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4A Wichita Falls Economic Development Minutes - 01/26/19984A SALES TAX CORPORATION BOARD MINUTES City Council Conference Room Memorial Auditorium January 26,1998 Present: Members Present: Ray Clymer Ron Bullock Gary Shores Others Present: Kay Yeager, Mayor Jim Berzina, City Manager Gregory D. Humbach, City Attorney Dave Clark, Community Dev. Director Linda Johnson Wilbur, Recording Secretary Dick Bundy, BCI Ron Mertens, BCI Ms. Angela Sammons, APAC, Inc. The meeting was called to order at 10:00 a.m. by Mr. Ray Clymer, board member. Mr. Clymer called for a motion to approve the minutes of the December 15, 1997 meeting. The motion was made and unanimously approved. Mr. Ron Mertens introduced Ms. Angela Sammons, Manager of Site Selection for APAC Inc., which is a telecommunication company interested in locating a site in Wichita Falls. Ms. Sammons discussed APAC's mission, details of the company, its background, facility, and a proposed call center project in Wichita Falls as its next in -bound call center. She stated that during APAC's existence since 1973 it has located over 69 call centers in 14 states. It is presently the largest in -bound and third largest out -bound telemarketing company in the United States. Currently APAC has over 13,000 employees and represents a variety of fortune 500 clients in telecommunication, insurance, financial services, manufacturing, package delivery, utilitiy, hospitality, retailing, entertainment, technology and health care. Sears, AT &T, GM, FTD, Western Union and Farmers Insurance are all APAC clients. Ms. Sammons told the board of the many awards and presentations APAC has received during the past years. Ms. Sammons explained that the APAC Company in Wichita Falls would be an in -bound call center and a full service customer service call center which would include activities such as billing, credit, customer relations, claims authorization and order entry. Ms. Sammons explained that APAC would bring into Wichita Falls a 550 -600 feet in -bound call center which is equivalent to 800 full time employees and as many as 1200 employees when it is fully staffed. Mr. Mertens stated that the present property being looked at is the old K -Mart building on Loop 11. Tentative building improvements will be a little over two million dollars and six million dollars in furnishing and equipment. Mr. Bullock asked what could be expected on the front leg. Ms. Sammons stated that the company did not have a client actually defined for this particular project and that would determine what type of capacity the company will be staffed for; but, a very conservative guess is that the company will claim about 200 in a matter of months. Mr. Mertens asked if the board had any other questions on the company and its setup. He stated that APAC's trigger on the level of incentives on this project would be between one million and two, and one million and four. He stated that this would entail three components: enterprise project designation, training grants, and 4A commitment of $400,000 insertion after the investment is made and the company has 200 full time employees on site. Mr. Bullock asked if all three components had to be in effect for the project to work. Ms. Sammons stated that that is what is desired. She said that her understanding is that for the enterprise zone designation the company would have to go through the state of Texas. Mr. Dave Clark explained that the enterprise zone status for the northern district, which this is a part of, is going to change in September and the qualifications for the basis of an enterprise zone has to do with employment levels and so forth. In order to qualify they would have to extend the enterprise zone to include this area and in order to do that we would probably have to eliminate some other parts of the enterprise zone to make that qualify, which can be accomplished if that is desired. Therefore, it requires a state approval and the approval of the area - -a two step process. Mr. Bullock stated that he thinks the site selected is just fantastic for the City. Ms. Sammons stated that due to the concentration of employees we should see a significant economic impact as a result of this. Mr. Clymer asked Ms. Sammons for an estimate on how much the company will spend on modernizing the building. Ms. Sammons stated that the company is estimating 2.7 million dollars in tentative improvements to come into the building and building it up to code and requirements, another 6 million dollars in furnishings, and over 9 million dollars in payroll. Mr. Clymer ask if the 9 million dollars is estimated at the 200 employee level. Ms. Sammons stated that it was estimated at the total of 550 call centers which would equate to 800 full time employees. Mr. Clymer stated that he understands the proposition is for the 4A Board to commit $400,000 to the company which is payable when the company reaches the 200 full time employee level using either the training programs or the enterprise zone's definition of a full time employee. Mr. Clymer asked if the board needed to have the money ready in several months, and is it reasonable to expect some kind of assurance that these jobs would last for some period of time? Ms. Sammons said that part of the requirement of the enterprise zone is that in order for a company to get money back on any job, the company has to be able to commit to employing those positions for at least three years from the date of hire. Mr. Mertens said that the estimated annual economic impact on the project would be $13.6 million on the economy and the return on the City would be about three years on the $400,000. Ms. Sammons stated that the company would have between 400 and 450 full time employees and the remainder would be part time. Mr. Clymer asked Ms. Sammons if she needed a commitment from the board today. Mr. Mertens said the company at this point does need some assurance that what has been discussed in concept will come forth. Mr. Clymer asked if the board's expression of intent to enter into an agreement with APAC for $400,000 subject to reasonable negotiation would be sufficient for APAC today. Ms. Sammons stated that she thought that would suffice for now. Mr. Bullock asked if the board could just consider making the $400,000 commitment subject to the enterprise zone being approved and the jobs package made. Mr. Berzina suggested that it be expressed in some way where the board makes the commitment and reserves the funds pending those things be worked out. This would say we will do it and we are reserving the funds to do it. Mr. Mertens stated that today they needed some indication from the Council on the 4A allocation and on the enterprise zone that if the project goes forward they will recommend to change in the enterprise zone and that the 4A funds would be available and that is on the real estate side then the company can go ahead and make their decisions. He thinks they are ready to proceed with a lease. The lease has been negotiated and the contract is sitting on the CFO's desk. Mr. Mertens stated that they needed some kind of action from the City Council indicating that they are ready to go ahead with the designation of the enterprise zone and the 4A funds. Mr. Clymer stated that he sensed the Council shared the board's opinion and he thinks they are ready to offer whatever level of confidence the company needs to assure them that if the deal goes forward the $400,000 commitment will be honored. A motion was made that if the investment in the building and improvements are made, and if the 200 full time jobs is met, with such definition specified by the City, then the 4A board reserve the $400,000 for the company. The motion was seconded by Mr. Ron Bullock and passed unanimously. Mr. Clymer call for any other business to come before the board. There was no other business to come before the board and the meeting was adjourned. Respectfully submitted: M I r -, 04 OPERA,