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2017 05 11 MDD Minutes, SpecialMINUTES OF THE SPECIAL MEETING OF THE BOARD OF DIRECTORS OF THE BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT May 11 2017 The Board of Directors of the Baytown Municipal Development District (MDD) met in a Special Meeting on Thursday May 11 2017 at 4:33 P M., in the Council Chamber of the Baytown City Hall, 2401 Market Street Baytown Texas with the following in attendance Stephen DonCarlos President Chris Presley Vice President Reggie Brewer Secretary Laura Alvarado Director Charles Johnson Director Gary Englert Director Dave Jirrels Director David McCartney Director Terry Sam Director Rick Davis General Manager Ignacio Ramirez Sr General Counsel Lehcia Brysch Assistant Secretary President DonCarlos convened the May 11, 2017, Municipal Development District (MDD) Board Special Meeting with a quorum present at 4:33 P M., all members were present with the exception of Director Johnson who arrived at 434 P M. Director Alvarado who arrived at 4.47 P M and Directors Hernandez and Hoskins who were both absent MINUTES a Consider approving the minutes of the Municipal Development District Board Regular Meeting held on April 06, 2017 A motion was made by Director Terry Sam and seconded by Secretary Reggie Brewer approving the April 06, 2017 MDD Board Regular Meeting minutes. The vote was as follows Ayes Secretary Reggie Brewer, President Stephen H DonCarlos Director Guy Englert Director David P hrrels, Director David McCartney Vice - President Chris Presley Director Terry Sam Nays None Other Director Charles Johnson (Not Present for Vote) Director Laura Alvarado (Not Present for Vote), Director Mary Hernandez (Absent) Director Robert C Hoskins (Absent) Approved MDD Board Special Meeting Minutes May 11 2017 Page 2 of 8 PROPOSED RESOLUTIONS a Consider a resolution approving the Baytown Municipal Development District's Investment Policy and Strategy Statement in accordance with the Public Fund's Investment Act Finance Director Wade Nickerson presented the agenda item and stated that Resolution No 305 approves the Baytown Municipal Development District's (MDD) Investment Policy and Strategy Statement in accordance with the Public Fund's Investment Act, Section 2256.005(e) He stated that the changes to this Investment Policy include amending authorized broker/dealers by adding FTN Financial to the broker/dealer lists A motion was made by Director David McCartney and seconded by Director Gary Englert approving Resolution No 305 regarding agenda item 2.a. The vote was as follows Ayes Secretary Reggie Brewer, President Stephen H DonCarlos Director Gary Englert Director David P Jirels, Director David McCartney Vice - President Chris Presley Director Terry Sam Nays None Other Director Charles Johnson (Not Present for Vote), Director Laura Alvarado (Not Present for Vote) Director Mary Hernandez (Absent), Director Robert C Hoskins (Absent) Approved RESOLUTION NO 305 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT ADOPTING THE BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT'S INVESTMENT POLICY IN ACCORDANCE WITH THE PUBLIC FUNDS INVESTMENT ACT AND PROVIDING FOR THE EFFECTIVE DATE THEREOF DISCUSSIONS a Discuss possible improvements to the Brunson Theater Building, located at 315 W Texas Avenue and in the Citizens Bank Building, located at 319 W Texas Avenue General Manager Davis presented the agenda item and stated that the City had opportunities to help save a historical landmark in the city that would add to the economic development in the downtown area, however, the Brunson Theater and Citizens Bank remain hollow buildings He stated that unfortunately, the parties that have been interested in the redevelopment of the MDD Board Special Meeting Minutes May 11, 2017 Page 3 of 8 Brunson building decided that their development was not as feasible as that thought He stated that per the President's direction the plan presented before the MDD Board was to rehabilitate the two buildings, particularly the Brunson He stated that the proposal is to utilize funding from two (2) budget years, whereas, there's currently funding in new initiatives and then put an equal amount in the following fiscal year in order to rehabilitate the Brunson establish more or additional parking in the vicinity of the Brunson and Citizen s Bank and generally clean up the area infrastructure of that block He further stated that this initiative will have as big an impact on the overall quality of this downtown area equal to or as much as the Town Square He stated that Staff recommends relocating the City's visitor bureau center to the front area of the Brunson Theater and establish an office incubator on the back half of the building Additionally General Manager Davis introduced Mr Drew Potts- to present the more technical aspects of these projects and Mr Wade Nickerson to explain some of the financial aspects of this initiative Mr Potts stated that Phase I of this project includes the design engineering and construction He noted that currently the Brunson has no roof or inside and is just a shell with some balcony and stairwell, therefore this phase will include a roof HVAC system, electrical, removing the theater seats and bringing the floor back to level and everything to put the building back together He stated that in the front half of the building where the concession area used to be, there would be three (3) to four (4) offices to house tourism staff and possibly the Economically Development staff as well as restrooms He stated that the upstairs would have restrooms and a small conference room Mr Potts stated that Phase I would include the design and engineering at a cost of approximately $150,000 to $200,000 and construction at approximately $1 3 million having a total cost of approximately $1 5 million He further stated that the second part would be the infrastructure of approximately $600,000 for the lighting, parking and landscaping of the area in a style very similar to that of the Town Center He noted that the teller booths of the Citizens Bank building would have to be taken out in order to use all that area for parking Mr Potts stated that Phase 11 would include the business incubator space which is the back half of the building. He stated that the goal is to have an area that would allow for small businesses wanting a space to startup and grow their building and in the future add a small conference area and space for shared resources at a cost of approximately $200,000 He further noted that this will also allow for a municipal presence in the downtown area by moving tourism downtown which also allows for more foot traffic in the ACE District During further discussion, Mr Potts stated with regards to the Citizen s Bank building that staff would probably bring before the board information for a partial demolition that includes the teller booths metal walls demo, and filling in the basement with an approximate cost of $250,000 and a new roof of an approximate cost of $500,000 He noted that the roof is in the state where it can no longer be partially done therefore, has to be completely done new Additionally, Mr Potts noted that the proposed amount would be the cost lust to dry the building out and secure it General Manager Davis stated that staff does not want to demolish the Citizen's bank building and would love to rehabilitate it but noted that putting a roof and securing it is a very expensive proposition as it is an entirely different project than the Brunson He stated that the MDD Board Special Meeting Minutes May 11 2017 Page 4 of 8 recommendation for the Brunson theater has funding already identified but if the MDD Board wants staff to do more staff will work towards that as funding becomes available Mr Potts responded to an inquiry from President DonCarlos and stated that the roof of the Citizen's Bank building has to be totally redone, therefore waiting a year or two will not really change or damage the structure of the Citizen s Bank much more than it is already Director Presley inquired if the budding could be listed with a professional real estate broker to gamer any interest in the Citizen s bank Building while Phases I and II are ongoing President DonCarlos stated that he thought that the concept has always been that the building couldn't be marketed until a roof was put on it Director Presley noted that the board was also told that the Brunson couldn't be marketed, although it was missing 100% of its roof, but further noted that the Citizen's Bank building was different as it is missing about 20% of its roof Director Brewer inquired if consideration was taken of the costs to demolish the bank building structure versus the recommended wst for its rehabilitation or if consideration was taken to demolish the Citizen s Bank in order to allow for more parking for the Brunson In response to Director Brewers inquiry, General Manager Davis stated that demolition was considered but the disadvantage for such was that it would create more empty space down town whereas there's currently spaces adjacent to Town's Square that was vacated years ago that have yet to be occupied General Manager Davis stated that the cost to mitigate the building would be significant and the city would still have to undertake all of the necessary updates to the surrounding infrastructure as well as, still have the need for parking He fiuther noted that from his perspective it would not be more marketable to have an empty flat surface and that staff has a plan for additional parking without demolishing a building Director Presley noted that staff also looked at various scenarios that included partial and complete demolition of the building. General Manager Davis further noted that the partial demolition of the bank building was more expensive than the demolition of the entire structure President DonCarlos noted that the initial plan for this area recommended the demolition of the bank building, but he feels that having more empty spaces would leave the area with a lesser downtown look During further discussion. General Manager Davis stated that staff started this project with the intent to not demolish anymore structures but rather begin the work on the Branson Theater, which is more feasible and will perhaps make the Citizens Bank building more marketable, then create parking by utilizing the space around the bank building, as well as the lot on Pearce Street Additionally he stated that regardless to the decision made on the buildings the next step in developing downtown needs to be made to avoid this condition to perpetuate, i.e do nothing with these buildings Mr Nickerson stated that in the current MDD budget this project would work better in two (2) different phases in multiple budget years He stated that if the project started this year there's $1,725,000.00 in the MDD budget for unforeseen/new initiatives, in which this project qualifies He further stated that included in next year's budget would be the completion of the Brunson MDD Board Special Meeting Minutes May 11 2017 Page 5 of 8 project along with the infrastructure and then there will be more discussion on the funding for the necessary improvements to the Citizen's Bank building Director Jirrels inquired if there was anything in the buildings to be concerned about such as asbestos In response to Director Jirrels's inquiry, General Manager Davis stated that he wasn t aware of any such concems Director Englert stated that if there's business in the extra spaces at the Brunson what will be done with regards to parking at that point being that Phase III would not have started yet During discussion it was noted that Phase I includes parking and General Manager Davis stated that the puking spaces located on the Pearce property could be done fairly quick Director Alvarado inquired as to how many small businesses gained interest through the incubator program General Manager Davis stated that Lee College already established an incubator program and the City would like to work with them and become an independent partner in that endeavor He noted that there are different types of incubator programs Director Presley noted that he and Mr BJ Simon spoke with a member from Lee College and in their service area there's not a small business incubator, meaning thus would be the only one Director Presley further noted that in the Houston and larger metropolitan areas, the term w working is being used as opposed to business incubator Director Alvardo stated that she's over operations in her organization and recently started looking into Co Op which is the term used in San Antonio, and were put on a four (4) month waiting list for such program that's similar to the topic of discussion General Manager Davis stated that staff needed an affirmation from the MDD board to brig back a proposal to spend funding on the new initiatives line item for the design and bid on construction for this project Additionally, he noted that the intent is to keep the Brunson sign or build it new Director Presley inquired if the city would be the project manager for this project sort of similar to the process done for the town center and could it be done in house In response to Director Presley's inquiry General Manager Davis stated that staff will discuss the option to be as efficient as possible Director Sam inquired if the $1.5 million estimate for Phase 1 was from in-house estimates or outside bids General Manager Davis stated that there were a few people that looked at the costs to rehabilitate the Brunson with the latest proposal being an estimate of $1 7 million Director Sam inquired as to what the O&M would be General Manager Davis stated that staff does not know what the O&M would be Director Presley further inquired as to who would occupy the space if the city created a conference room of its own in the budding General Manager Davis stated that the city would want to make that room available to those occupying the office incubator space and city staff MDD Board Special Meeting Minutes May 11 2017 Page 6 of 8 Director Brewer inquired if the incubator spaces would be considered for rent and if an income projection was done General Manager Davis stated that renting the spaces would be considered but that no income projection was done with this regard Director Brewer further noted that by him being a new member of the board it appears that things are moving faster than he could grasp and because of such he would not be able to vote with certainty for lack of details President DonCarlos requested for Mr BJ Simon to address some of the questions concerning small business incubators Mr Simon stated that the EDF's quarterly reports include references to the structure of the incubator without walls programs, which is a referral service of such need and demand He stated that the benefit for Baytown if the decision is to move forward with the project is establishing the municipal presence which is the main stay best practice for mann street redevelopment. Mr Simon stated that there's a small business development center sponsored by Lee College for referral and networking purposes, which can easily transition into any of the models being done around the country He further stated that he doesn't feel that there would be a problem programming wise, but it must be programmed because once incubated the next step is to drive in private sectors Additionally, Mr Simon stated that if the Brunson is redeveloped there could be interest in the bank building, in which there's already interest in the bank building through the private sector investments The consensus of the board was to have staff bring back more detailed information specific to the office incubator program General Manager Davis stated that until moving into the design phase of the project staff will not bring before the MDD board solid numbers with regards to the Brunson rebuild, but will provide a collection of best practices along with projections of use and revenues Additionally, he noted that the hope is to have the construction of the Brunson Theater concluded by the end of the summer year 2018 Deputy General Manager Bottoms stated for clarity that one of the things being looked at as far as infrastructure was the demolition of the bank tellers and filling in the basement REPORTS a. Receive the Economic Development Foundation's second quarter report for FY 2016-2017 Mr Simon presented the Economic Development Foundation's (EDF) second quarter report for FY 2016 2017 and stated that they continue their efforts to undertake initiatives designed to expand the economic base, to support development and redevelopment through tax abatement and incentive programs, to enhance telecommunications infrastructure in and around the Baytown West Chambers County service area, to support inter modal transportation and to enhance the area's capacity through workforce development partnerships with Lee College and GCCISD He further stated that they entertained 83 prospects along with several site visits of which two (2) of them will be sited in Baytown's extraterritorial jurisdiction (Project Pac Man and Project Hotel) He stated that they continue to coordinate with regional allies by participating in meetings tranmngs, and conferences with regards to economic development Additionally, Mr MDD Board Special Meeting Minutes May 11 2017 Page 7 of 8 Simon recommended providing an annual report to the MDD board in an effort to assist the new members with more information Director McCartney noted that at the last TPC meeting there was a presentation where there's going to be $50 billion worth of new projects in the ship channel of this vicinity of mainly plastic operations and once completed the Port of Houston will be the number port in the world President DonCarlos noted that due to the bill that was passed regarding heavy haul, Baytown will have significant truck traffic impacts being that it's between Mt Belvieu and the ports He stated that because of the anticipated impact he met with Exxon and they agreed to work with the city as well as, the school district on scheduling trucks routes. Additionally, he noted that the City has a long term solution to minimize truck traffic on Hwy 146 b Receive the Baytown Municipal Development District's Quarterly Financial and Investment Reports for the Quarter Ending March 31, 2017 Mr Nickerson presented the Baytown Municipal Development District's Quarterly Financial and Investment Reports for the Quarter Ending March 31, 2017, and stated that the revenues were lust under 50% overall He stated that there was a bump in collections from last month that's not reflected in this report, but expects the revenue to come as budgeted He noted that the sales tax was 2% above last years budget and that the budget was increased expecting to collect more revenue With regards to the expenditures which is primarily funding for projects, Mr Nickerson noted that the expenditures were at 41 % of budget He stated that the parks line item and the sewer projects line item were above 50% because of the payments made for the slides at Pirates Bay as well as the many sewer projects being done He noted the staff expects these fund line items to even out at the end of the budget year Mr Nickerson stated that at the end of this quarter the portfolio had $3.472 million with a 823% increase which is an increase to the yield and earnings of $6 156 5 MANAGER S REPORT a Reminder that the next Baytown Municipal Development District meeting is scheduled for Thursday, June 0l, 2017, at 4.30 P M., in the City Council Chamber, 2401 Market Street, Baytown Texas, 77520 There was no report 6 ADJOURN A motion was made by Director David McCartney and seconded by Vice President Chns Presley adjourning the May 11 2017 MDD Board Special meeting The vote was as follows MDD Board Special Meeting Minutes May 11 2017 Page 8 of 8 Ayes Secretary Reggie Brewer Director Charles Johnson, President Stephen H DonCarlos, Director Gary Englert Director David P Jurels Director David McCartney Vice President Chris Presley Director Laura Alvarado, Director Terry Sain Nays None Other Director Mary Hernandez (Absent), Director Robert C Hoskins (Absent) Approved With there being no further business to discuss, President DonCarlos adjourned the May 11, 2017, Municipal Development District (MDD) Board Special Meeting at 4.33 P M a �V 8 ,r 4L,tic,aBssistant tary City of Baytown