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4A Wichita Falls Economic Development Minutes - 02/17/2022 AMENDED MINUTES OF THE WICHITA FALLS ECONOMIC DEVELOPMENT CORPORATION February 17,2022 Present: David Toogood,Vice President § WFEDC Members Phyllis Cowling, Secretary-Treasurer § Darron Leiker § Brent Hillery § Bobby Whitely,Mayor Pro-Tem § Council Paul Menzies,Assistant City Manager § City Administration Blake Jurecek,Assistant City Manager R. Kinley Hegglund,Jr., City Attorney § Russell Schreiber,Director of Public Works § Jessica Williams, Chief Financial Officer § John Burrus,Dir of Aviation,Traffic,&Transportation § Terry Floyd,Director of Development Svcs Chris Horgen,Public Information Officer § Jon Waltjen,Airports Administrator § Andrea Kidd,Public Information § Paige Lessor,Recording Secretary § Henry Florsheim, President, and CEO § WFCCI David Leezer, V.P. Business Attraction § Tony Brumley § Dental Planet/DuraPro Nicholas Whittington § Peyton Cannedy representing Dental Planet § Sherrill&Gibson,Attorneys at Law Scott Poenitzsch § Delta T Thermal Solutions Michael Stanford § Absent: Leo Lane, President § WFEDC Member 1. Call to Order David Toogood called the meeting to order at 2:32 p.m. Mr. Toogood stated that even though the item was not on the agenda,representatives from Panda Biotech were at the meeting to give an update on construction and progress. Mr. Hegglund asked if that agenda was listed. Mr. Toogood explained that it was not on the agenda but that it was just an update and that no action would be involved. Mr. Hegglund explained that to have a discussion item without it being posted would be a violation of the Open Meetings Act.Mr.Leiker asked if anyone knew they were coming and if they were missed on the agenda. Mr. Hegglund Amended WFEDC Minutes 2/17/2022 Page 1 of 10 and Mr. Menzies stated that they did not know the representatives were coming.No discussion or action was taken regarding Panda Biotech.The meeting proceeded according to the posted agenda. 2. Discussion and possible action related to collateral agreements with 707 North Scott LLC/Dental Planet/DuraPro Enterprises. Mr. Florsheim addressed the Board about Dental Planet and its continued growth in Wichita Falls. He reminded the Board that the original agreement was with the property owner at 707 North Scott.Mr.Florsheim explained that the new owners of Dental Planet were in the process of purchasing that property. The new owners would like to take on the responsibility of the incentive agreement,which was not in their name. As they are working through the process,their bank has requested a first position on the collateral, which conflicts with our existing agreement. Mr. Florsheim further stated that he has been working with the new owners and their attorney, Peyton Cannedy from Sherrill and Gibson. There is a proposal to amend the agreement. Mr. Florsheim then calls upon Mr. Cannedy to address the Board. Mr. Cannedy introduces himself to the Board and explains that he represents Dental Planet and DuraPro Enterprises. The purpose of the agenda item is to request the WFEDC's cooperation in moving forward with the purchase of 707 North Scott Ave from its owner, 707 North Scott, LLC. Mr. Cannedy introduced Nick Whittington and Tony Brumley, the owners of DuraPro and Dental Planet. Mr. Cannedy briefly explained the agreement between the WFEDC and 707 North Scott, LLC. He said that the WFEDC and 707 North Scott, LLC entered into a forgivable Combined Promissory Note of $327,310 in 2014, secured by a Deed of Trust covering the Property. In connection with the Promissory Note, WFEDC and 707 North Scott, LLC entered into a Performance Agreement outlining the terms of the note forgiveness. As long as 707 North Scott, LLC employed 30 full-time employees or leased to a tenant who did, the total annual payment of principal and interest would be forgiven. If 707 NS or its tenant failed to reach this employment threshold, it would be required to pay the shortfall amount proportional to each position under 30. Since entering into this agreement, 707 NS has leased the property exclusively to Dental Planet. Since the date of the note, $224,753 has been forgiven, and $4,364 has been repaid. Dental Planet has met the qualifications of the agreement for note forgiveness each year except for 2020, in which they fell short by four employees, in part, due to the, pandemic. A balance of$98,193 remains on the note to be forgiven over the next three years or,if qualifications are not met,to be repaid. Mr. Cannedy goes on to describe his request. He states that part one of his request is that the WFEDC consent to DuraPro's assumption of the existing loan to 707 NS. Secondly, DuraPro would like WFEDC to subordinate its current lien against the property to a new bank lien for DuraPro to finance the remaining portion of the purchase price. Mr. Cannedy stated that he believed it was a win-win for all parties involved. It would return Wichita Falls property to local hands and is low risk. Mr. Cannedy thanked the Board and asked if anyone had any questions. Mr. Toogood asked the amount of the first lien. Mr. Cannedy replied that it is approximately $330,000 and explained that they met with a realtor and received a property valuation of about $500,000. Mr. Leiker stated that he was concerned because a second-line position is not worth much and asked if another option might be for DuraPro to get a bank letter of credit covering that difference to protect the taxpayers' investment. He explained that the first lien position was necessary when the deal was made and was WFEDC's collateral. He stated that the WFEDC is being asked to give up that collateral plus approximately$300,000 essentially. Mr. Cannedy responded by saying that he doesn't think the WFEDC would be giving up the collateral. Amended WFEDC Minutes 2/17/2022 Page 2 of 10 The collateral is half a million dollars, and the WFEDC will have a first bank lien and $330,000. So that's roughly $170,000 in equity that would be available if something were to happen. Mr. Cannedy then reiterated that the Company had met the qualifications of the performance agreement for the last seven years, except for the pandemic year. Ms. Cowling asked for clarification, verifying that the amount owed was not over $300,000 but was roughly $100,000. Mr. Cannedy confirmed that she was correct. Ms. Cowling also verified that in addition to the WFEDC, there are two different parties, a property owner and a tenant, but if this deal goes through, the property owner and tenant will be the same. Mr. Cannedy reaffirmed Ms. Cowling's understanding. 3. Discussion and possible action related to Delta T Thermal Solutions manufacturing project. Mr.Flosheim explained to the Board that Tranter Manufacturing announced that they were going to shut down this facility and move their manufacturing from that facility to Houston last year. Wichita Falls lost about one hundred jobs. However, they are keeping 15 to 20 employees in Wichita Falls, and they are renting space on the second floor of the Hamilton Building. A local group has formed that has expertise in this industry and the heat exchanger industry. They are in the process of purchasing some of the product lines, the facility, and the equipment from Tranter to take on some of that business. Mr. Florsheim introduced the Company, Delta T Thermal Solutions, and its representatives, Scott Poenitzsch and Michael Stanford. He explained that the Company is requesting a cash-for-jobs incentive. Mr. Poenitzsch introduced himself and Mr. Stafford, who represents the interests of the Sharp Iron Group. Mr. Poenitzsch proceeded to make a presentation to the Board. He explained that the project he is describing is called New Beginnings and that it is an acquisition of certain identified Tranter assets. He gave some background information explaining that Tranter,a wholly- owned subsidiary of the Swedish multinational corporation Alfa Laval AB, established operations in Wichita Falls in the mid-1960s. Tranter Inc. manufactures industrial heat exchangers for worldwide applications such as oil and gas, marine, HVAC, ethanol, food processing, and heat recovery. In May 2021, Tranter announced the closing of its Wichita Falls facility and the relocation of office and manufacturing operations to the greater Houston area. The Wichita Falls area lost approximately 115 manufacturing and office jobs. Additionally, the impact this move had on secondary and tertiary businesses in the area is estimated at $1.75 million to $2.25 million. These businesses are direct material suppliers, including Kalco, Construction Bolt, and Sharp Iron, and maintenance, repair, and operations (MRO) suppliers such as WebFire, Texoma Freight, and AirGas. Delta T was formed in late 2021 under the umbrella of the Sharp Iron Group,the managing partner from now on. Delta T plans to acquire three of five product lines from Tranter, Platecoil, Eonocoil, and Maxchanger. Tranter is transferring the other product lines to Houston. The three product lines to be purchased represent about 35% to 40% of the total revenue of Tranter at the time of its closure. Delta T is also planning to acquire the Tranter facility on Old Burk Highway and create up to 60 direct manufacturing and manufacturing-related positions for the local economy. These roles would be in manufacturing, asset procurement planning, sales, customer support, engineering, and quality assurance. Mr. Poenitzsch described the type of exchanges that would be manufactured. The Platecoil product line goes back to the early 1930s, and it is well recognized as a brand in the marketplace. Amended WFEDC Minutes 2/17/2022 Page 3 of 10 Mr. Poenitzch presented photos of examples of the Platecoil products. One example is a curved heating surface that can go on the outside of a take. Another example is a coffee bean dehydration system. And the third example is the immersion bank heater. He explained that immersion bank heaters are used to warm the tanks in which the dolphins swim in front of the Mirage in Las Vegas. Mr. Poenitzch described the second product to be acquired, Econocoil. He told the Board that the products as having a pillow pattern. He explained that the Flue Gas Waste Heat Recovery Bank could be used during a process operation that generates much heat.The recovery bank can recover the heat lost and then circulate it back into another process within the same facility. Jacketed-Process,Tanks are commonly used in the beverage industry, such as wine and beer production. The cooling jackets are placed outside to pull heat from the tank while alcohol is chemically processed. The last example of an Econocoil is drum heating. When the weather gets well below freezing in the northern states and liquid is stored in drums,these jackets can be placed around the drum to heat the fluid to improve flow from the drum. The third product to be acquired is the Maxchanger. These are found in oil and gas skid operations, both upstream and midstream. They are made from titanium or stainless, and they have high pressure and high heat ratings. The size of the unit in the photo is approximately 24 inches long, 3 inches thick, and 4 inches wide. It is made of titanium and sells for roughly $45,000. Mr.Poenitzsch described the structure of the Company moving forward.He explained that he would assume the role of President of Delta T Thermal Solutions. He will be hiring a sales force, manufacturing, quality assurance, and design engineering. Being a group company under Sharp Iron, they will share services under accounting, IT, and human resources. He would like to employ 58 to 60 people over three years, 19 of which will be in the office and 39 on the shop floor, with an estimated payroll of about $3.1 million. He anticipates much local business-to- business procurement with MRO suppliers and direct material suppliers. The estimated annual taxes by the organization to the City is $50,000, the County $50,000, and the WFISD is $80,000. The Company is acquiring the facility and real estate for $2.23 million and the product assets and manufacturing equipment to produce the three product lines for$250,000. Additionally, the Company is investing $1 million of capital to acquire raw materials to get the product started again and some-additional startup expenses. The request to the Board is a cash-for-jobs incentive. Mr. Poenitzsch anticipates that the Company will have at least 58 jobs 2after three years. His expectation for the first year is about 30 jobs. He explained that as he looks at the product in the market, currently, there is a void. These products have not been produced, and several reps in the industry say there is pent-up demand. It is difficult to understand how quickly the demand will come back, and Mr. Poenitzsch's concern is that it will return faster than he expects. He reiterated that the Company is committing to25 or 30 jobs in year one with the understanding of up to 58 positions over three years. He then asked if there were any questions. Ms. Cowling asked if the positions that Tranter kept in Wichita Falls would remain with Tranter or if they were going to transfer to Delta T. Mr.Poenitzsch said they would remain Tranter employees. Ms. Cowley reaffirmed that 58 jobs being referenced are in addition to the 15 or 20 that remain withTranter. Mr. Poenitzsch clarified that the individuals officing on the second floor of the Hamilton Building are engineers and product design engineers servicing the Tranter location in Houston. 4. Discussion and possible action related to development of industrial property at Wichita Falls Regional Airport. Amended WFEDC Minutes 2/17/2022 Page 4 of 10 Mr. Florsheim addressed the Board about aerospace as a target business attraction for Wichita Falls. He explained that communities that do a fine job with airspace-related economic development have industrial sites at their airport because the companies can fly in airplanes or helicopters and provide services to them on site. We have never had that,but we have talked about it before. He stated that a couple of prospects are looking for airport frontage property to be able to fly in a few aircraft at a time and service them. David Leezer has been working with them and spending time with John Burrus and John Waltjen from the airport They identified an opportunity to potentially develop some industrial property near the airport for these and other potential prospects. Mr. Florsheim calls on Mr. Leezer and Mr. Burrus to give the Board more details. Mr. Leezer explained to the Board that they are looking at potentially creating a second business park on the north side of Wichita Falls. The ideais to promote I44 and the airport. We've had some interest, and we need to move forward now. He has been working closely with John Burrus and John Waltjen,and they have seen an opportunity for some land around the airport. Mr. Menzies and his team have helped out immensely in the attempt to acquire the land. Today's request is no more than $75,000 for the options, potentially for Geotech, for phase one environmental. Additionally,this will allow for some federal funds to help acquire it. Mr. Leezer then deferred to Mr. Burrus for further explanation. Mr. Burrus stated that there is approximately $13.6 million of FAA funding over the next ten years that the City has no use for right now. He also noted that a company approached the City to open an operation in Wichita Falls and if the Board would be inclined to support this project, an even bigger project could be in the works. The entire $13.6 million in federal funds could be used toward that project. Mr. Leezer opened up the discussion for questions. He remarked that he believes this project will be a great thing to market and expand the availability of Wichita Falls because they do a great job out there. It would be a lot less expensive than doing something like this at DFW or Oklahoma City. Ms. Cowling asked for confirmation that the$75,000 would be inclusive of the site studies and securing the option on those properties to lock in pricing, so there is no escalation just because we are interested. Mr. Leezer reaffirmed the statement by Ms. Cowling and reiterated that Paul's team had done a great job. Mr. Leiker,asked if the cost estimate was accurate and if Mr. Leezer believed the amount would cover phase one. Mr. Leezer explained that he did two Geotech Reports for sites seven and eight, and the total of the two reports was $23,000. He also stated that he spoke to an engineering firm that estimated $15,000 to do a phase one study last year. Mr. Toogood asked if there were any restrictions on development since it is a joint-use field and if there have been any discussions with the Air Force. Mr. Burrus said there had been no-discussions yet because he wanted to get the options to secure the land before it was made public. Discussions with the Air Force will be the very next step. He explained that there is minimal space on the current leased property to do the project, so at a very minimum,they are looking at a"through the fence" agreement with Sheppard or seeing if we can expand our lease footprint. Mr. Leiker asked for clarification about communication with the Air Force. Mr. Leiker said he thought there were some initial meetings, and he did not want to leave anyone with the impression that the City had not been communicating with Sheppard AFB. Mr. Burrus explained that yes, there had been general discussions with the heads of each division like property management and airfield management but no one above the rank of colonel. The next step would be to formally up through the Department of Defense and the United States Air Force. Mr. Hillery asked if that would be a better location than Kickapoo Airport. Mr. Burrus explained that the Amended WFEDC Minutes 2/17/2022 Page 5 of 10 regional airport has a runway that is 13,000 feet long, and there are only five runways of that length in a five-state area which puts Wichita Falls at a significant advantage. Other possible industries being looked at are regional jet repair and maintenance, including sizeable aircraft, and Kickapoo is limited to 5,000 feet. Mr. Burrus said that this was not the first request like this to be made. Covid caused things to quiet down, but it is starting to pick back up with several groups becoming highly interested. Mr. Burrus explained that this is definitely a project that can be done from what he has seen. Mr. Burrus further explained that 13.6 million after the local match would generate about 15.1 million. The project would include the construction of a taxiway and apron. Mr. Burrus explained the Military Airports Program, and that is how the terminal building at Regional was built. Under that program, you can use FAA dollars to build hangars. There could be construction of up to fifty 60,000 square foot hangars to handle up to three Embraer-type aircraft. The jobs that would come with this project would pay anywhere from$25.00 per hour to $50.00 per hour.Mr.Burrus expressed that there was a lot of potential with this project.Mr.Leezer said that after talking with site consultants, the Aviation Aerospace industry is coming back big time. He will be representing Wichita Falls at an aviation aerospace MRO trade show soon and thinks it is in the best interest of Wichita Tails if he can describe what we are in the process of proposing and building. He believes having Sheppard Air Force Base is an asset because of its capabilities and the type of people who retire or leave the military. 5. Discussion and possible action on a request by the City of Wichita Falls related to the existing WFEDC-funded MPEC/Hotel Parking Lot Project. Mr. Jurecek addressed the Board.He explained that he would like to revisit a request made back in 2017 involving the expansion of the MPEC Parking Lot. Mr. Jurecek described the location of the construction of the new hotel. He explained that the new hotel is being constructed on the MPEC parking, which has displaced a lot of parking. Mr. Jurecek described the MPEC Hotel and Conference Center Project, explaining that it is a $48 million investment into the WICHITA FALLS community by Tim O'Reilly and his hospitality company. The hotel and conference center will be a 200-room full-service Delta by Marriot, owned and operated by O'Reilly Hospitality. He further reminded the Board that the WF4BSTC issued $19 million in revenue bonds to fund a portion of the conference center. He described the conference center explaining that it would be approximately 35,000 square feet. Mr. O'Reilly and his group also have an option to build a limited-service hotel right in this area. Mr. Jurecek talked about the project's economic impact, explaining that WF4BSTC hired a company to conduct a market study on the hotel's local economic impact and feasibility. During the construction phase, there will be 295 jobs for the first two years. Then, the study shows a$44 million impact on our local economy for the next ten years. So there is a total impact of approximately 84 million. Once the hotel is up and running,there,will be 116 additional jobs in the area. He explained how the hotel occupancy tax would impact the economy by about 500,000 for the first ten years. Mr. Jurecek then went on to explain the history of the request. In May 2017, when the original proposal was made, Biggs and Matthews estimated a cost of$1,000,000. At that time, WFEDC agreed to fund 50% of that cost. This project is 100% eligible to be funded by the WFEDC. Mr. Jurecek described where the current parking is located and the location of the initially planned parking additions. He explained that the need for more parking arose because the original Amended WFEDC Minutes 2/17/2022 Page 6 of 10 plan for the hotel was to be 150 rooms, and now it will be a 200-room hotel, so the displacement of parking has increased significantly.He explained that Parking Lot K would need to be expanded to 324 parking spaces. He further described the location of all the additional parking to be constructed and that there will be RV hookups. He also reminded everyone that construction costs have significantly increased over the last five years. Further,he went on to explain the current phase of the project. Public Works published the bid in January, and bids were received in February. Freeman Construction came in with a low bid at just a little over $2 million for the project. Mr. Jurecek described that one of the parking lot expansions was formerly a housing addition, so all the utilities are down the middle of the parking lot and will have to be moved. The process with Oncor has started to move those utilities, which is an 80,000 to 85,000 expenditure. The contract will go to the Council on March 1, and he hopes to begin construction in April and have it complete by the end of June or July 1, definitely before the Hotter'n Hell. He stated that today's request is to increase the funding for the parking lot replacement project from $497,000 to $1,000,000. This amount is equal to half of the price of the entire project. Mr. Jurecek asked if there were any questions, and Mr. Toogood asked if WF4BSTC had decided to increase its funding. Mr. Jurecek said yes, 4B is funding the other half of the project.No other questions or comments were made. 6. Strategic Discussion Mr.Florsheim addressed the Board and indicated that he had two subjects to discuss. First, he updated the Board about the Community-Wide Strategy and thanked the Board for funding the process and facilitator. Mr. Florsheim explained that the Falls Future Team met for the first time with Matt DeVeau in mid-January, and the group meets again next week to take the following steps. The team released an online survey both in English,and Spanish, and they ended up with around 3,300 responses. According to Matt, this is a valid enough response to give some good feedback.The team will be reviewing the survey results at next week's meeting and Matt's research as to where Wichita Falls is as a community right now. That information will help inform the group as they work on updating the strategy over the next four months. Mr. Florsheim then made a brief presentation about a study published by the Company, Polycom, and Wichita Falls's ranking in that study. According to its website, Polycom analyzes local and state economies' dynamics and offers solutions and ideas on how to improve those economies. Wichita Falls did not fare too well in this ranking. This particular ranking looks at metropolitan statistical areas (MSA). The Wichita Falls MSA comprises Wichita County, Archer County,and Clay County.Polycom's definition of an MSA is an area with at least a 50,000-person population. The MSA must have an adjacent territory with high economic interaction, meaning people go back and forth across the borders to do commerce. There are 384 MSAs in the country, and this ranking looks at all of them. Wichita Falls is not only compared with communities our size, but with MSA's such as Seattle, which ranked number one. Wichita Falls's current ranking on the list is 379 out of 384. The ranking also shares communities' changes in employment during COVID. For Wichita Falls, it was -5.1%,which ranked 232 out of 384, so the 5.1% loss was not anywhere near the worst-performing communities. Mr. Florsheim explained that this ranking is a twenty-year scale. Starting back in 2005, Wichita Falls was ranked 269 and 234 in 2006. The ranking began to change from there. Mr. Florsheim stated the labor force was growing in the year 2000 and was growing every year until 2004, and then it started to take a hit. Sheppard AFB lost a big medical mission and many high-paying local jobs moved Amended WFEDC Minutes 2/17/2022 Page 7 of 10 away. With the rest of the country, Wichita Falls entered a pretty big recession, and then around the last part of that decade, Wichita Falls lost thousands of industrial jobs with companies like Saint-Gobain Vetrotex and all the spin-offs that supported them. Between 2004 and 2015,Wichita Falls lost around 10,000 people from its workforce, and in 2010 Wichita Falls entered the worst drought we'd ever seen.Then in 2016,the labor force started to grow again modestly,then dropped a little in 2019. Since 2019, we have held our own, then recently, numbers have begun to grow again, and we are now back around 2016 figures. Mr. Florsheim summarized by saying that the rankings in the study are not actually who a community is today,but a look at the last 20 years with a bit of higher weight given to the previous five years. He explained that it is hard to rank a company today when you include years like 2004 to 2015. He explained that all the bad years are still incorporated in this data. He stated that he wanted to give the Board an overview of the tool, how the Company uses it, and how it compares to our labor force. Mr. Florsheim stated that the good news is that Mr. Leiker has told the Board multiple times that sales tax collections are up and retail sales are up. And everyone knows what home sales look like right now. Mr. Florsheim stated that the labor force is growing, and the numbers that are being looked at today are better than before. He asked if anyone had any questions. Mr. Leiker stated that he would clarify the methodology of this study. He noted that a significant component of the study is based on wage rates, and Wichita Falls has historically had low wage rates going back 40 years or more. But there is another side that the study does not include: the cost of living and Wichita Falls's cost of living is low. So the cost of living offsets the labor. Mr. Florsheim stated that Mr. Leiker was absolutely right. He explained that another community could have a higher wage rate but a much higher cost of living,and it would be ranked higher because the wages are higher.Mr.Florsheim reiterated that the cost of living is not included in the study. Ms.Cowling expressed that she has looked at reports on the highest performing cities from the Milken Institute for years. She said she looked at the 2021 study, and it is similar to Polycom, but the study does separate the MSAs into small, mid-size, and large groups. Wichita Falls is in the lower half of the small group of around 200. She did see some good news out of that study, and it was that we saw some wage growth, and Wichita Falls was 48 out of 200. She said it gives her hope that Wichita Falls is making up a little ground. She explained that everyone should be looking at this in two ways, comparing ourselves to ourselves(are we getting worse or better) and comparing ourselves to others. If we are not getting better more quickly than others,we are falling behind. She explained that she has said that we have to give ourselves credit for the progress that has been made but that we should not rest on that progress. She explained that we should continue to look into the manufacturing sector but asked should we not be looking into "high tech."Because there are higher wages in that industry, there are probably longer-range opportunities. But it all comes down to the "is it the chicken or the egg" theory. Do you have the "white collar"jobs first and then get the educated workforce to fill those jobs, or do you have the educated workforce, then get the jobs? It is definitely a balancing act. Mr. Florsheim agreed with Ms. Cowling. He stated that projects like Got IT work well for our community,with which 30 to 60 skilled people are needed. They can potentially recruit some to move here. He expressed that it would be tough to fill 1,000 positions of any type right now, but we are satisfied with a company that wants to hire 20, 30, 50, or 100 people here. Wichita Falls has a lot to offer. We are developing more housing downtown, and we are much cheaper as a community to do business in than somewhere like Plano. He said that he would discuss this with Amended WFEDC Minutes 2/17/2022 Page 8 of 10 Matt going through the next four months.Manufacturing will always be critical,but manufacturers are generating the same output as 20 to 30 years ago with half the workforce. Mr. Florsheim discussed the census and how it tells you a starting number and an ending number, but it does not tell you what happened in the middle. From 2010 to 2020, the first half looks way different than the second half. There is a good chance we got below 102,000 and have added since then. He stated the numbers now are encouraging, and many positive things are happening. Then, Ms. Cowling asked how the labor force slide presented compares with other similar-sized communities. We can see that Wichita Falls had a rough ten years with the drought and other economic issues and then the pandemic. Did other communities have a similar trend? Mr. Florsheim said his team could replicate the labor force slide for the three cities in their study, Abilene, Amarillo, and San Angelo. Mr. Leiker stated that his gut feeling is that Wichita Falls was worse off than the others because of our population relative to the number of industrial jobs we lost. He stated that it was a domino effect for several years. During this period, we lost many manufacturing jobs the City attracted in the 1960s and 1970s. Mr. Leiker expressed that the focus should be on incentivizing higher-paid positions. That may mean we do not go after every single job. If we do not focus on increasing wages, we will be at the bottom of these lists from here on out. It is nice to say we have a low cost of living, but that is changing too. Ms. Cowling agreed about the low cost of living and that it is a harder sell to potential workers. A potential employee will first compare the salary. Ms. Cowling stated that we need manufacturing and high- tech industries and acknowledged that we would not get major organizations in big companies. We will get niche, and that's ok, but we have to attract those higher salaried jobs. Mr. Leiker said we might need to save the economic development tax for the "home runs" or higher wages and give more per job created than the companies creating lower pay rate jobs. We will still encourage those companies to come, but those are not the livable wages we need to see. Mr. Florsheim suggested a small tax abatement but that the incentive would not be cash out of 4A's bank account. He stated that it is hard to turn down a deal from his perspective when a company is interested in doing business with your community, but we don't have unlimited funds. He spoke about Abilene spending$33,000,000 on Project Curt Hurd. He said that Abilene had saved money for years, and they claim they have landed the biggest economic impact in the history of Abilene. He asked if there were any more questions. No more questions or comments came from the Board. 7. Consent Agenda a. Approval of Minutes (January 20,2021). Mr. Toogood asked if anyone had any questions or comments about the minutes. No comments were made, or questions asked. b. Financial Report Mr. Toogood asked if anyone had any questions or comments about the financial report. Ms. Cowling that it looked good. Mr. Menzies stated that there is just a little over $1,000,000 in new requests,and with those new requests,there is a healthy unencumbered fund balance of about $7,000,000. This amount may be on the conservative side. February sales tax reflects December sales, and this past Christmas was 13.5%better than last Christmas. For the year,the pace of sales tax is running about a million dollars ahead of what was budgeted by the Board. Amended WFEDC Minutes 2/17/2022 Page 9 of 10 8. Executive Session. Mr. Toogood adjourned the meeting into executive session at 3:35 p.m. pursuant to Texas Government Code §551.087. He announced the meeting back into regular session at 5:03 p.m. The subjects posted in the Notice of Meeting were deliberated, and no votes or further actions were taken on the items in executive session. 9. Motions 707 North Scott LLC/Dental Planet/DuraPro Enterprises. Ms. Cowling moved to authorize DuraPro Enterprises to assume the WFEDC's existing loan to 707 North Scott, LLC and to subordinate WFEDC's existing lien against the Property to a new bank lien for DuraPro to finance the remaining portion of the purchase price. Seconded by Mr. Hillery, motion carried 4- 0. Delta T Thermal Solutions. Mr. Hillery moved to provide a cash-for-jobs incentive to Delta T Thermal Solutions for $7,500 per job up to 58 new jobs for a maximum commitment of $435,000. Seconded by Ms. Cowling, motion carried 4-0. Development of Industrial Property at Wichita Falls Regional Airport. Mr. Leiker moved to spend up to $75,000 for real estate options and site studies on properties adjacent to the Wichita Falls Regional Airport for purposes of developing industrial sites for potential tenants. Seconded by Mr. Hillery, motion carried 4-0. WFEDC-funded MPEC/Hotel Parking Lot Project. Mr. Leiker moved to approve the requested increase in funding for the MPEC Hotel and Conference Center Parking Lot project up to a total amount and not to exceed$1,025,000 for 50%of the project. Seconded by Ms. Cowling, motion carried 4-0. 10. Adjourned. The meeting adjourned at 5:1 1 p.m. _eo Lane, President Amended WFEDC Minutes 2/17/2022 Page 10 of 10