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03-B PEDC (11/20/02)MINUTES OF THE PARIS ECONOMIC DEVELOPMENT CORPORATION REGULAR MEETING November 20, 2002 The Paris Economic Development Corporation met in a regular session on Wednesday, November 20, 2002, 4:00 P.M. at Paris Junior College, Applied Technology Building, Room 1016, 2400 Clarksville Street. President Jay Guest called the meeting to order with the following Directors present: Curtis Fendley, Richard L. Severson, and Mike Dunn. Also present were Executive Director Gary Vest, City Manager Michael E. Malone, City Attorney Larry W. Schenk and City Clerk Mattie Cunningham. President Guest called for the approval of the minutes from a previous meeting. A motion was made by Director Fendley, seconded by Director Severson, for approval of the minutes as presented. The motion carried unanimously. President Guest advised the Board Members that Mr. Anderson was not able to attend the meeting, but the financial report had been included in their packet for review. A motion was made by Director Severson, seconded by Director Dunn, for approval of the financial report. The motion carried unanimously. President Guest called for the Director's report. Gary Vest, Executive Director of Paris Economic Development Corporation, reported that since the last meeting, they had twenty-nine inquiries through their advertisement program. Mr. Vest furnished the Board with a copy of an insert that was a special section on Enterprise Zones that they did in Plants Sites & Parks, and pointed out the ad for the City of Paris and a write up on the Enterprise Zone. Mr. Vest said they had been trying different things on advertising. At this time, there is an ad in The Houston Chronicle on the K-Mart Building and he had received a telephone call the previous day regarding this building from a company that does manufactured housing. Mr. Vest said they were going to continue placing ads in this same manner in The Dallas Morning News and maybe in some other newspapers to see how good the responses are. PEDC Meeting November 20, 2002 Page 2 He had contacted Jackson Products again about trying to revive that project. They told Mr. Vest that they wanted to put it on the back burner until after the first of the year. They have not had as good of a response from the periodical advertisements, so they are going to try a billboard on Interstate 30 promoting Paris as an industrial location. He was hopeful that there will be two billboards on Interstate 30, one for tourism and one for economic development. Mr. Vest thought this would generate a little interest in the City of Paris. Mr. Vest said there were two prospects from the Texas Department of Economic Development: Project Carl and Project Clearwater. He stated that work on the application for economic assistance, which follows the flexible incentive plan, is progressing and should be ready for Board approval next month. Mr. Vest advised that Eric has just returned from a real estate course in Dallas sponsored by the International Economic Development Council, which is the national association for economic developers. He reported that Paris was well represented in Austin for the request for funding from the Texas Department of Transportation for the completion of State Highway 24 from a two-lane roadway to a four-lane divided highway. Mr. Vest told the Board that Don Wall was meeting with Michael Berringer regarding this matter. Mr. Vest advised the board that he and Eric attended the Northeast Texas Economic Development Roundtable meeting in Tyler on October 16, 2002. He also submitted a grant request to the Economic Development Administration for assistance on a rail spur for Sara Lee. Mr. Vest said that Sara Lee wants to rebuild the rail spur into their plant, but so far, he has negative feedback on that and he did PEDC Meeting November 20, 2002 Page 3 not think EDA is going to give the assistance that they asked for. Mr. Vest reported that things had been quiet on Project Winter. Although another packet had been submitted, they had not heard from the company. The only way to contact the company is through Todd Thompson with Oncor or Angie Mendez with the Texas Department of Economic Development. President Guest announced that the next item on the agenda was to consider authorizing the negotiation of an economic development assistance agreement with Paris Custom Trailer. Director Fendley excused himself due to conflict of interest and he departed the meeting. Mr. Vest advised the Board that Paris Custom Trailer is a small manufacturing company in Paris and has been doing business since 1982. They have about twenty employees. He said that Cleve Fendley is the owner of the business and Mr. Fendley would like to expand his business. Mr. Vest advised that Mr. Fendley had looked at selling the business, but he is at the point where he wants to expand the operation. Mr. Vest said his financial statements for five years show that this is a profitable business. Mr. Fendley wants to add six new bays and add ten new employees to his operation. Mr. Vest had advised Mr. Fendley that PEDC's flexible incentive plan normally grants $2,000.00 per job. Mr. Fendley is requesting that assistance. After discussion, a motion was made by Director Severson, seconded by Director Dunn, authorizing Mr. Vest and the City Attorney to work out an agreement with Mr. Fendley and bring that agreement back to the Board for approval. The motion carried unanimously, voting 3-0, with Director Fendley having left the meeting. Director Fendley returned to the meeting and assumed his seat. Director Guest called for consideration of and action on authorizing the negotiation PEDC Meeting November 20, 2002 Page 4 of an economic development assistance agreement with Hydro-Conduit, a division of Rinker Corporation. Mr. Vest explained that Hydro-Conduit is a division of Rinker Corporation. Hydro- Conduit was formerly known as Wall Concrete Pipe Company and Director Don Wall was part owner of that company. He advised that Mr. Wall is still on a retainer with that company, but he is not actively employed. Mr. Vest said that Hydro-Conduit had a six-inch water line that feeds their box plant and the water pressure fell to 17 gallons per minute, which was not enough to operate the box plant. Mr. Vest said they had to close the box plant. The City Engineer went out and checked the situation and came to a resolution regarding the water problem. He ran a new water main to the property line and did not tie into the existing service coming from a different direction. The water line that was on Hydro-Conduit's property was installed twelve years ago and the city water main does not have the pressure to keep that pressurized at a level to adequately run their box plant. Mr. Vest said they put in a new eight-inch line on an emergency basis from their meter to the new city main. Mr. Vest said they were asking the PEDC to pay for that new eight inch water line as the City of Paris cannot build that water line because it is on private property. He said they were probably talking about $5,000.00. After discussion, a motion was made by Director Fendley, seconded by Director Severson, to authorize the funding of this project. The motion carried unanimously. President Guest called for discussion of the Revolving Loan Fund for the City of Paris. Tommy Haynes, Director of Community Development for the City of Paris, came forward and explained that Bob Jones, consultant for the City of Paris, wrote this particular grant and he was unable to attend this meeting. Mr. Haynes said he would answer any questions that the Directors had. Mr. Haynes said two years ago the City of Paris applied for a grant with the U. S. Department of Agricultural and Rural Development for a $200,000.00 economic development loan, which ties in with PEDC Meeting November 20, 2002 Page 5 creation of jobs. He said this is for any business in the city of Paris that needs financial help to add employees. Mr. Haynes said that this is a loan with a 4% interest rate and the business would have to repay the loan back to the City of Paris, and after the loan is paid back, the funds can be loaned again. Mr. Haynes said they can also tie in with banks. He said they did send out notices to a couple of banks trying to create interest from that standpoint. If you are a principle or owner in the business you do not count as one of the created jobs. If you own 20% or more of the business you cannot be counted. There have been several calls but most of them did not qualify. He said they have sent notices to a couple bands trying to create interest. There have also been two notices of availability placed in the newspaper. Since he and Mr. Vest talked there have been a couple of prospects; one looks good. Resolution No. 2002-007, accepting a revised proposal from Graeber, Simons, & Cowan for Professional Architectural Services related to the Master Planning and Design of a Business Park in Paris; authorizing a professional service contract in accordance with said revised proposal, was presented. City Attorney Schenk advised the Board that Mr. Shackelford with Graeber, Simons & Cowan has resolved two of the three issues that he was concerned with. The third one is the clause that has to do with liability. He said that basically what the original language said was "notwithstanding any other provision of this agreement, Graeber, Simmons & Cowan will not be liable for incidental, indirect, special or consequential damages or for lost profits, savings or revenues of any kind, regardless of whether Graeber, Simmons & Cowan has been advised of the possibility of such damages". City Attorney Schenk said to him that is a very sweeping release of liability. He said that he asked Mr. Shackerlford about that, but first he wanted to make sure that this limitation applied only to PEDC and not the world and he agreed to something that would address that. City Attorney Schenk said he wanted to make sure that it was not construed in any way to diminish their professional responsibility in the terms of the scope of work that they do. City Attorney Schenk said that Mr. Shackerlford has something that he had sent to him and he has accepted and felt this would resolve this PEDC Meeting November 20, 2002 Page 6 issue. City Attorney Schenk said what he may provide is that they will not be liable to the PEDC so we are the only ones accepting that limited liability. That does not mean that it is in any way to be construed that we are indemnifying a third party. City Attorney Schenk said if they were willing to accept that for the standpoint of our ability to make a claim, then he felt this clause would do what he wanted it to do. After further discussion, a motion was made by Director Fendley, seconded by Director Dunn, for approval of the resolution. The motion carried unanimously. President Guest announced that the Board would convene into executive session pursuant to Section 551.072, Texas Government Code (The Texas Open Meetings Act), to deliberate the purchase exchange, lease, or value of real property, where deliberation in an open meeting would have a detrimental effect on negotiations with a third person, to discuss the following: A. Purchase of real property for economic development purposes. President Guest declared the executive session open and the regular session closed at 4:45 P. M. President Guest declared the executive session closed and the regular session open at 5:14 P. M. President Guest called for possible action regarding the purchase of real property for economic development purposes. A motion was made by Director Severson, seconded by Director Dunn, authorizing the Gary Vest, Executive Director of the Paris Economic Development Corporation, to pursue further negotiation regarding property that would be of use for economic development purposes. The motion carried unanimously. There being no further business, the meeting was adjourned. PEDC Meeting November 20, 2002 Page 7 JAY GUEST, PRESIDENT ATTEST: MATTIE CUNNINGHAM, CITY CLERK