02-23-15 Meeting of the La Porte Development Corporation Board of Directors minutes

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Economic Development Coordlnator Scott Livingston provided a summary; Frank Herrera, ra , General Manager for Fischer's Do It Best Hardware, provided information for expanding and improving the business. Board member Woodard,asked if the ownership of the building is in a limited partnership or owned by an individual. Mr. Herrera responded the building is owned by both Mike Breaux and Rod Rothermel. Board member Woodard asked Mr. Breaux if he and Mr. Rothermel have a limited partnership. Mr. Breaux responded yes. Board member Woodard asked the name of the partnership. Mr. Breaux responded Fischer's Hardware Incorporated. Board member Woodard asked if the $1.2 million investment will be to enclose the lumber yard and change the fagade. Mr. Breaux responded yes. Board member Woodard asked if bids were done for the second phase of the expansion. Mr. Breaux responded not yet; the business is investigating programs that will assist with the expansion. Mr. Breaux also advised they will go out for bids in 2015, but he is not certain of the month. Board member Woodard asked if Do It Best is the primary lender of the program and if they are helping. Mr. Breaux advised not at the moment, but their biggest contribution will be merchandise. Board member Woodard asked if it has been discussed with the corporation the cost to improve the additional 15,000 square feet and double the area. Mr. Breaux responded that to take down the wall and put up a beam is a minimum of $50,000. Board member Woodard asked why not expand the business before spending on the fagade. Mr. Breaux responded they were not planning on expanding the square footage on the inside until the project came about and realized the store is not large enough, and then considered tearing the wall down and having a full lumber yard, which will increase sales by 15 to 20 percent. President Warren asked if Fischer's Hardware Incorporated is requesting $350,000 for a grant and the entire expansion will cost$750,000. Mr. Breaux responded no,they are requesting up to$350,000 and will spend an additional $750,000. Board member Woodard commented the board has tried to stay at about 10 years for paybacks. Board member Engelken commented the project is worthwhile, but his concern is the board usually has a cap at 25% and the payback is usually less years than what's proposed; and based on the facts he has heard at this point, the business needs to go back and sharpen up the plans and get bids with more details. Board member Engelken advised he is not ready to approve the grant at this point and would suggest the board deny the request. Economic Development Coordinator Scott Livingston informed the board there is not a policy that limits anything at 25%. The Pipeline Grill project was at 25%, and there are 5 other projects that are coming for consideration. He would like the board to consider the City of La Porte's 5-year Strategic Plan for beautification. This project is not an enhancement grant. Board member Woodard commented the payback period has been discussed more than once. Mr. Livingston responded yes he just want the board to consider the beautification and staff trying to fulfill the goals set by City Council with the 5-year Strategic Plan. City Manager Corby Alexander commented the 25% and payback of 10 years has been a rule of thumb without a policy. Board member Woodard asked if the board can give Fischer's Hardware Incorporated an amount to shoot for to help them with the business plan in order to come back to the board. Page 2 of 3 February 23,2015,La Porte Development Corporation Board Minutes