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4A Wichita Falls Economic Development Minutes - 03/01/2019MINUTES OF THE WICHITA FALLS ECONOMIC DEVELOPMENT CORPORATION March 1, 2019 PRESENT' Leo Lane, President § WFEDC Members David Toogood, Vice -President § Reno Gustafson, Secretary -Treasurer § Dave Lilley § Stephen Santellana, Mayor § Mayor & Council Bobby Whiteley, Councilor at Large § Jeff Browning, Councilor District 3 § R. Kinley Hegglund, Jr., City Attorney § Administration Jim Dockery, Deputy City Manager § Paul Menzies, Assistant City Manager § Karen Montgomery-Gagnd, Planning Administrator § Jennifer Babineaux, Purchasing Agent § Linda Merrill, Recording Secretary § Henry Florsheim, CEO § CCI Kevin Pearson, V.P., Economic Development § Scott Poenitzsch, Chairman § Katie Britt, Marketing Director § Adrine Wike, Director of Research § Sarah Harpole, Administrative Assistant § Hillary Robinson, Executive Assistant § Bradley S. Gray, Intern § Lindsye Boatman, Intern § Glenn Barham, President § SMAC Dick Bundy, President § BYSP Architects Martin Bohn § Cobra Kai/JPAG James Bullard, Plant Manager § Eagle Rail Car Cody Magana, Chairman § DWFD Jana Schmader, Executive Director § Tyler Sales, Board Member § Will Rutledge, Deputy Chief § Wichita Co. Sheriff Claire Kowalick, Journalist § Times Record News ABSENT' Darron Leiker § WFEDC member 1. Call to Order Leo Lane called the meeting to order at 1:30 p.m. 2. Financial Report Jim Dockery said three months of sales tax receipts have been received; the cumulative comparison to the prior year's same three-month period is an increase of 5.06%. The growth has been 7.3% over the past 12 months compared to the prior 12 months. The primary driving forces of that increase fall into three categories: (1) utilities, (2) retail, and (3) wholesale trade. These make up 70% of the growth; however, all categories are showing positive numbers. The Board has a budgeted unreserved fund balance of $5.7 million available for appropriation. 3. Approval of Minutes (1/17/19) David Toogood moved for pproval. Seconded by Reno Gustafson, the motion carried. 4. Discussion and possible approval of funds for Virtual Spec Building project. Kevin Pearson noted that the building size most requested by potential clients over the past couple of years is 30,000 to 60,000 square feet. Buildings of that size in Wichita Falls are scarce. Dick Bundy was here to show the attributes of a virtual spec building; which Mr. Pearson has used in the past with success. Dick Bundy showed a video presentation of a building that is now actually built to give the Board an idea of how the spec building would look. Both the 30,000 and 60,000 square foot buildings would be expandable by two times. Mr. Pearson noted a 30,000 square foot building could cost around $3 million; for $15,000, a virtual spec building is a low-cost alternative. It would take 30-45 days to pull this together. Mr. Toogood asked if this is only a visual aid, or if it came with blueprints. Mr. Bundy said it is only a visual aid, but it would save time getting to the actual production of drawings. It would also show preparedness. Mr. Pearson added that it would help market the business park. 5. Discussion and possible action relating to the award of City of Wichita Falls Bid #19- 10, Sheppard Air Force Base Main Gate Upgrade Project. Karen Montgomery-Gagnd reminded the Board that it had approved modifications to Benham Design Group's contract to incorporate additional options into the project scope for improvements to the City's Bus Transfer Plaza. This area has a big impact on the view corridor going into Sheppard's Main Gate. Any work done on the Transfer Plaza will be viewed as part of the Installation. The areas for improvement have been broken into three sections: Area A — sidewalk from bus area to main entry to Burkburnett Road and at point of exit from the Installation. This is the key visual area. Area B — to the east behind the bus shelters. Area C — to the north, sharing the property line with the Installation. The improvements to be made include: • benches; grading/detention; irrigation; landscaping; as well as six additional parking spaces in Area A • sidewalk area with lighting from the bus terminal to the main gate in Area A, and a sidewalk along Burk Road in Areas A and C There were two alternates for the plane -on -a -stick in the circle area. Based upon cost and size, the general's preference is Alternate 1. There will be a temporary sidewalk and a manned pedestrian checkpoint at the north property line; a scissor lift with lighting will be operational as of 4:30 a.m. March 11. This is a major collective partnership between federal, state and local entities. Federal funding was originally at $3 million and is now at $5.8 million. The WFEDC agreed to $1.5 million. The bids have revealed the cost of the project is much lower than anticipated. It is hoped that the DEEAG $1.5 million can be expended first, and then the remainder taken from the WFEDC funds, thus realizing significant cost savings for the 4A fund. Bids for the project were received from two local companies, Gary Baker Construction (base bid: $863,096) and Trinity Hughes Construction (base bid: $736,000), and from Terra Construction, from Oklahoma City (base bid: $668,100). The tabulation was broken down into base bid, and bid options 1-6 (with bid alternate 1 being the preferred option for the plane -on -a -stick). Bid options 5 and 6 allow for sod and irrigation in Areas B and C, and Bid option 7 is an alternative of hydro mulch. It is preferred by the Parks Department. It requires no irrigation, and is not as visible from the gate. Five staff members reviewed the bids using a matrix of price, time, past performance, experience, and safety records. Ms. Gagnd noted the bid documents made it clear that it was a best value bid, as opposed to a lowest bid. This would give the WFEDC members the opportunity to look at all the contributing factors to find the most advantageous contractor for this project. Staff recommends Terra Construction, Inc.'s base bid + Bid Alternate 1 + Bid Options 1- 4 + 7 = $668,100 + 76,500 + 465,300 + $79,100 = $1,289,000. This recommendation is based on not only the ranking, but also the fact that Terra was awarded the federal construction project from the Corps of Engineers. 6. Discussion and possible approval of incentives for Eagle Rail Car phase 4 expansion. James Bullard, Plant Manager for Eagle Rail Car, said the company wishes to purchase two parcels of property. Totaling approximately 30 acres, both have buildings on them that they could use. Their operations have outgrown their current location. They would use one of the structures for a training facility and paint storage. The biggest asset is the 26-acre tract for a storage yard. Eagle Rail needs to be able to receive unit trains. These trains consist of 100-110 cars, all of the same make, model and manufacturer, carrying the same commodity. This is very unique work; only three U.S. shops have this capability. Having this ability would create 32-35 hourly positions, including management staff. (They currently have 155 employees.) This would be done in multiple phases, requiring over 7,000 feet of track. They hope to handle up to three unit trains, and also have a paint and lining shop. Mr. Dockery asked the total amount of capital infrastructure investment over the life of the company. Mr. Bullard estimated $18 million by Eagle Rail. 3 Kinley Hegglund said the incentive is cash for jobs in the amount of $150,000, applied to 32 jobs over three years as set out in the chart in the incentive package, plus a forgivable loan of $450,000, forgiven over seven years, and secured by four rail switches and 7,200 feet of rail, with the WFEDC holding first lien. He asked Mr. Bullard if that was his understanding. Mr. Bullard said that was correct. 7. Discussion and possible approval of incentives for Cobra Kai expansion. Martin Bohn, owner of Cobra Kai Flight Academy and CEO of Joint Pilot Academy Grob, discussed a joint venture between Grob Aircraft from Germany and Cobra Kai, which involves cutting -edge technology to help the U.S. Air Force deal with the pilot shortage crisis. They are losing 400 pilots per year, and in three years' time, that number will increase to 650. The training would be proficiency -based, using artificial intelligence and virtual reality. High -end technology would be installed in the planes to create this kind of training. This new venture is attempting to develop a syllabus that is not time -based. For a pilot to graduate from a traditional flight school, he or she must have a certain number of flight hours. Under this new training, a student's knowledge and ability to learn is tested, and training is tailored to suit their individual needs. This is not done anywhere else in the world. To obtain a private pilot license, a minimum of 70 hours is required, yet they have done it in half that time with this new training. Most of the employees for this new venture would come from outside Wichita Falls. He promised the Air Force they would not steal instructors from the base. The salaries for the 21 instructor pilots would be at minimum $120,000. They would also need 50 maintenance technicians, and administrative staff. He also noted that an OEM facility would most likely be established here. Mr. Bohn said the Air Force is ready to fund the assessment center at $1 million. However, the start-up costs will be tremendous. He would like to request $1.5 million from the WFEDC. Of that sum, $350,000 would be used to build out their facilities, and $1.15 million for operations, including wages for the instructors. They would also request a forgivable loan of $500,000 for job creation over five years, perhaps, and they in turn would pay back $1 million within 24 months. They also anticipate needing more parking at Kickapoo, but that is not something that needs to be addressed at this time. Mr. Hegglund asked if any collateral could guarantee the loan. Mr. Bohn said he owns a $2.2 million simulator at the hangar that could be used. He added that Grob Aircraft owns 51 % of JPAG and he owns 49%. Mr. Hegglund asked if the deal is with JPAG. Mr. Bohn said there are different ways to do it. Mr. Hegglund asked if 4A action is required before the deal is struck with the Air Force. Mr. Bohn said there will be enough time once he knows exactly what the Air Force wants. Mr. Gustafson asked if the feedback from the WFEDC will help Mr. Bohn with the Air Force. Mr. Bohn said it is easier to make things happen if a community welcomes it. Mr. Lane suggested a motion of general endorsement. Mr. Hegglund said the Board could pass a motion to support the idea in general, but there is not enough information to proceed with an official motion. Mr. Dockery suggested an incentive letter. Mr. Florsheim said they could pursue that direction. 8. Discussion and possible action regarding Sheriff Duke's request to use Stanley Building parking area for construction staging. Mr. Florsheim said he was approached a few weeks ago by Sheriff Duke, who asked if the WFEDC would allow the new jail construction crews to use the parking lot at the Stanley Building for their personal vehicles. Sheriff Duke was not able to attend today's meeting, but Chief Will Rutledge is here to address the Board. Chief Rutledge passed out a map of the area. The blue area is the future parking area for the job site, but it will not be available for two to three months. In the meantime, they are asking to be allowed to park in the area marked in yellow. He added that they would have inmates from the jail clean up the area on a regular basis. Mr. Hegglund asked if Wichita County or the Sheriff's Office carried personal injury insurance. Chief Rutledge did not know; he referred Mr. Hegglund to Judge Gossom or Commissioner Beauchamp. Mr. Hegglund said it isn't a major point, but there is an issue of liability. 9. Discussion and possible approval of I)mmtow n Wichita Falls Development proposal for downtown economic development position. Cody Magana discussed the proposal for an additional downtown economic development position. A lot of organic growth is happening downtown, but it is time to move to the next step. After surveying many business owners and industry leaders, it was determined that there is no one place where potential buyers or developers can go to get questions answered regarding the buildings downtown, including roof conditions, occupancy rates, plumbing, etc. They want to make a huge database for all of this information. The proposal spells out what they hope to accomplish with a contractor. They request $107,500, as follows: o Compensation: $50,000 o Website and Platform Construction: $7,500 o Targeted Marketing & Travel Expenses: $25,000 o Organizational Overhead: $25,000 Mr. Lane asked if they anticipate the contractor to be a firm or a person. Mr. Magana said an individual. He then asked if the ongoing costs would remain the same. Mr. Magana said there would be front-end investments into programs they would have to buy for the database, and for them to attend trade shows. Janna Schmader said they hope to build the foundation necessary to move forward. Currently, it is difficult to take a developer through the process, as there is not that one place to go. Mr. Dockery asked who would be the liaison with this developer, once the inventory is complete. Mr. Magana said it would be Downtown Development. Mr. Dockery asked if they envisioned the need for any additional personnel. Mr. Magana said this contractor could fill two roles, by creating these assets while also using them through marketing and travel. The existing staff would also join in with that. Mr. Toogood noted the City's economic development strategy was to designate an economic development position specifically for downtown. He asked if this person is that individual, or related to that strategy. Mr. Magana said that a point of contact would help a developer, and he hoped that person would be housed in their office. He, Ms. Schmader and this contractor could handle everything in-house. Mayor Santellana asked Ms. Schmader if this was taking her away from what she was already doing. She said they already wanted her job and Downtown Development to grow, and she has been taking on additional responsibilities and forming those necessary relationships. Mayor Santellana asked how many property owners are willing to give up information on their buildings to be included in the database. Mr. Magana said a lot of information can be gleaned from the tax rolls. Ms. Schmader added that some regulatory changes may be coming out of the Downtown Development Steering Committee, if approved by the Council, that would require some information to be provided. 10. Discussion of dates for visits/survey from Opportunity Strategies. Mr. Lane furnished dates to the members when Opportunity Strategies could be in Wichita Falls and asked them to email him with favorable dates from those available. 11. Executive Session Mr. Lane adjourned the meeting into executive session at 2:54 p.m. pursuant to Texas Government Code §§551.072 and 551.087. He announced the meeting back into regular session at 4:23 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. 12. Motions Virtual Spec Building project No action was taken on this item. Sheppard Air Force Base Main Gate Upgrade Project Mr. Toogood moved to recommend the award of the base bid, with Alternate 1, and Bid Options 1-4 and 7, to Terra Construction in the amount of $1,289,000. Seconded by Mr. Gustafson, the motion carried 3-0. Mr. Hegglund noted that Dave Lilley filed the appropriate paperwork to recuse himself from the vote of this item since his company had submitted a bid on the project. He had not participated in any of the discussion or deliberation; everything was handled appropriately for this meeting. Eagle Rail Car Phase 4 Expansion Mr. Toogood moved to approve an incentive package for Eagle Rail Car's Phase 4 expansion in the amount of $600,000, broken into $150,000 as cash for 32 jobs over three years pursuant to the chart in the offer letter, and as a $450,000 forgivable loan over seven years, secured by four rail switches and 7,200 feet of rail, with the WFEDC holding first lien. Seconded by Mr. Gustafson, the motion carried 4-0. Cobra Kai Expansion Mr. Hegglund explained that the WFEDC's posted notice for today's meeting refers to possible approval of incentives for Cobra Kai expansion. However, a separate company, JPAG, is making this request, so this will have to be brought up at a subsequent WFEDC meeting and posted with the proper company name. This will also give staff a chance to clarify some action points. 6 Stanley parking area for construction staging Dave Lilley moved to authorize staff to draft a contract with Wichita County on behalf of the Wichita County Sheriff's Office to allow the Sheriff's Office personnel to use the Stanley Building_ parking lot, as that area was outlined in yellow on the map furnished by Chief Rutledge; further, to authorize the WFEDC President to sign said contract if negotiations with the County are successful, which negotiations shall include the County greein to o repair any damages sustained by the parking lot during such use. Seconded by Mr. Gustafson, the motion carried 4-0. Downtown Wichita Falls Development proposal for downtown economic development position No action was taken on this item. 13. Adjourn Dave Lilley moved to adjourn the meeting. The meeting adjourned at 4:32 p.m. Leo Lane, President