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HomeMy WebLinkAbout10/24/1995 MEDC MINUTES OF THE MUNICIPAL ECONOMIC DEVELOPMENT CORPORATION HELD ON OCTOBER 24, 1995 A meeting of the Municipal Economic Development Corporation Board of Directors for the City of The Colony, Texas was called to order at 6:45 p.m. on the 24th day of October, 1995, at the Chamber of Cominerce. The following persons were in attendance: Gary McClure, President David Stanwick, Vice President Ronnie Fischer, Treasurer Tommy Thompson, Executive Vice President Lori Harlan, City Staff Liaison, Director of Economic Development Vice Presidents Mary Watts and John Dillard arrived shortly after the start of the meeting. Secretary Jerry Sebastian joined the meeting at 8:00 p.m. 1. CONSIDERATION OF OFFICE LEASE AGREEMENT WITH CHAMBER OF COMMERCE Based on previous discussions and a concern for the visibility of the EDC office, board members voted to accept the Chamber's counter offer for an increase in rent from $200/month to $350/month. This new lease will take effect on November 1, 1995, and will be effective for one year. During that time, board members determined they would study other possible locations for the EDC office. Any negotiations with the Chamber concerning future rent (after November 1, 1996) should occur early in the FY 1997 budget year. 2. REVIEW OF PRIVATE GOLF COURSE PROPOSAL City Manager Johnny Smith joined the board for this discussion. Ms. Watts first referred to questions Mr. Sebastian had faxed to all board members earlier in the week. She questioned the EDC's authority to negotiate with the group that submitted the golf course proposal. President McClure stated that he believed it was the EDC's responsibility to develop a counter-proposal to submit back to the group and then attempt to resolve any differences. Tonight's meeting was scheduled to develop that counter- proposal. Ultimately, the proposal will be presented in a Council work session. At that time, the Peninsula Golf partners will be present to discuss any changes they think should be made that could not be resolved with the EDC. President McClure then led the group in a section-by-section evaluation of the Peninsula Golf proposal. Comments on each section were as follows: Section One: Name of Limited Partnership - Rusty Nichol's group working on Stewart's Peninsula is named Peninsula Golf Associates, Ltd. The similarity to Peninsula Golf Club at The Colony, Ltd. may be confusing. Name of Golf Course OWNERSHIP - Who has the right to the name? If the lease is not renewed at some point in the future, or for other reason the ownership of the course changes, the name should stay with the course. Definition of "Related Amenities" - What does the proposal encompass? Is it just for development of a golf course, or does this group propose additional amenities at this time? If so, they should be detailed in this proposal. Also, how much work are the partners planning to do outside of the course area, i.e. road improvements, landscaping, etc. This all needs to be detailed. Amount of Leased Acreage - Will the entire Wynnewood Park be leased to the partners, or should the EDC only sublease the amount necessary for the golf courses? Kevin Bleiler - If he will be the on-site manager at the golf course, the EDC would like more information on his qualifications, background, etc. Details of Golf Course Development - The proposal states the course will be constructed and operated "in substantially the manner contemplated and described in that certain Market and Financial Analysis dated August 14, 1995". This needs to be detailed. The partners have already stated that they are looking at two similar courses instead of the stratified style and price described in the feasibility study. This is a major change in the type of development envisioned by the EDC. What other changes will be made to the plan specified by the feasibility study, i.e. greens fees, course acreage, etc. Convention Center - Is this an immediate development, or will it be done several years after the golf courses open? Is this actually a separate building, or will it simply be meeting space incorporated in to the club house? If this is a separate building, the size is inadequate. Review of Plans and Specifications Prior to Construction - The EDC will also want to make checks during the construction process. In fact, the EDC will hire a project manager to oversee the city/EDC's interest during the design and construction process. Section Two: Escrow Deposit - $50,000 is too low, should a portion of the deposit be nonrefundable? What expenses - past, present, and future - should the project partners pay? Board members expressed a general concern that the EDC was placing this project on hold to work with the Peninsula Golf partners. However, there was no way to know that even if environmental assessments and other testing is positive this group would actually proceed and complete the project. There was agreement that some monetary value should be placed on the project idea and then used to ensure the serious commitment of the project partners. The following guidelines were established: "Right-to-do-Business Fee" - Peninsula Golf partners will pay The Colony EDC a $250,000 non-refundable fee to proceed. This fee will serve as a good faith pledge by the partners and will be sufficient to convince the EDC to suspend the bond process. This fee is necessary because the EDC's current path - financing the project with revenue bonds - may not be a viable alternative at some point in the future. The current bond market is good for such a project, and the EDC will be passing up a financing opportunity to pursue this avenue. This fee will also provide Peninsula Golf with the exclusive right to develop a golf course on Wynnewood Peninsula once an agreement is reached. If Peninsula Golf backs out of the project without cause, the fee will be forfeited to the EDC. If the EDC cancels without cause, the fee will be refunded to Peninsula Golf. Cause will be defined as any action outside the control of either party. EDC's legal adviser will assist in the wording of this to ensure it is valid. Reimbursement of Expenses to Date - Peninsula Golf will reimburse The Colony EDC for all expenses incurred to date on the project. These include the feasibility study, attorney's fees, EDC expenses, and any professional consulting fees that were a part of the feasibility study process. Project Oversight Cost - Peninsula Golf will provide a set amount to The Colony EDC to hire a third party project manager. Escrow Deposit - $50,000 initial deposit cannot drop below $10,000. When this occurs, Peninsula Golf must raise the level of the escrow deposit back to $50,000. Discussion on this item was not finalized. Board members determined that additional time would be necessary to adequately evaluate every aspect of the Peninsula Golf proposal. There also remained a lingering concern that Peninsula Golf would proceed through the study phase and then withdraw from the project. This would result in lost time and the aging of the feasibility study. It would necessitate an entirely new study to reach the bond financing stage once again. The "right to do business" fee will be used to alleviate those concerns. If Peninsula Golf does not meet the initial conditions of the "right to do business" fee, there will be no reason to invest the time in delineating each question and concern with their initial proposal. The board then directed Ms. Harlan to prepare a letter to send to Peninsula Golf with the following provisions: - $250,000 "right to do business" fee and its conditions - Escrow Deposit as described in the original proposal - 10 business days (November 7) to respond Ms. Harlan will prepare that letter for distribution on 10/25/95 after it is reviewed by board members and legal counsel. Unless Peninsula Golf responds prior to 11/7/95, the next meeting of the EDC will be scheduled for November 7 at the Chamber of Commerce. The meeting was adjourned at 9:40 p.m. Lori Harl , Director of Economic Development