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2023 02 02 MDD MinutesMINUTES OF THE REGULAR MEETING OF THE BOARD OF DIRECTORS OF THE BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT February 2, 2023 The Board of Directors of the Baytown Municipal Development District (MDD) met in a Regular Meeting on Thursday, February 2, 2023, at 4:32 P.M., in the Council Chamber of the Baytown City Hall, 2401 Market Street, Baytown, Texas with the following in attendance: Bandon Capetillo President Laura Alvarado Vice President Suhey Rios- Alvarez Director Sarah Graham Director Kenrick Griffith Director Jacob Powell Director Mike Lester Director Gary Englert Director Shaunna Bernshausen Director Jason Reynolds General Manager Scott Lamond General Counsel Angela Jackson Assistant Secretary President Brandon Capetillo convened the February 2, 2023, MDD Board Regular Meeting with a quorum present at 4:32 P.M., all members were present with the exception of Secretary David P. Jirrels, and Directors Donna Winfrey and Heather Betancourth, who were absent. 1. MINUTES a. Consider approving the minutes of the Municipal Development District Special Meeting held on December 12, 2022. A motion was made by Vice President Laura Alvarado, and seconded by Director Jacob Powell to approve the meeting minutes of the Municipal Development District Special Meeting held on December 12, 2022, as submitted. The vote was as follows: Ayes: President Brandon Capetillo, Vice President Laura Alvarado, Director Suhey Rios - Alvarez, Director Sarah Graham, Director Kenrick Griffith, Director Jacob Powell, Director Gary Englert, Director Mike Lester, Director Shaunna Bernshausen Nays: None Other: Secretary David P. Jirrels (Absent), Director Donna Winfrey (Absent), Director Heather Betancourth (Absent) Approved MDD Board Regular Meeting Minutes February 2, 2023 Page 2 of 8 2. PROPOSED RESOLUTIONS a. Consider a resolution authorizing the Economic Development Contract with Baytown Area/West Chambers County Economic Development Foundation. Finance Director Victor Brownlees presented agenda item 2.a., and stated that Resolution No. 455 approves the Economic Development Contract with Baytown Area/West Chambers County Economic Development Foundation ("EDF") for an amount not to exceed $350,000 and further stated that over the next year, Staff s intention is to review and redefine the services of the EDF and the services that are provided internally. A motion was made by Vice President Laura Alvarado, and seconded by Director Gary Englert to approve Resolution No. 455, related to Item 2.a. The vote was as follows: Ayes: President Brandon Capetillo, Vice President Laura Alvarado, Director Suhey Rios - Alvarez, Director Sarah Graham, Director Kenrick Griffith, Director Jacob Powell, Director Gary Englert, Director Mike Lester, Director Shaunna Bernshausen Nays: None Other: Secretary David P. Jirrels (Absent), Director Donna Winfrey (Absent), Director Heather Betancourth (Absent) Approved RESOLUTION NO. 455 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT AUTHORIZING THE GENERAL MANAGER TO EXECUTE AND THE ASSISTANT SECRETARY TO ATTEST TO AN ECONOMIC DEVELOPMENT CONTRACT WITH THE BAYTOWN AREA/WEST CHAMBERS COUNTY ECONOMIC DEVELOPMENT FOUNDATION FOR ECONOMIC DEVELOPMENT SERVICES; AUTHORIZING PAYMENT IN AN AMOUNT NOT TO EXCEED THREE HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($350,000.00); MAKING OTHER PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. b. Consider a resolution approving Business Improvement Grant applications not to exceed $40,000.00 per each individual grant. General Manager Jason Reynolds presented agenda item 2.b., and stated this item was originally presented to the Board at their meeting held on October 13, 2022, and that action on this item was suspended at that time, pending the findings and recommendations from staff concerning the validity of these applications and improvements, and possible amendments to the BIG program policies and guidelines. Furthermore Mr. Reynolds stated that there have been the questions received as far as what to do with the applications that were previous received and provided the following options for the Board to consider to: 1) approve the current applications under the current MDD Board Regular Meeting Minutes February 2, 2023 Page 3 of 8 guidelines, or 2) wait for the new program, and once established, move them to the new program with those guidelines. Furthermore, Mr. Reynolds stated that if approved this Resolution authorizes reimbursement funding under the Business Improvement Grant per the current guidelines of those pending applications and opened the discussion to the Board Members. President Brandon Capetillo suggested to the Board that they go ahead and approve those that have applied and offered any input from the other Board Members. Vice President Laura Alvarado voiced her support of Mr. Capetillo's suggestion to move forward with those pending applications. Director Mike Lester questioned the amount that each business would be awarded and General Manager Reynolds responded that the three applications that they had received will be awarded according to what is allowed under the current program. Staff will conduct a review of the receipts to ensure that they meet the guidelines and that the work was done, and they will be awarded up to what is allowed under the current guidelines of the program. A motion was made by Director Sarah Graham, and seconded by Director Mike Lester to approve Resolution No. 456, related to Item 2.b. The vote was as follows: Ayes: President Brandon Capetillo, Vice President Laura Alvarado, Director Suhey Rios - Alvarez, Director Sarah Graham, Director Kenrick Griffith, Director Jacob Powell, Director Gary Englert, Director Mike Lester, Director Shaunna Bernshausen Nays: None Other: Secretary David P. Jirrels (Absent), Director Donna Winfrey (Absent), Director Heather Betancourth (Absent) Approved RESOLUTION NO.456 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT APPROVING BUSINESS IMPROVEMENT GRANT APPLICATIONS; AUTHORIZING REIMBURSEMENT FUNDING UNDER THE BUSINESS IMPROVEMENT GRANT PROGRAM IN AN AMOUNT NOT TO EXCEED THE MAXIMUM GRANT AMOUNT OF FORTY THOUSAND AND NO/100 DOLLARS ($40,000.00) PER APPROVED GRANT APPLICATION; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. C. Consider a resolution authorizing the Property Analysis, Sales, and Negotiations Services Agreement with Garfield Public/Private LLC, and the City of Baytown, for the Baytown Hotel and Convention Center Project. Finance Director Victor Brownlees presented agenda item 2.c., and stated that Resolution No. 457 approves a Property Analysis, Sales, and Negotiations Services Agreement with Garfield Public/Private LLC ("GPP"), and the City of Baytown for the Baytown Hotel and Convention Center Project for the purpose of engaging GPP to provide additional services to MDD, including MDD Board Regular Meeting Minutes February 2, 2023 Page 4 of 8 sponsorship consulting, sales, and negotiations services (including naming rights) for the purpose of finding the appropriate strategic sponsorships for the Baytown Hotel and Convention Center Project. The parties previously entered into a Master Development Agreement in September 2018 in accordance with MDD Resolution 357. A motion was made by Vice President Laura Alvarado, and seconded by Director Kenrick Griffith to approve Resolution No. 457, related to Item 2.c. The vote was as follows: Ayes: President Brandon Capetillo, Vice President Laura Alvarado, Director Suhey Rios - Alvarez, Director Sarah Graham, Director Kenrick Griffith, Director Jacob Powell, Director Gary Englert, Director Mike Lester, Director Shaunna Bernshausen Nays: None Other: Secretary David P. Jirrels (Absent), Director Donna Winfrey (Absent), Director Heather Betancourth (Absent) Approved RESOLUTION NO.457 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT AUTHORIZING THE PRESIDENT TO EXECUTE A PROPERTY ANALYSIS, SALES, AND NEGOTIATIONS SERVICES AGREEMENT BY AND BETWEEN GARFIELD PUBLIC/PRIVATE LLC AND THE BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT FOR THE BAYTOWN HOTEL AND CONVENTION CENTER PROJECT; AUTHORIZING PAYMENT OF AN AMOUNT IN ACCORDANCE THEREWITH; MAKING OTHER PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. 3. DISCUSSIONS a. Discuss proposed amendments to the Business Improvement Grant program policies and guidelines. Planning and Development Services Director Martin Scribner introduced agenda Item 3.a., by stating that at the September MDD meeting, the Directors provided direction to the Planning and Development Services staff to evaluate changes to the Business Improvement Grant ("BIG") program, seeking staffs findings and recommendations on amendments to make the program more impactful to distressed areas of Baytown in need of economic investment and redevelopment. As such, Mr. Scribner noted the following suggested changes to the BIG program for the Board's discussion and input: Refine Program Area/Boundaries: • As the program currently stands the entire city limits is eligible for the program and the proposed revision would specify areas of eligibility in order to foster redevelopment of MDD Board Regular Meeting Minutes February 2, 2023 Page 5 of 8 those specific area with the goal of maximizing investment and redevelopment of economically -distressed areas; enhanced efforts of existing programs; and aim for catalytic efforts on the surrounding areas Maximizing Reimbursement: • As it stands, the current reimbursement amount is a one-to-one match with a max match of $40,000, for a total BIG budget fund of $250,000, and that the proposed change would be to provide funding on a first come, first serve basis, with a max allocation of $250,000, which would help attract investment and redevelopment of large, existing structures/sites, yield larger enhancements to the aesthetics of the surrounding area(s), and air for catalytic effects on the surrounding area(s.) Further Mr. Scribner stated most items have been coming in at amounts lower than $15,000, and that the proposed change would encourage larger and more substantial investments that will get more attention to the area. Evaluation Criteria: • Currently, the eligibility criteria is a scoring system that requires the applicant to score a minimum of sixty points in order to be considered for funding, and that each criterion contains their own weights as depicted below. They are rated by the Review Committee, which consists of the City Manager's Office, Economic Development, Planning, and Finance. Mr. Scribner further noted that applicants do not have to address each criterion category in order to receive the total number of allotted points: Current Scoring Eligibility Criteria: Possible 50 points for: Visual Impact or Life/Safety Code Improvements Possible 30 Points for: Economic Impact Possible 20 Points for: Community & Historical Impact The proposed recommendation is to remove the evaluation criteria and the Review Committee all together and that staff would review the application(s) for eligibility, and then make recommendation(s) for the Board's consideration, which would allow the Board to decide the merits of an application and removes the objective measure criteria, which is currently in place. Document Reformatting: • Pare the application down to make this application process more accessible, usable, and easier to interpret. Also, add this application in the Citizen Self Portal as well. Removing Barriers: • As the current program stands, the applicant cannot start their improvements within the ninety (90) days prior to application approval, however, many applicants learn of the grant opportunity during or near project completion. Staff recommends that applicants are eligible to apply at any time prior to issuance of Certificate of Occupancy/Project Completion. Additionally, the second barrier is the current timeframe to complete the improvements, which is four months once the permit is issued. This is a short time frame to complete the improvements as construction delays are common. As such, the recommendation is to expand that timeline to twelve (12) months after issuance of permit(s). Mr. Scribner stated that these proposed changes would remove barriers to entry/participation of the program and provide access to those who can benefit. MDD Board Regular Meeting Minutes February 2, 2023 Page 6 of 8 Furthermore, Mr. Scribner mentioned that staff is currently looking to see if there is a way applicant(s) could be funded for the project upfront and that staff is currently in discussions with various banks, but that it is too early to determine at this point if this is a feasible or not. Next Steps: • Mr. Scribner concluded his presentation of item 3 a., by stating the following next steps, which is to receive feedback from the Board and bring back those changes at the next meeting for a full policy change and offered any questions from the Board. Director Mike Lester stated that the initial intent of the BIG program was to support small local business, as well as existing business, to improve their current facilities and suggested possibly an increase if the applicant wants to do improvements to the exterior structure. Further, suggesting a tiered system based on what improvements are being made to help deter from one applicant receiving a large amount of monies, as well as incorporating language in the contract that applicants can participate in both the Reinvestment Zone ("RIZ") program and the BIG program consecutively if they are zoned to the specified area and meet the qualifications. Vice President Laura Alvarado, Directors Sarah Graham, Jacob Powell and Suhey Rios- Alvarez all concurred with Lester's concern with issuing all of the funds to one applicant. President Brandon Capetillo stated that the original intent of the BIG program was to support small businesses and that there are other tools that the City can use to encourage large scale improvements that are for larger amounts of for example $0.5 million or more. As such, Mr. Capetillo suggested the following in order to help assist small businesses — opening the application period for a specified time frame for small businesses for improvements of full budgeted amount, and if someone does not apply, then the application period remains open for everything else. Mr. Capetillo reiterated that the intent of the program is to incubate business owners that are currently in their home business for them to obtain a brick and mortar location for their business and for existing businesses to expand. In conclusion, Mr. Scribner stated that based on the direction from the Board, he will bring back a flush out policy that is based on a tiered or phased approach, and provide an update on the bank financing to the Board at their next meeting. Mr. David Isaac registered to speak before Council regarding agenda item 3.a., and stated that he is pleased that the Board is offering services to small businesses to support their growth, and appreciates that the Board is trying to narrow the scope to impact the businesses and areas of the City that need it the most. Mr. Isaac stated that metrics need to be measured for impact as we move forward with the program, and add money as needed as it is spent. He also encouraged future discussions as more data comes in. Further, Mr. Isaac stated his concern with allowing one applicant to receive the entire program fund balance and would like to keep the eligibility point system, but a simplified/scaled down version. Lastly, Mr. Isaac expressed his desire to have staff ensure that the program information gets out as a lot of business are not aware of this program. 4. REPORTS a. Receive the Monthly Construction Status Report for the Baytown Hotel and Convention Center Project. MDD Board Regular Meeting Minutes February 2, 2023 Page 7 of 8 Finance Director Victor Brownlees introduced Mr. Hugh Cronin with Broaddus & Associates, and Mr. Mark Bullard, Vice President of Garfield Public/Private LLC. He then turned the podium to Mr. Cronin, who presented the monthly construction status report for the Baytown Hotel and Convention Center Project and stated that through the end of January, DPR has built 82% of their current contract and applications have been reviewed by Broaddus & Associates and approved for payment. Per their contract schedule, they are at approximately at 85% complete with the work in progress. The original date of completion was February 24, 2023; however, DPR has experienced delays in delivery of material, specifically the chillers, which are scheduled to be delivered in February, leaving the completion date for March 24, 2023. Mr. Cronin was onsite today and stated that progress is going well, but that he feels it will be a challenge to reach the March completion date; however, a month buffer was worked into the project schedule. The second and third floors are complete and awaiting the final punch list from the staff at Hyatt. President Capetillo requested that the Board take a tour prior to opening, and Mr. Cronin responded that the end of the month would be a good opportunity to do so. Finance Director Victor Brownlees returned to the podium and updated the Board on the final Guaranteed Maximum Price ("GMP") of the project and stated that staff is still in conversations with DPR to flux this item out, and stated that there will be cost overruns for furniture, fixtures, and equipment, which are items that are not worked into the contract. As such, there might need to be a budget amendment and if so, that item will be brought before the Board at a later date. b. Receive the Baytown Municipal Development District's Quarterly Financial and Investment Reports for the Quarter Ending September 30, 2022. Chief Financial Officer Teresa McKenzie presented the Baytown Municipal Development District's Fourth Quarterly Investment Report, for the Quarter Ending September 30, 2022, and stated that the year ended with a little over $8,000,000 in Revenues. Total Expenditures ended at $6,000,000 million, which leaves an ending Fund Balance of $2,500,000. As it relates to the Investment Report, the Fourth Quarter Interest Earnings came in at $12,870 for the fourth quarter, and offered any questions from the Board. 5. MANAGER'S REPORT a. The next Baytown Municipal Development District meeting is scheduled for Thursday, March 2, 2023, at 4:30 p.m., in the Council Chamber located at City Hall, 2401 Market Street, Baytown, Texas, 77520. President Brandon Capetillo paid honor to the late Ms. Mary Hernandez, who served on the Board for over fourteen years and the Board provided a moment in silence in remembrance of Ms. Hernandez. General Manager Jason Reynolds reminded the Board of their next meeting and also announced that as the Baytown Hotel and Convention Center Project wraps up, staff will bring new projects before the Board for their discussion/consideration at future meetings. MDD Board Regular Meeting Minutes February 2, 2023 Page 8 of 8 6. ADJOURN With there being no further business to discuss, President Brandon Capetillo adjourned the February 2, 2023, MDD Board Regular Meeting at 5:22 P.M. Angela Jarekson, Ass�ant Secii City of Baytown