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4A Wichita Falls Economic Development Minutes - 06/25/2008MINUTES OF THE WICHITA FALLS ECONOMIC DEVELOPMENT CORPORATION JUNE 25, 2008 PRESENT: Bo Stahler, Vice Chairman/Sec. /Treasurer § Gary McLendon § Members Dave Lilley § Glenn Barham, Councilor At -Large § Charles Elmore, Councilor, District 5 § City Council Matt Benoit, Assistant City Manager § Linda Merrill, Recording Secretary § City Staff Tim Chase, President § Kevin Pearson, VP, Economic Dev. § BCI ABSENT: Gary Shores, Chairman § Members Dick Bundy § I. CALL TO ORDER Vice Chairman Bo Stahler called the meeting to order at 3:10 p.m. II. APPROVAL OF MINUTES — MAY 9, 2008 Gary McLendon moved, seconded by Dave Lilley, that the minutes be approved. The motion unanimously carried. III. DISCUSSION AND POSSIBLE ACTION ON ELECTRIC EXTENSION TO THE PUMP STATION AT THE WICHITA FALLS BUSINESS PARK Matt Benoit confirmed that Tim Chase was correct when he stated at the May 9 meeting that the Board had not yet authorized the expenditure for electricity to the pumps. He, Mr. Chase, and Gordon Drake (of Oncor) met to discuss the placement of underground lines to the pumps, as the Board desired that the lines be underground whenever possible. Mr. Drake advised against this practice. If the lines are installed underground and no other use of those lines would be needed, it would be fine. However, if a business ever locates on Lot 2, there may not be the right amount of electricity capacity for such business, and the lines would have to be pulled out and reinstalled, at a tremendous expense. The cost for overhead lines is $33,116. WFEDC — Minutes of June 25, 2008 2 Vice Chairman Stahler said that goes back to his question at the last meeting — whether a significantly large user will locate in the Park. Mr. Chase said it has been basically agreed that the Business Park is not the right place for those users. However, the intent is to remain flexible, and do a deal wherever it needs to be done. The message has always been that an underground "backbone" for the Park is not a smart idea, but the radials to feed users should go underground. Vice Chairman Stahler noted that the backbone of those lines runs along the side of the Park. Mr. Chase responded that those lines actually run across the back, next to a 400 -foot power transmission line. Vice Chairman Stahler questioned whether the lines will be unsightly. Mr. Chase replied that he did not think so. Dave Lilley said he tended to agree with Mr. Drake. From the perspective of a private developer, he would view installing underground lines without knowing who the end user is going to be as a waste of money. There is always a possibility that the end user may not want the line underground. Aesthetics are a concern, but as the lines are being run right down an existing overhead power right -of -way, it should not make that much difference. Mr. Lilley asked for clarification on the pumps being discussed. Mr. Benoit replied they are lift stations, used to move the sewer for Old Dominion. Mr. Lilley surmised that a lot of decisions have probably been predicated upon Old Dominion's use of these pumps. Mr. Chase observed that Jim Biggs pronounced the pumps as adequate for the foreseeable development along Midwestern Parkway in terms of something less than a process water user. Mr. Lilley asked if the power that Mr. Drake is proposing is adequate not only for the pumps, but also for any extra load. Mr. Chase said it is really the size of the transformer that dictates the capacity, rather than the line running to it. Mr. Lilley said the two are not mutually exclusive of the other. Mr. Chase said the size of the line is adequate for the foreseeable future. Councilor Elmore asked the size of the line (in terms of amps). Mr. Chase said he did not know. Mr. Chase added that the area under discussion is a very small parcel on the east side of Fisher Road. This has nothing to do with power for the balance of the Park. Although that parcel looks expansive, the actual amount of square feet of development is limited due to the number of easements on the property. Mr. Lilley said he has worked with Mr. Drake numerous times and trusts his judgment. Mr. Benoit noted that Mr. Drake took it upon himself to say it was not only more than what was needed to be spent, but it was also not what was needed. Mr. Lilley stated he is emphasizing function over form. Mr. McLendon said he has already expressed his desire for underground lines whenever possible, but understands the recommendation for overhead lines in this situation. Mr. Lilley moved, seconded by Mr. McLendon, to accept the recommendation from Oncor to install overhead lines to the pump station at the Business Park in the amount of $33,116. The motion unanimously carried. IV. UPDATE ON ANNEXATION OF THE WICHITA FALLS BUSINESS PARK Mr. Chase noted that the City is in the process of getting the annexation of the Business Park and former Stanley Tools building completed. The owner of the Stanley Tools building did , WFEDC — Minutes of June 25, 2008 not ask to be included; however, they are aware and have not protested. Mr. Benoit noted that public hearings are scheduled for July 1 and July 15 Council meetings regarding the annexation. V. DISCUSSION AND POSSIBLE ACTION ON INSURANCE FOR THE BOARD Mr. Chase stated that he is ready to propose a $1,250 policy from Allred Thompson Mason Daugherty for Officers and Director's liability insurance. The price is commensurate with what he's seen in the marketplace. He is not prepared to make such a recommendation regarding the purchase of general commercial liability insurance for two reasons: (1) there is a 400% difference in the two bids received for the same amount of insurance; and (2) he wants to talk with the City Attorney as to what safeguards that policy would provide that would not already be inherent in the Park, once annexed. VI. DISCUSSION ON PROJECT UPDATES Carter Copter was rejected by the Governor's Emergency Technology Fund. There continues to be debate over what should be done now. The group might want to have 4A dollars invested as a venture capital investment, in concert with private sector monies. Councilor Elmore asked how much money it would take for this project to go into production. Mr. Chase said the company hoped to get a total of $5 Million from the Governor's office and the private sector. Beyond that project, Mr. Chase reported there are several people interested in the Business Park. He still holds out reasonable expectations that something will come to pass. Councilor Elmore said it was his understanding that the 4A funds can be used for a wider variety of things (such as infrastructure) than what has currently been done. Mr. Chase said 4A money funded the infrastructure in the Business Park. Vice Chairman Stahler was of the opinion that true infrastructure improvements come under 4B sales tax funds, rather than 4A. Mr. Chase said that both 4A and 4B can fund infrastructure, but 4B funds are not limited exclusively to job creation. Mr. Benoit pointed out that "primary" job creation is required for the use of 4A funds. Mr. Chase agreed that was very important; meaning that a job is being filled by someone whose company brings something in from outside the area, adds value to it, and sells it outside the local market, resulting in a new dollar to the local economy. If that transaction is limited to the city, then it is classified as a secondary job, and is not allowed under the 4A statute. Councilor Elmore surmised this would contemplate manufacturing, basically. Mr. Chase replied that the product could be a "widget," or it could be information. For example, when someone answers the AT &T telephones on Kell, they are talking to someone in New Jersey. The transaction that pays their salary comes from a sale made in New Jersey. Councilor Elmore likened it to the call center operation off I -44. Mr. Chase advised that Cendant purchased Budget and Avis. Reservations for both companies are being taken at the local call center. Mr. Chase said that call center was one of the first companies recruited through the sales tax. Twenty -six projects have been completed to date; $9 Million has been spent, with an economic impact of $658 Million. WFEDC — Minutes of June 25, 2008 4 Councilor Elmore asked what is expected for the area in the next year or two. Mr. Chase replied that no projects are ready for discussion in the public setting. The BCI has always lived by the policy that the company will be the one to discuss its business when it is ready. Given the current national economy, he believes they are working on some very positive projects. If all came to pass, there would be a potential of between 800,000 to 1,000,000 square feet of new construction; over the next three to five years, employment could rise in the neighborhood of 400 new jobs. He doesn't harbor the illusion that all of these projects will come to fruition, however. Councilor Elmore asked if the opportunity for the one million square -foot warehouse at the Park was gone. Mr. Chase replied affirmatively. The warehouse has yet to be built anywhere. Even if the project were reactivated, the Business Park is not logistically cost effective. Councilor Elmore said a fiberglass operation considered locating a distribution center in Wichita Falls about five years ago. They liked the area due to the traffic situation. Mr. Chase said that project is not familiar to him. Councilor Elmore said he did not think the BCI had been involved; they talked to a friend of his about finding a location, and considered a 50 -acre tract on U.S. 287. Wichita Falls was attractive because distribution to the Metroplex would be easier out of Wichita Falls than out of the Metroplex itself. Mr. Chase believes that to be true, but the Park has yet to land a deal because of that. Councilor Elmore noted that, with fuel now $4 per gallon, the distance may be even more of a factor. Mr. Chase said the rising cost of containers, the escalating cost of doing business in China and India, coupled with the devaluing U.S. Dollar, amounts to analysts predicting that manufacturing will return to the United States in some large measure. He believes that to be true; the projects seen in the past six months have been overwhelmingly from foreign investors — from India, United Arab Emirates, Korea, and China. Mr. McLendon said a BMW plant closed in Germany about six months ago because the U.S. workers at its plant in South Carolina were cheaper to hire. VII. ADJOURN. Dave Lilley moved seconded by Gary McLendon, that the meeting adjourn. The meeting was adjourned at 3:44 p.m. Bo Stahler, Vice Chairman/ Secretary- Treasurer