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HomeMy WebLinkAbout2004/08/31-Minutes-Fort Worth Local Development Corporation (FWLDC) CITY OF FORT WORTH, TEXAS FORT WORTH LOCAL DEVELOPMENT CORPORATION CALLED—SPECIAL SESSION MINUTES TUESDAY,AUGUST 31,2004 Present: President Council Member John Stevenson—District 7 Vice President Council Member Wendy Davis—District 9 (arrived at 8:40 a.m.) Secretary Mayor Pro tempore Ralph McCloud—District 8 Treasurer Council Member Clyde Picht—District 6 (arrived at 8:25 a.m.) Director Mayor Mike Moncrief Director Council Member Jim Lane—District 2 Director Council Member Chuck Silcox—District Director Council Member Becky Haskin—District 4 Director Council Member Donavan Wheatfall—District 5 (arrived at 8:25 a.m.) City staff: Interim City Manager Charles Boswell Assistant City Manager Joe Paniagua City Attorney David Kett City Secretary Marty Hendrix Economic and Community Development Director Tom Higgins Finance Director Jim Keyes Call to Order (Agenda Item 1) President Stevenson called the meeting to order for the Board of Directors of the Fort Worth Local Development Corporation at 8:24 a.m. on Tuesday, August 31, 2004, in the Pre- Council Chamber of the Fort Worth Municipal Building, 1000 Throckmorton, Fort Worth, Texas. Approval of Minutes of the June 15, 2004 Meeting (Agenda Item 11) President Stevenson opened the floor for a motion on the approval of the minutes of the l'uesdaye, JI une 15, 2004 rneetfing, MOTION: Upon a motion mad-e by Director 1 iaskin and sCconded by Director McCloud. the Corporation Board voted six (6) "ayes" and no (0) "nays- toy approve the June 1151 2004 minutes as presented. Th' s motion carried. CITY OF FORT WORTH, TEXAS FORT WORTH LOCAL DEVELOPMENT CORPORATION CALLED—SPECIAL SESSION MINUTES TUESDAY,AUGUST 31, 2004 Page 2 Adoption of Resolution Authorizing Transfer to City of Fort Worth of $1,300,000 in Order to Complete Construction of the Fort Worth Mercado Building (Agenda Item 111) Assistant Citv Manager Paniagua spoke before the Board regarding the recommended Z_ sequence of events on this item. He recommended to the Board that this item be deferred until the Council has an opportunity to discuss M&C C-20251 (Appropriation Ordinance and Acceptance of Grant from Fort Worth Local Development Corporation and Assignment of Contract Between Fort Worth Mercado 1, L.P. and Muckelroy and Falls for Construction of the Fort Worth Mercado) in Executive Session after the Pre-Council Meeting. He suggested the Council then convene into regular session to conduct the regular City Council meeting, continue discussion in Executive Session on this item, if necessary, and then reconvene the Corporation Board for their action on the item. He stated at that time, he would make the presentation on this item to the Corporation Board and the Corporation Board would then take action. Afterwards, the Council would convene back into regular session to take formal action on this item. (Director Wheatfall and Treasurer Picht arrived at the meeting.) By consensus, the Corporation Board agreed to the sequence of events presented by Assistant City Manager Joe Paniagua. President Stevenson recessed the called — special session of the Fort Worth Local Development Corporation at 8-26 a.m. on Tuesday, August 31, 2004. President Stevenson reconvened the called — special session of the Fort Worth Local Development Corporation at 1:20 p.m. on Tuesday, August 31, 2004.1 in the Pre-Council t� Chamber of the Fort Worth Municipal Building. Assistant City Manager Joe Paniagua made a presentation to the Board Members on the Z-1 status of the construction of the Fort Worth Mercado Project development, He explained what has OCCUr ed over the last ten days: .r * Attempt by developer to secure financing from equitv partner and local bank has fallen through * Developer has assigned all rights and title to the City ol"Fort Worth Transportation and Public Works staff has conducted a first assessment of f construction prog.ress with the contractor ("I'v, staff lis workirniu, -,A,,ith developerion othier leota"I ""Sstle- CITY OF FORT WORTH, TEXAS FORT WORTH LOCAL DEVELOPMENT CORPORATION CALLED—SPECIAL SESSION MINUTES TUESDAY, AUGUST 31, 2004 Page 3 Adoption of Resolution Authorizing Transfer to City of Fort Worth of $1,300,000 in Order to Complete Construction of the Fort Worth Mercado Building (cont'd) (Agenda Item 111) Assistant City Manager Paniagua advised that the contract amount was $3.698 million. The amount paid to date (excluding the design) was $1.825 million, with the remaining funds being $656,000. He stated that the construction gap was $1.217 million. He advised of what would occur if the project shuts down as follows: • Restart costs of project could range from $600,000 to $1 million • Building would be at risk to weather damage • Building could be vandalized • Building poses significant safety risk to community • City will get no return on it's investment if building is not complete He advised that the recommendation was to: a. Fund the remaining construction costs of the building. b. Citv staff to work with contractor to determine possible construction savings c. Begin discussions with local developers about taking over the project d. If no developer is found, upon completion of the construction, put the facility on the market for sale. Assistant Citv Manager Paniagua advised of the source of the funds as follows: LDC Mercado Repayment $700.000 LDC Lease Income $600,000 Total $1,300k000 He added that up to S.3010,000 in CDB(i funds could be allocated f',--,,r additional finish-out as needed, Assistant City Manager Paniagua provided a project recap that the con struct;lon,idesign.'engineering was $4,298 -million, The preliminary appraisal was $4.200 million. f le added that this was a three-stork= buildina, at 1_55 North Main. It was to be 58,000+ sq� ft, total "o e r of cc, rtal i and public space. There vrould be 48.0100 sq, ft. "Or lease space, CITY OF FORT WORTH, TEXAS FORT WORTH LOCAL DEVELOPMENT CORPORATION CALLED-SPECIAL SESSION MINUTES TUESDAY, AUGUST 31,2004 Page 4 Adoption of Resolution Authorizing Transfer to City of Fort Worth of 51,300,000 in Order to Complete Construction of the Fort Worth Mercado 13uildinf! cont'd) (Agenda Item 111) There would be 6,000 sq. ft. for an activity hall with kitchen facility. The completion date was estimated in November/December 2004. Showing recent photographs of the building construction, he reviewed and explained the photographs to the Board. Assistant City Manager Paniagua stated that the next steps, if the Corporation Board approves the funding and the City Council approves M & C C-20251, then the City staff would: a. Notify contractor to complete construction b. Finalize transfer of construction contract to City of Fort Worth c. Complete legal transfer of project from developer (this will likely require additional City Council actions) d. Review lease options/sale of property e. Conduct weekly internal staff review of progress of construction project f. Bi-weekly written report to City Council on status In discussion on this item, Secretary McCloud requested further clarification on the comments made about individuals being interested in this development and whether they were interested to get into the project at this time or when the project is completed. Assistant City Manager Paniagua explained that he was not sure about when they wanted to get into the project, but that they were very interested in the project. He indicated that this would be something that they would be working out. Director Dane requested clarification on the action time line for construction completion. Mr. Paniagua stated that mid-November or December of 2004. Ile stated that on]-' half of the buildinL, would be finished out. Director bane made a personal observation on the issue that this had been a !ong-term dream or vision of Dula Guadiana. f le recommended that, ifa group was going to get together to meet with potential interested developers, she be included as the project is the result of her vision. He requested further clarification about the City taking over the pr(Ject. Ile questioned that if the City owns the building, wouid the City he able to tailor the tvp.- of group that could u"i I ize this N 611-11d hnig anid coulvd, the City direct the vision of ho--,:% it sl'muld be USC(I- I he Statted thall CITY OF FORT WORTH, TEXAS FORT WORTH LOCAL DEVELOPMENT CORPORATION CALLED—SPECIAL SESSION MINUTES TUESDAY, AUGUST 31, 2004 Page 5 Adoption of Resolution Authorizing Transfer to City of Fort Worth of 51,300,000 in Order to Complete Construction of the Fort Worth Mercado BuildinLy(cont'd) (Agenda Item 111) this building is very special to the northside of Fort Worth. He added that he is uncomfortable with someone wanting to turn it into another office building. Director Lane suggested that the City needed to have the ability to direct the purchase or the management of the property. City Attorney Kett explained that the purchase or management of the property would have to come back before the Council for approval and at that time it would be up to the Council as to what direction the project should take. He did caution the Directors that the Council would have to follow all of the rules relating to the HUD funding and governing of the LDC funds. Director Lane interjected that he wanted the Council to be sensitive to the dream that started with this building and that it was to showcase the Mexican/American heritage and culture. Director Silcox requested clarification on the source of the funding. Assistant City Manager Paniagua stated that it was from HUD funds and revenue income from the leasing of Local Development Corporation property. He pointed out that it is not from the City's general fund monies. Director Silcox explained that his office had received telephone calls regarding a recent newspaper article. The callers had indicated that the article implied that this funding was from the City's general fund. Mr. Paniagua reiterated that it was not general fund monies and explained that the HUD funding would be handled through the LDC and from the LDC to the City of Fort Worth. Director Silcox wanted to make sure this statement was made clear to the public in any further publicity. Vice President Davis pointed out that there would be a one year time period to repay the $700,000. Vice President Davis stated that she wanted to know what the backup plan was going to be if all of this did not work out for the City. Assistant City Manager Paniagua stated that there are two options for the City to consider, tie advised that one option was to seek more time with HUD,- and, the second option would be to inject more CDBG monies into the project in order to repay that amount. He indicated that another option would be that funding might be available through the LDC from another property income or Emm the sale of that property. Vice Pres ident Davis pointed out that while the Council approved of all oft he aspects of this project, she wanted to look back and determine where the City could have done a better job with the project to carry it forward and not be in this position. She suggested that the City staff' develop a procedure for this type of situation and that it be put into place and provided in a staff report to the Counc-11. Site -Indicated that she wanted to see the City do a better Jol 0 the next time. CITY OF FORT WORTH, TEXAS FORT WORTH LOCAL DEVELOPMENT CORPORATION CALLED— SPECIAL SESSION MINUTES TUESDAY, AUGUST 31, 2004 Page 6 Adoption of Resolution Authorizing Transfer to City of Fort Worth of $1,300,000 in Order to Complete Construction of the Fort Worth Mercado Building(cont'd) (Agenda Item 111) There was further discussion by the Board Members on the City staff's recommendation to move forward to complete this project, sell it and keep in mind the vision that had initiated the project. Assistant City Manager Paniagua suggested that the Council move forward with the action to approve the proposed resolution. President Stevenson reiterated some of the points that had been made by the other Directors. He indicated that the City staff had agreed to provide bi-weekly reports on this project to the Council. Treasurer Picht stated that if the City had to have a "white elephant" that it should be a completed one and he recommended that the City not do this type of project in the future. � President Stevenson read the resolution into the record as follows: "FORT WORTH LOCAL DEVELOPMENT CORPORATION RESOLUTION OF THE BOARD OF TRUSTEES Whereas, the City of Fort Worth wishes to complete construction of the Fort Worth Mercado, a 58,000 square foot facility located at 1500 North Main Street; and Whereas, consistent with the economic development objectives of the Fort Worth Local Development Corporation, the Corporation wishes to transfer $1,300,000 to the City in order to make completion of the project feasible for the Citv.- NOW, THIHIREFORE. BE 1T RESOL.VED that the or p.,oration hereby authorizes khe transfer to the Citv of $1,300,000 of the Corporation orations current1v available funds for the purpose of assisting the City's completion of the construction of the Fort Worth Mercado, a 58,000 square foot facility located at 1500 North Main Street. CITY OF FORT WORTH, TEXAS FORT WORTH LOCAL DEVELOPMENT CORPORATION CALLED—SPECIAL SESSION MINUTES TUESDAY, AUGUST 31, 2044 Page 7 Adoption of Resolution Authorizing Transfer to City of Fort Worth of $1,300,000 in Order to Complete Construction of the Fort Worth Mercado Building (cont'd) (Agenda Item 111) FURTHER RESOLVED, that the Secretary or any Assistant Secretary of the Corporation is hereby authorized and directed to certify the adoption of this resolution." Adopted this the 31't day of August, 2004." MOTION: Upon a motion made by Director Wheatfall and seconded by Director McCloud, the Board voted nine (9) "ayes" and no (0) "nays" to approve the proposed resolution as stated previously. The motion carried. Adiourn (Agenda Item IV) With no further business before the Board, President Stevenson adjourned the called — special session of the Fort Worth Local Development Corporation at 1:315 p.m. on Tuesday, August 31, 2004. These minutes approved by the Fort Worth Local Development Corporation on the 30th day of November, 2004. APPROVED: J o n Steverson resident esident N i Ralph McCloud ��� Secretary CITY OF FORT WORTH, TEXAS FORT WORTH LOCAL DEVELOPMENT CORPORATION CALLED—SPECIAL SESSION MINUTES TUESDAY, AUGUST 31, 2004 Page 8 Prepared and respectfully submitted by: Marty Hendrix, TtN4C/CMC City Secretary