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1999-02-10-Minutes 425 MINUTES OF THE PARIS ECONOMIC DEVELOPMENT CORPORATION REGULAR MEETING February 10, 1999 The Paris Economic Development Corporation met in a regular meeting on Wednesday, February 10, 1999, at 4:00 P.M., in the City Council Chambers, City -- Hall, Paris, Texas. President Mike Rhodes called the meeting to order with the following boardmembers present: Melba Harris, Barney Bray, and Dick Amis. Also present were ex-officio boardmembers Mayor Charles Neeley, Chamber President George Struve, Executive Director Gary Vest, and City Attorney Scott Foster. President Rhodes stated that the next item on the agenda was approval of the minutes from the previous meeting of the Paris Economic Development Corporation. He asked if there were any corrections or additions to the minutes of the previous meeting, and there were none. Boardmember Dick Amis made a motion, seconded by Boardmember Barney Bray, that the minutes be approved as presented. The motion carried unanimously. President Rhodes asked Gene Anderson, Director of Finance, to give the financial report for the month of January. Mr. Anderson gave the financial report. Mr. Anderson stated that he would be glad to answer any questions. President Rhodes asked if he was able to make the investment on the INS Fund. Mr. Anderson said that this cannot be accomplished through a certificate of deposit with one of the local banks, specifically Liberty National Bank, because of the location of the City of Paris depository. He said that the Paris Economic -- Development Corporation's funds are not covered under the depository agreement as it is written, and he is going to have to purchase some other type instrument in order for the fund to be insured. After discussion, Mr. Rhodes advised that perhaps this amount could be placed in three different certificates of deposit. Mr. Vest asked Mr. Anderson if he had spoken with Mr. Coker of the school system concerning the funds, and Mr. Anderson stated that he would get with Mr. Coker. Mr. Anderson said that he would report this information and the action taken at the next meeting. President Rhodes asked if anyone had any questions and there were.none. Boardmember Bray made a motion, seconded by Boardmember Harris, that the financial report be approved as presented. The motion carried unanimously. President Rhodes asked Gary Vest to give the Director's Report. Mr. Vest discussed responses received due to the advertising program, and he said that he had attended the T.E.D.C. Meeting in Austin this past month. He said one important item at this meeting was the formation of a sales tax communities organization which will be a part of the Texas Economic Development Council. He said that they adopted a legislative strategy for this session which he provided to each boardmember. He said there are a lot of economic development bills in this legislative session, and Mark Homer was appointed to the House __ Economic Development Committee. He said that T.E.D.C. is pushing for state priority services for regional economic development efforts in parts of the state that combine on a development program. Mr. Vest also discussed the requested changes in connection with the Texas Open Meetings Records Act concerning confidentiality. Mr. Vest advised that they have obtained two grants for Turner International Piping Systems. 426 Mr. Vest stated that T.E.D.C. requested that the legislature give consideration to capital intensive industry incentives, research and development incentives, electric deregulation, and travel policy for state agents. He said that there is a program called InvesTexas that has asked the legislature to give some credit to companies spending large sums of money on capital investment in our state and on research and development. He said at the present time Texas does not help companies that research and develop products while most states give them significant incentives. He stated that this organization has asked for our support of this program by adopting a resolution, and he requested that this item be placed on next month's agenda. Mr. Vest reminded the boardmembers of the upcoming Lamar County Day in Austin to be held on February 24th and 25th and the importance to the East Texas Gulf Highway Program and Paris. President Rhodes stated the next item on the agenda was consideration of and action on a resolution approving a letter of commitment to Panda Energy International, Inc. He asked Mr. Vest to discuss this item. Mr. Vest stated that this is the incentive that was offered to Panda if they built a power plant in Paris. He said that the financing for Panda Energy International, Inc., is to close on Friday, so they have asked the Board to pay the incentive which will be accomplished through this resolution. City Attorney Scott Foster read the resolution. Resolution No. 99-001, approving the letter of commitment to Panda Energy International, Inc. PARIS ECONOMIC DEVELOPMENT CORPORATION RESOLUTION NO. 99-001 WHEREAS, the Paris Economic Development Corporation is a non-profit corporation governed by the Development Corporation Act of 1979 (the Act) and was established for the purposes of promoting, assisting, and enhancing economic development; and, WHEREAS, the means and measures authorized by the Act and the assistance provided therein with respect to Financing and providing grants are found to be in the public interest and serve a public purpose of the state in promoting the welfare of the citizens of the state economically by the securing and retaining of business enterprises and the resulting maintenance of a higher level of employment, economic activity, and stability; and, WHEREAS, in keeping with the purposes for which the legislature enacted the Development Corporation Act of 1979 and the purposes for which the voters of the City of Paris established the Paris Economic Development Corporation, it is deemed appropriate that the letter of commitment to Panda Energy International, Inc., dated March 27, 1998, be approved; NOW, THEREFORE, BE IT RESOLVED BY THE PARIS ECONOMIC DEVELOPMENT CORPORATION, that the form of the letter of commitment to Panda Energy International, Inc., attached hereto as Exhibit A, be, and the same is hereby, approved. 427 PASSED AND ADOPTED this 10th day of February, 1999. Michael R. Rhodes, President ATTEST: Melba Harris, Secretary-Treasurer APPROVED AS TO FORM: Scott P. Foster, City Attorney March 27, 1998 Mr. Bob Carter Panda Energy International, Inc. 4100 Spring valley, Suite 1001 Dallas, Texas 75244 Dear Mr. Carter: It is a pleasure for Paris to have the opportunity to work with Panda Energy and we look forward to having Panda as a part of our business community. All of your staff that we have had the pleasure of working with thus far on this project have been exceptional and extremely professional in their activities. There are three basic components regarding your project that we thought merited some type of written agreement or understanding. We would like to lay those items out in this letter for each of our reference. Issue number 1: Tax abatement. The sites that you have under option are either in our designated Enterprise Zone or they are outside the City. For the site in the City, the City would initiate action for tax abatement. The city of Paris has typically granted 7 years of abatement at 100% of value. This is what we would ask the council to adopt for Panda. 428 The County and Paris Junior College would be asked to adopt the same agreement. The City structures this agreement to grant 5 years with a 2 year renewal option if all terms of the agreement have been met. The sites .: which are outside the city limits would be subject to the City providing a Municipal Annexation Agreement, which means no city taxes for 7 years but that you would receive all city services during that time as if you were within the city limits. On these sites, the County would take the lead in the tax abatement, declaring your site as a reinvestment zone and drawing up the tax abatement agreement. Either way, whether in the city or out, you will receive 7 years of 100% tax abatement on City, County, and any special districts such as Paris Junior College. 1651 Clarksville Street · Paris, Texa.s 75460 (9039 784-250] · 1-800-PARIS, TX · Fax (903) 784-2503 Mr. Bob Carter Page 2 The school taxing entity will not be included in any tax abatement agreements. Issue number 2: Site. The Paris Economic Development Corporation (PEDC) will assist Panda with the site for the construction of this power generation plant as an incentive for locating in the Paris area. Approximate value $300,000. This would be provided as a cash grant for Panda to acquire the desired site. Issue number 3: Infrastructure. The city of Paris will construct the necessary water line to provide service to Panda in the quantity agreed upon. Estimated construction costs are $4,146,850 to provide up to 4.8 million gallons per day. The city of Paris will pursue finanl.ing for all construction related costs subject to a contractual agreement and bond approval. The total amortization costs will be allocated directly to Panda over the retirement period of the debt service, probably 20 years. The city of Paris will make application for the Infrastructure Grant Program through the Economic Development Administration (EDA), Paris being located within a certified redevelopment area as designated by the EDA. This grant could be as much as $1.5 million if approved. The city of Paris will also make application to the Texas Capital Fund to receive as much as $500,000 in assistance on this infrastructure project. Please see the attached information sheets on these programs. The PEDC and the city of Paris are most interested in working with Panda to see this plant constructed in our area. We hope that this letter will clarify these three particular issues and how we will proceed with these agreements. Sincerely yours, Curtis Fendeley Gary Vest Director Director cc: Mike Malone 429 After discussion by the Board, Boardmember Dick Amis made a motion, seconded by Boardmember Barney Bray that this resolution be adopted, and the Board voted unanimously to adopt the resolution. Boardmember Amis mentioned the Hearne Street Project and asked that an -- update be given on what needs to be done in order to accomplish this project. Mr. Vest said originally they thought this could be done through a grant with the Texas Capital Fund, and it was determined that this was not possible. Mr. Vest said that he is working with Tommy Haynes, and they are looking into the possibility of an E.D.A. grant to fund this project. Mr. Vest said that this project is a high' I~riority on his list, and he believes within the next couple of months some progress can be made on this project. President Rhodes asked if there was any other business and there being none he declared the board meeting adjourned. President MichaeI Rhodes ATTEST: Assistant City Clerk, Barbara Denny