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HomeMy WebLinkAbout01-09-17 Meeting of the La Porte Development Corporation Board RICHARD WARREN, PRESIDENTRICHARD WARREN, PRESIDENTMIKE CLAUSEN, BOARD MEMBERMIKE CLAUSEN, BOARD MEMBER SHELLEY FULLER, BOARD MEMBERSHELLEY FULLER, BOARD MEMBERRANDY WOODARD, BOARD MEMBERRANDY WOODARD, BOARD MEMBER VENESSA GUERRERO, BOARD MEMBERVENESSA GUERRERO, BOARD MEMBERNANCY OJEDA, VICENANCY OJEDA, VICE-PRESIDENT 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 January 9, 2017January 9, 2017, 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 5:00 PM to consider the following items of business:beginning at 5:00 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 Development Corporation Board and will be enacted by one motion. There will be no separate 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 discussion of these items unless a Board member requests an item be removed and considered separately)separately) (a)Consider approval or other action regarding minutes of the meeting held on December 12, Consider approval or other action regarding minutes of the meeting held on December 12, 2016 2016 -- P. Fogarty P. Fogarty (b)Consider approval or other action authorizing Staff to execute payment in the amount of Consider approval or other action authorizing Staff to execute payment in the amount of $166,000.00 to ACT Independent Turbo Services, Inc., in accordance with terms of $166,000.00 to ACT Independent Turbo Services, Inc., in accordance with terms of incentive agreement incentive agreement -- T. Leach T. Leach (c)Financial Report Financial Report -- M. Dolby M. Dolby 3.PUBLIC HEARING AND ASSOCIATED MATTERSPUBLIC HEARING AND ASSOCIATED MATTERS (a)Public Hearing to receive comments regarding proposed projects of the La Porte Public Hearing to receive comments regarding proposed projects of the La Porte Development Corporation for: 1) decorative fencing at Wharton Weems at the Golf Course, Development Corporation for: 1) decorative fencing at Wharton Weems at the Golf Course, in the amount of $250, 000.00; 2) beautification along Spencer Highway, in the amount of in the amount of $250, 000.00; 2) beautification along Spencer Highway, in the amount of $340,200.00; and 3) Community Cooperation Projects, in the amount of $10,000.00; $340,200.00; and 3) Community Cooperation Projects, in the amount of $10,000.00; consider approval or other action authorizing projects of the La Porte Development consider approval or other action authorizing projects of the La Porte Development Corporation in the amount of $250,000.00 for decorative fencing at Wharton Weems at the Corporation in the amount of $250,000.00 for decorative fencing at Wharton Weems at the Golf Course; $340,200.00 for beautification along Spencer Highway; and $10,000.00 for Golf Course; $340,200.00 for beautification along Spencer Highway; and $10,000.00 for Community Cooperation Projects Community Cooperation Projects -- T. Leach T. Leach 4.AUTHORIZATIONSAUTHORIZATIONS (a)Consider approval or other action authorizing President Richard Warren to sign a letter Consider approval or other action authorizing President Richard Warren to sign a letter advocating the Texas Legislature to change language of Section 505.258(1) of the Local advocating the Texas Legislature to change language of Section 505.258(1) of the Local Government Code to allow the La Porte Development Corporation to continue to collect Government Code to allow the La Porte Development Corporation to continue to collect sales taxes as long as bonds, projects or other obligations of the Corporation exist sales taxes as long as bonds, projects or other obligations of the Corporation exist - T. LeachLeach 5.SET DATE FOR NEXT MEETINGSET DATE FOR NEXT MEETING 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.AdjournAdjourn The La Porte Development Corporation Board reserves the right to meet in closed session on any The La Porte Development Corporation Board reserves the right to meet in closed session on any agenda item should the need arise and if applicable pursuant to authorization by Title 5, Chapter 551, agenda item should the need arise and if applicable pursuant to authorization by Title 5, Chapter 551, of the Texas Government Code (the Texas open meetings laws).of the Texas Government Code (the Texas open meetings laws). 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 January 9, 2017 , agenda of items to be considered by the Board of the La Porte Development I certify that a copy of the January 9, 2017 , agenda of items to be considered by the Board of the La Porte Development Corporation was placed on the City Hall Bulletin Board on January 3, 2017.Corporation was placed on the City Hall Bulletin Board on January 3, 2017.        Patrice Fogarty, City SecretaryPatrice Fogarty, City Secretary   RICHARD WARREN, PRESIDENT MIKE CLAUSEN, BOARD MEMBER NANCY OJEDA, VICE-PRESIDENT RANDY WOODARD, BOARD MEMBER CHUCK ENGELKEN, BOARD MEMBER SHELLEY FULLER, BOARD MEMBER VENESSA GUERRERO, BOARD MEMBER MINUTES OF LA PORTE DEVELOPMENT CORPORATION BOARD MEETING OF DECEMBER 12, 2016 The City of La Porte Development Corporation Board met on December 12, 2016, at the City Hall Council Chambers, 604 West Fairmont Parkway, La Porte, Texas, 77571, at 5:00 p.m. to consider the following items of business: 1. CALL TO ORDER President Richard 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 Fuller, Engelken, Guerrero, Woodard, Clausen, and Ojeda. Staff Present: Corby Alexander, Traci Leach, Patrice Fogarty and Clark Askins. 2. CONSENT (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 or other action regarding minutes of the La Porte Development Corporation Board meeting held on October 24, 2016 P. Fogarty (b) Consider approval or other action authorizing Staff to execute payment in the amount of $2,868.50 to Deborah S. Bernay, O.D. (dba La Porte Vision Center) for completion of enhancement grant project, in accordance with terms of incentive agreement T. Leach Board member Clausen moved to approve the Consent Agenda items pursuant to staff recommendations. Board member Woodard seconded. MOTION PASSED UNANIMOUSLY 7/0. 3. PUBLIC HEARING AND ASSOCIATED MATTERS (a) Public hearing to receive comments regarding proposed projects providing for designation of 1) $350,000.00 for parking spaces at Pecan Park; 2) $400,000.00 for restroom/Pavilion at Five Points and 3) $229,665.00 for Enhancement Grant Program; consider approval or other action authorizing projects of the La Porte Development Corporation in the amount of $350,000.00 for parking spaces at Pecan Park; $400,000.00 for restroom/Pavilion at Five Points and $229,665.00 for Enhancement Grant Program T. Leach The public hearing opened at 5:01 p.m. Assistant City Manager Traci Leach presented a summary. Board member Woodard asked if the proposed parking spaces at Pecan Park are concrete or asphalt. Assistant City Manager Traci Leach responded concrete. Board member Woodard asked if funds Page 1 of 3 December 12, 2016, La Porte Development Corporation Board Minutes have already been spent for restrooms at Five Points. Ms. Leach responded yes, either $11,000.00 or $17,000.00 has been spent. Board member Woodard asked Ms. Leach to explain the concept of tipurpose structure with electrical, fans, and restrooms. There being no public comments, the public hearing closed at 5:12 p.m. Board member Clausen moved to authorize a project of the La Porte Development Corporation in the amount of $350,000.00 for parking spaces at Pecan Park. Board member Woodard seconded. MOTION PASSED UNANIMOUSLY 7/0. Board member Clausen moved to authorize a project of the La Porte Development Corporation in the amount of $400,000.00 for restrooms/pavilion at Five Points. Vice-President Ojeda a seconded. MOTION PASSED 6/1. Ayes: President Warren, Vice-President Ojeda, Board members Fuller, Clausen, Engelken and Guerrero Nays: Board member Woodard Absent: None Board member Clausen moved to authorize a project of the La Porte Development Corporation in the amount of $229,665.00 for the Enhancement Grant Program. Board member Woodard seconded. MOTION PASSED UNANIMOUSLY 7/0. 4. AUTHORIZATIONS (a) Consider approval or other action amending the Enhancement Grant Program to include a requirement that City of La Porte businesses be included in the quotation process for applicable projects T. Leach Assistant City Manager Traci Leach presented a summary. Vice-President Ojeda requested the La Porte-Bayshore Chamber of Commerce listings be included in the quotation process. Board member Woodard moved to amend the Enhancement Grant Program to include a requirement that City of La Porte businesses be included in the quotation process for applicable projects as written. Board member Fuller seconded. MOTION PASSED UNANIMOUSLY 7/0. 5. SET DATE FOR NEXT MEETING Board members set the next meeting date for Monday, January 9, 2017, at 5:00 p.m. 6. 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. Board member Engelken requested an update on the status of hiring an Economic Development Coordinator. City Manager Corby Alexander reported interviews were conducted with one potential candidate; but the background check was unacceptable. Therefore, the recruiting process begins again. President Warren wished everyone a Merry Christmas and a Happy New Year. Page 2 of 3 December 12, 2016, La Porte Development Corporation Board Minutes 7. ADJOURN There being no further business, Board member Engelken moved to adjourn the meeting at 5:30 p.m. Board member Clausen seconded the motion. MOTION PASSED UNANIMOUSLY 7/0. Respectfully submitted, ____________________________________ Patrice Fogarty, City Secretary th Passed and approved on this the 9 day of January, 2017. ____________________________________ President Richard Warren Page 3 of 3 December 12, 2016, La Porte Development Corporation Board Minutes REQUEST FOR LA PORTE DEVELOPMENT CORPORATION AGENDA REQUEST FOR LA PORTE DEVELOPMENT CORPORATION AGENDA ITEMITEM January 9, 2017January 9, 2017AppropriationAppropriation Agenda Date Requested:Agenda Date Requested: Fund 038Fund 038 Traci LeachTraci LeachSource of Funds:Source of Funds: Requested By:Requested By:    AdministrationAdministrationAccount Number:Account Number: Department: $426,000.00$426,000.00 Report:Resolution:Resolution:Ordinance:Ordinance:Amount Budgeted:Amount Budgeted: $166,000.00$166,000.00 Amount Requested:Amount Requested: Exhibits: Budgeted Item:Budgeted Item:YESYESNONO 1.Development Agreement ExcerptDevelopment Agreement Excerpt 2.Presentation and Tax StatementPresentation and Tax Statement SUMMARY & RECOMMENDATIONSSUMMARY & RECOMMENDATIONS On September 22, 2014, both the ED Board and City Council approved an economic development incentive On September 22, 2014, both the ED Board and City Council approved an economic development incentive for “ACT Independent Turbo Services, Inc.ACT Independent Turbo Services, Inc.””((ACT) in the amount of ACT) in the amount of $426,000$426,000.. The ED Board approved and The ED Board approved and executed the development agreement for this project on 17 November 2014.executed the development agreement for this project on 17 November 2014. According to the terms of the development agreement, ACT may receive three separate payments of up to According to the terms of the development agreement, ACT may receive three separate payments of up to $75,000, $185,000, and $166,000 over a three year period.$75,000, $185,000, and $166,000 over a three year period. On June 27, 2016, the ED Board approved On June 27, 2016, the ED Board approved Payment Request No. 1 for $75,000 and on October 24, 2016, the Board approved Pay Request No. 2 for Payment Request No. 1 for $75,000 and on October 24, 2016, the Board approved Pay Request No. 2 for $185,000. In order to qualify for the third and final payment of $166,000, ACT must: In order to qualify for the third and final payment of $166,000, ACT must: Submit proof of total taxable value of at least $6,000,000 by October 31, 2017.Submit proof of total taxable value of at least $6,000,000 by October 31, 2017. Staff reviewed the both the documentation available on Harris County Appraisal District and the City of La Staff reviewed the both the documentation available on Harris County Appraisal District and the City of La Porte billing.Porte billing. The ACT Independent Turbo operation covers several HCAD parcels and for tax year 2015, the The ACT Independent Turbo operation covers several HCAD parcels and for tax year 2015, the The ACT Independent Turbo operation covers several HCAD parcels and for tax year 2015, the The ACT Independent Turbo operation covers several HCAD parcels and for tax year 2015, the company’s total real property valuation is over $7,000,000.s total real property valuation is over $7,000,000. The company has surpassed the taxable value The company has surpassed the taxable value requirement in the development agreement without even accounting for the business personal property requirement in the development agreement without even accounting for the business personal property (equipment). Please note that the property is held under two separate company names Please note that the property is held under two separate company names-- Gantua, LLC and NGT Gantua, LLC and NGT & L Properties, LLC.& L Properties, LLC. These are the real estate/construction arms of ACT Turbo. These are the real estate/construction arms of ACT Turbo. ACT Turbo currently has ACT Turbo currently has long-term auto renewing leases with these two companies, whose principals include Glenn Turner and Billy term auto renewing leases with these two companies, whose principals include Glenn Turner and Billy Coleman. Staff has evaluated the required documentation, finds that the company has satisfied the requirements of the Staff has evaluated the required documentation, finds that the company has satisfied the requirements of the development agreement, and recommends execution of payment in the amount of development agreement, and recommends execution of payment in the amount of $166,000$166,000 to to “ACT Independent Turbo Services, Inc.Independent Turbo Services, Inc.””.. Representatives of the company will be available to answer any questions that the Board may have about the Representatives of the company will be available to answer any questions that the Board may have about the project. Action Required by the La Porte Development Corporation:Action Required by the La Porte Development Corporation: Consider approval or other action to authorize staff to execute payment in the amount of Consider approval or other action to authorize staff to execute payment in the amount of $166,000.00 $166,000.00 to to “ACT Independent Turbo Services, Inc.Independent Turbo Services, Inc.””in accordance with terms of incentive agreement.in accordance with terms of incentive agreement. Approved for the La Porte Development Corporation AgendaApproved for the La Porte Development Corporation Agenda Corby D. Alexander, City ManagerCorby D. Alexander, City ManagerDateDate Independent Turbo Services ACT Independent Turbo Services City of La Porte EDC Presentation January 2017 January 2017 La Porte EDC Presentation Independent Turbo Services City of La Porte Economic Development Grant Milestones -$426k Lever-1 / Occupancy Permit: $75k 1 Achieved 04/25/16 –Expires 06/01/16 Lever-2 / >=75 People Move-In: $185k 2 Achieved August 2016 Lever-3 / HCAD Tax Appraisal: $166k 3 Achieved late 2016 ACT Independent Turbo Service EDC Presentation Update –January 2016 Construction Progress and Update Impact on Local Businesses and Community Continued Business Expansion January 2017 La Porte EDC Presentation Independent Turbo Services January 2017 La Porte EDC Presentation Independent Turbo Services HCAD Acct: 023-147-000-0918 ACT Independent Turbo Services La Porte Facility Operations HCAD Acct: HCAD Account2016 Taxable Value 023-147-000-0903 023-147-000-0918$ 684,013.00 023-147-000-0903$ 5,516,951.00 023-147-000-0924$ 766,346.00 023-147-000-0925$ 88,584.00 HCAD Acct: Total 2016 $ 7,055,894.00 023-147-000-0924 Property Taxable 2016 Appraised Value HCAD Acct: >$1,000,000 over ACT 023-147-000-0925 contracted milestone with EDC January 2017 La Porte EDC Presentation Independent Turbo Services Local Economic Impact -In the move/transition process, ACT worked to source products from La Porte Businesses La Porte Suppliers -In the last 18 months, ACT has spent $1MM+ with businesses within the City limits -The economic impact made by these initiatives have resulted in job creation and additional tax revenues in La Porte January 2017 La Porte EDC Presentation Independent Turbo Services Local Economic Impact -In the past 24 months, ACT has interviewed ~20 people that live in La Porte or graduated from LPHS. Hiring several. Employment -ACT currently employs ~90 people at our La Porte Location Opportunities January 2017 La Porte EDC Presentation Independent Turbo Services Local Economy Impact -ACT employees are active patrons of La Porte Restaurants on a daily basis to the tune of ~$25,000/yr Restaurants -Lunch Meetings Frequented -Customer Entertainment -Catering January 2017 La Porte EDC Presentation Independent Turbo Services Growth in Addition to the Incentive Package -100ft Expansion of existing Mechanical/rotor overhaul building Additional completed in 2016 2 Business -25,000ftExpansion under current Growth construction -ACT has developed an additional 2 30,000ftof facilities above original plan and promise to EDC in 2014 Independent Turbo Services ACT Independent Turbo Services City of La Porte EDC Presentation January 2017 Supporting Materials This is an Unaudited Statement. City of La Porte La Porte Development Corporation (038) Fund Summary (Section 4B Sales Tax) Previous ReportFY 2016-17FY 2015-16 Unaudited Beginning Fund Balance 9/30$ 5,494,9005,494,900$ 4,544,417$ Plus Year to Date Revenues: 1/2 Cent Sales Tax -- - Interest Income3,771 6,118 1,733 Total Revenues3,771 6,118 1,733 Equals Total Resources 5,501,0185,498,671 4,546,150 Less Year to Date Expenditures: Payroll 3,2051,473 14,659 Supplies 3636 392 Services & Charges (Memberships, Training, Advertising, Legal, Utilities)1,117 1,929 4,190 Incentive Grants185,000 185,000 - Debt Service Transfer57,104* 114,208 113,445 Capital Projects Transfers111,683 223,367 - ** Total Expenditures356,413 527,745 132,686 Estimated Year to Date Fund Balance as of 11/30/2016$ 4,973,2735,142,258$ 4,413,464$ Commitments Pipeline Grill$200,000 Fischer's Hardware 120,000 Richard Industrial Group 10,000 ACT Independent Turbo Service, Inc.166,000 Debt Service Reserve 1,083,817 $1,579,817 Adjusted Year to Date Fund Balance$3,393,456 Projection Through Year End Adjusted Year to Date Fund Balance$3,393,456 Plus: Estimated Sales Tax 2,212,500 Less: Estimated Operational Costs(415,564) Less: Debt Service Transfers(571,039) Less: Capital Projects Transfers(1,116,833) Projected Year End Fund Balance$3,502,520 Sales tax revenues for Fiscal Year 2017 are estimated to be $2,212,500. Capital Improvement Projects (Accounted for in Fund 015 - General CIP Fund) BudgetExpendituresBalance Façade Grants407,669 166,834 240,835 Restroom/Pavilion at Five Points400,000 400,000 Parking Spaces at Pecan Park 350,000350,000 Fencing at Golf Course250,000 250,000 Fencing on Spencer Highway 340,200340,200 Available Balance1,747,869 166,834 1,581,035 *Debt Service Payments for Library, Bay Area Boulevard & Canada Road and Ballfields. REQUEST FOR LA PORTE DEVELOPMENT CORPORATION AGENDA REQUEST FOR LA PORTE DEVELOPMENT CORPORATION AGENDA ITEMITEM January 9, 2017January 9, 2017AppropriationAppropriation Agenda Date Requested:Agenda Date Requested: Fund 038Fund 038 Traci LeachTraci LeachSource of Funds:Source of Funds: Requested By:Requested By:    AdministrationAdministrationAccount Number:Account Number: Department: $600,200.00$600,200.00 Report:Resolution:Resolution:Ordinance:Ordinance:Amount Budgeted:Amount Budgeted:    Amount Requested:Amount Requested: Exhibits: Budgeted Item:Budgeted Item:YESYESNONO SUMMARY & RECOMMENDATIONSSUMMARY & RECOMMENDATIONS On September 26, 2016, the City Council approved the proposed budget for FY 2017, which began on October 1, On September 26, 2016, the City Council approved the proposed budget for FY 2017, which began on October 1, 2016.  As part of the approved budget, the budget for the Development Corporation Board now includes funding 2016.  As part of the approved budget, the budget for the Development Corporation Board now includes funding for three projects.  These projects are as follows:for three projects.  These projects are as follows: Decorative fencing at Wharton Weems at the Golf Course:  This project has a scope that includes the Decorative fencing at Wharton Weems at the Golf Course:  This project has a scope that includes the installation of masonry pillars with decorative wrought iron fencing, plus removal of existing vegetation and installation of masonry pillars with decorative wrought iron fencing, plus removal of existing vegetation and fencing.  Masonry pillars would be placed every 50 feet and the project limits would include approximately fencing.  Masonry pillars would be placed every 50 feet and the project limits would include approximately 970 linear feet of fence/pillar on each side of Wharton Weems (north and south).  The estimated budget for 970 linear feet of fence/pillar on each side of Wharton Weems (north and south).  The estimated budget for this project is $250,000.   this project is $250,000.    Beautification along Spencer Highway:  This project has a scope that includes installation of single wythe Beautification along Spencer Highway:  This project has a scope that includes installation of single wythe masonry fencing along Spencer Highway from Farrington to Myrtle Creek. This fence is an engineered masonry fencing along Spencer Highway from Farrington to Myrtle Creek. This fence is an engineered beam that sits on a continuous foundation and is usually a split faced block (with a pattern) that is reinforced beam that sits on a continuous foundation and is usually a split faced block (with a pattern) that is reinforced with rebar and concrete placed in the with rebar and concrete placed in the ““hollowhollow””areas of the block. The total estimated cost for this project areas of the block. The total estimated cost for this project is $680,400.  However, Council indicated that the project be funded over two fiscal years with construction is $680,400.  However, Council indicated that the project be funded over two fiscal years with construction is $680,400.  However, Council indicated that the project be funded over two fiscal years with construction is $680,400.  However, Council indicated that the project be funded over two fiscal years with construction to occur in FY18.  For the purposes of the FY17 budget, a total of $340,200 is included in the EDC budget.to occur in FY18.  For the purposes of the FY17 budget, a total of $340,200 is included in the EDC budget. Community Cooperation Projects:  This project has been funded in the general Fund CIP for several years.  Community Cooperation Projects:  This project has been funded in the general Fund CIP for several years.  However, each year there has been a waiting list for community groups that would like to take part in the However, each year there has been a waiting list for community groups that would like to take part in the program.  Typically, thereprogram.  Typically, there’’s been at least one project each year that falls within a City park.  The funding s been at least one project each year that falls within a City park.  The funding included in the EDC budget for the FY17 budget would fund only those projects that fall into this category.  included in the EDC budget for the FY17 budget would fund only those projects that fall into this category.  The total budget is $10,000, which would provide for two community cooperation projects.The total budget is $10,000, which would provide for two community cooperation projects. As no petition was received regarding these projects, staff is requesting Board approval to declare these three As no petition was received regarding these projects, staff is requesting Board approval to declare these three initiatives a “projectsprojects””of the Development Corporation Board.  of the Development Corporation Board.   Action Required by the La Porte Development Corporation:Action Required by the La Porte Development Corporation: 1.Conduct public hearing.Conduct public hearing. 2.Consider approval or other action to declare Consider approval or other action to declare Decorative fencing at Wharton Weems at the Golf CourseDecorative fencing at Wharton Weems at the Golf Course, Beautification along Spencer Highway, and Beautification along Spencer Highway, and Community Cooperation Projects as projects of the Community Cooperation Projects as projects of the CorporationCorporation.. 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 January 9, 2017January 9, 2017AppropriationAppropriation Agenda Date Requested:Agenda Date Requested:    Traci LeachTraci LeachSource of Funds:Source of Funds: Requested By:Requested By:    AdministrationAdministrationAccount Number:Account Number: Department:    Report:Resolution:Resolution:Ordinance:Ordinance:Amount Budgeted:Amount Budgeted:    Amount Requested:Amount Requested: Exhibits: Budgeted Item:Budgeted Item:YESYESNONO 1.Development Agreement ProjectsDevelopment Agreement Projects 2.Letter to RepresentativesLetter to Representatives 3.Proposed Amended LanguageProposed Amended Language SUMMARY & RECOMMENDATIONSSUMMARY & RECOMMENDATIONS The La Porte Development Corporation was approved by the voters in April 1999.  This vote allowed the The La Porte Development Corporation was approved by the voters in April 1999.  This vote allowed the Corporation to collect a oneCorporation to collect a one--half cent sales tax to promote new or expanded business enterprises, including roads half cent sales tax to promote new or expanded business enterprises, including roads and related infrastructure.  Funds can also be used for public parks, museums, and facilities.  Since its inception, and related infrastructure.  Funds can also be used for public parks, museums, and facilities.  Since its inception, the La Porte Development Corporation has completed a variety of projects, ranging from quality of life the La Porte Development Corporation has completed a variety of projects, ranging from quality of life improvements like construction of regional baseball complex to infrastructure projects like additional downtown improvements like construction of regional baseball complex to infrastructure projects like additional downtown parking lots and Canada Road street construction to development incentives that facilitated both new business parking lots and Canada Road street construction to development incentives that facilitated both new business recruitment and business expansion/retention.  The Corporation has entered into development agreements with recruitment and business expansion/retention.  The Corporation has entered into development agreements with businesses for a total of almost $2.2 million in incentives, which facilitated over $273 million in capital investment, businesses for a total of almost $2.2 million in incentives, which facilitated over $273 million in capital investment, 465 additional jobs, and an increase in taxable sales of at least $6.5 million over the life of the agreements.  465 additional jobs, and an increase in taxable sales of at least $6.5 million over the life of the agreements.  Additionally, there are several planned projects funded in the FY17 budget (Pecan Park parking spaces, Five Additionally, there are several planned projects funded in the FY17 budget (Pecan Park parking spaces, Five Points restroom/Pavilion, Beautification efforts along Wharton Weems/Spencer) that would potentially be in Points restroom/Pavilion, Beautification efforts along Wharton Weems/Spencer) that would potentially be in jeopardy without changing the law. jeopardy without changing the law.  Currently, as the law is written, a 4B Corporation must issue debt in order to continue to collect Sales and Use Currently, as the law is written, a 4B Corporation must issue debt in order to continue to collect Sales and Use taxes.  In La Portetaxes.  In La Porte’’s situation, there is enough fund balance to continue to offer incentive for properly defined s situation, there is enough fund balance to continue to offer incentive for properly defined Projects without the need to issue debt.  Without taking action, it is possible that the La Porte Development Projects without the need to issue debt.  Without taking action, it is possible that the La Porte Development Corporation would be precluded from collection of sales tax for economic development purposes if the Corporation Corporation would be precluded from collection of sales tax for economic development purposes if the Corporation does not have existing debt, which it currently does not.does not have existing debt, which it currently does not. The proposed amended language to Section 505.258(1), Local Government Code would clarify the law by The proposed amended language to Section 505.258(1), Local Government Code would clarify the law by accounting for Corporations that do not require issuance of debt to fund eligible projects.  It is a minor change with accounting for Corporations that do not require issuance of debt to fund eligible projects.  It is a minor change with major implications.major implications. Staff recommends that the La Porte Development Board authorize President Richard Warren to coStaff recommends that the La Porte Development Board authorize President Richard Warren to co--sign the letter sign the letter that will be sent to La Porte elected representatives, urging them to present this amended language in the that will be sent to La Porte elected representatives, urging them to present this amended language in the upcoming 2017 Legislative Session.  This item is on the January 9, 2017 agenda for Council consideration to have upcoming 2017 Legislative Session.  This item is on the January 9, 2017 agenda for Council consideration to have the Mayor co--sign the letter, as well.sign the letter, as well. Action Required by the La Porte Development Corporation:Action Required by the La Porte Development Corporation: Consider approval or other action authorizing Richard Warren to sign a letter advocating changing the language of Consider approval or other action authorizing Richard Warren to sign a letter advocating changing the language of Section 505.258(1), Local Government Code to allow the La Porte Development Corporation to continue to collect Section 505.258(1), Local Government Code to allow the La Porte Development Corporation to continue to collect sales tax as long as bonds, projects, or other obligations of the Corporation exist.sales tax as long as bonds, projects, or other obligations of the Corporation exist. Approved for the La Porte Development Corporation AgendaApproved for the La Porte Development Corporation Agenda Corby D. Alexander, City ManagerCorby D. Alexander, City ManagerDateDate Capital Investment by Business BusinessNew or ExistingIncentive AmountJobs CreatedComments Rob Johnson (Dollar Tree/Goodwill Select) New$ 106,000.00$ 7,250,000.0010 Richard Industrial GroupNew$ 15,000.00$ 500,000.0075 IneosNew$ 300,000.00$ 250,000,000.00 60Located in the ETJ IntergulfNew$ 500,000.00$ 2,100,000.0030Corporate headquarters ACT Independent TurboExisting$ 426,000.00$ 6,000,000.0075 Pipeline GrillNew$ 300,000.00$ 1,200,000.0035Also includes $4M in taxable sales benchmark El ToroNew$ 124,100.00$ 5,000,000.00 Fischer's HardwareExisting$ 120,000.00$ 600,000.004Also includes 20% increase in taxable sales benchmark Northern SafetyExisting$ 230,000.00$ 140,000.00140Also includes $2.5M in sales tax benchmarks 4Ever Clear PoolsExisting$ 19,192.00$ 38,385.005Enhancement Grant Development Agreement Gates at Main StreetExisting$ 7,559.00$ 15,119.004Enhancement Grant Development Agreement Maher Strip Center on FairmontExisting$ 17,045.00$ 34,091.0014Enhancement Grant Development Agreement Patrasia Hefley (832 S. Broadway)Existing$ 25,000.00$ 67,152.00PendingRequires evidence of valid lease for second payment La Porte VisionExisting$ 2,868.00$ 5,737.006Enhancement Grant Development Agreement Jack's Convenience CenterExisting$ 11,169.00$ 22,339.007Enhancement Grant Development Agreement Total$ 2,203,933.00$ 272,972,823.00 465 December 21, 2016 Honorable Larry Taylor 6117 Broadway, Suite 122 Pearland TX 77581 wĻʹ tğƭƭğŭĻ ƚŅ \[ĻŭźƭƌğƷźƚƓ Dear Representative Taylor: The City of La Porte seeks passage of legislation that would correct a flaw in the Texas Local Government Code. A municipality that is located in a county with a population of 500,000 or more is authorized to create a Type B economic development corporation in accordance with Chapter 505 of the Texas Local Government Code. If approved by voters, the municipality may adopt a sales and use tax for the benefit of the corporation. This additional tax may be used only for the type of projects that are specified within Chapter 505. The La Porte Development Corporation was incorporated in 1999 after voters authorized a half-cent sales tax to promote new or expanded business enterprises, including roads and related infrastructure. Funds can also be used for public parks, museums, and facilities. Since its inception, the La Porte Development Corporation has completed a variety of projects, ranging from quality of life improvements like construction of regional baseball complex to infrastructure projects like additional downtown parking lots and Canada Road street construction to development incentives that facilitated both new business recruitment and business expansion/retention. The Corporation has entered into development agreements with businesses for a total of almost $2.2 million in incentives, which facilitated over $273 million in capital investment, 465 additional jobs, and an increase in taxable sales of at least $6.5 million over the life of the agreements. Section 505.258 of the Local Government Code states that a sales and use tax for economic development purposes may corporation cannot collect its only source of revenue, it has no reason to exist. While it was not likely intended by the Legislature, this language incentivizes the issuance of debt even if it is not needed to fund projects, which is the case for the La Porte Development Corporation. The projects identified above were all funded without the use of Corporation- issued debt. While corporations are not required to issue debt, those that do must continue to do so just to maintain their existence. The City of La Porte requests legislation that modifies Section 505.258 to allow a Type B corporation to continue to collect sales taxes so long as bonds, projects, and other obligations exist for the corporation. The La Porte Economic Development Corporation, for example, receives almost $2.5 million per year in sales tax revenue that could cash fund many important projects that will spur the local economy. Without a change to the current code, however, the La Porte Development Corporation would cease to exist after the effective date of this harmful legislation, as it currently carries no Corporation-issued debt. I have attached for your reference the specific changes that should be made to Section 505.258 . Thank you very much for your consideration. Sincerely, Louis R. Rigby Richard Warren Mayor, City of La Porte President, La Porte Development Corporation A BILL TO BE ENTITLED AN ACT relating to the cessation of collection of sales and use taxes by a Type B economic development corporation. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. Section 505.258(1), Local Government Code, is amended to read as follows: Sec. 505.258. CESSATION OF COLLECTION OF TAXES. A sales and use tax imposed under this chapter may not be collected after the last day of the first calendar quarter that occurs after the Type B corporation notifies the comptroller that: (1) all bonds or, projects as defined under this chapter, and other obligations of the corporation, including any refunding bonds and maintenance and operations , payable wholly or partly from the proceeds of the sales and use tax imposed under this chapter, have been paid in full; or (2) the total amount, exclusive of guaranteed interest, necessary to pay in full the bonds and other obligations has been set aside in a trust account dedicated to the payment of the bonds and other obligations. SECTION 2. This Act takes effect January 1, 2018.