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03-C PEDC MinutesMINUTES OF THE PARIS ECONOMIC DEVELOPMENT CORPORATION SPECIAL MEETING OCTOBER 17, 2001 The Paris Economic Development Corporation met in special session on Wednesday, October 17, 2001, 4:00 P. M., at Heritage Hall, 1009 West Kaufman Street, Paris, Texas. Director Jay Guest called the meeting to order with the following Directors present: Don Wall, Mike Dunn, and Curtis Fendley. Also present were ex-officio Board Members Bobby Walters, Mike Graxiola, Executive Director Gary Vest, City Manager Michael E. Malone, and City Clerk Mattie Cunningham. Director Guest called for approval of minutes from the previous meeting. A motion was made by Director Fendley, seconded by Director Wall, for approval of the minutes as presented. The motion carried unanimously. City Manager Malone advised that the financial report for the month of September was not available at this time because the Finance Director was in the process of closing out the fiscal year and has not completed the process. He stated that the Finance Director would forward a financial report to the Board as soon as it was available. Director Guest called for consideration of and action on a recommendation to the City Council of the City of Paris on the tax abatement application from S. I. Management, Inc., and KG Properties, LLP. Gary Vest, Executive Director of the Paris Economic Development Corporation, advised the Board that this request had been considered at the last meeting and the Board did not take any action. Mr. Vest advised that Gary Kammer, one of the principals of S.I. Management Inc., and KG Properties, LLP was here today to speak. Kenney Kammer who had visited with the Paris Economic Development Corporation at the last meeting asked if this matter could be placed back on the agenda for reconsideration. Mr. Vest said that last month nine incentives were requested. There was confusion about those incentives. Mr. Vest advised that the companies have Minutes of Special Meeting PEDC October 17, 2001 Page 2 withdrawn their request for all of the incentives except the tax abatement. Mr. Vest pointed out that one of the concerns that the PEDC had was about the financing. His understanding is they have 90 percent financing from HUD, which means they will have to do 10 percent of the financing locally. Mr. Vest advised that the PEDC has not done this type of tax abatement in the past. He said the other abatements that have been given were for industrial type facilities. He stated that it is allowed under state law because it is in an enterprise zone, and there is goodwill that could be established. Mr. Vest said he did not know if the City Council would go through with this tax abatement because of the perception of East and West Paris. He advised that this would be a significant addition to West Paris. Mr. Vest further advised that there are other things that they need to look at if the PEDC is going to recommend a tax abatement of this type. Mr. Vest said his recommendation to the Board would be to do the tax abatement on a phase-in basis for this type project. He said they would give 80 percent abatement for year one through three; year four would be reduced by 25 percent; and then continue to reduce the tax abatement for years five, six, seven. After seven years the property would be on the tax roll at one 100 percent. Mr. Vest said that the proposal that he and City Attorney Schenk have been working on is still not refined, and it will come to the Board as soon as it is finished. He said the recommendation of this type of tax abatement phase-in would be based on the amount of capital investment and j ob creation. He said for this project, the Board and Council could expect 2.7 million dollars for capital investment and 25 employees with a $400,000.00 annual payroll, so it would be a very significant investment for the area of town where it would be located. Mr. Vest further advised that the PEDC can only make a recommendation to the City Council. Director Guest suggested that the PEDC adopt a policy for use in the future. Mr. Gary Kammer came forward speaking on behalf of their request for a tax abatement. Mr. Kammer said that they had chosen West Paris to attempt to Minutes of Special Meeting PEDC October 17, 2001 Page 3 develop the area. Mr. Kammer advised that he was not aware of the enterprise zone, but that his brother was the one who researched the possibility of receiving a tax abatement. Mr. Kammer told the Board that he felt this was an excellent project. Mr. Kammer said they would appreciate the PEDC recommending this project to the City Council for a tax abatement. Director Guest called for consideration of and action on a recommendation to the City Council of the City of Paris on the tax abatement application from S.I. Management, Inc., and KG Properties, LLP. No motion was made and the item died for lack of a motion. Mr. Vest reported that they have received eight inquiries in response to their advertising campaign. Mr. Vest stated that, in light of the national economy, he thought the PEDC should stop advertising until after the first of the year. Mr. Vest said they were spending between 70 to 90 thousand dollars a year in advertisement through the PEDC, and he felt that they were not going to get any type of response from advertisement. Mr. Walters felt the PEDC should still utilize the internet because people go to the internet to look for opportunities to move to certain places. Mr. Vest stated that they still have annual directories that the PEDC is listed in, and they will still be working with the Department of Economic Development and TXU. Mr. Vest said on September 28,2001, they had a prospect visit from a company that was looking at Paris, and they showed the Oliver Rubber Plant along with a number of sites. He said the company is a relatively small operation requiring only thirty thousand square feet, and would employ approximately 35 employees. Mr. Vest advised that they made a proposal for a %uild to suit" project, and they are considering that possibility at this time. Mr. Vest advised that they do have a company that has made an offer on the Oliver Building. The offer was rejected by Cooper Tire, but he is hoping that they will get back together. Minutes of Special Meeting PEDC October 17, 2001 Page 4 Mr. Vest told the Board that the Texas Economic Development Council had their annual conference in Dallas from September 19th through the 21 st, and he and Eric attended that meeting. They also had a meeting with the Economic Development of Irving, Texas. Mr. Vest said that in 1998 the PEDC did a wage and benefit survey along with a labor survey and last year they talked about doing another. The Board instructed him to go out and get bids from a number of firms before they hiring this company to do this service. He said that as it turned out, they were trying to get regional service because they could get a regional labor survey at a considerably lower cost if they did it themselves. After he proposed the contract to the Board, Greenville, Commerce, and Sulphur Springs all decided not to do the survey. Mr. Vest said they had a meeting on October 1,2001, with Economic Development Services and it looked as if the company has Greenville, Commerce, and Sulphur Springs lined up to do a labor survey along with a wage and benefit survey. Mr. Vest advised that the labor survey will cost approximately $10,000.00 and the wage and benefit survey will cost approximately $4,500.00. Mr. Vest pointed out that there is $15,000.00 budgeted for the surveys. It was the consensus of the Board to go forward with the surveys. Mr. Vest reported that the Northeast Texas Regional Mobility Council is a new Council that has been formed to push for highway development in the region which includes Lamar, Delta, Hopkins, and Hunt Counties. He said there are two board members from each county along with one at-large, who is Jack Gray from Texas A & M Commerce. He said they have adopted a program of trying to get 1-30 designated as a master corridor, Highway 24 four lane completed through Delta County, and getting Highway 19 as a super two lane. Mr. Vest furnished the Board Members with brochures regarding Proposition 15, which will allow TxDOT to issue bonds to finance highway construction. There being no further business, the meeting was adjourned. Minutes of Special Meeting PEDC October 17, 2001 Page 5 JAY GUEST, DIRECTOR ATTEST: THOMAS E. HAYNES ASSISTANT CITY CLERK