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4A Wichita Falls Economic Development Minutes - 10/12/2004MINUTES OF THE WICHITA FALLS ECONOMIC DEVELOPMENT CORPORATION Meeting of October 12, 2004 Present. Members: Gary Shores, President Bo Stahler, Vice - President Jim Berzina, Secretary- Treasurer Lou Rodriguez, Member Bill Altman, Mayor City Staff: Matt Benoit, Assistant City Manager Scott Taylor, Director of Public Works Linda Merrill, Recording Secretary BCI Staff: Tim Chase, President Tommy McCulloch, President, Board of Directors Guests: Isaac Manning, Trinity Works Tyler Arbogast, Trinity Works Bill Millsia, Mesa Design Group Jim Biggs, Biggs & Mathews, Inc. James Frank, Sharp Iron Mark McMullen, Sharp Iron I. Call To Order. President Gary Shores called the meeting to order at 10:02 a.m. 11. Approval of Minutes — August 30, 2004. Vice - President Bo Stahler noted that the minutes should reflect that Mr. Shores sign the minutes, rather than himself. With that correction, Lou Rodriguez moved that the minutes be approved. Mr. Stahler seconded the motion, and the motion carried. III. Consider a Presentation from Representatives of Sharp Iron President Shores presented representatives from Sharp Iron, James Frank and Mark McMullen. Mr. Chase stated that this is the fun part of the job; after a project has been completed and jobs created (or as in this case, retained), the companies make a wrap - up presentation and have a final reconciliation. .Wichita Falls Economic Development Corporation October 12, 2004 Meeting Minutes Page 2 Custom Metal Services was destined for closure when these gentlemen put together a package with assistance from 4A funds, renamed the company Sharp Iron, and put it back in good shape. Mr. Frank welcomed the opportunity to thank the Corporation. He noted that 32 out of 40 of the jobs pay more than $11 /hour; 18 of the jobs pay more than $14 /hour. The sales for the 12 months just ended are 55% higher than the 12 months immediately prior, done with 10 less employees. There has been seven straight months of profitability, which represents better security for the remaining employees. Sharp Iron has experienced the ability to bring more sales, from either PMT (Production Machine and Tool) or BW Environmental. The synergy between the three companies from a sales standpoint has been better than anticipated. One of Sharp Iron's newest customers is one of Mark McMullen's biggest customers from a machine standpoint. Thus, they are expanding sales to existing customers in the group. In addition, Mr. Frank added, the 4A money had the effect of expanding employment at BW Sinclair and PMT. Both of these companies are growing at least in part due to the success of Sharp Iron. Mark McMullen agreed, stating that he has enjoyed witnessing first -hand what the 4A funds are able to do. If not for this project, there would be at least 43 fewer good jobs in the City today. In fact, Mr. Mullen continued, they underestimated how well this project would be received. They can build anything at this point, between the three companies (Sharp Iron, PMT, and BW Sinclair). They are passing up more than they can take on right now. Mr. Chase asked them to comment on the origins of Sharp Iron. Mr. Frank stated the name comes from Proverbs: iron sharpens iron; one man sharpens another. He believes that one company can make another one stronger. Mr. Stahler congratulated the company on this successful venture. Mr. Shores asked if this growth had allowed for an increase in employment in BW or PMT. Mr. Frank stated that Sharp Iron has a final reporting in six months, and they will put together some numbers to answer that question. He thinks BW Environmental is probably up three to four employees; PMT, maybe five to eight. Mr. McMullen added that they not only offer a good salary, but a good benefits package, as well. Mr. Berzina told the gentlemen to come back when they are ready for a major expansion. Tim Chase noted the actual reconciliation on this deal was $166,000. Wichita Falls Economic Development Corporation October 12, 2004 Meeting Minutes Page 3 IV. Consider an Economic Development Incentive Agreement with PPG. Mr. Chase stated a similar meeting to this one was held earlier this morning with the Burkburnett Development Corporation. Susan Plies, the Plant Manager for PPG, was also present for that meeting, and made a great presentation explaining the proposed project. Burkburnett passed the Memorandum of Understanding, and he believes this may be the first successful joint effort between the two communities. Ms. Plies stated that PPG Industries is considering an expansion to construct a state -of- the -art MSVD (Magnetic Sputtering Vapor Deposition) coater at the Wichita Falls plant. This coater converts several products currently made into high - performance, energy efficient products for construction and specialty markets. In order to meet the Energy Star requirements, one light in a two -light window system must have this MSVD coating. PPG wants to get a coater so that it can supply both lights. This project would represent a capital investment of nearly $40 million, and would create 50 new jobs. Most importantly, it would improve the competitive position of PPG, assuring a more secure future. Several potential locations have been reviewed, with factors such as labor costs, general wage and benefits packages considered. Ms. Plies continued, stating that PPG executives have looked at the Metroplex or its Mequiladora operation in Mexico. It has been a lengthy analytical process. The package crafted between Wichita Falls and Burkburnett makes this area more attractive. If these incentives are approved, they will be included in the request for funding presented to PPG's Board of Directors on December 9. She cannot guarantee that the project will be approved, but it is an attractive proposal. It meets the requirements of previous proposals that have been approved. Ms. Plies stated that her boss is the Director of Manufacturing in Pittsburgh. His superior is the Vice President of Glass, Mark Orcutt. Mr. Orcutt will be the one to present this item to the Board. He has been extremely thorough in his review of this incentive package and this area, and will be very prepared to answer any questions the Board may have. Jim Berzina asked if Mr. Orcutt is committed to this location. Ms. Plies replied that he is, contingent upon the approval of these incentives. If the Board approves the plan, she anticipates breaking ground in the first quarter of 2005, and being in production in mid -2006. She noted that Tim Chase and former BCI employee Todd McDaniel have been very valuable in this process. Mr. Orcutt is conservative and concerned about word getting out that this will definitely happen. She reiterated that nothing is final, and is all based upon the Board of Director's approval. Anticipating approval of the incentive package here today, she looks forward to meeting with the City Council at its meeting October 19. Mr. Berzina asked if publicity from today would hurt the process. She states that it will not, and that it is necessary that it be approved before November 1, as that is when her package is due to the executive committee. Wichita Falls Economic Development Corporation October 12, 2004 Meeting Minutes Page 4 She states the MSVD coater does not require any environmental permitting, as it is a very clean process. She showed a photograph of the 800 -foot long coater. The glass is magnetically vaporized, and the metals fall onto the glass in very thin layers. All Energy Star windows have these products coated on them. She then showed the proposed expansion to PPG's existing building. Mr. Berzina asked if the coating is applied after the glass is finished in production. She replied affirmatively, stating it is taken off the line, staged in a building, fed through, packaged and shipped. It is cut after it is coated. Mr. Shores asked how many other PPG plants have this process in- house. Ms. Plies replied there is a plant in Pennsylvania, one in Illinois, and Oregon. Illinois is the home of the first coater. Mr. McCullough asked if it were possible that all plants will have such coating capabilities in the future. Ms. Plies stated it is probable that all plants that service residential and trade will, but the automotive trade is not as interested in the coated glass. Mr. Stahler asked if this process makes the windows too pricey for tract -style homes. Ms. Plies stated it is required by law in the State of Texas to have such windows. Eighty percent of the glass has to be Low -E; the remaining 20% is allowed for doors. Window replacements are required to be done with Low -E glass. Mr. Stahler moved, seconded by Mr. Rodriguez, that the economic development incentive agreement with PPG be approved. The motion unanimously carried. Mr. Stahler asked how many workers are employed by PPG. Ms. Plies said around 415. She heard in its peak days, as many as 1,200 people were employed. That was when works did labor- intensive hand packing of glass. That process has since been automated. V. Consider a Presentation on Infrastructure Construction for the Wichita Falls Business Park. Isaac Manning of Trinity Works addressed the Board. He reminded them that last spring, his company was directed to get the Master Plan for the Wichita Falls Business Park worked out and priced, and to obtain landscape estimates, as well. Jim Biggs of Biggs and Mathews then addressed the Board. He discussed Phase 1 plans for street drainage and water and sewer. Presentation was made regarding the water system design, sanitary sewer and lift station. He then noted Fisher Road is a four -lane divided boulevard, while Production is a normal commercial -width street. There would be an eventual tie -in to Midwestern Parkway. Wichita Falls Economic Development Corporation October 12, 2004 Meeting Minutes Page 5 He has a cost estimate to do the project in phases. The first phase eliminates Production Boulevard's tie to two lanes of Fisher, and two lanes of Midwestern Parkway. All water and sewer are installed at this time. The size of the pumps and lift station will depend on the first couple of users out there. Mr. Chase wants to make sure the park can accommodate a wide variety of projects. Mr. Biggs stated the facilities are sized to accommodate any user. If a real large water user moves out there, there may be some downstream infrastructure issues to be addressed. But he sees no problem with a normal distribution -type center or a small manufacturing center. The cost to install all water and sewer connections is $445,000 (at today's prices). Mr. Biggs notes that 15% contingency funds were included to be fairly safe. To construct all the streets and the drainage as designed, the cost would be $1.8 million. Fisher can either be a five lane road, or for now, a two lane road with a boulevard. This issue needs to be settled. Mr. Manning stated the issue is more on the phasing of this project. It was thought to be possible to do three lanes without curb and gutter on both sides, to allow for expansion. But the City requires curb and gutter be installed on both sides upon development. If the decision were made to expand, the curb and gutter would have to be ripped out. It is possible to do two lanes today, curb and gutter that, put in a boulevard, and eventually have four lanes, rather than five. Mr. Manning continued, stating the idea is to give some flexibility, but also to get the business park up and operating. As demand increases, it may be more problematic on maintenance, but it is very cost effective today to get two lanes in. The customers should drive the decision as to whether to increase the number of lanes. Mr. Rodriguez asked if it is advantageous to do the water, sewer and streets at one time, from a cost point of view. Mr. Biggs replied it is essential to get the water and sewer done now, under the pavement. Mr. Manning stated it is advantageous to get it all done and be through with it. If it is done in phases, and businesses are located in the park, there is some temporary disruption in routing. It can be inconvenient, but it is done all the time. Mayor Altman expressed concern that it would be an unnecessary headache to maintain the boulevard. Scott Taylor said he had the same concern, until Mr. Manning pointed out that once the business park is up and running, the park itself is responsible for the maintenance. Mr. Shores asked how many businesses must be in place before that takeover happens. Mr. Manning stated the largest landowner takes on the cost. He states the property association for the park can dial up or down the maintenance level of the park. Trees in medians do require maintenance. But in order to have a higher finish on the park, there will naturally be a higher maintenance level. Mayor Altman asked if a median is preferred, from a practical and aesthetic view. Mr. Manning stated the only reason to do a median is in the phasing of the project. If Wichita Falls Economic Development Corporation October 12, 2004 Meeting Minutes Page 6 the Board decides not to do this particular project in phases, he would encourage a five -lane road. Fisher Road is important, Mr. Manning continued, as it is the entrance to the park. If big distribution centers are anticipated, a five -lane road is the way to go, with no medians. But the question, he cautioned, is one of optics: does the Board want a two - lane road that can be widened in the future, or a five -lane road that goes nowhere at this time. Mr. Stahler asked if the cost is $972,000 with two lanes, and $1.8 million with five. Mr. Biggs stated other items are included in that cost. The cut -down version eliminates Production Boulevard out of Phase 1, although it would provide access to the skills training center. Mr. Biggs added that two lanes of Fisher and three lanes of Midwestern Parkway are not included in the $972,000. Mr. Stahler stated he is concerned with constructing a five -lane road that goes nowhere, but he does see the need to have a road access the skills training center. Mr. Berzina stated that if and when Midwestern Parkway is built to tie in to what is there now, he suspects that fairly early, two lanes won't be enough, but it won't just be business park traffic. Mr. Shores expressed his concern that city leaders fought the battle regarding Kell Boulevard (heading "nowhere ") for a long time. Mr. Stahler agreed. He sees no problem with a boulevard on Fisher, or the road to the skills training center. However, he does not want to see five lanes with nothing to support such construction. Mr. Shores suggested leaving Fisher as two lanes with a median, with an eventual construction of two more lanes. If the park is successful, there will not be criticism if curb and gutter and the boulevard are removed to make room for another lane. Mr. Berzina asked if Production Boulevard is constructed of asphalt. He noted that prospective tenants will come away with a first impression of the park. Mr. Taylor stated it is, and it could use a little reworking. Mr. Chase stated this area was chosen because it is an extension of what is already out there today. The ability to incorporate new materials and landscaping retroactively into the existing park is a positive thing. All other roads will be concrete. Mayor Altman noted that, if Production and Fisher are both completed, the outline of the entire business park is laid out. Mr. Shores asked if access to the skills training center is essential at this point, if there is no one to train. He asked how long it would take to put in the road. Mr. Biggs replied it would take six months at the outside. Mayor Altman noted that most companies today are on the fast track. The more of an outline of the business park that we can provide, the more attractive it will be to these businesses. Besides, he added, it would not cost that much more money to do Production in Phase 1. Wichita Falls Economic Development Corporation October 12, 2004 Meeting Minutes Page 7 Mr. Biggs noted that projects can be added or subtracted as the Board desires. Bill Millsia then spoke regarding the landscaping plans. To increase visibility, he suggests removing mesquite in a triangular area at the entrance to the park. The plan also calls for a detention basin at this location; the dirt from the basin would be mounded up on the other side. Flagpoles would be placed on a berm, and lighted at the base. An entrance sign is provided in sandstone. The name of the business park is formed in anodized aluminum. From there, Mr. Millsia continued, is a row of trees on both sides of the street, leading back to a larger amenity for the park (also a detention basin). There will be a formal row of trees on one side, and a natural row on the other, with a 25 -foot setback on each side. On one side, there will be an additional drainage swale. A series of red cedars will circle the base of the basin, and will spiral back in on one side of the drive. This is an asymmetrical landscape, as the signage is also asymmetrical. Mr. Manning noted that since the proposal calls for putting in two rows of live oaks on the right -hand side and median, and then 10 -12 years later planting trees on the other side, it will be necessary to use a completely different type of tree in order to not try to match the existing trees. Mr. Millsia noted there will be a concrete pathway sidewalk running through the park, going around the detention basin. The landscape will include trees, natural grass, and cut grass. There will be a drainage swale lined with hedges to block the sight of the parking lot. Each street will be lined with sidewalk. The entry into each future tenant's property will have a sign that complements the entrance sign to the business park. Mr. Stahler asked if the detention pond will be a grassy hole, or will it be filled with water. Mr. Manning stated it will be a grassy hole. He also commented that the business park will be naturalistic. He also noted there is a budget of $70,000 for installing underground power lines. Mr. Manning added there are presently two aboveground power lines. In order to not have those power lines interfere with the appearance of the entrance to the park, he believes it is important to budget for the cost to drop the power lines underground. He also noted that conduit should be put in now, for center streetlights, to avoid having to rip up the landscape at a later date. Mr. Millsia continued, stated the master plan includes master signage, accent lighting, flagpoles, seeding, irrigation and trees. Phase 1 contemplates construction of the entrance features, and two rows of trees down Fisher, as well as the landscaping and irrigation for the median on the right -hand side only. This does not include trees 'Wichita Falls Economic Development Corporation October 12, 2004 Meeting Minutes Page 8 down Midwestern Parkway or Production. Those improvements would be done as the parcels get developed. Those businesses would be required to put in their own signs and landscaping. Mr. Stahler asked how important it is to have a row of trees down Fisher. Mr. Manning stated it would provide a "pop" to the entrance. The real money spent is on the grass and irrigation. The trees on Fisher only cost $35,000. It would provide a certain level of finish. He also added there is no need to tree Midwestern Parkway now. Mr. Chase asked about the trees in the Parks Department's inventory. Mr. Berzina replied they are low at present. Mr. Manning stated these trees will be 4" caliper live oaks, staked on 40 -foot centers. Mr. Millsia added that each tree would have its own bubbler irrigation system, watered separately from the lawn. That makes a difference in the health and growth of trees. Mayor Altman suggested funding the landscaping on Production in Phase 1. That would provide visible lines to prospective tenants from both ways. Mr. Stahler disagreed, not believing it is necessary at the present time. He would prefer to get tenants in the park first. Mr. Shores agreed, stating the Board is contemplating spending 15% to 16% of its cash reserves, for a project that has had only one viable contact. He believes further improvements can be made after tenants are moved in. Mr. Altman countered that the Board has $10 million in the bank, and $2.8 million coming in. He feels it is important to show a solid commitment to this project. The additional $280,000 for Production is a mere drop in the bucket to have a visual image of the park both ways. Mr. Shores stated he does not mind being aggressive, but it is taxpayer money. He would prefer to be a bit more conservative; have a park that first attracts tenants, and then do these extra items. He is not even sure at this point about putting the trees down Fisher. Once the trees are in, it is a maintenance expense. Mr. Berzina stated that he has learned two things about trees: don't put them in unless you're willing to water them. However, the sooner you plant them, the sooner they look like trees. They take a long time to grow in this area. Mr. Chase stated he has an upcoming meeting with Wichita Clutch. They are interested in sprucing up their appearance, and they may be willing to share, or shoulder, the cost of the frontage. The Board will have to purchase a sliver of their property, .9 of an acre, to make sure the alignment is correct. An agreement could be reached whereby Wichita Clutch uses that purchase money to improve their landscaping in keeping with the vision for the business park. Wichita Falls Economic Development Corporation October 12, 2004 Meeting Minutes Page 9 Mr. McCullough asked Mr. Manning for guidance on what prospective tenants would care about seeing at the park. Mr. Manning suggests doing Phase 1, including two lanes of Fisher and Midwestern Parkway, plus acquire the land. Production Boulevard landscaping and roadwork would cost $525,000. To do Production and Phase 1 of Fisher and Midwestern Parkway, the cost would be approximately $2.5 million. Mr. Manning continued, stating he would suggest minimum infrastructure until some tenants are in the park. He would advise, if only two lanes of Fisher are being completed at this time, then tree and landscape that, and not build additional roads until later. He would spend money on the entrance and Fisher, turn the corner of Midwestern Parkway, and just grass it and forget it for now. Mayor Altman asked his opinion regarding Production Boulevard. Mr. Manning stated he would not do Production right now. He believes he would bulk up the area when tenants are in the park. Right now, he would advise the Board do as little infrastructure as possible to make the right statement. Mr. Chase stated he always felt Production was an add -on at a later point in time. The objective now is to give the appearance of the intersection. Jim Biggs stubbed out the intersection a certain number of feet to give the feel of the intersection. Mr. Chase stated there is a question as to whether to build it, and they will come, versus build it when they come. He believes both need to occur in order to be competitive. He took a look at what is being offered in Wichita Falls' competitive cities (Sherman, Denison, Tyler, Waco, Lawton, Abilene). He provided the Board with a summary of what is offered at those cities' business parks. For the most part, they do not have landscaping; they have a road and some parcels. He believes differentiating Wichita Falls from its competitors as a high amenity, low -cost alternative, will make the difference. What constitutes a real prospect versus a "tire kicker," no one knows, he continued. The Wichita Falls Business Park has had two prospects. One of those prospects was a manufacturing company which, 45 days ago, announced its intention to locate its facility in Ennis, Texas. The other was a large warehouse distribution facility that has not yet announced its location. The Ennis company's representative stated that they liked Wichita Falls, but logistics came into play, as well as the fact that the business park's development did not meet their timeframe. He then stated this process has been ongoing for two years, and is just now at the construction - drawing phase. He noted, with all deference, that it is not realistic that a road can be constructed in 3 -6 months. Mr. Biggs replied it could get done. Mr. Taylor noted there would be contractors available who could do the job. Mr. Manning noted the decision to go forward was made in December or February. Things get done more slowly in the public sector. Wichita Falls Economic Development Corporation October 12, 2004 Meeting Minutes Page 10 VI. Consider Project Approval for Infrastructure Construction for the Wichita Falls Business Park. Mr. Manning suggested the Board approve doing all of the Phase 1 engineering work, all the water and sewer, two lanes of Fisher, and two lanes of Midwestern Parkway, as well as a stub -out on Production, and Phase 1 of the landscaping plan. Mr. Stahler moved that the Board approve such action. Mr. Rodriguez seconded the motion, which was unanimously approved. VII. Other Business. There was no other business to come before the Corporation. VIII. Adjourn. The meeting adjourned at 11:37 a.m. Linda Merrill, Recording Secretary Gary S ores, President