEDC Financial Reports Daniel Bowman presented the AEDC financial reports. On a motion by Gary Caplinger, seconded by Susan Bartlemay. the Board unanimously approved the AFDC Financial Reports as presented. d AFDC Meeting Minutes November l6, 2011 - Page 5 13. Discuss Administrative and Marketing Activities of the AEDC and Upcoming Local Events Daniel Bowman updated the Board on the administrative and marketing activities of the AEDC, upcoming events and local partnerships. Bowman mentioned that the Texas Stampede was a successful event, noting that 17 prospects and their guests joined AEDC Staff at the Allen Event Center suite. Bowman also added that coordination and logistics for the suite were provided by Linda Bums. Tim Wood noted that the catering was subpar but overall, the event was enjoyable. Bowman also mentioned that AEDC staff is in the final stages of completing the updated demographics book and aerial maps to be used for marketing purposes. 14. AEDC Executive Director's Report Regarding Office. Industrial, and Retail Proiects Daniel Bowman updated the Board on office, industrial and retail projects. Bowman mentioned that Project Legal and Project Onshore are two related projects that are considering options in Allen. Bowman noted that Project Legal is currently looking for build -to -suit options in Allen Central Park. Project Onshore may consider existing sublease space in the Finisar building. Bowman noted that Project Med-Tech is working through issues related to the approval of the use of certain chemicals within the proposed Allen facility Bowman mentioned that AEDC Staff has been contacted by Noah's, a firm that is considering a multi -use facility for corporate and private events. Bowman also mentioned that Project Whistler secured financing and their lease should be finalized in the coming weeks. Bowman recently attended the Corenet Global Conference and met with brokers and developers from Jones Lang LaSalle, Transwestern, KDC, and Coresite. 15. Determine Next Meeting Date Since Carl Clemencich and Scott Sutherland were absent from today's meeting, the Board decided to determine the date of the next meeting at a later date. 16. Adjournment The meeting was adjourned at 7:04 p.m. These Minutes approved this 14'h day of December 20l Tim pod, re 'dent Carl Clemencich, Secretary/Treasurer