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03-A PEDC (06/19/02)ANNUAL MEETING PARIS ECONOMIC DEVELOPMENT CORPORATION June 19_ 2002 The Paris Economic Development Corporation held its annual meeting on Wednesday, June 19, 2002, at 4:00 P. M., Heritage Hall, 1009 West Kaufman Street, Paris, Texas. President Mike Rhodes called the meeting to order with the following Directors present: Curtis Fendley, Jay Guest, and Don Wall. Also present were ex-officio board members Bobby Walters, Executive Director Gary Vest, City Manager Michael E. Malone, Mayor Michael J. Pfiester, and City Clerk Mattie Cunningham. President Rhodes introduced Dick Severson as a new appointee to the board and expressed the appreciation of the board for his willingness to serve. President Rhodes felt that Mr. Severson's service would be rewarding both to the PEDC and to Mr. Severson. President Rhodes announced that Paul Spencer was present and that Gary Vest would be introducing him later in the meeting. Jim Bell, President of the Paris Board of Realtors, was also present to discuss an issue. President Rhodes called for approval of minutes from the April 17, 2002, meeting. A motion was made by Director Guest, seconded by Director Fendley, for approval of the minutes as presented. The motion carried unanimously. President Rhodes asked Gene Anderson, Director of Finance, to give the financial report for the months of April, 2002, and May, 2002. Mr. Anderson came forward presenting the financial statements. Mr. Anderson advised that they did not have any expenditures that were other than the routine type in either month. There were more expenditures in April but they were all routine. A motion was made by Director Wall, seconded by Director Guest, for approval of the financial report as presented by Mr. Anderson. The motion PEDC Minutes June 19, 2002 Page 2 carried unanimously. President Rhodes called for acceptance of and possible action on a recommendation by the Board of Realtors for the marketing of commercial sites by the Paris Economic Development Corporation. President Rhodes advised that he, Jim Bell, and Vic Ressler had a discussion relative to the consistent marketing of commercial property by the PEDC. President Rhodes advised that he had mailed a letter to all of the members of the Paris Board of Realtors Board regarding this issue. President Rhodes read the letter addressed to Jim Bell, President of the Paris Board of Realtors, which advised that it was the intent of the Paris Economic Development Corporation to attract industries and jobs for Paris, and in this instance, to facilitate the goal of recruitment of an industrial tenant for the recently vacated K-Mart building. President Rhodes advised that he invited Mr. Bell to attend the scheduled June 19, 2002, PEDC meeting at Heritage Hall. He stated that the Board was open to any suggestions as to how the PEDC can avoid this type issue in the future. President Rhodes said his letter was the result of an issue that arose when the K-Mart Building became vacant and Mr. Vest attempted to try to market that building by mailing out a brochure listing Donald Lewis as the broker involved. President Rhodes requested that Mr. Vest go over the procedures in marketing a building through the PEDC. Mr. Vest advised that when a building that comes on the market is an industrial facility, PEDC tries to find a user for it. The K-Mart building, even though it is a retail type building, does have significant industrial applications, particularly for small, light industry. He said that he had mailed almost five thousand brochures primarily to pharmaceutical companies, light manufacturing companies, and medical device companies that need a controlled environment type building. Mr. Vest said that Donald PEDC Minutes June 19, 2002 Page 3 Lewis has the listing on the building, so his name was placed on the brochure as the contact person, which is the normal procedure. Mr. Vest drew the Board's attention to a brochure on the Oliver Rubber building that has been included in the agenda packet, and pointed out that a realtor is listed on it. Mr. Vest said that anytime PEDC has a building with 10,000 square feet or more, a brochure will be done. Mr. Vest said the owner of the K-Mart building told him that he did not want anyone calling him. The owner had listed it with a realtor, and if there were any inquiries, those calling were to contact the realtor. Mr. Vest advised that the building is under contract, but the contract is with a real estate investment firm. Jim Bell said there were misunderstandings but many of the issues had been covered before this meeting. The big issue goes further than the K-Mart building. Brokers have listed property with more than 10,000 square feet, such as the Foxworth building, and they did not get marketing assistance from the PEDC. The brokers are not sure what type building will qualify and what procedure to follow to get PEDC's assistance. Mr. Bell said the brokers would like the PEDC board to formally propose parameters for buildings that the PEDC would consider, as well as what procedure a broker should follow to request assistance. He would like the PEDC to present programs providing this information to the Paris Board of Real Estate. Mr. Bell stated that both organizations are here for the purpose of moving property; if the property is a building of any size, then it will be providing jobs. Mr. Bell said there needs to be a formal but brief agreement between the Board of Realtors and the PEDC that would at least say that the Realtor is the point of contact and that would keep both parties informed. Mr. Bell said that a number of Realtors would like to see if there was some way to include a standard flyer that states, "if you are an interested party and want bi representation." Mr. Bell advised that the real estate industry has changed in the last few years. Their listing agreements are contractual and a Realtor has to declare one of three statuses: buyer, agent, or seller agent; or they have to be an intermediator which it is very hard. He said that many PEDC Minutes June 19, 2002 Page 4 of the PEDC's prospects may want bi-representation. If that is the case, Mr. Bell said it was only fair to say a possible benefit of a Chamber membership is to include something in the brochure that says "if you want to talk to someone other than the listing agent to have this building investigated on your on behalf contact one of these Chamber member Realtors for bi-representation." Mr. Bell noted that these were just suggestions. President Rhodes informed Mr. Bell that sometimes the PEDC has to operate through the realm of confidentiality, which is a touchy problem. He said the PEDC wants to be sure that everybody is pleased with the way they do business concerning fairness. This includes all of the Chamber members even though this is not a Chamber issue. President Rhodes said the PEDC directors were expecting a written proposal from the Paris Board of Realtors on what PEDC can do. President Rhodes advised Mr. Bell that it was hard for the PEDC to propose because they really do not know where the Paris Board of Realtors is coming from, what they need , and what their requirements might be. Donald Lewis advised that he received a call from Gary Vest who had explained that several Realtors had lodged complaints. Mr. Lewis said that people need to understand the legality of a listing agreement. When an owner lists his property with an agent, the owner has a legal obligation to refer prospects to that agent and not negotiate directly with the prospective buyer. Mr. Lewis said the owner is appointing that agent as his representative. Mr. Lewis said there are two problems. One is whether you have permission to send out a flyer to market the building, and two, should an agent be on the flyer. Mr. Lewis said legally, an owner has some obligation to the hired agent. He said he did not understand the PEDC policy enough to know, but, he felt that whether it is a public company or an individual owner, the PEDC would want the owner's consent to send out flyers. PEDC Minutes June 19, 2002 Page 5 Mr. Lewis advised that the owner of the K-Mart building came to Paris and he went to Mr. Vest and visited with him, as he did with at least two Realtors. Mr. Lewis advised that the property owner chose one of the Realtors to market the property and consented to let the PEDC mail the flyers out. Mr. Lewis said the property owner could not believe that other Realtors were upset because Mr. Lewis' name was on the flyer. The property owner said he did not want it any other way. After discussion, President Rhodes asked that Mr. Vest, Jim Bell, Donald Lewis, and anyone who would like to serve on a committee with them, meet and come up with a solution that would please everyone. President Rhodes requested that they bring the answer back to the PEDC next month so that the board can take formal action. President Rhodes called for the Director's report. Gary Vest, Executive Director, reported they have had six inquiries from the advertisement program and eight inquiries last month. There were two from TxED, one from the postcard mailing, and a walk-in prospect. Mr. Vest advised that he and Eric Roddy attended the TEDC meeting in Round Rock on April 24, 2002. He also testified before the Texas House Ways and Means Committee about the Economic Development Sales Tax. Mr. Vest said that last year the legislature passed a law, House Bi113178, which says the Executive Director of the Development Corporation, the City Manager, the City Attorney, or the City Clerk will attend training on rules and regulations concerning the economic development corporation. He advised that training will be provided through the Texas Economic Development Council, the Attorney General's office, and the State Comptroller's office. Mr. Vest said they have had one training session so far and that was in Round Rock with ninety-two people attending that training session. The next session is going to be in Tyler on July 24, 2002, PEDC Minutes June 19, 2002 Page 6 starting at 8:30 A.M. through 3:30 P. M. He said that he and Eric will be attending and invited the City Manager, the City Attorney and anyone else who wish to attend to this training session. Mr. Vest introduced Paul Ray Spencer and advised that Mr. Spencer makes stuffed jalapeno peppers and samples were available. Mr. Vest said that Mr. Spencer was selling them through his store and to other convenience stores. Mr. Vest told the Board that Mr. Spencer secured an account with the Choctaw Nation's stores and that they came to him and wanted him to provide peppers to fifty-two stores. There is an opportunity for a local small industry to grow into what could be a major industry. Mr. Vest said he had worked with a company once before that was stuffing cheese in jalapeno peppers and they now have about three hundred employees. It is a tremendous business. Mr. Vest felt that Mr. Spencer has the same potential here in Paris and felt this is an opportunity for the PEDC to help a small homegrown industry to get off the ground. Mr. Vest advised that the PEDC's potential aid would be to build the facility for him, with PEDC owning the facility, and do a lease purchase back to Mr. Spencer. He said as the facility grew there may be a need to expand the building. It will be built in a manner where it can be expanded. The building will have to meet USDA specifications. Mr. Spencer told the Board that he has two full-time employees at this time. He said he has talked to the Choctaw Nation along with Grocery Supply, who has thirty thousand stores. Mr. Spencer said he also received a telephone call from one of the world's largest food suppliers and he has an appointment to meet with them. He advised that he has gone from selling fifteen dozen stuffed peppers to 175 to 200 dozen. Mr. Spencer informed the Board that they were doing everything by hand, but there is a lot of equipment that he is going to have to purchase. Mr. Vest advised that the survey has been received on the Northwest Industrial Park. He has the plat and will have the field notes tomorrow. The PEDC Minutes June 19, 2002 Page 7 next step will be the design work and to go out for bids along with the timber cutting and cleaning. Mr. Vest said on June 6, 2002, staff attended a meeting of the Texas Economic Development Sales Tax Association in Mesquite. There were 94 economic development people in attendance and they debated matters concerning the economic development sales tax as to whether or not they should be doing retail projects. Mr. Vest advised that some people are doing retail which is causing concern in the legislature. Paris Junior College received another Skill Development Fund Grant in the amount of eight hundred thousand plus for training new workers at Campbell Soup, Kimberly Clark, and to retrain a considerable number of workers. President Rhodes called for consideration of and action on a resolution approving the audit for the fiscal year ending September 30, 2001. Resolution No. 2002-001, approving the audit prepared by McClanahan & Holmes for the Paris Economic Development Corporation for the fiscal year ending September 30, 2001, was presented. A motion was made by Director Fendley, seconded by Director Guest, for approval of the resolution. The motion carried unanimously. President Rhodes called for consideration of and action on a resolution approving the Annual Plan of Work outlining the activities, tasks, projects and programs to be undertaken by the Board during the fiscal year 2002/2003. Mr. Vest read the Executive Summary of the Program of Work to the Board in its entirety, discussing items within the summary. Resolution No. 2002-002, approving the Annual Plan of Work for the Paris PEDC Minutes June 19, 2002 Page 8 Economic Development Corporation, that the Director of Economic Development be, and he is hereby directed to deliver the Annual Plan of Work to the City Manager of the City of Paris, was presented. A motion was made by Director Wall, seconded by Director Fendley, for approval of the resolution. The motion carried unanimously. President Rhodes announced that the next item on the agenda was consideration of and action on a resolution approving the Annual Budget for fiscal year 2002/2003. Resolution No. 2002-003, approving the Annual Budget for fiscal year 2002- 2003; directing the Secretary-Treasurer to deliver the budget to the City Manager of the City of Paris for inclusion in his annual budget to be presented to the City Council in accordance with the Charter of the City of Paris, was presented. Mr. Vest called the Board's attention to the revenue statement. He anticipated carrying over $778,000.00 from this fiscal year, which is about $400,000.00 less than was carried over last year. He said the anticipated revenue is $896,000.00, with interest earned of $35,000.00. With the Paris Packaging payment of $384,000.00, the total revenues would be approximately 1.3 million dollars with about two million dollars in total resources. Mr. Vest said there were several things that the PEDC is committed to do such as supporting the Texas Air Quality Coalition at a cost of $5,000.00, the bond payment on the debt which would be $388,936.00, and an additional payment to Turner International in the amount of $500,000.00. He pointed out that there is $250,000.00 that is going to be used for the Hearne Street extension and $53,906.00 to repay the Chapman Revolving Loan Fund. Mr. Vest said that next year will be the last year to pay this loan. The PEDC will pay $50,000.00 on the TCIM contract, leaving one payment of $25,000.00. Mr. Vest pointed out that in the operating budget listed under Chamber of Commerce there is $269,000.00 PEDC Minutes June 19, 2002 Page 9 available for projects next year based on this $573,000.00. Mr. Vest went over the general expenditures with the Board. After discussion, a motion was made by Director Guest, seconded by Director Wall, for approval of the resolution. The motion carried unanimously. President Rhodes called for discussion of and possible action on changing the date for the July, 2002, Board of Directors Meeting from July 24, 2002, to July 31, 2002. A motion was made by Director Wall, seconded by Director Fendley, authorizing changing the date for the July, 2002, Paris Economic Development Corporation's meeting from July 24, 2002, to July 31, 2002. The motion carried unanimously. Mr. Vest presented President Rhodes with a plaque for his outstanding service on the Paris Economic Development Corporation's Board. There being no further business, President Rhodes adjourned the meeting. MICHAEL RHODES, PRESIDENT ATTEST: MATTIE CUNNINGHAM, CITY CLERK