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Home My WebLink About2008/01/22-Minutes-Fort Worth Local Development Corporation (FWLDC) r CITY OF FORT WORTH, TEXAS FORT WORTH LOCAL DEVELOPMENT CORPORATION CALLED—SPECIAL SESSION MINUTES TUESDAY,JANUARY 22,2008 Present: President Jungus Jordan Vice President Chuck Silcox Secretary Carter Burdette Treasurer Salvador Espino Director Mike Moncrief Director Danny Scarth Director Frank Moss Director Kathleen Hicks Director Joel Burns City staff: Charles Boswell, City Manager Tom Higgins, Acting Assistant City Manager r Peter Vaky, Senior Assistant City Attorney Gerald Pruitt, Deputy City Attorney Marty Hendrix, City Secretary Jay Chapa, Director of Economic and Community Development Henry Day, Senior Management Analyst, Economic and Community Development Department Cynthia Garcia, Community Development Manager, Economic and Community Development Department Doug Rademaker, Director of Engineering Department Other City staff in attendance included: Dale Fisseler, Assistant City Manager Joe Paniagua, Assistant City Manager Karen Montgomery, Assistant City Manager/Chief Financial Officer LeAnn Guzman, Assistant City Attorney Ardina Washington, Economic Development Manager, Economic and Community Development Department Mark Folden, Business Development Coordinator, Economic and Community Development Department CITY OF FORT WORTH, TEXAS FORT WORTH LOCAL DEVELOPMENT CORPORATION CALLED—SPECIAL SESSION MINUTES TUESDAY, JANUARY 22,2008 Page 2 Call to Order (Agenda Item 1) With a quorum of the Board Members present, President Jordan called the meeting to order for the Board of Directors of the Fort Worth Local Development Corporation (LDC) at 12:45 p.m. on Tuesday, January 22, 2008, in the Pre-Council Chamber of the Fort Worth Municipal Building, 1000 Throckmorton, Fort Worth, Texas. Approval of Minutes from Meeting held on December 18,2007 (Agenda Item 2) President Jordan opened the floor for a motion on the minutes. MOTION: Upon a motion made by Director Moncrief and seconded by Director Hicks, the Board of Directors of the Fort Worth Local Development Corporation voted unanimously nine (9) "ayes" and zero (0) "nays", to approve the minutes of the December 18, 2007, meeting of the Fort Worth Local Development Corporation. The motion carried. Chairman Jordan adjourned the called — special session into Executive Session at 12:46 p.m. in accordance with the requirements of the Open Meetings Law. Executive Session (Agenda Item 3) A. Seek the advice of its attorneys concerning legal issues regarding (i) American Ironhorse Lease Agreement and (ii) any current agenda items that are exempt from public disclosure under Article X, Section 9 of the Texas State Bar Rules, as authorized by Section 551.071 of the Texas Government Code; and B. Discuss the purchase, sale, lease or value of real property, as authorized by Section 551.072 of the Texas Government Code. Deliberation in an open meeting would have a detrimental effect on the position of the City in negotiations with a third party; and C. Discuss or deliberate negotiations relating to any economic development negotiations, as authorized by Section 551.087 of the Texas Government Code. The Executive Session was adjourned at 12:55 p.m. r CITY OF FORT WORTH, TEXAS FORT WORTH LOCAL DEVELOPMENT CORPORATION CALLED—SPECIAL SESSION MINUTES TUESDAY, JANUARY 22,2008 Page 3 President Jordan reconvened from the Executive Session back into the called — special session at 12:55 p.m. Consideration of Financial Report (Agenda Item 4) Henry Day, Senior Management Analyst in the Economic and Community Development Department, spoke before the Directors on the various financial reports. Mr. Day, presented the Balance Sheet dated December 31, 2007, for the Fort Worth Local Development Corporation (unaudited) as follows: Assets Cash and Cash Equivalents $1,225,407.19 Interest Receivable $3,060.72 Accounts Receivable (1) $270,386.36 Total Assets 1.498.854.27 Liabilities and Fund Balance Accounts and Contracts Payable 0.00 Total Liabilities 0.00 Fund Balance (Deficit) Designated for Authorized Expenditures $1,498,854.27 Undesignated 0.00 Total Fund Balance $1,498,854.27 Total Liabilities and Fund Balance $11.498.854.27 The Balance Sheet noted that all accounts receivable are from American IronHorse Motorcycle Company, Inc. In October of 2006, the FWLDC Board of Directors approved a deferral of six months rent beginning November 1, 2006. Monthly rent is $24,699.69 and five months rent is due for a total of $123,498.45. Property taxes, interest and penalties have been paid on the behalf of American IronHorse Motorcycle Company, Inc., for a total of$97,488.53. November and December 2007 rent was not paid, as a result an additional $49,399.38 was added to receivables. There was an additional notation that on August 21, 2007, $275,000.00 was transferred to the City by M & C C-22334 with the understanding that it would be paid back '�kj: CITY OF FORT WORTH, TEXAS FORT WORTH LOCAL DEVELOPMENT CORPORATION CALLED— SPECIAL SESSION MINUTES TUESDAY,JANUARY 22, 2008 Page 4 when properties along Lancaster are sold. The transfer was made to fund an art sculpture on Lancaster Avenue. Mr. Day continued his review with the Statement of Revenues and Expenditures for the Three Months Ended December 31, 2007 (unaudited) for the Fort Worth Local Development Corporation as follows: Revenues Property Tax Reimbursement $2,387.52 Revenue from Rents $135,990.60 Sale of Property 0.00 Interest Income $5,566.54 Change in Fair Value of Investments 0.00 Other Revenue 0.00 Total Revenue $143,944.66 Expenditures Bank Charges $13.04 Contractual Services $43,389.00 Property Management $5,439.63 Property Purchase 0.00 Property Taxes 0.00 Repairs $17,052.28 Storm Water Utility $5,161.50 Transfers to City of Fort Worth $162,000.00 Total Expenditures $233,055.45 Excess (Deficiency) of Revenues Over (Under) Expenditures ($89.110.791 Mr. Day reviewed the Schedule of Available Funds dated December 31, 2007, for the Fort Worth Local Development Corporation as follows: Total Cash at December 31, 2007 $1,225,407.19 Cash in Property Management Account ($91,463.88) Cash Available in City account $1,333,943.31 Commitments Cypress, Approved May 1, 2007 $160,000.00 Proposed Commitments . r CITY OF FORT WORTH, TEXAS ` FORT WORTH LOCAL DEVELOPMENT CORPORATION CALLED—SPECIAL SESSION MINUTES TUESDAY,JANUARY 22,2008 Page 5 Purchase of 1009 Evans $61,000.00 Reserves Maintenance Reserve $100,000.00 Property Tax Reserve $100,000.00 Total Commitments & Reserves $421,000.00 Unrestricted Cash Available $712,943.31 Mr. Day then reviewed the Fort Worth Local Development Corporation Statement of Budget vs Actual for the Three Months Ended December 31, 2007 (unaudited) as follows: Revenues Budget Actual Variance Property Tax Reimbursement $155,000.00 $2,387.52 ($152,612.48) Revenue from Rents 564,412.44 135,990.60 ($428,421.84) Sale of Property 0.00 0.00 0.00 Interest Income 40,000.00 5,566.54 ($34,433.46) Change in Fair Value of 0.00 0.00 0.00 Investments Other Revenue 0.00 0.00 0.00 Total Revenue $759,412.44 $143,944.66 ($615,467.78) Expenditures Bank Charges $100.00 $13.04 $86.96 Contractual Services $210,000.00 $43,389.00 $166,611.00 Property Management 22,576.50 5,439.63 17,136.87 Property Purchase 63,000.00 0.00 63,000.00 Property Taxes 155,000.00 0.00 155,000.00 Repairs 25,000.00 17,052.28 7,947.72 Storm Water Utility 21,145.50 5,161.50 15,984.00 Transfers to City of Fort Worth 0.00 $162,000.00 ($162,000.00) Total Expenditures $496,822.00 $233,055.45 $263,766.55 Excess (Deficiency) of Revenues Over (Under) Expenditures $262,590.44 ($89,110.79) ($351,701.231 Mr. Day concluded his presentation. President Jordan opened the floor for discussion on these reports. CITY OF FORT WORTH, TEXAS FORT WORTH LOCAL DEVELOPMENT CORPORATION CALLED—SPECIAL SESSION MINUTES TUESDAY, JANUARY 22,2008 Page 6 Director Espino questioned the revenue on the rents and if the difference in the actual as compared to the budget was the result of the lack of payment by American Ironhorse. Mr. Day indicated that the budget was for the whole year. In further discussion, it was clarified that the budget was for the whole year and the report was just for the first three months. President Jordan questioned the deficit of$351,701.23. Mr. Day explained that the report was only looking at the first quarter of the fiscal year. President Jordan indicated that he did not like to see deficit amounts. Director Burns requested that the City staff prepare a budget-to-date comparison for the Board for future meetings so that the Board could see the budget for three months as compared to what the actual was for that period of time. Mr. Day indicated that the City staff could start doing a re-estimate for the Board. President Jordan indicated that he wanted to see a recommendation on how the LDC could get out of the hole with the deficit amounts. Mr. Day explained that there were large expenditures on the front of the year and there would not be that much committed towards the end of the year. He added that the monthly revenue to the LDC was about $40,000.00. He pointed out that as more revenues are received in the next months, that deficient figure would go away. President Jordan pointed out in that same respect would the $350,000.00 deficit go away as well. Mr. Day concurred. President Jordan requested annotation of the financial report with those types of notes. Jay Chapa, Director of Economic and Community Development interjected that the City staff would turn the report into a 12 month re- estimate with projections of how the end of the year will look for revenues versus expenditures. Director Scarth requested clarification on the $162,000.00 expenditure that was a transfer to the City of Fort Worth for the Lancaster Corridor survey. He asked if the LDC would receive reimbursement for that expense. Mr. Chapa clarified that once the property is sold on Lancaster for redevelopment, then the LDC would be reimbursed for that amount. MOTION: Upon a motion made by Director Hicks and seconded by Director Moncrief, the Local Development Corporation voted unanimously nine (9) "ayes" to zero (0) "nays" to accept and approve the referenced financial reports as presented. The motion carried. Consideration of a Resolution Authorizing Payment of Property Taxes for the Property Located at 4600 Blue Mound Road Occupied by American Ironhorse Motorcycle Company (Agenda Item 5) Mr. Day advised of the proposed resolution which would authorize payment of the property taxes in the amount of$82,071.70 for the property located at 4600 Blue Mound Road. CITY OF FORT WORTH, TEXAS k 3'` FORT WORTH LOCAL DEVELOPMENT CORPORATION CALLED—SPECIAL SESSION MINUTES TUESDAY,JANUARY 22,2008 Page 7 which is occupied by American Ironhorse Motorcycle Company. Mr. Day advised that this was necessary to avoid the penalty and interest charges. President Jordan requested clarification as to what would be the consequences of not paying the taxes. City staff reiterated that there would be penalty and interest charges that would be added to the tax bill which would be the responsibility of the LDC. There was further clarification that the taxes owed were for all of the taxes owed to the various taxing entities. MOTION: Upon a motion made by Director Espino and seconded by Director Moss, the Local Development Corporation voted unanimously nine (9) "ayes" to zero (0) "nays" to approve Resolution No. LDC-2008-01 authorizing payment of the property taxes in the amount of$82,071.70 for the property located at 4600 Blue Mound Road, currently occupied by American lronhorse Motorcycle Company, as presented. The motion carried. Consideration of a Resolution Awarding of Gas Lease for Property Located at 4600 Blue Mound Road (Agenda Item 6) Doug Rademaker, Director of Engineering, spoke before the Board on the proposed resolution awarding the gas lease for property located at 4600 Blue Mound Road. Using a PowerPoint Presentation, Mr. Rademaker advised that 4600 Blue Mound Road was the former Fruehauf Property, which was approximately 50 acres. He pointed out that the current surface lease was to American Ironhorse, Wackenhut, Building Specialties and Charter Communications. Mr. Rademaker reviewed an aerial photograph showing the location of the property, which was northeast of Fort Worth Meacham Airport. Mr. Rademaker advised that on April 3, 2007, the LDC Board authorized the advertisement for a gas drilling lease with the following bid requirements: Standard City lease form Minimum $10,000/acre bonus Minimum 26%royalty No surface use Mr. Rademaker advised that two bids were received on November 29, 2007, as follows: CITY OF FORT WORTH, TEXAS FORT WORTH LOCAL DEVELOPMENT CORPORATION CALLED—SPECIAL SESSION MINUTES TUESDAY,JANUARY 22,2008 Page 8 XTO Energy, Inc. $681,359.73 bonus ($13,511/acre) 26% Royalty Drill site acquired off site Chesapeake Exploration, L.L.C. $684,774.11 ($13,777/acre) 26.25%Royalty No drill site acquired Mr. Rademaker advised of the bid comparison process. He stated that the City staff met with XTO and Chesapeake on December 17, 2007, to discuss the bids. • XTO has drill site, drilling development plan and ability to recover LDC minerals • Chesapeake has no drill site, no drilling development plan and no ability to recover LDC minerals. Mr. Rademaker advised that the City staff's recommendation was to award the bid to XTO Energy, Inc., as follows: XTO controls 97% of leases in surrounding area XTO has drill sites available XTO has the pipeline facilities to get the gas to market XTO has drilling experience in this area of the City Mr. Rademaker showed a map of all of the XTO drilling locations in the City and near this location. Director Moncrief requested clarification on the amount of minerals that are owned. Mr. Rademaker advised that the LDC owns 100% of the mineral interests. Director Burdette questioned whether the LDC's gas revenues are a part of the City's financial policy regarding the distribution of the gas well revenues. Cynthia Garcia advised that the LDC was a separate entity from the City and was not included. She added that the LDC could become part of the policy. Director Burdette questioned where this gas well revenue would be placed. City staff clarified that this revenue would be placed with the other revenues the LDC receives and goes into that particular bank account. There was further discussion that the LDC gas revenues should remain separate and be utilized by the LDC for economic development purposes. CITY OF FORT WORTH, TEXAS FORT WORTH LOCAL DEVELOPMENT CORPORATION CALLED—SPECIAL SESSION MINUTES TUESDAY,JANUARY 22, 2008 Page 9 MOTION: Upon a motion made by Director Hicks and seconded by Director Espino, the Local Development Corporation voted unanimously nine (9) "ayes" to zero (0) "nays" to approve Resolution No. FWLDC-2008-02 awarding the gas lease for property located at 4600 Blue Mound Road to XTO Energy, Inc., that includes, among other things, a bonus of not less than $13,511.00 per acre and a royalty of not less than 26%. The motion carried. Consideration of a Resolution Authorizing the Purchase of Property Located in the Evans & Rosedale Proiect Area (Agenda Item 7) Cynthia Garcia, Community Development Manager, Economic and Community Development Department, spoke before the Board on the proposed resolution authorizing the purchase of property located at 1037 S. Freeway (Lot 21, Block 3, Evans South Addition) for $35,000.00, in the Evans and Rosedale project area. She advised that there was a billboard located on this property and it had been moved to another location at south of IH2O at IH35W. Using a map of the area, she identified the properties that have been purchased by the City, and the site for the library and public health building. She explained that now that the billboard had been removed the owner was willing to sell the property. She added that with the purchase of this corner lot, this will complete the overall purchase of property in this area for the redevelopment project. Manager Garcia explained that the total cost of the purchase would be an amount not to exceed $46,000, which included the survey, closing costs and the broker fee. MOTION: Upon a motion made by Director Moncrief and seconded by Director Hicks, the Local Development Corporation voted unanimously nine (9) "ayes" to zero (0) "nays" to approve the Resolution No. FWLDC-2008-03 authorizing the purchase of property located at 1037 S. Freeway (Lot 21, Block 3, Evans South Addition) from the owner in an amount up to $46,000, which includes survey, closing costs and broker fee. The motion carried. Requests for Future Agenda Items (Agenda Item 8) There were no requests for future agenda items. CITY OF FORT WORTH, TEXAS FORT WORTH LOCAL DEVELOPMENT CORPORATION CALLED—SPECIAL SESSION MINUTES TUESDAY,JANUARY 22, 2008 Page 10 Adiourn (Agenda Item 9) With no further business before the Board, President Jordan adjourned the called — special session of the Fort Worth Local Development Corporation at 1:09 p.m. on Tuesday, January 22, 2008. These minutes approved by the Fort Worth Local Development Corporation on the 19th day of February, 2008. APPROVED: Jung s Jor Presi ent ATTEST: U/IA SL, Carter Burdette, Secretary Prepared and respectfully submitted by: Marty Hendrix, T C/MMC City Secretary