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Home My WebLink About01-13-14 Meeting of the La Porte Development Corporation Board of Directors RICHARD WARREN,PRESIDENT MIKE CLAUSEN, BOARD MEMBER MIKE COOKSLEY, BOARD MEMBERRANDY WOODARD, BOARD MEMBER JAY MARTIN, BOARD MEMBERNANCY OJEDA,BOARD MEMBER CHUCK ENGELKEN, BOARD MEMBER CITY OF LA PORTE DEVELOPMENT CORPORATION MEETING AGENDA Notice is hereby given of a meeting of theCity of La Porte Development Corporation to be held on January 13,2014, at the City Hall Council Chambers, 604 West Fairmont Parkway, LaPorte, Texas, at 5:00p.m. to consider the followingitems of business. 1.CALL TO ORDER ( 2.CONSENT AGENDA All consent agenda items are considered routine by the La Porte Development Corporation Boardand will be enacted by one motion. There will be no separate discussion of these items unless a Board memberrequests anitem be removed and considered separately.) (a) Consider approval of minutes of the meeting of La Porte Development Corporation Board held on December 9,2013–P. Fogarty (b) Consider approval or other action to authorizing the President of the La Porte Development Corporation Board to execute a development agreement in an amount not to exceed $66,000.00 for Rob Johnson Interests, for demolition work at the former Chevrolet dealership site at corner of Spencer Hwy and SH 146–S. Livingston 3.PRESENTATIONS (a) Receive an update on the La Porte Plaza, a new proposed retail development by Rob Johnson Interests at the former Chevrolet dealership site at corner of Spencer Hwy and SH 146–S. Livingston 4.AUTHORIZATIONS (a) Consider approval or other action to allow staff to post appropriate notice for a public hearing for an incentive grant request in an amountnot to exceed $40,000.00 to Rob Johnson Interests to attract new retail development on the former Chevrolet dealership site at the corner of Spencer Hwy and SH 146 –S. Livingston 5.SET DATE FOR NEXT MEETING S. Livingston – 6.STAFF REPORTS (a) Receive Financial Report –M. Dolby 7.BOARD MEMBER COMMENTS regarding matters appearing on agenda; recognition of community members, city employees, and upcoming events; inquiry of staff regarding specific factual information or existing policies. 8.EXECUTIVE SESSION –The La Porte Development Corporation reserves the right to meet in executive session on any agenda item should the need arise and if authorized by the Texas Open Meetings Act, Title 5, Chapter 551, of the Texas Government Code, including, but not limited to, the following: Texas Government Code, Section 551.087(1) and (2) –Deliberation regarding economic development negotiations:Discuss and/or deliberate regarding financial and commercial information received from business prospect, and deliberate possible offer of financial or other incentives to business prospect, in at the former Chevrolet dealership site at connection with new retail development/business enterprises corner of Spencer Hwy and SH 146 . January 13, 2014, La Porte Development Corporation Agenda 9.RECONVENE into regular session and consider action, if any, on items discussed in executive session. 10.ADJOURN In compliance with the Americans with Disabilities Act, the City of La Porte City will provide for reasonable accommodations for persons attending publicmeetings. To better serve attendees, requests should be received 24 hours prior to the meetings. Please contact Patrice Fogarty, City Secretary, at 281.470.5019. The La Porte Development Corporation reserves the right to meet in executive session on anyagenda item should the need arise and if authorized by the Texas Open Meetings Act, Title 5, Chapter 551, of the Texas Government Code. CERTIFICATION I certify that a copy of the January 13, 2014, agenda of items to be considered by the Board of the La Porte Development Corporation was posted on the City Hall bulletin Boardon January 7, 2014. January 13, 2014, La Porte Development Corporation Agenda RICHARD WARREN,PRESIDENT MIKE CLAUSEN, BOARD MEMBER MIKE COOKSLEY, BOARD MEMBERRANDY WOODARD,BOARDMEMBER CHUCK ENGELKEN, BOARD MEMBERNANCY OJEDA, BOARD MEMBER JAY MARTIN, BOARD MEMBER MINUTES OF LA PORTE DEVELOPMENT CORPORATION BOARD MEETING OF DECEMBER 9, 2013 December 9,2013, The City of La Porte Development Corporation Board met on at the City Hall Council 5:00p.m Chambers, 604 West Fairmont Parkway, La Porte, Texas, at .to consider the followingitems of business: 1. Call to Order President Warrencalled the meeting to order at 5:00p.m.The following members of the LaPorte Development Corporation Board were present: Board membersEngelken, Martin, Woodard, Clausen, andOjeda. Staff Present:Corby Alexander,Patrice Fogarty,Scott Livingston, Michael Dolbyand Assistant City Attorney ClarkAskins. ( 2. CONSENT AGENDA All consent agenda items are considered routine by the La Porte Development Corporation Boardand will be enacted by one motion. There will be no separate discussion of these items unless a Board memberrequests anitem be removed and considered separately.) (a) Consider approval of minutes of the meeting of La Porte Development Corporation Board held on November 11, 2013 –P. Fogarty Board memberEngelkenmoved to approve the minutes as presented.Boardmember Cooksley seconded. Ayes: President Warren, Vice-President Cooksley, Boardmembers Clausen, Martin, Woodard, Engelken and Ojeda Nays: None Absent:None 3.PUBLIC HEARING AND ASSOCIATED MATTERS (a)Public Hearing to receive comments regarding proposedincentive grant request in an amount not to exceed $15,000.00 to the Richard Industrial Group to open a new office and relocate and/or hire at least 75 full-time employees in La Porte –S. Livingston The public hearing was opened at 5:02 p.m. Economic Development Coordinator Scott Livingston presented a summaryregarding a proposed incentive grant request in an amount not to exceed $15,000.00 to the Richard Industrial Group to open a new office and relocate and/or hire at least 75 full-time employees in La Porte.Mr. Livingston advised Board members, Richard Industrial Group plans to relocate 8 employees and hire approximately 80 employees. Rusty Sims with Richard Design Services provided an update for the Richard Industrial Groupand advised Board members they have now moved into the facility located at 1200 Highway 146; are now members of the Chamber of Commerce and Economic Alliance; have 12 employees;and have plans for an OpenHouse of the facility at the end of January 2014. Page 1of 2 December 9, 2013, La Porte Development Corporation Board Minutes Board member Ojeda questioned if any of the employees were coming from Beaumont, Texas. Mr. Sims responded none from Beaumont, several from the Deer Park/Pasadena area, Mont Belvieu, and one from Orange. Board member Engelken questioned the number of full time jobs. Mr. Sims responded 90 employees at the end of the third year. Board memberClausen moved to approvethe proposed incentive grant request in an amount not to exceed $15,000.00 to the Richard Industrial Group to open a new office and relocate and/or hire at least 75 full-time employees in La Porte.Boardmember Martinseconded. Ayes: President Warren, Vice-President Cooksley, Boardmembers Clausen, Martin, Woodard, Engelken and Ojeda Nays: None Absent:None 4.SET DATE FOR NEXT MEETING S. Livingston – Board members set the next meeting date for January 13, 2014,at 5:00 p.m. 5.STAFF REPORTS (a)Receive Financial Report –M. Dolby Finance Director Michael Dolby presented the Financial Report and provided an estimate of the year end Fund Balance after commitments to Project Nebula, Intergulf,and Rob Johnson Interests. BOARD MEMBER COMMENTS regarding matters appearing on agenda; recognition of 6. community members, city employees, and upcoming events; inquiry of staff regarding specific factual information or existing policies. There were no comments. 7.ADJOURN There being no further business, at 5:20p.m.Board member Vice-President Cooksleymoved to MOTION PASSED. adjourn the meeting.Board member Woodardseconded. Ayes: President Warren, Vice-President Cooksley, Board members Clausen, Martin, Woodard, Engelken, andOjeda Nays: None Absent:None Respectfully submitted, ____________________________________ Patrice Fogarty,City Secretary th Passed and approved on this13dayofJanuary,2014. ____________________________________ President RichardWarren Page 2of 2 December 9, 2013, La Porte Development Corporation Board Minutes REQUEST FOR LA PORTE DEVELOPMENT CORPORATION AGENDA ITEM Budget Agenda Date Requested:13January 2014 Source of Funds:4B Board Requested By:Scott D. Livingston Account Number: 038 (General Revenue) Department: Administration/Economic Development Amount Budgeted: N/A Report: Resolution:Ordinance: Amount Requested:$66,000 Exhibit:Development Agreement for RJI Budgeted Item:YESNO Exhibit: SUMMARY & RECOMMENDATION On July 8, 2013, Rob Johnson, Owner of Rob Johnson Interests, requested an economic $66,000 development incentive in the amount up to to demolish and remove theconcrete slabs ontwo (2) tracts of land for Phase #1 of a proposed, new retail development in thesouthwest quadrant of Spencer Highway and SH 146. Per the Board’s directiononJuly 8, 2013, staff published at least 60 day notice of a public hearingto discuss the project during the 4B Board meeting on September23,2013.By September 23,2013, no qualified petition had been received. The project was presented and discussed at both the 4B Board and City Council meetings on September 23, 2013. The enclosed development agreement outlines theminimum thresholds for key performance indicators such asactual expenses for infrastructure and site improvements, capital investment, and primary job creation. Action Required by the La Porte Development Corporation Board: Consider approval or other action to authorize Richard Warren, President of the 4B Board, to execute a development agreement in anamount not to exceed $66,000forRob Johnson Interests. Approved for the La Porte Development CorporationAgenda Corby D. Alexander,City ManagerDate REQUEST FOR LA PORTE DEVELOPMENT CORPORATION AGENDA ITEM Budget Agenda Date Requested:13January 2014 Source of Funds:Fund 038 Requested By:Scott D. Livingston Account Number: Department: Administration/Economic Development Amount Budgeted: N/A Report: Resolution:Ordinance: Amount Requested:$0 Exhibit:Project Backup Information Budgeted Item:YESNO SUMMARY & RECOMMENDATION Mr.RobJohnsonistheOwnerofRobJohnsonInterests(RJI),whichisalocalRealEstate DevelopmentCompany.RJIdevelopedtheShoppesofTownSquareonCenterStreetand PasadenaBlvdinDeerPark,Texas.RJIrecentlyplacedaportionoftheJayMarks Chevroletdealershipundercontracttoconstructanewretail/commercialdevelopment. Phase#1isplannedtoencompass2.86acres,whilePhase#2isplannedtoencompass1.67 acres.Mr.JohnsonplanstocompletePhase#1 in2014andPhase#2byeitherlate2014or early 2015. RJIhas beenpursuingandnegotiatingwithmultiple, retailprospectsto lease space in Phase #1 of the new, proposed retail development. In order to accommodate a larger, national retail tenant in the retail center, RJImust construct a larger building with firewallsbetween the adjoining lease spaces. In order to keep theconstruction costs within limits that will still allow RJIto offer competitive and attractive lease rates to the prospective national retail tenant, RJIis requestinganadditional incentive in the amount of $40,000. Thesubjectpropertyof both Phases #1 and #2 isonthetaxrollsfor$700,000,which yieldsapproximately$4,970(at$0.71/$100ofassessedvalue)annuallyintaxestotheCity ofLaPorte. Oncedevelopmenthasbeencompleted on both phases,theestimatedtaxable valueofthenewdevelopmentwill be$6,000,000to$8,000,000.Excludingsalestax revenue,theestimatedannualtaxeswouldbe$42,600to$56,800.Takinganaverageofthe two,iftheestimatedtaxablevalueweretobe$7,000,000,theannualtaxeswouldbe $49,700.Therefore,theestimatedannualincreaseintaxesuponcompletionofthemulti-phase $44,730 projectis. $106,000 Assuming a total incentive grant of ($66,000 plus $40,000) and new annual taxes $44,7302 years and 4 months ($49,700 -$4,970) of , the break-even point would be . BaseduponsomeofthequestionsabouttheprojectonJune 10, 2013,pleasenotethatthe followinginformationis beingprovided: Metes and Bounds description of Property: A matching boundary survey is included in the packet. ItemizedListofWorkCompleted to DatetoSecuretheProperty Paymentofearnestmoney Propertyisundercontractforpurchase PhaseIEnvironmental“NoFurtherActionRequired”,datedMay24,2013. ClosureLetterfromtheStateofTexas(T.E.C.Q.),December2012–Aftercurrent ownerhaddoneaPhaseIIonsite. Marketing–AerialPhotographsandDemographics(seeattached) ItemizedListofExpensestoDate: PhaseI-$2,500 AerialPhotographs-$1,500 Demographics-$750 ArchitectandEngineering-$6,500 EarnestMoney-$30,000 CenterPointEnergyEasementRemoval-$1,000 Survey-$4,800 ArchitecturalSitePlanDesignwithCitycomments-$3,600 AlleyEasementROWAcquisition-$6,500(est.) $57,150. TOTALinvestedcapitalatriskis Other ClosingSchedule for Phase #1–January 28, 2014 Partners–RobertE.Johnson,Jr.andRobertE.Johnson,III Rob Johnson is prepared to meet with the Board inExecutive Session to discuss any questions about prospective retailers for the proposed, new retail development. Action Required by the La Porte Development Corporation Board: None Approved for the La Porte Development CorporationAgenda Corby D. Alexander,City ManagerDate Project Rob Johnson’sFACTS AND FIGURES Assumptions: $6-8 million Total estimated, taxablevalue of both Phases #1 and 2: August 2014 Phase #1 will be substantially complete by . 2015 Phase #2 will begin by early . Current Property Value and Taxes $700,000 Current, taxableproperty value(based upon HCAD valuation): Total annual taxes currently paid to the City of La Porteat $0.71per $100 of assessed $4,970 taxable value: Real, Business Personal Property Tax to be Received Annually: Totaltaxes to be paid tothe City of La Porte upon completion of both Phases #1 and 2 of $49,700* the project,and an estimatedtotal taxable value of $7,000,000: Break-Even Point: $106,000$44,730 Assuming a total incentive grant of and new annual taxes of , the 2 years and 4 months break-even point would be . st ) Incentive:$66,000 Value of the First (1 Current, Additional Incentive Request:$40,000 TotalIncentive to the Project:$106,000 + Break-Even Point:2.37years * * This sum does not consider the amount of new sales tax that thewholeproject will generate. + $106,000/($49,700-$4,970)=2.37years, or 2 years and 4 months REQUEST FOR LA PORTE DEVELOPMENT CORPORATION AGENDA ITEM Budget Agenda Date Requested:13January 2014 Source of Funds:Fund 038 Requested By:Scott D. Livingston Account Number: Department: Administration/Economic Development Amount Budgeted: N/A Report: Resolution:Ordinance: Amount Requested:$40,000 Exhibit:Facts and Figures Budgeted Item:YESNO SUMMARY & RECOMMENDATION RJIhas beenpursuingandnegotiatingwithmultiple,retailprospectsto lease space in Phase #1 of the new, proposed retail development. In order to accommodate a larger, national retail tenant in the retail center, RJImust construct a larger building with firewalls between the adjoining lease spaces. In order to keep theconstruction costs within limits that will still allow RJIto offer competitive and attractive lease rates to the prospective national retail tenant,RJIis requestinganadditional incentive in the amount of $40,000. Thesubjectpropertyof both Phases #1 and #2 isonthetaxrollsfor$700,000,which yieldsapproximately$4,970(at$0.71/$100ofassessedvalue)annuallyintaxestotheCity ofLaPorte. Oncedevelopmenthasbeencompleted on both phases,theestimatedtaxable valueofthenewdevelopmentwill be$6,000,000to$8,000,000.Excludingsalestax revenue,theestimatedannualtaxeswouldbe$42,600to$56,800.Takinganaverageofthe two,iftheestimatedtaxablevalueweretobe$7,000,000,theannualtaxeswouldbe $49,700.Therefore,theestimatedannualincreaseintaxesuponcompletionofthemulti-phase $44,730 projectis. $106,000 Assuming a total incentive grant of ($66,000 plus $40,000) and new annual taxes $44,7302 years and 4 months ($49,700 -$4,970) of , the break-even point would be . Should the Board like to move forward with this incentive, staff recommends that the Board: Vote to approve the project in concept and approve the posting of a public hearingto designate the incentive as a project of the La Porte Development Corporation. The 60- day petition period would begin once the notice of public hearing appears in the Houston rdth Chronicle (January 23ifthe notice is submitted to the Chronicle on January 16). The th Board would conduct the public hearing on or after March 24and then formally vote to appropriate funds or not for the project at that time. Authorize staff to draft an incentive/development agreement with legal counsel. Action Required by the La Porte Development Corporation Board: Consider approval or other action to set a public hearing on or after March 24 to designatean incentive grant request in the amount not to exceed $40,000 to Rob Johnson Interests to attract a new retail development and business enterprise to the City of La Porteas a project of the La Porte Development Corporation. Approved for the La Porte Development CorporationAgenda Corby D. Alexander,City ManagerDate Project Rob Johnson’sFACTS AND FIGURES Assumptions: $6-8 million Total estimated, taxablevalue of both Phases #1 and 2: August 2014 Phase #1 will be substantially complete by . 2015 Phase #2 will begin by early . Current Property Value and Taxes $700,000 Current, taxableproperty value(based upon HCAD valuation): Total annual taxes currently paid to the City of La Porteat $0.71per $100 of assessed $4,970 taxable value: Real, Business Personal Property Tax to be Received Annually: Totaltaxes to be paid tothe City of La Porte upon completion of both Phases #1 and 2 of $49,700* the project,and an estimatedtotal taxable value of $7,000,000: Break-Even Point: $106,000$44,730 Assuming a total incentive grant of and new annual taxes of , the 2 years and 4 months break-even point would be . st ) Incentive:$66,000 Value of the First (1 Current, Additional Incentive Request:$40,000 TotalIncentive to the Project:$106,000 + Break-Even Point:2.37years * * This sum does not consider the amount of new sales tax that thewholeproject will generate. + $106,000/($49,700-$4,970)=2.37years, or 2 years and 4 months This is an Unaudited Statement. City of La Porte La Porte Development Corporation (038) Fund Summary (Section 4B Sales Tax) Previous ReportFY 2013-14FY 2012-13 Unaudited Beginning Fund Balance 9/302,768,1552,768,1552,196,935 Plus Year to Date Revenues: 1/2 Cent Sales Tax--- Interest Income346956983 Total Revenues346956983 Equals Total Resources2,768,5012,769,1112,197,918 Less Year to Date Expenditures: Payroll2,37310,4559,297 Supplies-116 Services & Charges (Memberships, Training, Advertising, Legal, Utilities)1,0076,03515,206 Debt Service Transfer79,045158,09168,344 * Capital Projects Transfers**6,41712,83320,833 Total Expenditures88,842187,425113,686 Estimated Year to Date Fund Balance$2,679,659$2,581,686$2,084,232 *Debt Service Payments for Library, Bay Area Boulevard & Canada Road and Ballfields. **Capital Project Transfer is for 1/2 of the Golf Course/Little Cedar Bayou Park Irrigation Sytstem.