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4B Sales Tax Corporation Minutes - 05/23/20161. Call to Order Jima Ginning called the meeting to ardor at 3.114 p.m. 2. Approval of Minutes (April 25, 2016) Rick l Tit her maoved to a rove the rraimutes. seconded Tann ei er the motion carried. Report of Financial Condition -- as presented by Jim Dockery Another month of sales tax revenue receipts are available since the Board's last meeting. Halfway through the year, revenues are .67 percent below where they were at this time last year. 1f that percentage holds true the rest of the fiscal year, the Board's revenue would be under budget by $13,600. The unreserved fund balance would end at $3.2 million. ffi Discussion and consideration of proposal from Gatehouse Capital, LLC, to prepare an Initial Period Conceptual Plan for a Downtown Conference Center Hotel. Mr. Dockery explained that in January 2015, the City entered into an agreement with consulting firm P F l.:lSA for a feasibility market study relating to hotels. The results were favorable for a full-service convention hotel near MPC. PKF USA was then hired to solicit hotel developers that do these type projects on a joint public/private basis, and recommended Gatehouse Capital. Colin McDonald of Gatehouse Capital is here today to present the company's $110,000, ~day proposal. N:\ is al\4A, 4B. TiFS\4 Corp\ B Minutc s\ 016\ 016.5.23\fiv nutes.. 4B 20 i f .5,23.iioc MINUTES OF THE WICHITA FALLS 4B SALEs TAX CORPORATION May 23, 2016 ERESENT.* Jim Cunnings, President § Members Dave Clark Tony Fidelis § Rick Hatcher Dacron Leike Michael Mills Tina Ingle, Councilor, District 4 § City Council Stephen Samellana, Councilor, District 1 Jim Dockery, Deputy City Manager § City Staff" R. Ainley Hegglund, Jr., City Attorney Linda. Merrill, Recording Secretary Henry plorsheim, CECT § Chamber of Commerce & Industry Colin McDonald § Gatehouse Capital ABSENT: Dustin Nimz, Vice President/Sec, Treasurer § Member 1. Call to Order Jima Ginning called the meeting to ardor at 3.114 p.m. 2. Approval of Minutes (April 25, 2016) Rick l Tit her maoved to a rove the rraimutes. seconded Tann ei er the motion carried. Report of Financial Condition -- as presented by Jim Dockery Another month of sales tax revenue receipts are available since the Board's last meeting. Halfway through the year, revenues are .67 percent below where they were at this time last year. 1f that percentage holds true the rest of the fiscal year, the Board's revenue would be under budget by $13,600. The unreserved fund balance would end at $3.2 million. ffi Discussion and consideration of proposal from Gatehouse Capital, LLC, to prepare an Initial Period Conceptual Plan for a Downtown Conference Center Hotel. Mr. Dockery explained that in January 2015, the City entered into an agreement with consulting firm P F l.:lSA for a feasibility market study relating to hotels. The results were favorable for a full-service convention hotel near MPC. PKF USA was then hired to solicit hotel developers that do these type projects on a joint public/private basis, and recommended Gatehouse Capital. Colin McDonald of Gatehouse Capital is here today to present the company's $110,000, ~day proposal. N:\ is al\4A, 4B. TiFS\4 Corp\ B Minutc s\ 016\ 016.5.23\fiv nutes.. 4B 20 i f .5,23.iioc WFEDC — Minutes of May 23, 2016 2 Mr. McDonald thanked the Board for the opportunity. He said Gatchouse Capital does not operate the hotels; rather, they build them and have experts (such as Aimbridge Hospitality) run them. At the end of the 90 days, they will deliver a project plan, with concept design drawings, a definitive budget identifying the most cost effective financing strategy, and letters of intent from a number of operators and brands. The only thing that will forestall this hotel development would be the City deciding not to move forward due to financial constraints. Mr. Ginnings asked about how much equity Gatehouse Capital would have in the project. Mr. McDonald replied the company would have no cash equity, but the cost of the hotel (not including the conference space) would be financed by the company borrowing the money. Tony Fidelie asked the chances of coming out of this 90 -day period with the consensus that this project would not be successful, Mr. McDonald said Gatehouse Capital would not have gone through this preliminary effort if they had not felt there was potential. There are challenges, but it is an intriguing opportunity. Mr. Dockery said the expense is what could make the deal crater. Mr. Leiker agreed; everyone recognizes the need for the hotel, but it will depend upon the availability of public resources. He is optimistic, and happy that Gatehouse Capital is at the table. If it does not work out with them, it probably would not work, out at all. If it were going to happen in a solely private venture, it would have already been built. Dave Clark said he believes there are three factors involved: the effectiveness of MPEC and its financial feasibility; the additional downtown improvements; and two hotels in the area -- one one that has been in disrepair for over 25 years, and the other that is in a flooded location. Mr. McDonald said it is important to quickly scale down the wish list. He also urged all to get clarity early in the process; gatehouse Capital will not get into a continual, reiteration of concepts, Mr. Dockery said the big decision is how much conference space will be needed. It might be more important to concentrate on the restaurant and lounge. He sees this as being a destination for not only overnight guests, but also for locals who might stop in for lunch and a drink before attending shows, such as Christmas Magic. The CVB will weigh in on whether additional conference space is necessary. Mr. McDonald noted that Doubletree's full-service hotels require a minimum amount of meeting room space. lie urged them to imagine what downtown Wichita Falls will look like in 2025 and what its needs will be. gatehouse �,__'a �ital a, a �Ieyel �, ... .. �C-,X Mr. Clark moved �tofund the r Deal from Gatchouse C )ital at a level not to exceed 0 u mous Mr e t motion r LBiker the rr�iotion �carried unau�i $111 Oil. Seconded b 4. Status update of performance agreements. Mr. Dockery reminded the Board that they wished to see the performance agreements for the entities that received assistance for the cost of the purchase and installation of fire suppression systems (728 Indiana and 922 Indiana). Kinley Hegglund said each company will sign a performance agreement, a promissory note, and a deed of trust. The deed of trust gives the 4B Board the most protection, as it puts a lien against the property. The funds are to be used solely for the fire suppression system equipment and installation. Every year they successfully operate their respective facilities, 20% of their loans will be forgiven. In five years, their entire loans will be forgiven and the deeds of trust will be released. No funding will be provided until the projects are built and the Certificates of Occupancy issued. Rick Hatcher asked if both entities have enough capital to handle their operations without receiving the 4B funds in advance. Mr. Hegglund said the 728 Indiana developers do, but he WFEDC — Minutes of May 23, 2016 3 does not know about the 922 Indiana developers. Mr. Ginnings wondered if the 4B Board's lien could be relegated to second position if the developers seek a bank loan. Mr. f said the lien first filed has priority. The developers might run into difficulties securing a bank to with an existing lien on the property, and could ask the Board to release the lien or take a second position. 5. Discussion of guidelines for Downtown incentives. Mr. Ginnings said the Board ought to have a consensus on priorities for downtown grants. He believes residential properties, and those businesses that directly support residential (e.g., cleaners, grocery stores, pharmacies, clinics), should have priority. Priority number two would include all other businesses. He also opined that the Board should not be in favor of any business that would detract from the neighborhood atmosphere, such as honky-tonks, arcades, industrial businesses, and flea markets, (He noted that he did not classify the Iron Horse Pub as a honky-tonk.) Mr. Dockery noted that the owners of the former Southwestern Bell Telephone building at 824 Scott Street want to develop the upper floors into apartments, and put a restaurant in the lower flower. That project, and Brick Oven Pizza, have both received $5,000 downtown grants. They both want to approach the Board for additional funding for fire suppression. He believes the Board will begin to receive several similar requests for financial assistance, now that the funding granted to the developers of 728 Indiana and 922 Indiana has been publicized. He suggested they decide upon an approach to consider these requests — consider all as they come in, wait until the next fiscal year to hear similar requests, or develop an application process. nd Dave Mr. Glum. as established a subcommittee consistith-1 of himself Michael Mills aa ad - Clark. This subcommittee will review re nnest s for fundinut via emails from Mr. Docker . If the be resented for the threesubcommittee m�ember�stley�will�r�ese EEEE worth meet two of f 0 are deemed o It b consideration to the entire 4B Board at a al Michael ills asked when beautification, such as streets and green space, comes into play. Mr. Leiker said downtown beautification projects have been accomplished, such as the intersection improvements and landscaping, but there is not a set budget. Mr. Dockery said Vision 2020 called for pedestrian access and wayfinding. There is also the MPO transit oriented development plan that covers a 16 -block area. But there is nothing definitive on paper that shows what is being spent and identifies the next project. Mr. Mills wondered if the 4B Board could fund a master plan. Henry Florsheim agreed that there is a need for a comprehensive master plan for downtown. Mr. Leiker said a lot of downtowns have a Business Improvement District, including Ft. Worth and Sundance Square. It is a self-imposed tax upon downtown business owners and the money is used to beautify downtown. That has been tried in Wichita Falls before, but it failed. Mr. Florsheira said it would be best to create a master plan first in order to be able to show downtown property owners the long-term vision. Mr. Ginnings asked if this would be a function for the downtown development group. Mr. Leiker sees this as a City staff project. Wi~ED — Minutes of May 23.2016 4 . Dockery said Freese and Nichols will finish its transit-oriented development study b June. It is a pretty thorough downtown plan, paid for by the FTA. Staff feels it would be good for the 4B Board to hear the results of this study, and will schedule a time to present it to them. . Adjourn. -m Mr. Matcher moved to ad°o , Seconded r l m Clark the eet n ad`ou ed at :CIf im Cronin , President