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4A Wichita Falls Economic Development Minutes - 11/16/2017MINUTES OF THE WICIDTA FALLS ECONOMIC DEVELOPMENT CORPORATION November 16, 2017 PRESENT: Dick Bundy, President § WFEDC Members Darron Leiker . § David Toogood § Stephen Santellana, Mayor § Mayor and Council Jim Dockery, Deputy City Manager/CFO § City Staff Paul Menzies, Asst. City Manager § R. Kinley Hegglund, Jr., City Attorney § Linda Merrill, Recording Secretary § Henry Florsheim, CEO § Chamber of Commerce and Industry Travis Haggard, V.P., BR&E § Adrene Wike, Research Associate § Brian Havins, Marketing § Tony Rindone § Owens Coming Jeff Mitchell § Aaron Bowling § Julie Miller § Jones Lang LaSalle James Bullard § Eagle Railcar Marc Walraven § Eagle Railcar Glenn Barham § Sheppard Military Affairs Committee ABSENT: Reno Gustafson, Vice PresidentiSecretary-Treasurer § Members Leo Lane § 1. Call to Order Dick Bundy called the meeting to order at 3:30 p.m. 2. Approval of Minutes (10/10/17) Darron Leiker moved for approval of the minutes. Seconded by David Toogood, the motion carried 3-0. 3. Financial Report -presellted by Jim Dockery The fund brought injust under $3.9 million in revenues in the last fiscal year, which amount was budgeted. The Board spent $6.3 million during the year, with several projects requiring large expenditures, including the Stanley building, USA 800, and Pratt and Whitney. Vitro has requested the first $1 million of the $3 million that was approved; the WFEDC is responsible for $2.7 million of the remainder, and Burkburnett for $300,000. The Board had a beginning cash balance of a little under $18 million, $10 million of which was encumbered. At the end of the year, just over $5 million was unencumbered. Revenues are projected at $3.8 million, with expenditures at $3.2 million. 4. Discussion of incentives for Owens Corning expansion Henry Florsheim said Owens Coming is considering consolidation of its facilities in Maine with its Wichita Falls facility. He introduced Tony Rindone of the company, and Julie Miller of Jones Lang LaSalle (JLL). Mr. Rindone said Owens Corning Fiberglass has three divisions -roofing, insulation, and composite solution, which division he represents. Wind energy is a main component of their business, as they make the fabric that goes inside the blades of the windmills as reinforcement. They are also looking to the future of replacing infrastructure by installing pipes within existing pipes. They provide reinforcement for any product that requires fiberglass. Their Wichita Falls factory was built in 1977 and is in the floodplain. They also lease a nearby factory. It has a low ceiling and is in poor condition. They are looking at the FedEx building across Randy Road from their existing site. They would expand that building by 110,000 square feet, and also buy the adjacent 20 acres and use it to build a retention pond. The total project cost is $16 million. They are seeking financial support to keep jobs here, and bring new ones. The local plant has 38-42 employees, and they would add 52 new jobs with this expansion. The average armual base salary is $48,000, plus benefits. The incentive plan would consist of the following: 1. 1 O-year forgivable loan of $1.3 million based on 90 employees 2. $2,500 employee training skills grant 3. Property tax abatement for 10 years They need to quickly finalize their site selection. Other options include Amarillo, Iowa, North or South Dakota. They would like to make it work in Wichita Falls. Mr. Florsheim stated that JLL has asked that the purchase of the City-owned property also be included in the incentive package, at a cost of approximately $70,000. So the actual request would be approximately $1.615 million, based upon the appraisal of the property. 2 Mr. Rindone said they would begin the engineering of the project in 20 18, and construction in 2019. Kinley Hegglund said the WFEDC's loan is guaranteed through a purchase money security interest and/or collateral. Mr. Rindone replied that each piece of equipment is valued at $1.5 million. Mr. Hegglund asked if there are prior liens on the equipment. Mr. Rindone said no. Mr. Rindone said they have had preliminary discussions with City Building Official Bobby Teague regarding the 110,000 square foot expansion. The initial feedback is promising. Mr. Toogood asked when the money would be needed. Mr. Rindone said they have already hired 12 new employees, and look to have all hiring completed by March 2018. Mr. Dockery said the property tax abatement is not approved by this Board, but rather, by the City and County. Mr. Hegglund said the process would take a maximum of 120 days. 5. Discussion of incentives for Eagle Rail Car expansion Mr. Florsheim said this is the third project from Eagle Rail Car. He introduced Marc Walraven and Project Manager James Bullard. Mr. Walraven thanked the Board for its generosity toward Eagle Rail Car. The company repairs/maintains railroad cars. They currently have 125 employees and anticipate reaching the 128 employee milestone shortly. Phase 3 involves the purchase of additional track, and for the purchase of a double overhead crane. In addition, they want to have an independent cleaning facility. This expansion would cost $1.6 million. They are requesting $500,000 of this cost, $350,000 in the form of a forgivable loan and $150,000 as cash for jobs. They will add an additional 32 employees over a three-year period. 6. Discussion of SMAC request for funds for development of BRAC strategy Glenn Barham was directed by the SMAC board to look into a BRAC strategy. Although the National Defense Authorization Act took BRAC out of the 2018-19 budget year, the Department of Defense may still reduce infrastructure. He requested proposals for a SWOT (strengths, weaknesses, opportunities, and threats) analysis. SMAC's executive committee chose the Spectrum Group from Alexandria, Virginia, at a cost of$50,000, plus an additional $6,000 for two trips to Wichita Falls by Spectrum. The WFEDC is being asked to fund 50%, or $28,000. Wichita County will be asked to fund 30%, or $16,800. Burkburnett and Iowa Park will each be requested to fund 10%, or $5,600. Burkburnett has already approved its contribution. In the event Wichita County or Iowa Park does not fund at the requested level, Mr. Barham asked the WFEDC to agree to cover whatever deficiency might remain. 7. Executive Session Mr. Bundy adjourned the meeting into executive session at 4:14 p.m. pursuant to Texas Government Code §551.087. He announced the meeting back into regular session at 4:37 p.m. The subjects posted in the Notice of Meeting were deliberated, and no votes or further action was taken on these items in executive session. 3 8. Motions Owens Corning Mr. Leiker moved, seconded by Mr. Toogood, for approval of an economic development incentive package for Owens Corning as specifically detailed in the offer letter furnished to the company, providing a forgivable loan in the amount of$1.32 million; skills training grants totaling $225,000; and land acquisition of $70,000, for a total 0[$1.615 million. The motion carried 3-0. Eagle Rail Car Mr. Leiker moved, seconded by Mr. Toogood, for approval of an economic development incentive package for Eagle Rail Car, as specifically detailed in the offer letter furnished to the company, providing $150,000 in cash for jobs over a three-year period; and a $350,000 no-interest forgivable loan for the purchase of a crane, on which the WFEDC will have collateral. The motion carried 3-0. CMH Manufacturing Mr. Leiker moved for approval of the resolution pertaining to the sale of property at 2400 Burkburnett Road to CMH Manufacturing, Inc., as presented in the Board's meeting packet. Seconded by Mr. Toogood, the motion carried 3-0. SMAC Mr. Leiker moved, seconded by Mr. Toogood, for approval of funding up to $50,400 to the Sheppard Military Affairs Committee for development of a BRAC strategy, contingent upon this amount being reduced as Iowa Park or Wichita County might contribute. The motion carried 3-0. 9. Adjourn Before adjourning, Mr. Dockery introduced new Assistant City Manager Paul Menzies. He will be attending 4A and 4B meetings to acquaint himself with the activities of these Boards, and is a source of good help and support for himself and Mr. Leiker. The meeting adjourned at 4:44 p.m. D ck Bundy, President 4