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Home My WebLink About2008/05/27-Minutes-Fort Worth Local Development Corporation (FWLDC) CITY OF FORT WORTH, TEXAS FORT WORTH LOCAL DEVELOPMENT CORPORATION CALLED—SPECIAL SESSION MINUTES TUESDAY, MAY 27, 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: Tom Higgins, Assistant City Manager Peter Vaky, Senior Assistant City Attorney Marty Hendrix, City Secretary Jay Chapa, Director of Community and Economic Development Department Cynthia Garcia, Community Development Manager, Economic and Community Development Department Chris Mosley, Assistant City Attorney Other City staff in attendance included: Dale Fisseler, City Manager David Yett, City Attorney Gerald Pruitt, Deputy City Attorney Marcia Wise, Deputy City Attorney Harvey Frey, Assistant City Attorney LeAnn Guzman, Assistant City Attorney Joe Paniagua, First Assistant City Manager (arrived at 11:24 a.m.) Fernando Costa, Assistant City Manager Carl Smart, Acting Assistant City Manager Karen Montgomery, Assistant City Manager/Chief Financial Officer Ardina Washington, Economic Development Manager, Economic and Community Development Department CITY OF FORT WORTH, TEXAS FORT WORTH LOCAL DEVELOPMENT CORPORATION CALLED— SPECIAL SESSION MINUTES TUESDAY, MAY 27,2008 Page 2 Guest: Mr. Scott Meyers, AIH Acquisitions Company, LLC Call to Order (Agenda Item I) 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 (Corporation) at 9:58 a.m. on Tuesday, May 27, 2008, in the Pre-Council Chamber of the Fort Worth Municipal Building, 1000 Throckmorton, Fort Worth, Texas. President Jordan read the contents of the Executive Session agenda and advised that the Corporation would convene into Executive Session once the regular City Council meeting was completed today. Chairman Jordan recessed the Corporation at 10:00 a.m. in order for the members to attend the Fort Worth City Council meeting. Reconvene President Jordan reconvened the called-special session of the Fort Worth Local Development Corporation at 11:16 a.m. in the Pre-Council Chamber of the Fort Worth City Hall, 1000 Throckmorton, Fort Worth, Texas 76102, with Corporation Members Moncrief and Scarth temporarily absent. He adjourned the called — special session into Executive Session at 11:16 p.m. on Tuesday, May 20, 2008, in accordance with the requirements of the Open Meetings Law. Executive Session (Agenda Item II) In accordance with Chapter 551 of the Texas Government Code, President Jordan and the Directors of the Fort Worth Local Development Corporation, except Directors Scarth and Moncrief who were temporarily absent, convened into Executive Session at 11:16 a.m., on Tuesday, May 27, 2008, in the Pre-Council Chamber of the Fort Worth City Hall, 1000 Throckmorton Street, Fort Worth, Texas 76102, in order to: A. Seek the advice of its attorneys concerning legal issues regarding (i) American Ironhorse Lease Agreement and (ii) American Ironhorse Motorcycle Company, Inc.. U.S. Bankruptcy Court Northern District of Texas. Fort Worth DiN'ision. Case No. 08-40926 and (iii) any current agenda CITY OF FORT WORTH, TEXAS FORT WORTH LOCAL DEVELOPMENT CORPORATION CALLED—SPECIAL SESSION MINUTES TUESDAY, MAY 27, 2008 Page 3 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 by President Jordan at 11:19 a.m. President Jordan reconvened from the Executive Session back into the called — special session at 11:19 a.m., and Directors Moncrief and Scarth had arrived at the meeting. Consideration of a Lease Agreement of a Portion of the Property Located at 4600 Blue Mound Road with AIH Acquisition Company, LLC. (Agenda Item III) President Jordan recognized Cynthia Garcia, Community Development Manager, Economic and Community Development Department of the City of Fort Worth, who made a presentation to the Corporation Board Members on the proposed lease agreement of a portion of the property located at 4600 Blue Mound Road with AIH Acquisition Company, LLC. Ms. Garcia recognized Mr. Scott Meyers who was the owner of AIH Acquisition Company, LLC, in the audience. Ms. Garcia began the presentation with a review of the amount of monies owed to the Corporation from American Ironhorse based upon their previous lease agreement. The chart showed the following: Pre-Bankruptcy Property Taxes 2006 including P & 1 $97.488.53 Property Taxes 2007 $81071.70 Rent October 2006 thru February 2007 $123.498.45 CITY OF FORT WORTH, TEXAS FORT WORTH LOCAL DEVELOPMENT CORPORATION CALLED— SPECIAL SESSION MINUTES TUESDAY, MAY 27,2008 Page 4 Consideration of a Lease Agreement of a Portion of the Property Located at 4600 Blue Mound Road with AIH Acquisition Company, LLC. (cont'd ) (Agenda Item III) Rent January 2008 $14,399.38 Rent February 2008 $24,699.69 Rent March 2008 to the 24th $19,122.34 Total Pre-Bankruptcy Receivables $361,280.09 Post-Bankruptcy Rent March 2008 25ththru 31St $5,577.35 Rent April 2008 $0.69 Rent May 2008 $0.69 Total Post-Bankruptcy Receivables $5,578.73 Total Receivables $366,858.82 Ms. Garcia reviewed the new lease agreement details as follows: New Owner: • AIH Acquisitions Company, LLC • Scott Meyers • Former CEO of Alliant Techsystems, as conglomerate of defense contractors based in Minnesota • Owns two (2) motorcycle dealerships • Rocky Mountain Choppers in Montana • Black Water Choppers in Minnesota Proposed Lease Terms: • Payment of$100,000 at lease signing • Lease term— 7 years • Amount of space— 1 10,000 square feet CITY OF FORT WORTH, TEXAS FORT WORTH LOCAL DEVELOPMENT CORPORATION CALLED—SPECIAL SESSION MINUTES TUESDAY, MAY 27, 2008 Page 5 Consideration of a Lease Agreement of a Portion of the Property Located at 4600 Blue Mound Road with AIH Acquisition Company, LLC. (cont'd ) (Agenda Item III) • Proportional area of parking to be included with the square footage of the building so that appropriate parking area can remain with the rest of the building • Rent Payments: • $1.25/square foot for years 1 —3 • $1.50/square foot for years 4—5 • $1.75/square foot for years 6 - 7 Repayment schedule paid during first five (5) years of lease: • $500 per month for months 1 — 12 • $1,925 per month for months 13 — 36 • $3,750 per month for months 37—60 • $124,658.82 paid in month 60 • 1 month rent deposit — if lease is terminated — deposit will be used to pay down past due amount owned to lessor Renewal Options: • First—five(5) year term at market rate • Second five (5) year term at market rate and only at the discretion of the Corporation Proposed Terms: • No right to purchase property • No subleasing • Property can only be used for the manufacture of motorcycles • Right of first refusal on remaining square footage • Dollar for Dollar rent credit for improvements that are made to the property so long as the Corporation approves the improvements and the improvement benefits the entire property. CITY OF FORT WORTH, TEXAS FORT WORTH LOCAL DEVELOPMENT CORPORATION CALLED—SPECIAL SESSION MINUTES TUESDAY, MAY 27, 2008 Page 6 Consideration of a Lease Agreement of a Portion of the Property Located at 4600 Blue Mound Road with AIH Acquisition Company, LLC. (cont'd ) (Agenda Item III) Partition Buyer pays to partition the property if another tenant leases a portion of the property. They will use chain link fence or superior material agreed upon by the Corporation and Buyer. Early Termination If buyer terminates or vacates the premises prior to the expiration of the initial seven year term of the lease, the deferred amount will be paid in full upon such termination or vacancy. Ms. Garcia concluded the presentation. President Jordan summarized that the terms of the new agreement would clear all of the debts that were owed to the Corporation by American Ironhorse. Director Moncrief spoke about the Corporation's unfortunate experience with American Ironhorse and that the Corporation wanted to ensure there were ample safeguards in place with the new lease agreement and that the Corporation was comfortable with the new agreement. Tom Higgins, Assistant City Manager, pointed out the need to address the financial obligations and to enter into an agreement with the right party who can afford the financial obligations, which was what was being done with the new lease agreement. He also pointed out that the Corporation wanted to try and retain the number of jobs associated with the business. Director Espino pointed out that the new owner had the expertise and financial backing to make the company more successful. He expressed appreciation to the new owner and staff for working out the agreement. At this time, President Jordan recognized Mr. Steve Meyers, who spoke before the Board. Mr. Meyers made comments on this new acquisition, and working with the people and keeping the jobs in the City of Fort Worth. He advised that it would take time to get the production line up and running again. He also spoke about the economy and how in down times it can impact CITY OF FORT WORTH, TEXAS FORT WORTH LOCAL DEVELOPMENT CORPORATION CALLED—SPECIAL SESSION MINUTES TUESDAY, MAY 27, 2008 Page 7 Consideration of a Lease Agreement of a Portion of the Property Located at 4600 Blue Mound Road with AIH Acquisition Company, LLC. (cont'd ) (Agenda Item III) businesses. Mr. Meyers advised that he and his family were moving to Fort Worth and that his philosophy was an open door policy and that he would keep the Corporation informed on what was happening at the business. Director Moncrief provided welcoming remarks to Mr. Meyers and his family to the Fort Worth area and he advised that he would like to see Mr. Meyers make the American Ironhorse customers happy again with their products. President Jordan indicated that the Corporation had seen his credentials and had knowledge of Mr. Meyer's track record. Mr. Meyers advised that their product could provide for 38 miles to the gallon of gasoline and in these times of high gas prices, the customers were looking for alternative methods of transportation. He recognized one of the employees he was retaining with his company who had formerly worked for American Ironhorse. MOTION: Upon a motion made by Director Moncrief and seconded by Director Espino, the Fort Worth Local Development Corporation Board voted nine (9) "ayes" and zero (0) "nays" to approve the lease agreement for a portion of the property located at 4600 Blue Mound Road with AIH Acquisition Company, LLC., for a term of seven (7) years, commencing June 1, 2008, and ending on May 31, 2015, with two additional options to extend the lease for additional periods of five years each and to adopt Resolution No. FWLDC-2008-04. The motion carried. Director Moss requested the opportunity to speak about an item for a future agenda of the Corporation. He advised of a program that was sponsored at the National League of Cities that he had heard about at their conference addressing the issue of foreclosures in cities. He stated that they had created a collaboration of agencies which cities should be aware of to address certain issues and to help people in their communities who are facing this problem. He asked that a speaker who was aware of this program be scheduled to make a presentation before the Corporation at a future meeting. CITY OF FORT WORTH, TEXAS FORT WORTH LOCAL DEVELOPMENT CORPORATION CALLED— SPECIAL SESSION MINUTES TUESDAY, MAY 27,2008 Page 8 Adiourn (Agenda Item IV) With no further business before the Corporation, President Jordan adjourned the called — special session of the Fort Worth Local Development Corporation at 11:30 a.m. on Tuesday, May 27, 2008. These minutes approved by the Fort Worth Local Development Corporation on the 10th day of June, 2008. APPROVED: at"� — Jung Jor Presi ent ATTEST: Carter Burdette, Secretary Prepared and respectfully submitted by: 1� Marty Hendrix, C/MMC City Secretary