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R2006-146 09-11-06 RESOLUTION NO. R2006-146 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS, AUTHORIZING THE PEARLAND ECONOMIC DEVELOPMENT CORPORATION TO ENTER INTO AN ECONOMIC INCENTIVE AGREEMENT WITH KEMLON PRODUCTS & DEVELOPMENT CO., LTD. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS: Section 1. That the Pearland Economic Development Corporation is hereby authorized to enter into an Economic Incentive Agreement with Kemlon Products & Development Co., Ltd. PASSED, APPROVED, AND ADOPTED this 11th day of September, A.D., 2006. ~f2EJ TOM REID MAYOR ATTEST: APPROVED AS TO FORM: ~f(.~ DARRIN M. COKER CITY ATTORNEY Pearl and EDC Memo To: Randy Ferguson From: Fred Welch cc: PEDC Board, City Council and Staff Date: 6/27/2006 Re: Executive Director's Report ending June 26, 2006 Randy: Staff is working a number of issues as we prepare for next year and the 2006-2007 operating budget. Just a reminder to all Board members that a hearing for next year's budget will be held Monday, July 10, 2006 at 5:00 PM in the Council Chambers prior to our scheduled Board meeting. Janice will be forwarding an agenda to you and the PEDC board next week. Bond Sale - Word has been received that our bond sale has been approved by the Attomey General's office and as of June 22nd we should be funded. The Bailey/Oiler Project is out for bid and should be returned or opening on June 29th. I would advise the PEDC board that the project will in all likelihood exceed the $10,000,000 bonded. Preliminary estimates from the engineering firm put the job in the vicinity of $10,500,000. The additional expense is primarily due to the extraordinary costs associated with drainage and detention. The Board should be prepared to take approximately $500,000 from reserves to pay for the remainder of the project. This action is not needed right away. We can wait until the contract has been awarded and take the funds from our reserves early in the next fiscal year. Events Summary ICSC - The ICSC event was a tremendous success this year. We made over fifteen visits to retail representatives, site selectors and leasing agents all with an interest in the Pearland market. My thanks to Will Benson for arranging all of these visits for us. Mayor Reid, Council Member Kevin Cole, Will Benson, Carol Artz and Keith Ordeneaux from the Chamber, and myself made up the contingent that worked the 43,000 plus attendees at this year's conference. Kirby Ribbon Cutting and update - I want to thank everyone who attended the ribbon cutting for the Kirby Drive extension last week. As a quick update to the board, the intersection will have a stop sign posted in the interim until it can be signalized. TxDOT approved the signal permit in May but it will take a couple of months to get the project bid and signals installed. The Street lighting along Kirby has been ordered from Reliant/CenterPoint. We are working with CenterPoint on extension of electric service north from the lift station for part of the lights and extension of a circuit along Spectrum Boulevard (North Spectrum) for the remaining lights. The circuit along North Spectrum will also go east to the Poag & McEwen project. This will ultimately allow us to serve about 2/3 of the 1000 acre Spectrum development with dual feed circuits. This is extremely important for technology related industries and those firms needing a redundant power supply to keep a constant supply of power to computers, servers and specialized manufacturing and research equipment. Final design is under way. Poag & McEwen Ground Breaking - The ground breaking for the Poag & McEwen project was held on June 22nd. Over 100 persons attended the event at The Spectrum. The ground breaking was held at the site for the Bass Pro Shop. The construction schedule for the entire project calls for vertical construction to begin in late October of this year with completion and grand opening in October of 2007. The venue looks to be a very exciting one with many retail and entertainment venues designed to bring in customers from a greater distance (40 miles or more) than most centers of this type. The Bass Pro folks have already been to a pre-development meeting and are working on their final design for a 133,000 square foot center and an 8,000 square foot restaurant adjoining the Bass Pro Shop. Staff Projects Plastics Show - Eric Gage has just returned from the National Plastics Engineering Show in Chicago. This event is held every third year at McCormick Place. PEDC shared a booth through the courtesy of CenterPoint Energy with seven other Houston area communities. Several good contacts were made as a result of the show. Staff will be following up over the next several weeks with letters and additional information packets requested from visitors to the booth. Manpower and workforce development conference - Staff will be attending a workforce development conference in July. The annual conference held on the West Coast this year will feature a program centered on local community involvement in work force development and training as it pertains to existing businesses in a community. State visit to New York City - the Office of the Governor has extended an invitation for communities in Texas to accompany Secretary of State Roger Williams to New York City in late July. The three-day visit will include a hosted reception with thirty or more site development and relocation specialists in the New York area and one on one visits with them by each attending community. This looks to be a very great marketing tool for us to use. Will Benson attended the last function in December. We are working with one firm on the West Coast as a result of his visit. The more opportunities we have to meet one on one with these folks and tell the Pearland story, the better our chances of securing additional investment in the city. Projects The PEDC Board will consider action on three possible projects for assistance at the July 10th meeting. Packet completion and impact analysis is being completed on all three projects and will be submitted to the board next week. Although I will be out of town on vacation until July 9th, staff is available to answer any questions of the Board. I will be back in the office on July 10th and can be reached prior to the Board meeting if there are any questions or concerns that any of you may have. Third Coast Expansion - As previously reported Third Coast Terminals is contemplating an expansion of their terminal on Mykawa Road in Pearland. In order to meet the requirement for fire safety, a 12- inch water line is needed along Mykawa Road to replace an existing 8-inch line. City staff is working on the cost estimate for this project. Should the Board elect to participate in all or part of this project, it would be more cost effective and time sensitive to allow Third Coast to do the work and reimburse them based upon their costs or amount specified by the Board. We anticipate application for tax abatement from the City of Pearland along with any other incentive granted. Staff is working on the analysis and should have it prepared for submission to the Board next week. Kemlon - Kemlon is anticipating a $4,000,000 expansion to their facility along South Main. We are competing with the City of Schulenburg on this project as the firm has an existing facility there. The expansion includes additional fa<tade to their current facility, landscaping and detention. It is anticipated that they will hire 100 to 150 new employees over the next five years. In 1997 PEDC and the city granted tax abatement for seven years at 50%, extension of water and sewer lines to the property and . Page 2 a cash grant of $70,000 to the firm. Total value of the incentive package on the original 70,000 square foot facility was approximately $238,000 according to our records. This expansion is equivalent to what the firm originally invested in 1997. Bison Lumber - Bison Lumber has a contract to purchase the Chem Central Property at the corner of McHard Road and Mykawa Road. The city took action last week along with Planning and Zoning to approve abandonment of a road right of way in the middle of their property that is not in the thoroughfare plan. Additional coordination with Burlington Northern Santa Fe is ongoing to secure a rail siding. The firm will invest $12 to $15 million dollars. Retail and wholesale sales will take place from this site. Retail sales to contractors are estimated to be in the range of $25 million dollars per year. A more detailed analysis on this project is being prepared by staff and will be available to the Board next week. I anticipate any participation by the PEDC to be in the rail siding to serve the site. We need to set a dollar figure on this supported by their investment, anticipated sales taxes and jobs created. Budget for 2006-2007 - Our Budget for next year was pretty well outlined this past month. A copy will be forwarded to you early next week. We have a conservative budget based on anticipated sales tax revenues of approximately $5 million next year. Over $1 million dollars has been budgeted for business incentives and additional funds to begin financing the extension of water and sewer lines east from the Poag & McEwen project, across SH 288 to the area where Turbo Care and Speed Shore now have their businesses. We have been working on an effective means to extend water and sewer service to this area for some time. The Poag & McEwen project gives us the means to enter into this project if the board so chooses. We will have a surplus estimated to be at $5.9 million at the beginning of the fiscal year. There are a number of projects that the Board can consider for infrastructure, etc. and two significant projects in terms of job creation that we have been working which will require a large cash incentive if we are to be competitive with our neighbors in Fort Bend County. We are in a good posture to go after a couple of big accounts next year and will endeavor to do just that. Other Activities Interviewing for Will Benson's position will start the week of July 10th. Resume's and applications have been coming into the HR office and are being screened. I hope to make a hiring decision some time in the month of July. (Can you tell I am getting ready to go out of town for vacation?) I left it all for the staff to finish while I am out of town. Fred . Page 3 Assistance Application Form Applicant Information Company Name: Address: Company Official: Title: Telephone: FAX: J<E t-tLo t-..1 r (Lo ,bl..{ C- T S ~ D8.> ~o L '1 D _f. () , ko ''i 21 8r --1324 tJ, MA.lW ?~~1)1 T'I- ,,7S-~8"- 2-( 3C( JOH-N +-t. 12.lrJG V P / 0 (.vl\J EI2- I 2..~ I ~ tf<1"l- 3 so () ~€I -'('f'l L300 Please submit third party reviewed financial statements or IRS tax filings for the prior two years. Project Description Applicant MUST attach a statement fully explaining the project. Describe future site improvements, business operations, and economic impacts of the proposed project. If the company will be required to obtain any State or Federal permits, please detail which permits and why they are required. The company must ask for assistance from the PEDC. Description of Facility (Select those that apply) Corporation ( ) Partnershi~ Expansion () Modernization ( ) Office/ Professional ( ) Proprietorship ( ) New Plant ( ) Manufacturing ( ) Sales ( ) Other Industry () Distribution Center ( ) Project Location (Attach site plan): ( 4- 'LL{ ~'M A: I kJ Total Capital Investment (Excluding Land Value): $ 3,0 (V 3. S ~ Estimated Expenses of Bringing Utilities to Site: $ 0 Building Size (Sq. Ft.): 43 ( 000 Estimated Moving Expenses: $ 0 Estimated Annual Sales Tax Contribution: $ Estimated Value of Fixed Equipment: $ 5"00 I 000 Sales Tax Sent to State of Texas (Last year): $ -x SEb Pe=rtn.LI Company Profile: Employment: ( '1 { S~ b~1. "'5 Current Employment: 23 q P~~p\oyment in 5 years: Gross Annual Payroll: $ i OJ bl "f" OD 0 Annual Payroll inS years: $ Average Hourly Wage: ,$ 1 S, ~ I Avg. Wage in 5 years: $ ~QSe.c Oil\. l~ ~+ 1O~ l4-'()~ '';L~~ YQQr - ..eM. oS- MINUTES OF A REGULAR MEETING OF THE PEARLAND ECONOMIC DEVELOPMENT CORPORATION ("PEDC") BOARD OF DIRECTORS OF THE CITY OF PEARLAND, TEXAS, HELD MONDAY, JULY 10, 2006, AT 5:30 P.M., 1ST FLOOR CONFERENCE ROOM, CITY HALL, 3519 LIBERTY DRIVE, PEARLAND, TEXAS. I. Call to Order The meeting was called to order at 5:30 p.m. with the following present: BOARD MEMBERS Chairman Randy Ferguson Board member Gary Idoux Board member George Sandars Board member Lucy Stevener Board member Ed Thompson EX-OFFICIO BOARD MEMBERS Pearland Area Chamber of Commerce Carol Artz Not in attendance: Due to a conflict in schedule, Ex-Officio Board Members Bill Eisen and Mayor Tom Reid were unable to attend the meeting. STAFF MEMBERS Executive Director Fred Welch Office Coordinator Janice Vega Minutes of a Regular Meeting July 10, 2006 Page 2 II. Approval of Minutes: Board member George Sandars made the motion, seconded by Board member Lucy Stevener to approve the minutes of the Public Hearing and Regular Meeting of May 22, 2006. Motion Passed: 5 - 0 III. Board Member Reports: Board members Lucy Stevener and George Sandars attended the Kirby Road ribbon cutting and the Poag & McEwen groundbreaking. Board member Gary Idoux also attended the Kirby Road ribbon cutting. IV. Monthly Financial Report: Reviewed and discussed Pearland Economic Development Corporation Financial Report for the period ending June, 2006. V. Executive Director's Report: Executive Director Fred Welch reported that Texas Honing may be getting ready to start an expansion of their facility. Aggreko is progressing on their training facility. VI. Public Comments: None VII. New Business A. FY2006 Budget Amendment: Board member Ed Thompson made the motion, seconded by Board member George Sandars to amend the FY2006 budget for projections as presented by Director of Finance Claire Manthei. Motion Passed: 5 - 0 B. FY2007 PEDC Budget: Board member George Sandars made the motion, seconded by Board Member Lucy Stevener to approved the FY2007 budget. Motion Passed: 5 - 0 C. Quarterly Report: President Carol Artz of the Pearland Area Chamber of Commerce gave a report and one was submitted to file. EXECUTIVE SESSION UNDER TEXAS GOVERNMENT CODE The meeting was adjourned to enter into Executive Session at 6:41 p.m. 1. SECTION 551.087 DELIBERATIONS REGARDING ECONOMIC DEVELOPMENT INCENTIVES - Prospect #0606. 2. SECTION 551.087 DELIBERATIONS REGARDING ECONOMIC DEVELOPMENT INCENTIVES - Prospect #0607. 3. SECTION 551.087 DELIBERATIONS REGARDING ECONOMIC DEVELOPMENT INCENTIVES - Prospect #0608. The Board reconvened into Open Session at 7:03p.m. NEW BUSINESS (Continued) D. Economic Development Incentives - Prospect #0606: Board member George Sandars made the motion, seconded by Board member Lucy Stevener to grant economic development incentives to Prospect #0606 in the amount of $150,000.00 for the cost of a rail switch. Minutes of a Regular Meeting July 10,2006 Page 3 E. Economic Development Incentives - Prospect #0607: Board member Ed Thompson made the motion, seconded by Board member Gary Idoux to grant economic development incentives to Prospect #0607 for infrastructure for an amount not to exceed $55,000.00. F. Economic Development Incentives - Prospect #0608: Board member George Sandars made the motion, seconded by Board member Lucy Stevener to grant economic development incentives to Prospect #0608 for infrastructure for an amount not to exceed $225,000.00, and will recommend that City Council consider granting the company a tax abatement. VII. Adjournment: Board member George Sandars made the motion, seconded by Board member Ed Thompson to adjourn the meeting. Motion Passed: 5 - 0 Time: 7:08 p.m. Minutes a~ved eu l ~ i as submitted and/or , A.D., 2006. corrected this --< ~ +:J\,"" day of ~~ ATTEST: