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2020 12 03 MDD MinutesMINUTES OF THE REGULAR MEETING OF THE BOARD OF DIRECTORS OF THE BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT December 3, 2020 The Board of Directors of the Baytown Municipal Development District (MDD) met in a Regular Meeting on Thursday, December 3, 2020, at 4:33 P.M., in the Council Chamber of the Baytown City Hall, 2401 Market Street, Baytown, Texas with the following in attendance: Brandon Capetillo President Chris Presley Vice President Laura Alvarado Secretary Suhey Rios -Alvarez Director Mary Hernandez Director Charles Johnson Director Heather Betancourth Director Robert C. Hoskins Director David P. Jirrels Director Rick Davis General Manager Karen Horner General Counsel Leticia Brysch Assistant Secretary President Brandon Capetillo convened the December 3, 2020, MDD Board Regular Meeting with a quorum present at 4:33 P.M., all members were present with the exception of Director Alvarado who arrived at 4:37 P.M. and Directors Himsel and Englert who were absent. 1. PROPOSED RESOLUTIONS a. Consider a resolution authorizing an interlocal agreement with the City of Baytown to provide supplemental funding for the Baytown Tourism Grant Partnership Program. Assistant General Manager Nick Woolery presented the item and stated that the Greater Houston Football Coaches Association originally applied for a tourism hotel occupancy tax grant through the city council, and their request was for twenty-five thousand dollars. In the review that request, the only amount that was eligible for actual hot tax funding was twelve thousand, so, that left the remainder of thirteen thousand, which is the amount that is in front of the MDD tonight. A motion was made by Director Robert C. Hoskins, and seconded by Director David P. Jirrels to approve Resolution No. 406, related to Item l .a. The vote was as follows: Ayes: President Brandon Capetillo, Vice -President Chris Presley, Director Suhey Rios - Alvarez, Director Mary Hernandez, Director Charles Johnson, Director Heather Betancourth, Director Robert C. Hoskins, Director David P. Jirrels MDD Board Regular Meeting Minutes December 3, 2020 Page 2 of 5 Nays: None Other: Director David Himsel (Absent), Director Gary Englert (Absent), Secretary Laura Alvarado (Not Present for Vote) Approved RESOLUTION NO. 406 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 INTERLOCAL AGREEMENT WITH THE CITY OF BAYTOWN TO PROVIDE SUPPLEMENTAL FUNDING FOR THE BAYTOWN TOURISM GRANT PARTNERSHIP PROGRAM; AUTHORIZING PAYMENT IN AN AMOUNT NOT TO EXCEED THIRTEEN THOUSAND AND NO./ 100 DOLLARS (S 13,000.00); MAKING OTHER PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. b. Consider a resolution authorizing an interlocal agreement with the City of Baytown for the acquisition of 4000 Tompkins Road, Baytown, Harris County, Texas. General Counsel Karen Horner presented the item and stated that this proposed resolution authorizes an interlocal agreement with the City of Baytown for the acquisition 4000 Tompkins for park purposes in the amount of $225,000. Parks and Recreation Director Scott Johnson stated that property will be future parkland. He further stated that this property, currently called the Lannie property is close to SH 146 and Tompkins Roads and is about five and a half acres in size that it is just a beautiful. Mr. Johnson noted that the staff had secured a retroactive waiver from the Texas Parks and Wildlife Department, which means the city can use the value of the land as a match in the future grant application. The waiver is valid for two years. A motion was made by Director Robert C. Hoskins, and seconded by Director Charles Johnson to approve Resolution No. 407, related to Item l .b. The vote was as follows: Ayes: President Brandon Capetillo, Vice -President Chris Presley, Secretary Laura Alvarado, Director Suhey Rios -Alvarez, Director Mary Hernandez, Director Charles Johnson, Director Heather Betancourth, Director Robert C. Hoskins, Director David P. Jirrels Nays: None Other: Director David Himsel (Absent), Director Gary Englert (Absent) Approved RESOLUTION NO.407 MDD Board Regular Meeting Minutes December 3, 2020 Page 3 of 5 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 INTERLOCAL AGREEMENT WITH THE CITY OF BAYTOWN TO PROVIDE FUNDING FOR THE FOR THE ACQUISITION 4000 TOMPKINS DRIVE, BAYTOWN, HARRIS COUNTY, TEXAS, FOR PARK PURPOSES; AUTHORIZING PAYMENT IN AN AMOUNT NOT TO EXCEED TWO HUNDRED TWENTY-FIVE THOUSAND AND NO.! 100 DOLLARS ($225,000.00); MAKING OTHER PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. 2. REPORT a. Receive a report concerning updates on the Hotel/Convention Center Project. General Manager Rick Davis presented that item and stated that he had participated in a call with Garfield and the other project partners at 1:30 p.m. He stated that it was a very brief call, but he wanted to let the District know the latest on a couple of things. First, as the District members may remember, as a result of having been hit by the virus and the kind of implosion of the tnuni-bond market, which caused an increase of the cost of debt projections at the time as to what the revenue was going to be; remember it created that delta or that deficiency that we were hoping would mend itself later on. Well, we will know within about a week whether that is indeed the case, but based on the results that other municipalities are having, particularly Conroe, who just received results from CBRE, we are extremely optimistic. He also noted that he believed that given the recovery that has occurred in the bond market and continues as of today to improve, and on the favorable results that CBRE has delivered to other municipalities; including, Conroe, just very, very recently, that his expectation is that we will be at a stasis or equilibrium that will allow us then to go forward with the sale of the bonds for the Hotel Convention Center. Mr. Davis noted that this is much sooner than what he thought was going to be possible but you might remember months ago, my saying that it will be magic what the announcement of a vaccine will do, and the impact that it will have on our abilities to move forward. Mr. Davis noted that he remembers that Director Presley echoed his same sentiments and he is very encouraged by that. Mr. Davis further stated that nevertheless, from the time that we put the project on "hold" until this period, there are some additional costs that were incurred to keep the team together and to perform other things that we needed to. He stated that they are in the process of verifying some of those costs, validating them, getting detail on those costs, but as of today, even our master developer said, "look, the most important thing is to move towards closing as soon as possible." As you remember, we have fronted a lot of the funding for this project based on our ability to close on the MDD Board Regular Meeting Minutes December 3, 2020 Page 4 of S project. We have been keeping very meticulous notes and records of all of those transactions and feel very good about being able to bring this project to fruition; however, there are two things that I want to bring to your attention. First of all, a very great deal of optimism that we have that we are going to be able to move forward with this project sooner than we had thought and because every time I give you a date, I jinx it, so, I am not going to give you that date, but it is going to be very, very soon. Mr. Davis stated that they had looked at the first week in April as a possible time for breaking ground on the project, but he would like to do that before March, if possible and a lot of this has to do with our next stage if we decide to go forward with the vending of the bonds in the placement of that debt is that now we have to get the POS from SMP. Then after that, we were able to place the debt and there are processes. SMP is going to have to take a look at our study and some other things and it usually takes them about three weeks or so to do that. Mr. Davis noted that as we are in the middle of the Christmas season, it is going to take some time before we are ready to do this, but he estimated that probably in early February, we should be definitely ready to place our debt and move forward with the project to sell this project which would allow us to move our groundbreaking up really as much as a month. Mr. Davis noted that this is important because prices change with regard to labor and materials and we do not want that to outpace us in this regard. He also noted that they are still trying to validate whatever as a collateral cost occurred during this period that things were shut down that we might need to support, but he could not speak authoritatively to what those are, as we are still reviewing those, so he could not give the board member a lot of detail right now. However, he did not think it was going to be terribly significant compared to the cost of the project, but he wanted to give them a heads -up, so that they knew as early as he did that this is going to occur. Director Presley asked what would one example of collateral costs be; just one or two examples, but not numbers. Mr. Davis responded that it is not just only as a result of the virus shut down, but they have made several improvements to the island. Again, he noted, they are trying to wrap their heads around what these costs are but one of the items pertains to some additional design costs that they did not originally anticipate coming from BOKA Powell; DPR wanted some additional funding, or say funding prior to closing, but right now, that is a moot point since we are moving to close in so quickly that it probably will not be an issue. Mr. Davis stated that again, staff will bring back an itemization of everything that they may need to address but they are not there right now. Staff has some very vague ideas and this is based on some communication they have had with the project's master developer, and is nothing that they have been able to audit, review, and itemize, but if and when we feel like there is something that needs to come to MDD, we will have our master developer actually present that to you and go over sotne of those things. Mr. Davis further noted that it has been not difficult, but he would have thought it was a little improbable given the impact of this virus that we would have been able to keep the entire team together to maintain the enthusiasm of this project, and other things like that and we have been able to do it. He stated he would have thought when they had to delay this project, for sure that the project was in peril and that we would not be able to keep everybody together, but evidently, there are some costs associated with doing that and time is money, kind of thing, so we will find out what those are, maybe nothing, he did not know. He stated that staff needs to really vet these, but he wanted the board members to know as early as staff, that this might be a factor, so they know right away and then staff will bring the board more details. MDD Board Regular Meeting Minutes December 3, 2020 Page 5 of 5 3. MANAGER'S REPORT a. The next Baytown Municipal Development District meeting is scheduled for Thursday, January 7, 2021, at 4:30 p.m., in the Council Chamber located at City Hall, 2401 Market Street, Baytown, Texas, 77520. General Manager Rick Davis reminded the members of their next meeting on January 7"' and wished them all Happy Holidays. 4. ADJOURN With there being no further business to discuss, President Capetillo adjourned the December 3, 2020, MDD Board Regular Meeting at 4:48 P.M. Leti is Brysch, Assistant Sec a y City of Baytown p