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BM 2001-11-07 EcDevCOPPELL ECONOMIC DEVELOPMENT COMMITTEE November 7, 2001 MINUTES The Coppell Economic Development Committee met at 6:00 p.m. on Wednesday, November 7, 2001, at Coppell Town Center, 2nd Floor Conference Room, 255 Parkway Boulevard, Coppell, Texas. The following were present: Chairman Bill Rohloff, Bruce Bradford, Jay Thompson, Dennis Onalaja, Tim Brancheau, Bill Herries, Mary Ann Kellam, Robert Key, Councilmember Marsha Tunnell, and Councilmember Jayne Peters, City Manager Jim Witt, Chad Beach, Gary Sieb and Andrea Roy. Call to Order. The meeting was called to order at 6:10 p.m. Approval of Minutes It was moved by Mary Ann Kellam and seconded by Dennis Onalaja that the minutes of the October 3,2001 meeting be approved as recorded. The motion passed unanimously. Request by KPT Inc. for tax abatement for a 35,000 square-foot printing facility within the Koll Center Coppell building (700 S. Freeport Parkway). Mr. Kurt Pyka, President and CEO of KPT Inc. was present. Mr. Pyka spoke to the Committee, describing the proposed printing facility, giving the background on the company, which has been in business since 1977. The proposed printing facility will contain approximately 7,000 square-feet of office, 17,000 square-feet of production, with the remaining area serving as warehouse. KPT Inc. will be the first tenant in the recently completed 240,000 square-foot Koll project. Mr. Pyka indicated that the site's close proximity to the Mail Distribution facility is key factor. Mr. Pyka also indicated that the value of the company's tangible personal property is approximately $2.5 million and the company generates approximately $7 million in sales annually, with half ($3.5 million) generating sales tax revenue. Chad Beach followed with the review of a summary of the results of the econometric model, indicating that KPT Inc. is requesting a tax abatement based on either a minimum level of sales tax generated to the City or the value of Furniture, Fixtures, & Equipment for KPT Inc. The Committee briefly discussed the item, expressing that the subject company would be an asset to the community and generate a level of sales tax far beyond the abatement amount. Chad Beach indicated that the company would generate sales tax revenue; however, linking the terms of the abatement to the sales tax is more difficult to monitor that linking the abatement to the value of the personal property. While the applicant indicated that the current value of the tangible personal property is $2.5 million, it is known that equipment depreciates. It was recommended to lower the minimum personal property value to $2 million, in order to prevent the applicant from becoming disqualified, due to depreciation. It was moved by Bill Herries and seconded by Jay Thompson that KPT Inc. be granted a 5-year, 50% abatement, based on a minimum personal property value of $2 million. It was passed unanimously. Chad Beach exited the meeting to inform Mr. Pyka of the Committee's decision, explaining the terms of the agreement. At this time, Chairman Bill Rohloff swore in re- appointed Committee member Bruce Bradford. 1 Chad Beach rejoined the meeting to inform the Committee that item #3 needed to be re- opened for further discussion. Item #3 was re-opened for discussion. Mr. Beach indicated that the applicant's personal property will depreciate to a level below $2 million and recommended that the terms of the abatement be linked to the level of sales tax generated by KPT Inc. It was moved by Tim Brancheau and seconded by Bill Herries that KPT Inc. be granted a 5-year, 50% abatement, provided the City receives a minimum $30,000 or more annually from the collection of the one percent (1%) local sales and use tax. It was passed unanimously. Request by Centex Commercial Development to amend minimum requirements for the tax abatement for a 71,144 square-foot office building (Vista Ridge Addition) on a 7.017 acre portion of a 25.93 acre tract of land. Jay Thompson exited the meeting due to a conflict of interest, as he is employed by Centex. Dan Anderson with Centex Commercial Development again presented. The applicant requested that the terms of the tax abatement for the proposed 71,144 square- foot building, previously recommended for approval by the Committee, be revised. Mr. Anderson indicated that the estimated value of the building may be approximately $4-4.5 million, but could reach the $5.5 million minimum, depending upon leasing by Centex. Mr. Anderson has requested a 60% abatement based on a minimum of $4 million and a 75% abatement if the $5.5 million is reached. Mr. Anderson indicated that the other Centex divisions, which were to initially occupy half the building, have not yet signed a lease and are still in negotiations. Mr. Anderson concluded and exited the meeting. The item was briefly discussed among Committee members and it was determined that the Committee wished to remain consistent in its recommendations and maintain abatement percentages of 25, 50, & 75, not to begin a trend of granting 60% abatements, which also exceeds the standard for this improvement value and type of use. Chad Beach followed with the review of a summary of the results of the econometric model. It was moved by Tim Brancheau and seconded by Dennis Onalaja that Centex Commercial Development be granted a 5-year, 50% abatement based on a minimum improvement value of $4 million, or a 5-year, 75% abatement if the minimum improvement value reaches $5.5 million. It was passed unanimously. The applicant was informed of the Committee's decision. Jay Thompson returned to the meeting. Request by Spears Manufacturing to amend the existing tax abatement for 4250 Patriot Drive (Bldg. "F") within the D/FW Trade Center. Andrea Roy briefed the Committee on the request made by Spears Manufacturing, who purchased the subject property from the original owner and recipient of the tax abatement. Spears has requested that the minimum value of improvements, as noted in the tax abatement agreement, be decreased from $20 million to $10 million, still exceeding the minimum $5.5 million investment value. As one year of the abatement has passed, the amended value will be applied to the remaining four years of the abatement period. It was moved by Bill Herries and seconded by Bruce Bradford that Spears Manufacturing (4250 Patriot Drive) be granted an amendment to the existing Tax Abatement Agreement to reduce the minimum improvement value from $20 million to $10 million for the reaming four years of the abatement period. It was passed unanimously. o Discussion regarding possible incentives for existing building located at 500 Airline Drive (formerly MJ Designs). Andrea Roy briefed the Committee on the recent purchase of the former MJDesigns facility by Ablah Enterprises. The owner is making numerous improvements to the facility and actively marketing the property. Staff has been in contact with the new owners, who have expressed that the area competitors are providing tax abatements and extensive sign-on discounts; however, the original property owner received a tax abatement which has already been utilized, placing the current owners at a disadvantage. The Committee indicated their desire to occupy the facility, but wished to discuss incentives with specific tenants that may individually qualify. o Economic Development Topics of Consideration-Staffing, Chamber of Commerce, Hot Spots, and Incentives. The Committee briefly discussed Chamber of Commerce staffing, with the understanding that the acting Chamber Director had officially been made the Director. The role of the Chamber was also discussed and it was suggested that staff confirm the new Chamber Director's appointment and invite her and the Chamber President to our next meeting to discuss each entities goals and objectives, business retention (west side), and define the roles of the Committee and the Chamber. Staff will put Bill Rohloff in contact with the Chamber Director and President. Staff will formally invite the Chamber to the next meeting. Additionally, staff briefed the Committee on the four "Hot Spots" which were deemed priorities at the October Meeting, further clarifying the recommended use according to the Comprehensive Plan and indicating development obstacles. Staff will look into Ms. Lesley's estate and Bruce Bradford will contact H.T. Ardinger regarding the status of his property and report the findings at the December meeting. ge Update on development within the City Staff briefed the Committee on new development in the City, informing the Committee of upcoming development cases. The City Manager briefed the Committee on the status of the possible relocation/consolidation of Staples, which has been placed temporarily on hold. Mr. Witt also informed the Committee that a large carpet manufacturer/distributor is considering relocation to Coppell and he is working with the developer in recruitment efforts. It was also mentioned that the construction of S.H. 121 along the northern edge of the City has been moved up. Adjournment With no further business to discuss, it was moved by Bill Herries and seconded by Tim Brancheau that the meeting adjourn. By unanimous vote, the meeting was adjourned at approximately 8:05 p.m. Respectfully submitted, Andrea L. Roy