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4A Wichita Falls Economic Development Minutes - 02/16/2017INLITES OF THE WICHITA ALLs ECONOMIC DEVELOPMENT CORPORATION February 16,217 PRESENT: Dick Bundy, President Reno Gustafson, Secretary -Treasurer Darren Leiker Dave Lilley Stephen L. Santellana, Mayor ,ling Dockery, Deputy City Manager/CFO R. ICinley Flegglund, Jr., City Attorney Linda Merrill. Recording Secretary Henry FF'lorsheina, CEO Kevin Pearson, V.F ., Economic Development Travis Haggard. V.11.. BR&E Adreno: W ike, Research Associate Marvin Groves, President Brent Bluhm.' General Manager Holmes Davis, Senior Vice President Randy Funston, CEO WFC?DC Members ti Mayer and City Council , City Staff fi e Chamber of Commerce and Industry 4 y Marvin Groves Electric Wichita Clutch Binswanger § Excalibur faint ABSENT: L o Lane § Member 1. Call to Order Dick. Bundy called the meeting , to carder at .:30 pm. 2. Approval of Minutes (January 19, 2 17 Reno Gustafson moved to antmove the minutes, Seconded lav Dave Lilh-V the motion carried. 4-0. . Financial Report —presented by Jim cket:y The Board has an unreserved hand balance of $4.755 million. Sales tax revenues are 1.4% ahead of'this time last year. Revenues had been up 4%, but February receipts were clown 2.74%. leading to the downturn.. Mr, Dockery also included historical sales tax: figures to show the fluctuations in revenues through the years. 4. Discussion of 36 -month extension for existing Wichita Clutch Performance Agreement Kevin Pearson said the original agreement with Wichita Clutch was executed in 2013, and an extension, granted a couple of years later, is about to expire. lie then introduced Brent Blulim, General Manager of the local plant. Mr, Blohm said the plant was slated to close a couple of years ago, per its corporate offices. The facilities in San Marcos were to expand and take on their operations. Fortunately, that did not happen, and Wichita Clutch has tried to make sure the plant stays open. Their attempt to bring a product froni a facility closing in Green Bay, Wisconsin, failed due to the plant not having enough room. They have since treed up 15,000 square feet of space and are searching for other operations to put in the plant. They have obtained one new product line that lie hopes will be an opportunity for growth. Mr. Pearson asked how many additional jobs might be anticipated it' that 15,000 square feet of space is filled with another operation. Mr, 1lbm, said they are currently at 66-69 employees, and still on as partial lay-off schedule. At present, they arc looking to regain full employment and restart their second shift. They hope to find a big, aggressive product line for that space in the facility to bring in more employees. 5. Discussion of 36 -month extension for existing Excalibur Paint & Coatings Performance Agreement Randy Dunston said his business had enjoyed steady growth until the oil collapse in 2014. "I'lley pivoted to other markets. and he never laid oil' or cut any employee's hours during the downturn. At the end of 2014, Excalibur had met half of the phase 2 funding conditions, and could have easily met the employment requirements by the first of 2015. Excalibur has reached the 25 -employee threshold as required by the performance agreement, and is advertising to hire 3-5 more employees, He could have hired 3 employees ill August 2016 to reach the 25 employee threshold; however, he preferred to offer raises to his current employees rather than to hire new ones. The waterborne Paint is responsible for over 25% of gross sales and expanding, A company that builds jet bridges has written the product into their specs, as has as major drilling contractor. Textron, which owns Cessna, continues to work with Excalibur. It has recently approved seven new colors for Excalibur to manufacture. Some of those colors will be used for military aircraft, and that may lead to Excalibur getting military specification approval. Mr. Bundy asked ifthe work forTextron is on new aircraft, Mr. Dunston replied it is all new aircraft, lie asked if he has had any success working with Eagle Railcar. Mr. Funston replied he is working on that market. 6. Discussion of brokerage agreement with Binswanger for the former ATCO and Stanley Tools facilities. Mr. Pearson introduced Holmes Davis from Binswanger, who was here to give a short presentation regarding a potential brokerage agreement 11or the former ATC O and Stanley Tools facilities. N Mr. Davis thanked the Board for the opportunity. The company focuses on facilities that are over 80,000 square feet in size. The two facilities are flexible, and not too large for the market. They each have good ceiling height for most industries, and expansion capabilities. Binswanger would immediately send an email to its contacts about the facilities, should the WFEDC decide to engage their services. A brochure would take about 30 days to produce. They would also prepare narrated video presentations with the use of drone. The facilities would get market exposure on a global level, and they would target industries suitable for this area. 1 -le mentioned aerospace defense, the oil field industry, and automotive suppliers, to name a few. They are asking for a 12 -month term and a 6% commission. If there is an outside broker, that fee would be split 50/50. A lease commission would be 4.5%. An outside broker would receive 4.5%, and Binswanger would receive 2.5%. fle understands the WFEDC would prefer to sell the buildings, but a tenant would bring in jobs. Mr. Dockery asked what would happen to his commission if the Board gave the building to a potential buyer as an incentive. Mr. Davis said that happens quite often., and his fee is usually a percentage of the market value. Mr. Dockery asked him at what amount he valued these buildings, Mr. Davis said it's probably on the high end, but $3.6 million ($18 to $20 per square foot) for the Stanley Tools building, and $1.5 million ($10 to $12 per square foot) For the ATCO structure, It will be important to discuss price. It would cost $50 to $60 per square foot to build such a structure, but the price needs to be accessible. 7. Discussion of funds to retain Marvin Groves Construction to repair the electrical system at the former Stanley Tools facility. Marvin Groves said that once the switch gears were blown, they had to be shut down and tested. Unfortunately, not all ofthern were good, including the main ones coining into the building. The conductors going out to Oncor. and Oncor's equipment are good, however. I le has been working to bring switch gears in to power up the mezzanine and the back part of the plant. There is no distribution of power, and there never was enough to power the entire building. Code restrictions might limit the number of breakers that can be energized, Mr. Pearson referenced an $83,000 proposal, but understood Mr. Groves thought there was something else the Board might consider for $30,000. Mr. Groves said that even though the switch gear is installed and energized, not all the lights nor the air conditioning may work. Mr. Pearson asked for confirmation that the additional $3 1,00 will make everything work at a bare minimum. Mr, (,troves said he had two numbers at his cost, as he would be able to purchase them without markup. The main switch was $45,000, and the other was $36,000, He wondered aloud if another $36,000 is spent to energize another substation, would that reduce the amount of work to get the air conditioning and lights to work, and decided it was "kind of a wash," Mr. Pearson then asked, bottom line, did the Board only needed to spend $83,000? Mr. Groves replied that would only cover the switch gears. It would not cover the installation and demolition. Mr. Pearson asked for the total cost. Mr. Groves said he is still due to be paid $13,000. then $8 1,000 for the switch gears-. and $108.000 as a rough estimate to energize the lights, air conditioning, and get power in the office area. Mr. Bundy said funding needs to be allocated to get power to the building in order to determine the next most cost effective move. 3 8. Discussion of annual operating expenses fart e former ATCO facility. Mr. Pearson said the Board needs to deliberate budget operating expenses Im tile A'T"CC) facility in executive session. . Executive Session M•. Bundy adjourned the meeting into executive session at 4:30 p.m. pursuant to "f°ERAS GOVERNMENT CODE section 551.0 7, He announced the meeting back into regular session at 5:59 .m. The subjects posted in the Notice of Meeting were deliberated, and no votes or further action was taken on these items in executive session. 10. 36-monthextension for existing WichitaClutch to Performance Agreement No action was taken on this item. Mr. Pearson will discuss further options with Wichita Clutch and this item will be placed on the Board's next agenda. 11. 36 -month extension for existing Excalibur Paint & Coatings s erfor ce Agreement No action was taken on this item. 12. Brokerage agreement with i swa ger for the former ATCO and Stanley Tools facilities. Mr. Gustafson moved fora Davis of l�inswan Yet tt�r the t�>rmer A.`T'C�( and �tanle '1"oc�ls fT�c.lities :.with the laud��et tc� be set at a later time ° and f rtl�cr autlzori in the President cif the W 17 E C to into enter said a ,reement `seconded Mr. Lilley, the motion carried -0. 13. Funds to retain Marvin Groves Construction to repair the electrical system at the former Stanley "Pools facility. Marron Leiker moved to retain Marvin Groves Construction and for the ex ~,enditure of t tc tJC) t10 to re stir the electrical s stem at the former Stanley Tools facility, The motion was sec c>nded b M . Caustatson. Tle WI TC finds that this action is necessary° toTrese:ry e and protect public assets it is necessary to be done in a quick and efficient manner. The motion carried 4- 14. - 1 . Annual operating expenses for the former ATCO O facili Mr. Lilley ac tl «tired tlle ex end Lure of $144,000 to covet the estimated operating e et ses fear tlj(L_f(jrpjer ATC0 tac�lity t< r c>t7c:m ca TM_We Seconded by MGustafson, the motion carried -0. 1. Adjourn Mr. Gustatson moved t`or adjournment. The "d,.( 1a. . nt In