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4A Wichita Falls Economic Development Minutes - 09/07/2011MINUTES OF THE WICHITA FALLS ECONOMIC DEVELOPMENT CORPORATION September 7, 2011 PRESENT: Gary Shores, President § Members Dick Bundy, Vice President/Sec.- Treasurer § Lanham Lyne § Gary McLendon § Dave Lilley § Glenn Barham, Mayor Darron Leiker, City Manager Jim Dockery, CFO /Asst. City Manager Miles Risley, City Attorney Linda Merrill, Recording Secretary Tim Chase, President Kevin Pearson, Vice President Jim Johnson Barry Hardin Stan Spruiell Bobby Albert Jason Turner Alyssa Johnston 1. CALL TO ORDER § Council Liaison § City Staff RECEIVED IN CITY CLERK'S OFFICE ATE: �_�-_� § Chamber of Commerce & Industry § Cryovac § Albert Moving Staffers § Times Record News President Gary Shores called the meeting to order at 4:00 p.m. 2. APPROVAL OF MINUTES (AUGUST 25, 2011) Dick Bundy moved, seconded by Lanham Lyne, that the minutes of August 25, 2011 be approved with two corrections (correct the spelling of the name of Linda Beltchev, and delete a duplicate sentence under Item 2). The motion unanimously carried. 3. AMERI -KAL VITAMIN MANUFACTURE PROJECT Kevin Pearson explained that after the agenda was posted for the August 25 meeting, it was decided to offer $3,000 per job for this project, for a total cost of $75,000. However, the posted agenda reflected $50,000. The MOU has been executed by all parties for $75,000. Mr. Risley said it would not cause a delay to re- approve this item, but would serve to enhance transparency. Mr. Lyne moved to re- approve the project, at a cost of $75,000. Seconded by Bundy, the motion unanimously carried. HA legal \4A & 4B \4A Corp\Minutes\201 1\9.7.1 1\2011.9.7 4a minutes.doc WFEDC — Minutes of September 7, 2011 2 4. ECONOMIC DEVELOPMENT TASK FORCE Tim Chase proposed the formation of a legacy panel comprised of folks who have been involved in economic development over the past several years. The panel would discuss how economic development was handled through the 1970's - 1990's, and the current way of doing business. The panel would include representatives from the City, the County, the Chamber of Commerce, and from the 20 under 40 group. Mr. Shores suggested involving the business education staff from MSU, as well. Mr. Bundy said it would be helpful to have an effective facilitator, so that there is an actionable item for their efforts. Mr. Chase said the process could be handled in- house, or they could hire a facilitator. Mr. Lyne suggested they proceed on a do- it- yourself basis until the group is formed and its objective is determined. Mr. Chase hopes to have this group formed by the first week of October. Mr. Shores said it sounded like a good program. 5. CRYOVAC PROJECT Mr. Chase said that at the end of last year, he, Secretary of State Hope Andrade, and Barry Hardin of Cryovac went to Duncanville, South Carolina, to talk to Cryovac's corporate leadership. Cryovac had made investments in 2010 for which they desired a property tax abatement. The County acted swiftly and did such an agreement. Mr. Chase said the tax abatement to be requested of the City Council would be the traditional 10 -year abatement. Mr. Hardin said incremental growth has occurred at the two local plants, but growth opportunities are few and far between. New facilities have been opened, and competition among the plants is fierce. Investments made by Cryovac will total $12.2 million by the end of this year, and 19 jobs will have been created. Mr. Hardin acknowledged that not all of this new investment will generate new jobs, but it will help to maintain the current positions. Cryovac employs between 950 to 1,000 at its two locations. This area is definitely viewed as one of Cryovac's main North American locations. However, other smaller locations are just as eager to grow their businesses. Cryovac did not ask the WFEDC for funds for its most recently acquired piece of equipment, valued at $3.4 million. They are hoping to gain another piece of equipment for the Wichita Falls facility, resulting in four permanent jobs and four temporary positions. If the equipment does not come here, it would go to Cryovac's plant in Mexico. Stan Spruiell pointed out that whichever plant gets the new equipment would be most likely to get additional equipment in the future. Any incentive is crucial when considering the overall cost impact. Mr. Shores thanked Messrs. Spruiell and Hardin for their attendance and presentation. WFEDC — Minutes of September 7, 2011 3 6. ALBERT MOVING STAFFERS ASSISTANCE PROJECT Mr. Chase said Jason Turner and Bobby Albert appeared before the Board in December to discuss a new project, and get an indication of the WFEDC's willingness to help them grow a piece of their business. They return to provide more clarity, and discuss approval of an MOU. Mr. Turner said that Albert Moving Staffers (AMS) has been moving Department of Defense members and their families around the country for 20 years. The company is positioned in the alternative move market, and works with many companies, such as ABF U -Pack, POD, and Penske. The work performed by AMS is third -party and can be accomplished anywhere. They are particularly integrated with ABF, which is in control in a sense as they generate and market the business. The question is, should all or part of the Moving Staffers division remain in Wichita Falls or relocate to ABF's headquarters in Fort Smith, Arkansas? AMS created 30 jobs in 2011 to support this business, and they anticipate hiring 60 additional positions within their five -year growth plan. Both sets of positions in Wichita Falls are possibly in jeopardy, but more so the 60 additional employees. They are requesting any incentives from the WFEDC that can tip the scales to stay in Wichita Falls. Mr. Chase said that the WFEDC has occasionally been asked to take bold action, in order to show what the community is prepared to do, without having the automatic quid pro quo. This MOU would arm AMS with a powerful incentive and send a message to ABF. Mr. Turner said there are benefits to both business locations. Staying here keeps the company in a more neutral stance when viewed by the other companies with which it works that are in competition with ABF. However, locating in Fort Smith would result in the entire operation being under one roof. Mr. Turner said space is a big problem for the company. That pushes them to Fort Smith, because they have space available. Mr. Shores asked if Wichita Falls would be entering into a bidding war with Fort Smith's economic development board. Mr. Turner said Fort Smith is looking at economic incentives to keep ABF's corporate headquarters in Fort Smith. If a bidding war results, it will be over actions far bigger than the location of AMS. Mr. Lyne asked the types of jobs in question. Mr. Turner said the majority are front -line customer service positions (hourly wage earners), and then the standard complement of supervision up to the top leaders in the organization. Early October should be considered the deadline for the decision to be made. They need to have staff in place for the 90 -day learning curve needed to be up to speed for April, the beginning of their busy season. Not all 60 jobs can be kept here; maybe 50 of them will remain. This will not be an either /or proposition, but rather an "and" scenario. Mr. Shores thanked them for their presentation. WFEDC — Minutes of September 7, 2011 Dick Bundy presented to his fellow Board members a graphic diagram he used to visually break down the complex Excalibur funding agreement. He said a schematic helps him understand the more complicated agreements. Mr. Risley said it would be of greatest use early in the process. Messrs. Lyne and Shores agreed that it would be a good tool to have. 7. EXECUTIVE SESSION Mr. Shores adjourned the meeting into executive session at 4:50 p.m. pursuant to TEXAS GOVERNMENT CODE § §551.071, 551.072, and 551.087. He announced the meeting back into regular session at 5:10 p.m. The subjects posted in the Notice of Meeting were deliberated, and no action was taken on these items in executive session. Mr. Lyne moved seconded by Dave Lilley, to recommend to the City Council the expenditure of 4A funds in the sum of $32,000 for the Cryovac project. The motion unanimously carried- Mr. Lyne moved to recommend to the City Council the approval of the MOU with Albert Container Concepts paying for the 30 retained jobs, with a loan to Albert Container Concepts that is guaranteed by Albert Moving and Storage. Such loan is forgiven if all 30 positions are retained for 36 months. The motion also approved payment for up to an additional 60 jobs, in a total amount not to exceed $364,000. Seconded by Mr. McLendon, the motion carried (with Dick Bundy abstaining). 8. ADJOURN The meeting adjourned at 5:15 p.m. ary Wores, President