HomeMy WebLinkAbout03/19/1996 MEDC
MINUTES OF THE MUNICIPAL ECONOMIC
DEVELOPMENT CORPORATION
HELD ON
MARCH 19, 1996
A meeting of the Municipal Economic Development Corporation Board of Directors for the City of The
Colony, Texas was called to order at 6:40 p.m. on the 19th day of March, 1996, at The Colony
Chamber of Commerce. The following board members were in attendance:
Gary McClure, President
David Stanwick, Vice President
Jerry Sebastian, Secretary
Ronnie Fischer, Treasurer
Tommy Thompson, Executive Vice President
Mary Watts, Executive Vice President
John Dillard, Executive Vice President
Lori Harlan, City Staff Liaison, Director of Economic Development
Others in attendance included:
Boyd London, First Southwest.
Leroy Grawunder, Vinson & Elkins
Tripp Davis, Davis/Woodward Golf Architects
Tim House, Matthews Southwest
Lee Singletary, Northern Texas PGA
Kiun Brown, Northern Texas PGA
1. DISCUSSION OF GOLF COURSE FINANCING ALTERNATIVES
President McClure opened the meeting by asking Boyd London and Leroy Grawunder to review a
memo forwarded to the board concerning financing alternatives. Mr. London presented various
alternatives including proceeding with revenue bonds to fund a smaller project, consideration of private
development possibilities, and the formation of a. Public Improvement District that would allow the
developer to possibly provide additional security to any bond offering.
While discussing the possibility of remaining on the revenue bond financing course, a question arose
concerning the use of Rich Grossman with Mark Pressman Associates as the project underwriter. The
most recent correspondence fi•om Mr. Grossman contained a request for a more formal relationship
between his firm and the EDC if this project is to proceed forward. Mr. London stated that he had no
problem with naming MPA as the underwriter if they can perform. However, he did have a problem
with exclusivity on the chance that MPA could not perform and therefore would hinder the project.
Tripp Davis shared that he and Mike Sheridan with Finger Dye Spann have visited with several
operators concerning the possibility of structuring the project as a 5-year 36-hole facility by building the
first 18 holes with the intention to refinance at a specific time for better terms and then construct the
second 18 holes. Mr. London stated that the ability to refinance is a function of the interest rate at the
time. Also, the market for the bonds would still be limited after two years because that short a period of
operation would not be considered a stable history.
Tim House asked Mr. London to discuss other alternatives. Mr. London suggested that a letter of credit
for five years is the best alternative. The letter of credit would provide the project a low initial interest
rate. However, there is still a risk because at the end of the five years the project would have to be
refinanced at market interest rates. Mr. House discussed the opportunity for a 27-hole facility. That size
facility would provide added flexibility with lower construction costs and the facility would still appeal
to the corporate market. A brief discussion followed concerning the size of the property and the
possibility of a much larger ultimate facility.
Mr. House stated that Matthews Southwest remains open to researching the Public Improvement
District (PID) concept. Mr. London suggested that the PID could be limited in the number of years the
assessment is effective to limit the marketing impact on the housing development. Mr. London stated
that he liked the idea of the PID because it helps the "looks" of the financing in the market. However,
Mr. Grawunder warned to be careful in mixing public and private financing types. That mix would
require a complex, carefully structured deal.
Mr. London stated that proceeding with privately financed development is the best way to go because it
requires no financial risk on behalf of the EDC/city. Mr. Sebastian stated that the EDC needs to pick an
approach and move forward. Mr. Sebastian and Mr. McClure questioned the differences between
strictly private development and public/private partnerships. From that perspective, what are our
options?
Ms. Watts suggested that the EDC focus on going out to seek private developers to finance the project
through an RFP process. Mr. House suggested that instead of an RFP, Matthews Southwest would like
to lead in finding a private developer. Ms. Watts moved to allow Matthews Southwest, assisted by
Tripp Davis, to pursue private sector development of the project. The motion was seconded by Mr.
Sebastian and approved unanimously.
President McClure called for a five minute break to allow visitors to excuse themselves prior to the
remainder of the agenda.
2. DISCUSSION CONCERNING GOLF COURSE ENVIRONMENTAL ASSESSMENT
FIRM
A brief discussion was held concerning the board's desire to proceed with the environmental
assessment. The City Manager has expressed his desire that the board take the assessment as far as
possible to allow for an easier path to future development regardless of the direction of the golf course
project. The final question is whether the environmental assessment can be completed without a
finalized course layout. Ms. Harlan will contact CURA to determine the feasibility of going forward
with the assessment.
The next meeting of the Economic Development Corporation will be Tuesday, April 2, 1996.
The meeting was adjourned at 8:20 p.m.
Lori Harlan, Director of Economic Development