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HomeMy WebLinkAbout09-22-14 Meeting of the La Porte Development Corporation Board of Directors RICHARD WARREN, PRESIDENTRICHARD WARREN, PRESIDENTMIKE CLAUSEN, BOARD MEMBERMIKE CLAUSEN, BOARD MEMBER MIKE COOKSLEY, BOARD MEMBERMIKE COOKSLEY, BOARD MEMBERRANDY WOODARD, BOARD MEMBERRANDY WOODARD, BOARD MEMBER JAY MARTIN, BOARD MEMBERJAY MARTIN, BOARD MEMBERNANCY OJEDA, BOARD MEMBERNANCY OJEDA, BOARD MEMBER CHUCK ENGELKEN, BOARD MEMBERCHUCK ENGELKEN, BOARD MEMBER CITY OF LA PORTE DEVELOPMENT CORPORATION MEETING AGENDACITY OF LA PORTE DEVELOPMENT CORPORATION MEETING AGENDA Notice is hereby given of a meeting of the City of La Porte Development Corporation to be held on Notice is hereby given of a meeting of the City of La Porte Development Corporation to be held on September 22, 2014September 22, 2014, at the City Hall Council Chambers, 604 W. Fairmont Parkway, La Porte, Texas, , at the City Hall Council Chambers, 604 W. Fairmont Parkway, La Porte, Texas, beginning at 04:45 PM to consider the following items of business:beginning at 04:45 PM to consider the following items of business: 1.CALL TO ORDERCALL TO ORDER 2.CONSENT AGENDACONSENT AGENDA (All consent agenda items are considered routine by the La Porte (All consent agenda items are considered routine by the La Porte Decelopment Corporation Board and will be enacted by one motion. There will be no separate Decelopment Corporation Board and will be enacted by one motion. There will be no separate discussion of these items unless a Board member requests an item be removed and considered discussion of these items unless a Board member requests an item be removed and considered separately)separately) Consider approval of minutes of the meeting of La Porte Development Corporation Board Consider approval of minutes of the meeting of La Porte Development Corporation Board (a) held on August 18, 2014 held on August 18, 2014 -- S. Harris S. Harris Consider approval or other action authorizing the disbursement of Payment No. 1 of 3, in the Consider approval or other action authorizing the disbursement of Payment No. 1 of 3, in the (b) amount of $5,000.00, to Richard Design Services, Inc., pursuant to previously approved amount of $5,000.00, to Richard Design Services, Inc., pursuant to previously approved economic incentive agreement between the La Porte Development Corporation and Richard economic incentive agreement between the La Porte Development Corporation and Richard Design Services, Inc. Design Services, Inc. Design Services, Inc. Design Services, Inc. ---- S. Livingston S. Livingston S. Livingston S. Livingston 3.PUBLIC HEARING AND ASSOCIATED MATTERSPUBLIC HEARING AND ASSOCIATED MATTERS Public Hearing to receive comments regarding proposed project of the La Porte Public Hearing to receive comments regarding proposed project of the La Porte (a) Development Corporation to make expenditure of funds not to exceed $450,000.00, in Development Corporation to make expenditure of funds not to exceed $450,000.00, in accordance with economic incentive agreement with ACT Independent Turbo Services, accordance with economic incentive agreement with ACT Independent Turbo Services, Inc., Inc., -- S. Livingston S. Livingston Consider approval or other action authoring project of the La Porte Development Consider approval or other action authoring project of the La Porte Development (b) Corporation to make expenditure of funds not to exceed $450,000.00, in accordance with Corporation to make expenditure of funds not to exceed $450,000.00, in accordance with economic incentive agreement with ACT Independent Turbo Services, Inc., economic incentive agreement with ACT Independent Turbo Services, Inc., -- S. Livingston S. Livingston 4.SET DATE FOR NEXT MEETING SET DATE FOR NEXT MEETING --  S. Livingston  S. Livingston   5.STAFF REPORTSSTAFF REPORTS Receive 2014 Annual Report from Bob Mitchell, President of the Bay Area Houston Receive 2014 Annual Report from Bob Mitchell, President of the Bay Area Houston (a) Economic Partnership Economic Partnership -- S. Livingston S. Livingston Receive Financial Report Receive Financial Report -- M. Dolby M. Dolby (b) 6.Board member comments regarding matters appearing on agenda; Recognition of Board member comments regarding matters appearing on agenda; Recognition of community members, city employees, and upcoming events; inquiry of staff regarding community members, city employees, and upcoming events; inquiry of staff regarding specific factual information or existing policies.specific factual information or existing policies. 7.Executive Session Executive Session ——The La Porte Development Corporation reserves the right to meet in 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 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.Open Meetings Act, Title 5, Chapter 551, of the Texas Government Code. 8.Reconvene into regular session and consider action, if any, on items discussed in executive Reconvene into regular session and consider action, if any, on items discussed in executive session.session. 9.AdjournAdjourn In compliance with the Americans with Disabilities Act, the City of La Porte will provide for reasonable In compliance with the Americans with Disabilities Act, the City of La Porte will provide for reasonable accommodations for persons attending public meetings. To better serve attendees, requests should be received accommodations for persons attending public meetings. To better serve attendees, requests should be received 24 hours prior to the meetings. Please contact Patrice Fogarty, City Secretary, at 281.470.5019.24 hours prior to the meetings. Please contact Patrice Fogarty, City Secretary, at 281.470.5019. CERTIFICATIONCERTIFICATION I certify that a copy of the September 22, 2014, agenda of items to be considered by the Board of the La Porte I certify that a copy of the September 22, 2014, agenda of items to be considered by the Board of the La Porte Development Corporation was placed on the City Hall Bulletin Board on September 16, 2014.Development Corporation was placed on the City Hall Bulletin Board on September 16, 2014.   signature heresignature here     Patrice Fogarty, City SecretaryPatrice Fogarty, City Secretary   RICHARD WARREN, PRESIDENT MIKE CLAUSEN, BOARD MEMBER MIKE COOKSLEY, VICE PRESIDENT RANDY WOODARD, BOARD MEMBER CHUCK ENGELKEN, BOARD MEMBER NANCY OJEDA, BOARD MEMBER JAY MARTIN, BOARD MEMBER MINUTES OF LA PORTE DEVELOPMENT CORPORATION BOARD MEETING OF AUGUST 18, 2014 August 18, 2014, The City of La Porte Development Corporation Board met on at the City Hall Council 5:00 p.m Chambers, 604 West Fairmont Parkway, La Porte, Texas, at . to consider the following items of business: 1. CALL TO ORDER President Warren called the meeting to order at 5:00 p.m. The following members of the La Porte Development Corporation Board were present: Board members Martin, Clausen, Engelken and Vice President Cooksley. Vice-President Cooksley arrived at the table at 5:04 p.m. Staff Present: Corby Alexander, Sharon Harris, Scott Livingston, Michael Dolby, Clark Askins and Traci Leach. ( 2. CONSENT AGENDA All consent agenda items are considered routine by the La Porte Development Corporation Board and will be enacted by one motion. There will be no separate discussion of these items unless a Board member requests an item be removed and considered separately.) (a) Consider approval of minutes of the meeting of La Porte Development Corporation Board held on August 11, 2014 S. Harris Board member Clausen moved to approve the consent agenda as presented. Board member Engelken seconded. Ayes: President Warren, Board members Woodard, Ojeda, Clausen, Engelken and Martin Nays: None Absent: Vice-President Cooksley 3. DISCUSSION OR OTHER ACTION (a) Discussion or other action regarding basic plan for moving forward with Retail and Restaurant Development in the next twelve (12) months S. Livingston Economic Development Coordinator Scott Livingston presented prospective Retail and Restaurant Development in the City for the next twelve (12) months and his working efforts that are also in process. Mr. Livingston also advised Board members he is fulfilling all request for information from each of the contacts at the recent ICSC Show that was attended in Las Vegas. Page 1 of 3 August 18, 2014, La Porte Development Corporation Board Minutes Board member Martin questioned how many acres are located behind the Jack-in-the-Box on Fairmont Parkway. Economic Development Coordinator responded he think it is about 12 acres. Board member Engelken questioned if there is an option for development for property located behind Discount Tire on Spencer Highway. Economic Development Coordinator responded it maybe an option and developers may be looking in the area. Board member Woodard left the table at 5:21 p.m. and returned at 5:22 p.m. Economic Development Coordinator Scott Livingston advised Board members Dollar Tree is open and will have the sign up on the building this week and Rob Johnson is looking for prospective tenants for the other two spaces available next to the Dollar Tree. Mr. Livingston informed Board members Rob Johnson has a prospective retailer interested in purchasing the property south of his current development. Mr. Livingston also advised Board members of his conversations with shopping center owners at the intersection of S. Broadway and W. Fairmont Parkway regarding development projects. Board member Martin left the table at 5:53 p.m. and returned at 5:54 p.m. Vice-President Cooksley questioned if it City bay front property that Economic Development Coordinator Scott Livingston will be promoting commercial development. Mr. Livingston responded yes he is always looking for prospective developers. Board member Ojeda questioned if Developer Rob Johnson has expressed feedback or difficulties filing spaces in La Porte since spaces are filing up at the property located across from San Jacinto College in Pasadena. Economic Development Coordinator Scott Livingston responded he has been told retailers prefer to be closer to other retailers that are already currently established and La Porte is considered too far East as per a demographic analysis conducted by some of the retailers. Mr. Livingston also advised, Developer Rob Johnson is pursuing some of the same retailers that are located in Deer Park and Pasadena. (b) Discussion or other action regarding La Porte Development Corporation Board priorities regarding the variety of projects for which the Board may wish to consider awarding financial incentives. S. Livingston Economic Development Coordinator Scott Livingston presented the Tax Abatement Policy and a Project Score Card and discussed priorities regarding the variety of projects for which the Board may wish to consider awarding financial incentives. Mr. Livingston informed Board members of businesses along Broadway St. that express interests for being awarded financial incentives and his review of La Tax Abatement Policy. Board member Woodard questioned if staff is requesting the La Porte Development Corporation Board to look at the Tax Abatement Policy. City Manager Corby Alexander responded no staff is suggestion the policy is a tool for new businesses the City has as a whole in the recruitment and retention process. Board member Woodard then questioned if City Council and the La Porte Development Corporation Board members would like for the La Porte Development Corporation Board to look at the Tax Abatement Policy along with the incentive grants when new companies come to La Porte. Board member Martin commented he does not have a problem with Economic Development Coordinator Scott Livingston using the policy as tool if a prospective business requested the policy be utilized and then presented to the board for City Council consideration if required. Page 2 of 3 August 18, 2014, La Porte Development Corporation Board Minutes City Manager Corby Alexander asked Assistant City Attorney Clark Askins if he recalls the last Tax Abatement Agreement. Mr. Askins responded the Tax Abatement is exclusive to City Council in which it is written to law in the Tax Code. Finance Director Michael Dolby added the last agreement has been a long time ago and as a Finance Director he does not care for the particular agreement. Economic Development Coordinator Scott Livingston advised Board members, Tax Abatement is a difficult process but payments can be given in lieu of the Texas Local Government, Chapter 380 through the La Porte Development Corporation Board. Board member Clausen commented his decision for lending is based on when the La Porte Development Corporation Board reviews a project, decide on an amount to be given for the project and also considers the payback period for the investment. Economic Development Coordinator Scott Livingston commented staff will use the Project Score Card as a tool when preparing incentive proposals for their consideration. 4. SET DATE FOR NEXT MEETING S. Livingston Board members set the next meeting date for Monday, September 22, 2014 at 4:45 p.m. BOARD MEMBER COMMENTS regarding matters appearing on agenda; recognition of community 5. members, city employees, and upcoming events; inquiry of staff regarding specific factual information or existing policies. There were no comments. 6. 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. There was no executive session. 7. RECONVENE into regular session and consider action, if any, on items discussed in executive session. There was no executive session. 8. ADJOURN There being no further business, Board member Engelken moved to adjourn the meeting at 6:38 p.m. MOTION PASSED Board member Woodard seconded. . Respectfully submitted, ____________________________________ Sharon Harris, Assistant City Secretary nd Passed and approved on this 22 day of September, 2014. ____________________________________ President Richard Warren Page 3 of 3 August 18, 2014, La Porte Development Corporation Board Minutes REQUEST FOR LA PORTE DEVELOPMENT CORPORATION AGENDA REQUEST FOR LA PORTE DEVELOPMENT CORPORATION AGENDA ITEMITEM September 22, 2014September 22, 2014AppropriationAppropriation Agenda Date Requested:Agenda Date Requested: N/A N/A S. Livingston S. Livingston Source of Funds:Source of Funds: Requested By:Requested By: N/A N/A Economic Development/Tourism Economic Development/Tourism Account Number:Account Number: Department: N/A N/A Amount Budgeted:Amount Budgeted: Report:Resolution:Resolution:Ordinance:Ordinance: N/A N/A Amount Requested:Amount Requested: Exhibits: Budgeted Item:Budgeted Item:YESYESNONO 1. RDS Pay Req, Emp Roster and Forms 941 1. RDS Pay Req, Emp Roster and Forms 941 (IRS) and C3 (TWC)(IRS) and C3 (TWC) 2. RDS Incentive Agreement2. RDS Incentive Agreement 3. RDS Lease Agreement3. RDS Lease Agreement SUMMARY & RECOMMENDATIONSSUMMARY & RECOMMENDATIONS (aka Richard Industrial Group) has either relocated or hired (aka Richard Industrial Group) has either relocated or hired Richard Design Services, Inc.Richard Design Services, Inc. full time employees, since it signed a lease and moved into 1200 SH 146, La Porte, Texas.full time employees, since it signed a lease and moved into 1200 SH 146, La Porte, Texas. thirty five (35) thirty five (35)  Based upon the terms of the enclosed incentive agreement, Rusty Sims, General Manager for East Houston  Based upon the terms of the enclosed incentive agreement, Rusty Sims, General Manager for East Houston Operations of RDS, respectively requests payment for the first of three, annual installments in the amount of Operations of RDS, respectively requests payment for the first of three, annual installments in the amount of .  $5,000 Action Required by the La Porte Development Corporation:Action Required by the La Porte Development Corporation: Consider approval or other action to disburse Payment No. 1 of 3 to Richard Design Services, Inc., in the amount Consider approval or other action to disburse Payment No. 1 of 3 to Richard Design Services, Inc., in the amount of $5,000.   Approved for the La Porte Development Corporation AgendaApproved for the La Porte Development Corporation Agenda Corby D. Alexander, City ManagerCorby D. Alexander, City ManagerDateDate REQUEST FOR LA PORTE DEVELOPMENT CORPORATION AGENDA REQUEST FOR LA PORTE DEVELOPMENT CORPORATION AGENDA ITEMITEM September 22, 2014September 22, 2014AppropriationAppropriation Agenda Date Requested:Agenda Date Requested: N/A N/A S. Livingston S. Livingston Source of Funds:Source of Funds: Requested By:Requested By: N/A N/A Economic Development/Tourism Economic Development/Tourism Account Number:Account Number: Department: N/A N/A Amount Budgeted:Amount Budgeted: Report:Resolution:Resolution:Ordinance:Ordinance: N/A N/A Amount Requested:Amount Requested: Exhibits: Budgeted Item:Budgeted Item:YESYESNONO SUMMARY & RECOMMENDATIONSSUMMARY & RECOMMENDATIONS   (ACT) is a fast growing company that specializes in industrial gas (ACT) is a fast growing company that specializes in industrial gas ACT Independent Turbo Services, Inc.ACT Independent Turbo Services, Inc. turbine overhaul and repair and has positioned itself as a leader in the market.  Based upon the successes over the turbine overhaul and repair and has positioned itself as a leader in the market.  Based upon the successes over the last couple of years, increases in production capacity and expanded facilities will be required to keep up with the last couple of years, increases in production capacity and expanded facilities will be required to keep up with the demand for ACTdemand for ACT’’s service offerings.  Company management believes that consolidating and relocating all service s service offerings.  Company management believes that consolidating and relocating all service offerings to La Porte will benefit the business, employees, and the community.  However, a significant cost offerings to La Porte will benefit the business, employees, and the community.  However, a significant cost difference exists between expanding at ACTdifference exists between expanding at ACT’’s existing location in Houston versus relocating to La Porte.  In order s existing location in Houston versus relocating to La Porte.  In order to assist ACT in the proposed relocation of its Main Production facility to La Porte, ACT requests economic to assist ACT in the proposed relocation of its Main Production facility to La Porte, ACT requests economic assistance in the amount ofassistance in the amount of.. $450,000 $450,000   Public Hearing PostingPublic Hearing Posting   On 14 July 2014, staff presented this proposed project to the 4B Board.  The 4B Board authorized staff to post On 14 July 2014, staff presented this proposed project to the 4B Board.  The 4B Board authorized staff to post public notice for at least sixty (60) days of a public hearing at 5:00 pm on 22 September 2014 to consider awarding public notice for at least sixty (60) days of a public hearing at 5:00 pm on 22 September 2014 to consider awarding an economic development grant for this project.  Public notice for tonightan economic development grant for this project.  Public notice for tonight’’s public hearing was posted on 17 July s public hearing was posted on 17 July 2014.   Proposed Expansion HighlightsProposed Expansion Highlights   If ACT relocates to La Porte, it will:If ACT relocates to La Porte, it will:   Invest a total, estimated taxable value of Invest a total, estimated taxable value of in property and business personal property as in property and business personal property as $6.6 million$6.6 million follows:   Invest in new building construction as follows: in new building construction as follows: $3.6 million$3.6 million 15,000 square foot office, 15,000 square foot office, 33,000 square foot, crane served industrial building, 33,000 square foot, crane served industrial building, Relocate Relocate of existing equipment and inventory, of existing equipment and inventory, $2 million$2 million Purchase Purchase in new equipment, in new equipment, $1 million$1 million   Relocate seventyRelocate seventy--three (73) full time employees from its existing location at Hobby Airport in Houston. three (73) full time employees from its existing location at Hobby Airport in Houston.  Note:  Seven (7) full time employees are already working at ACT:  Seven (7) full time employees are already working at ACT’’s facility in La Porte. s facility in La Porte.   Start the project in September of 2014 and finish the relocation by the end of 2015. Start the project in September of 2014 and finish the relocation by the end of 2015.   Personnel InformationPersonnel Information   Below is an itemized categorization of the ACTBelow is an itemized categorization of the ACT’’s employment:s employment:    (6)    Executive Management  (6)    Executive Management  (9)    Sales, Accounting and Support Staff  (9)    Sales, Accounting and Support Staff (12)   Engineering & Supervision (12)   Engineering & Supervision (53)   Hourly Technicians (53)   Hourly Technicians   ACT offers competitive salary and benefits.  Many of ACTACT offers competitive salary and benefits.  Many of ACT’’s hourly employees make between $20 s hourly employees make between $20 --$$30/hr. 30/hr.  Supervisors and engineering staff are typically compensated at or above the industry average.  All full time  Supervisors and engineering staff are typically compensated at or above the industry average.  All full time employees are eligible to receive benefits that include generous insurance benefits (medical, vision, dental), 401(k) employees are eligible to receive benefits that include generous insurance benefits (medical, vision, dental), 401(k) plan with matching program, disability & life insurance, profit sharing incentives, paid vacation and holidays.plan with matching program, disability & life insurance, profit sharing incentives, paid vacation and holidays.   Other Pertinent InformationOther Pertinent Information   Of the six (6) senior members of ACTOf the six (6) senior members of ACT’’s executive management team, three (3) are La Porte High School s executive management team, three (3) are La Porte High School graduates and two (2) others have lived and/or worked in La Porte for over 20 years.graduates and two (2) others have lived and/or worked in La Porte for over 20 years.   Impact AnalysisImpact Analysis   Excluding the impact of the seventyExcluding the impact of the seventy--three (73) new jobs to be relocated to La Porte, three (73) new jobs to be relocated to La Porte, this project would this project would each yeareach year contribute approximately contribute approximately of new, annual property tax revenue to the City of La Porte.  of new, annual property tax revenue to the City of La Porte.  directly$42,600$42,600Please Please refer to “Project Facts and FiguresProject Facts and Figures””and the and the ““LPDC Project Score Card LPDC Project Score Card --10 September 10 September 2014“(enclosed) for payback figures.enclosed) for payback figures.   Demand for Capital, Other Projects, and PrioritiesDemand for Capital, Other Projects, and Priorities   According to the enclosed monthly financial reports, the 4B Board currently has approximately According to the enclosed monthly financial reports, the 4B Board currently has approximately $933,155$933,155 available at its discretion to use for new economic development projects.  available at its discretion to use for new economic development projects.  According to the same financial reports, According to the same financial reports, the 4B Board’s projected fund balance, assuming that no additional funds are committed to new projects, by 30 s projected fund balance, assuming that no additional funds are committed to new projects, by 30 September 2014 is September 2014 is . .  $1,347,674$1,347,674   Other projects, which are in various stages of discussion and may request funds from the 4B Board, are as Other projects, which are in various stages of discussion and may request funds from the 4B Board, are as follows:   S. Broadway ReS. Broadway Re--Development Retail Strip Center Development Retail Strip Center             $250,000 +             $250,000 + South                South                S. Broadway ReS. Broadway Re--Development FischerDevelopment Fischer’’s Hardware                                                  $250,000 + s Hardware                                                   $250,000 + Re-Development Former Kroger                                                                   $400,000 Development Former Kroger                                                                   $400,000 Main Street ReMain Street Re--Development/Business Attraction                                        $150,000 Development/Business Attraction                                        $150,000 Retail Attraction, SEC of Spencer Hwy and Canada Road                                       $200,000 Retail Attraction, SEC of Spencer Hwy and Canada Road                                       $200,000     Action Required by the La Porte Development Corporation:Action Required by the La Porte Development Corporation: Based upon the 4B BoardBased upon the 4B Board’’s priorities, existing capital constraints, and demand for capital by other projects, Staff s priorities, existing capital constraints, and demand for capital by other projects, Staff recommends that the 4B Board consider awarding an economic development incentive to ACT Turbo Independent recommends that the 4B Board consider awarding an economic development incentive to ACT Turbo Independent Services, Inc. for Services, Inc. for . .  $275,000$275,000   Approved for the La Porte Development Corporation AgendaApproved for the La Porte Development Corporation Agenda Corby D. Alexander, City ManagerCorby D. Alexander, City ManagerDateDate REQUEST FOR LA PORTE DEVELOPMENT CORPORATION AGENDA REQUEST FOR LA PORTE DEVELOPMENT CORPORATION AGENDA ITEMITEM September 22, 2014September 22, 2014AppropriationAppropriation Agenda Date Requested:Agenda Date Requested: N/A N/A S. Livingston S. Livingston Source of Funds:Source of Funds: Requested By:Requested By: N/A N/A Economic Development/Tourism Economic Development/Tourism Account Number:Account Number: Department: N/A N/A Amount Budgeted:Amount Budgeted: Report:Resolution:Resolution:Ordinance:Ordinance: N/A N/A Amount Requested:Amount Requested: Exhibits: Budgeted Item:Budgeted Item:YESYESNONO 1. Business Overview, ACT Independent Turbo1. Business Overview, ACT Independent Turbo 2. Incentive Request, ACT Independent Turbo2. Incentive Request, ACT Independent Turbo 3. Facts and Figures3. Facts and Figures 4. LPDC Project Score Card, 10 Sept. 20144. LPDC Project Score Card, 10 Sept. 2014 5. ACT Turbo, Public Hearing Posting Affidavit5. ACT Turbo, Public Hearing Posting Affidavit SUMMARY & RECOMMENDATIONSSUMMARY & RECOMMENDATIONS   (ACT) is a fast growing company that specializes in industrial gas (ACT) is a fast growing company that specializes in industrial gas ACT Independent Turbo Services, Inc.ACT Independent Turbo Services, Inc. turbine overhaul and repair and has positioned itself as a leader in the market.  Based upon the successes over the turbine overhaul and repair and has positioned itself as a leader in the market.  Based upon the successes over the last couple of years, increases in production capacity and expanded facilities will be required to keep up with the last couple of years, increases in production capacity and expanded facilities will be required to keep up with the demand for ACTdemand for ACT’’s service offerings.  Company management believes that consolidating and relocating all service s service offerings.  Company management believes that consolidating and relocating all service offerings to La Porte will benefit the business, employees, and the community.  However, a significant cost offerings to La Porte will benefit the business, employees, and the community.  However, a significant cost difference exists between expanding at ACTdifference exists between expanding at ACT’’s existing location in Houston versus relocating to La Porte.  In order s existing location in Houston versus relocating to La Porte.  In order to assist ACT in the proposed relocation of its Main Production facility to La Porte, ACT requests economic to assist ACT in the proposed relocation of its Main Production facility to La Porte, ACT requests economic assistance in the amount ofassistance in the amount of.. $450,000 $450,000   Public Hearing PostingPublic Hearing Posting   On 14 July 2014, staff presented this proposed project to the 4B Board.  The 4B Board authorized staff to post On 14 July 2014, staff presented this proposed project to the 4B Board.  The 4B Board authorized staff to post public notice for at least sixty (60) days of a public hearing at 5:00 pm on 22 September 2014 to consider awarding public notice for at least sixty (60) days of a public hearing at 5:00 pm on 22 September 2014 to consider awarding an economic development grant for this project.  Public notice for tonightan economic development grant for this project.  Public notice for tonight’’s public hearing was posted on 17 July s public hearing was posted on 17 July 2014.   Proposed Expansion HighlightsProposed Expansion Highlights   If ACT relocates to La Porte, it will:If ACT relocates to La Porte, it will:   Invest a total, estimated taxable value of Invest a total, estimated taxable value of in property and business personal property as in property and business personal property as $6.6 million$6.6 million follows:   Invest in new building construction as follows: in new building construction as follows: $3.6 million$3.6 million 15,000 square foot office, 15,000 square foot office, 33,000 square foot, crane served industrial building, 33,000 square foot, crane served industrial building, Relocate Relocate of existing equipment and inventory, of existing equipment and inventory, $2 million$2 million Purchase Purchase in new equipment, in new equipment, $1 million$1 million   Relocate seventyRelocate seventy--three (73) full time employees from its existing location at Hobby Airport in Houston. three (73) full time employees from its existing location at Hobby Airport in Houston.  Note:  Seven (7) full time employees are already working at ACT:  Seven (7) full time employees are already working at ACT’’s facility in La Porte. s facility in La Porte.   Start the project in September of 2014 and finish the relocation by the end of 2015. Start the project in September of 2014 and finish the relocation by the end of 2015.   Personnel InformationPersonnel Information   Below is an itemized categorization of the ACTBelow is an itemized categorization of the ACTBelow is an itemized categorization of the ACTBelow is an itemized categorization of the ACT’’’’s employment:s employment:s employment:s employment:    (6)    Executive Management  (6)    Executive Management  (9)    Sales, Accounting and Support Staff  (9)    Sales, Accounting and Support Staff (12)   Engineering & Supervision (12)   Engineering & Supervision (53)   Hourly Technicians (53)   Hourly Technicians   ACT offers competitive salary and benefits.  Many of ACTACT offers competitive salary and benefits.  Many of ACT’’s hourly employees make between $20 s hourly employees make between $20 --$$30/hr. 30/hr.  Supervisors and engineering staff are typically compensated at or above the industry average.  All full time  Supervisors and engineering staff are typically compensated at or above the industry average.  All full time employees are eligible to receive benefits that include generous insurance benefits (medical, vision, dental), 401(k) employees are eligible to receive benefits that include generous insurance benefits (medical, vision, dental), 401(k) plan with matching program, disability & life insurance, profit sharing incentives, paid vacation and holidays.plan with matching program, disability & life insurance, profit sharing incentives, paid vacation and holidays.   Other Pertinent InformationOther Pertinent Information   Of the six (6) senior members of ACTOf the six (6) senior members of ACT’’s executive management team, three (3) are La Porte High School s executive management team, three (3) are La Porte High School graduates and two (2) others have lived and/or worked in La Porte for over 20 years.graduates and two (2) others have lived and/or worked in La Porte for over 20 years.   Impact AnalysisImpact Analysis   Excluding the impact of the seventyExcluding the impact of the seventy--three (73) new jobs to be relocated to La Porte, three (73) new jobs to be relocated to La Porte, this project would this project would each yeareach year contribute approximately contribute approximately of new, annual property tax revenue to the City of La Porte.  of new, annual property tax revenue to the City of La Porte.  directly$42,600$42,600Please Please refer to “Project Facts and FiguresProject Facts and Figures””and the and the ““LPDC Project Score Card LPDC Project Score Card --10 September 10 September 2014“(enclosed) for payback figures.enclosed) for payback figures.   Demand for Capital, Other Projects, and PrioritiesDemand for Capital, Other Projects, and Priorities   According to the enclosed monthly financial reports, the 4B Board currently has approximately According to the enclosed monthly financial reports, the 4B Board currently has approximately $933,155$933,155 available at its discretion to use for new economic development projects.  According to the same financial reports, available at its discretion to use for new economic development projects.  According to the same financial reports, the 4B Board’s projected fund balance, assuming that no additional funds are committed to new projects, by 30 s projected fund balance, assuming that no additional funds are committed to new projects, by 30 September 2014 is September 2014 is . .  $1,347,674$1,347,674   Other projects, which are in various stages of discussion and may request funds from the 4B Board, are as Other projects, which are in various stages of discussion and may request funds from the 4B Board, are as follows:   S. Broadway ReS. Broadway Re--Development Retail Strip Center Development Retail Strip Center             $250,000 +             $250,000 + South                South                S. Broadway ReS. Broadway Re--Development FischerDevelopment Fischer’’s Hardware                                                  $250,000 + s Hardware                                                   $250,000 + Re-Development Former Kroger                                                                   $400,000 Development Former Kroger                                                                   $400,000 Main Street ReMain Street Re--Development/Business Attraction                                        $150,000 Development/Business Attraction                                        $150,000 Retail Attraction, SEC of Spencer Hwy and Canada Road                                       $200,000 Retail Attraction, SEC of Spencer Hwy and Canada Road                                       $200,000   Action Required by the La Porte Development Corporation:Action Required by the La Porte Development Corporation: Based upon the 4B BoardBased upon the 4B Board’’s priorities, existing capital constraints, and demand for capital by other projects, Staff s priorities, existing capital constraints, and demand for capital by other projects, Staff recommends that the 4B Board consider awarding an economic development incentive to ACT Turbo Independent recommends that the 4B Board consider awarding an economic development incentive to ACT Turbo Independent Services, Inc. for Services, Inc. for . .  $275,000$275,000   Approved for the La Porte Development Corporation AgendaApproved for the La Porte Development Corporation Agenda Corby D. Alexander, City ManagerCorby D. Alexander, City ManagerDateDate Rotor Facility Component Facility 12022 N. P Street 8525 Freeland St La Porte, TX 77571 Houston, TX 77061 713-364-7500 713-364-7500 To: City of La Porte Economic Development Corporation 604 W. Fairmont La Porte, TX 77571 Attn: Scott Livingston Re: ACT Independent Turbo Services Application for Economic Assistance Executive Summary ACT Independent Turbo Services is a fast growing company that specializes in IGT Overhaul and Repair. The company has worked hard to position itself as a leader in the market and based on the successes over the last couple of years, increase in production capacity and facilities expansion will be required to keep up with demand and expand our service offerings. Company management believes that relocating all service offerings to La Porte will be beneficial to the business, employees and the community. However, there is significant cost difference between expanding at the existing Houston location and performing a relocation of the business to La Porte. To assist in the relocation of our Main Production facility to La Porte, ACT Independent Turbo Services is requesting economic assistance in the amount of $450,000. About ACT Independent Turbo Services ACT Independent Turbo Services was founded in 1996 and served as a small niche market IGT (Industrial Gas Turbine) service provider for many years. In 2011 the decision was made to expand the service offerings as well as make significant investments in capabilities and personnel. Today, we employ 80 people between two locations and provide skilled services to industrial rotating equipment and power generation clients all over North and South America. We take pride in our highly skilled employee base that includes expert craftsman such as super-alloy welders, precision machinists, industrial mechanics, engineers and a tenured supervision and support network. With the addition of our Rotor facility in early 2013 and installation of state of the art equipment; ACT has invested more than $8MM into the business since 2011. Starting in early 2013, ACT Independent Turbo Services opened a second facility with expanded capabilities. This allows us to serve our clients out of not only our original and main facility located near Hobby Airport but a newly built rotor & heavy mechanical facility located in La Porte TX. Since 2012, the business has experienced growth greater than 20% year over year growth and are projected to reach full capacity at our main facility near Hobby Airport before or during the 2016 calendar year. The company is at a critical juncture as there is a requirement to invest capital to expand our operations to meet the current and projected demand. ACT Independent Turbo Services will need to enlarge the existing Hobby Airport location or totally relocate the entire business to La Porte. Why La Porte? The management team is familiar with the La Porte area and the benefits that living and working in the area have to offer. Our Rotor Facility property has room for an expanding business and could easily accommodate the current Houston business plus room for future expansions. In addition to La Porte favorable location, our executive management is comprised of (6) senior members of which (3) are La Porte High School graduates and (2) others have lived and/or worked in La Porte for over 20 years. We not only have a commitment to make the business grow, but also a personal connection to the community. Some of the many benefits to the local La Porte economy and community upon will be: -Several of our Employees are looking to relocate and buy homes in the area -We often entertain our clients and staff at local restaurants and golf courses -Development of Vocational programs to train students and recent graduates with vocational skills Drafting / Engineering o Welding / Fabrication o Machining o June 30, 2014 Page: 1 of 3 Rotor Facility Component Facility 12022 N. P Street 8525 Freeland St La Porte, TX 77571 Houston, TX 77061 713-364-7500 713-364-7500 Proposed Expansion ACT Independent Turbo Services is proposing to custom build 48,000sqft of NEW crane building and offices, and move our existing equipment, operations and (73) full time personnel from our Hobby Location to La Porte. This will require a new build, likely utilizing local contractor(s) on undeveloped land. Assuming all hurdles are met and the company receives approval from the ACT Board of Directors for the relocation, we would anticipate the start of the project in September of 2014 and completion by the end of 2015. The Taxable Value of the proposed improvement is estimated to be: -$3.6MM in New Building Construction -$1.0MM in New Equipment -$2.0MM in movement of existing equipment and inventory -$6.6MM Total estimated property & equipment value -This would lead to an estimated Yearly City Tax Revenue of $46,860 -This would lead to an estimated Yearly LPISD Tax Revenue of $87,780 Employee Relocation ACT Independent Turbo Services currently employs (80) people at various levels within the organization. As of June 2014 we have (73) personnel reporting full time to our Hobby facility and (7) personnel reporting full time to our La Porte Facility. Below is a breakdown of Employees throughout ACT: -(6) Executive Management -(9) Sales, Accounting and Support Staff -(12) Engineering & Supervision -(53) Hourly Technicians As a leader in the service business, ACT Independent Turbo Services also offers competitive salary and benefits. Many of our Hourly employees make between $20 - $30/hr. Our supervision and engineering staff are typically compensated at our above industry average. All Full Time employees (Hourly and Salaried) are eligible to receive benefits that include generous insurance benefits (medical, vision, dental), 401(k) plan with matching program, disability & life insurance, profit sharing incentives, paid vacation and holidays. If approved and finalization of construction, all personnel would report to the La Porte facility. June 30, 2014 Page: 2 of 3 Rotor Facility Component Facility 12022 N. P Street 8525 Freeland St La Porte, TX 77571 Houston, TX 77061 713-364-7500 713-364-7500 La Porte Development Corporation Board Assistance Since 2011, ACT Independent Turbo Services has added additional service offerings and experienced rapid growth. The company is prepared to invest in additional capacity and capabilities, but the move to La Porte at this time is very cost prohibitive. Below is a summary of the costs associated with moving the business to La Porte versus expanding at our existing location near Hobby Airport. Estimated Costs Hobby Facility Note: The Building Costs would be born by the developer Developer Cost - Estimated Additional Building and Laydown Capacity - 15,000sqftand amortized to ACT as lease costs. This is to Expand Hobby $1,700,000 - Pavement ImprovementsFacility to Match Capacity with Proposed LP Facility. Business Interruption$ 200,000 Project Management Expenses$ 75,000 ACT Independent Turbo Services 2014/2015 Expenses$ 275,000 La Porte Facility Estimated Costs Developer Cost - Estimated NEW 40,000sqft Crane & Offices Building Note: The Building Costs would be born by the developer $2,600,000 and amortized to ACT as lease costs. Developer Cost - Estimated NEW 6,000sqft Main Office Building & Employee Parking $1,000,000 Note: Previous Management signed long term lease. The Mitigated Lease Obligations at Hobby until early 2018$ 600,000 total lease obligation is over $1MM. This is the estimated mitigated value. Business Interruption$ 400,000 Moving Expenses$ 450,000 Project Management$ 150,000 ACT Independent Turbo Services 2014/2015 Expenses$ 1,600,000 The company Board of Directors has indicated that approval may be given for relocation if management can keep the total expansion and relocation cost to the company at less than $1MM total. The management team feels that with a commitment of assistance from the Development Corporation of $450k and internal efforts by management on the continued mitigation of existing lease obligations, moving expenses, business interruption and overall project costs that we can achieve the $1MM target. June 30, 2014 Page: 3 of 3 PROJECT FACTS AND FIGURES for ACT Independent Turbo Services, Inc. $6 million Estimated, total amount of new taxable value to be invested: annual $42,600 Estimated, total amount of new tax revenue to the City of La Porte: Payback Period Analysis (raw, excluding employment) $200,0004.69years City of La Porte Payback Period for a grant is . $250,000 5.87 years City of La Porte Payback Period for a grant is . $300,000 7.04 years City of La Porte Payback Period for a grant is . $350,000 8.22 years City of La Porte Payback Period for a grant is . $400,000 9.39 years City of La Porte Payback Period for agrant is . $450,000 10.56 years City of La Porte Payback Period for a grant is . Payback Period Analysis (adjusted for employment) $200,000-2.81years City of La Porte Payback Period for a grant is . $250,000 -1.63years City of La Porte Payback Period for a grant is . $300,000 -0.46year City of La Porte Payback Period for a grant is . $350,000 0.72year City of La Porte Payback Period for a grant is . $400,000 1.89years City of La Porte Payback Period for agrant is . $450,000 3.06years City of La Porte Payback Period for a grant is . ACT is proposing to retain seven (7) full time employees and relocate seventy-three (73) full time employees at the La Porte facility. ACT wishes to reserve a few positions students) Program at LPISD. REQUEST FOR LA PORTE DEVELOPMENT CORPORATION AGENDA REQUEST FOR LA PORTE DEVELOPMENT CORPORATION AGENDA ITEMITEM September 22, 2014September 22, 2014AppropriationAppropriation Agenda Date Requested:Agenda Date Requested: N/A N/A S. Livingston S. Livingston Source of Funds:Source of Funds: Requested By:Requested By: N/A N/A Economic Development/Tourism Economic Development/Tourism Account Number:Account Number: Department: N/A N/A Amount Budgeted:Amount Budgeted: Report:Resolution:Resolution:Ordinance:Ordinance: N/A N/A Amount Requested:Amount Requested: Exhibits: Budgeted Item:Budgeted Item:YESYESNONO 1. Bay Area Houston Economic Partnership 1. Bay Area Houston Economic Partnership (BAHEP) 2014 Annual Report(BAHEP) 2014 Annual Report SUMMARY & RECOMMENDATIONSSUMMARY & RECOMMENDATIONS Bob Mitchell, President of the Bay Area Houston Economic Partnership, will present BAHEPBob Mitchell, President of the Bay Area Houston Economic Partnership, will present BAHEP’’s 2014 Annual s 2014 Annual Report to the 4B Board. Report to the 4B Board.  Action Required by the La Porte Development Corporation:Action Required by the La Porte Development Corporation: No formal action or vote is required.No formal action or vote is required. Approved for the La Porte Development Corporation AgendaApproved for the La Porte Development Corporation Agenda Corby D. Alexander, City ManagerCorby D. Alexander, City ManagerDateDate 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 9/30$2,768,155$2,768,155$2,196,935 Plus Year to Date Revenues: 1/2 Cent Sales Tax1,293,4581,497,8291,317,899 Interest Income3,6193,8313,999 Total Revenues1,297,0771,501,6601,321,898 Equals Total Resources 4,065,2324,269,8153,518,833 Less Year to Date Expenditures: Payroll50,46455,93541,818 Supplies9051,115932 Services & Charges (Memberships, Training, Advertising, Legal, Utilities)266,196276,444146,752 Debt Service Transfer711,409790,454341,718 * Capital Projects Transfers**157,750164,167674,167 Total Expenditures1,186,7241,288,1151,205,387 Estimated Year to Date Fund Balance as of 7/31/2014$2,878,508$2,981,700$2,313,446 Commitments Project Nebula/Ineos$1,000,000 Intergulf 45,000 Rob Johnson Interests 40,000 Richard Industrial Group 15,000 Debt Service Reserve 948,545 $2,048,545 Adjusted Year to Date Fund Balance$933,155 Projection Through Year End Adjusted Year to Date Fund Balance$933,155 Plus: Estimated Sales Tax 656,932 Less: Estimated Operational Costs(71,489) Less: Debt Service Transfers(158,091) Less: Capital Projects Transfers(12,833) Projected Year End Fund Balance$1,347,674 Sales tax revenues for Fiscal Year 2015 are estimated to be $2,208,630. (2.5% growth over current year) Previously Funded Projects (Funding in Fund 015 - General CIP Fund) BudgetExpendituresBalance District 23 Street Paving175,000-175,000 Façade Grants300,00081,570218,430 Total475,00081,570393,430 *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.