4A Wichita Falls Economic Development Minutes - 06/18/2020MINUTES OF THE
WICHITA FALLS ECONOMIC DEVELOPMENT CORPORATION
June 18, 2020
PRESENT'
Leo Lane, President § WFEDC Members
David Toogood, Vice -President §
Phyllis Cowling §
Darron Leiker §
Bobby Whiteley
§ Councilor at -Large
Paul Menzies, Assistant City Manager § City Staff
Blake Jurecek, Assistant City Manager §
R. Kinley Hegglund, Jr., City Attorney §
Linda Merrill, Recording Secretary §
Henry Florsheim, CEO § CCI
David Leezer, Vice President of Business Attraction §
Travis Haggard, V.P., Business Retention & Expansion §
Scott Poenitzsch, Chairman §
Ripley Tate, Past -Chair §
Mark Dora, Member
Anthony Inman, Member
Bob Carter, Chairman
Blake Carter, VP, Business Development
Scott Evans, Executive Vice President
PRESENT'
Reno Gustafson, Secretary -Treasurer
1. Call to Order
Leo Lane called the meeting to order at 3:00 p.m.
2. Financial Report
§ 8600 Central Venture
§ Panda Biotech
§ WFEDC Member
Paul Menzies noted that the sales tax report for June was better than anticipated. Reflective
of April's receipts, it covered the full month of the City's economic shutdown due to the
coronavirus pandemic. Some estimates had the loss as high as 40% less than the same time period
a year ago. However, the receipts came in at only 11.5% less. Normally that would not be good
news, but it exceeded expectations.
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The cumulative for the year is a little more than 1 % less than the same time period last
year. The next benchmark will be May's receipts, which will show whether the City is seeing a
semblance of recovery.
The staff and Chamber personnel audited some of the Board's existing projects to
unencumber some money. For example, the DEEAG grant is closed out, from the City's
perspective. That unencumbers about $1.2 million. Three hundred thousand dollars was
unencumbered from the Vitro project, at the Burkburnett Economic Development Corporation
paid that sum, giving the fund a $1.5 million increase in available cash.
3. Approval of Minutes (May 21, 2020)
David Toogood moved for approval; seconded by Darron Leiker, the motion carried 4-0.
4. Discussion and possible action related to Panda Biotech recruitment project
Henry Florsheim presented this project. Panda Biotech is an industrial hemp processing
company that is looking for a location to get a large project started. The company intends to make
a $9 million capital investment, with an initial creation of 50 jobs. This project, brought to the
Board by David Leezer, has the ability to have a positive impact on the agricultural community.
The incentive package includes a $2 million forgivable loan; cash for jobs of $350,000; up
to $150,000 for rehabilitation of the rail spur leading into the former Delphi facility; and relocation
assistance of up to $300,000.
Scott Evans, Executive Vice President, said Panda Biotech was formed two years ago on
the strength of the potential in industrial hemp. It is a processing facility that takes hemp straw and
turns it into textile grade fiber. It is then sold to major brands to blend with other fibers to make
clothing.
The residual product from the hemp is called the hurd. It has several applications, including
animal bedding and bioplastics. It has the potential to bring a lot of ancillary businesses to the area.
They had originally thought to locate in the high plains area, but the incentives offered for
this project offset the capital it will take to move the hemp straw produced elsewhere. This area is
not the first site choice from the agricultural side of things. A lot of revenue will be made simply
from shipping.
In addition, he was pleasantly surprised at the condition of the Delphi building.
Bonds in the amount of $80 million have been approved to be sold on the company's behalf
with the State of Texas. They are in the process of raising $30-35 million in equity, as well. The
company donated 60 tons of hemp seed to the state to kick start the industry. A lot of that seed did
come to this area, and trials are ongoing.
They have big aspirations. There is no large-scale processing facility in the country, but
this project will fill that missing link in the supply chain. Household name brands are excited to
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get this hemp fiber, as it is a more sustainable option than cotton or other materials. They not only
want to use the hemp, but also want the Texas logo on their product.
They intend to hire fifty employees to start, ranging from engineers and mechanics
($100,000 to $200,000 salary range), to labor jobs ($20.00 per hour). They could easily fit three
lines in the building, increasing to 200 jobs.
Mr. Florsheim said this type of industry attracts a lot of media coverage. If it is a right fit
for Wichita Falls, it stands to put the community on the forefront of the industrial hemp industry.
5. Discussion and possible action related to Braun Intertec work at ATCO building
Mr. Florsheim said it was very clear after the Board's last meeting that there was confusion
about the financials regarding Braun Intertec. Some questions did not get asked that probably
should have been asked that that meeting. He ran through the financial
February 20, 2020
Braun Intertec had been paid $235,000
Outstanding balance of approximately $50,000
Total liability: $285,000
Motion at this meeting was to approve an amended contract with Braun Intertec to finalize
the work that has been previously agreed to in the three prior contracts, coupled with the new
proposal with an addendum stating that the monies owed will not exceed $90,000.
The vote changed the maximum owed to Braun Intertec to $325,000 ($235,000 + $90,000)
February 2020 - May 1
$50,000 in additional work was performed by Braun Intertec.
$285,000 had been paid ($235,000 + $50,000)
Left $40,000 to be paid ($325,000 - $285,000)
May 21, 2020
Motion to retract the 2/20/20 approval of the Braun Intertec contract, and adopt the contract
presented today (5/21/20) to complete the work, including the work to be done on the additional
9-acre tract to the south, at a cost not to exceed $60,000.
As of this date, $285,000 in work had been done.
Points of contention:
Scenario 1: If the May vote meant the $60,000 was the maximum that could be spent after
that date, then the $285,000 + the new $60,000 = $345,000. This would mean the correct amount
of expenditures have been approved to wrap up the work currently under contract.
Scenario 2: If the $60,000 motion took the place of the $90,000 motion, then $235,000 +
$60,000 = $295,000. As $285,000 has been paid, that would leave only $10,000 available to spend
on the new agreement, and would leave $50,000 unallocated.
There is around $40,000 in the existing professional services budget that could be used for
this project; however, that would not cover the $50,000 shortfall in Scenario 2.
The concern is, have sufficient funds been allocated by the Board, and has the Council
approved the right budget amendment?
Ms. Cowling requested a hard copy of this presentation, and copies were made available
to the Board.
6. Executive Session
Mr. Lane adjourned the meeting into executive session at 3:32 p.m. pursuant to Texas
Government Code §§551.072 and 551.087. David Toogood 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 were taken on these items in executive session.
7. Motions
Darron Leiker moved to approve the incentive agreement for Panda Biotech for the project
discussed at today's meeting, as outlined below:
• WFEDC will grant Panda Biotech a $2 million forgivable loan, so long as the company
creates and retains 50 jobs over a period of five years; the loan will be forgiven at a rate
of 20% for each of those five years.
• WFEDC will have first lien on the building and land at 8600 Central Freeway North in
Wichita Falls, Wichita County, Texas.
• WFEDC will grant cash for j obs in an amount not to exceed $350,000 to Panda Biotech.
• WFEDC will grant relocation costs for those employees hired outside of Wichita
County, Texas, who locate to an area within the County, not to exceed $300,000.
• WFEDC will reimburse expenses for repair of the rail spur on the property located at
8600 Central Freeway North in Wichita Falls, Wichita County, Texas, in an amount
not to exceed $150,000.
Seconded by Ms. Cowling, the motion carried 3-0 (Leo Lane abstained from voting).
8. Adjourn
The meeting adjourned at 4:28 p.m.
Leo Lane, President
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