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2021 11 04 MDD MinutesMINUTES OF THE REGULAR MEETING OF THE BOARD OF DIRECTORS OF THE BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT November 4, 2021 The Board of Directors of the Baytown Municipal Development District (MDD) met in a Regular Meeting on Thursday, November 4, 2021, at 4:31 P.M., in the Council Chamber of the Baytown City Hall, 2401 Market Street, Baytown, Texas with the following in attendance: Bandon Capetillo President Chris Presley Vice President Laura Alvarado Secretary Suhey Rios -Alvarez Director Mary Hernandez Director Charles Johnson Director Jacob Powell Director Mike Lester Director David P. Jirrels Director Gary Englert Director Rick Davis General Manager Karen Horner General Counsel Angela Jackson Assistant Secretary President Brandon Capetillo convened the November 4, 2021, MDD Board Regular Meeting with a quorum present at 4:31 P.M., all members were present with the exception of Director Heather Betancourth who was absent; Vice President Chris Presley who arrived at 4:32 P.M.; Director Suhey Rios -Alvarez who arrived at 4:33 P.M. and Secretary Laura Alvarado who arrived at 4:40 P.M. 1. MINUTES a. Consider approving the minutes of the Municipal Development District Special Meeting held on August 25, 2021. A motion was made by Director Charles Johnson, and seconded by Director Jacob Powell to approve the meeting minutes of the Municipal Development District Special Meeting held on August 25, 2021, as submitted. The vote was as follows: Ayes: President Brandon Capetillo, Director Mary Hernandez, Director Charles Johnson, Director Jacob Powell, Director Mike Lester, Director David P. Jirrels, Director Gary Englert Nays: None MDD Board Regular Meeting Minutes November 4, 2021 Page 2 of 9 Other: Vice President Chris Presley (Not Present for Vote), Secretary Laura Alvarado (Not Present for Vote), Director Suhey Rios -Alvarez (Not Present for Vote), Director Heather Betancourth (Absent) Approved b. Consider approving the minutes of the Municipal Development District Regular Meeting held on September 2, 2021. A motion was made by Director Charles Johnson, and seconded by Director Jacob Powell to approve the meeting minutes of the Municipal Development District Regular Meeting held on September 2, 2021, as submitted. The vote was as follows: Ayes: President Brandon Capetillo, Director Mary Hernandez, Director Charles Johnson, Director Jacob Powell, Director Mike Lester, Director David P. Jirrels, Director Gary Englert Nays: None Other: Vice President Chris Presley (Not Present for Vote), Secretary Laura Alvarado (Not Present for Vote), Director Suhey Rios -Alvarez (Not Present for Vote), Director Heather Betancourth (Absent) Approved 2. PROPOSED RESOLUTIONS a. Consider a resolution authorizing a consulting agreement with Carollo Engineers, Inc. to perform construction management and administrative support services for the Hotel and Convention Center Lift Station Project. Assistant Director of Public Works and Engineering Andrea Brinkley presented agenda item 2.a. and stated that Resolution No. 435 authorized a consulting services agreement with Carollo Engineers, Inc., to perform construction management services for staff augmentation for capacity and expertise. She noted that they were in the process to start construction of the Hotel and Convention Center Lift Station, which would provide support for the Hotel and Convention Center as well as any future development on the island. A motion was made by Director Jacob Powell, and seconded by Director Mike Lester to approve Resolution No. 435, related to Item 2.a. The vote was as follows: Ayes: President Brandon Capetillo, Director Mary Hernandez, Director Charles Johnson, Director Jacob Powell, Director Mike Lester, Director David P. Jirrels, Director Gary Englert Nays: None MDD Board Regular Meeting Minutes November 4, 2021 Page 3 of 9 Other: Vice President Chris Presley (Not Present for Vote), Secretary Laura Alvarado (Not Present for Vote), Director Suhey Rios -Alvarez (Not Present for Vote), Director Heather Betancourth (Absent) Approved RESOLUTION NO. 435 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT AUTHORIZING THE GENERAL MANAGER TO EXECUTE A CONSULTING SERVICES AGREEMENT WITH CAROLLO ENGINEERS, INC., FOR CONSTRUCTION MANAGEMENT AND ADMINISTRATIVE SUPPORT SERVICES FOR THE CONVENTION CENTER AND HOTEL LIFT STATION PROJECT; AUTHORIZING PAYMENT IN AN AMOUNT NOT TO EXCEED ONE HUNDRED EIGHTY-SEVEN THOUSAND SIXTY-NINE AND NO/100 DOLLARS ($187,069.00); MAKING OTHER PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. b. Consider a resolution approving the Baytown Municipal Development District's Investment Policy and Strategy Statement in accordance with the Public Fund's Investment Act, Section 2256.005(e) for the addition of an investment officer. Finance Director Victor Brownlees presented agenda item 2.b. and stated that this item was for an administrative change to add another qualified individual as an Investment Officer to function in his stead in the event of his absence. A motion was made by Director Charles Johnson, and seconded by Vice -President Chris Presley to approve Resolution No. 436, related to Item 2.b. However, there was discussion prior to the vote. Vice President Presley stated that it was his belief that the City of Baytown was considering hiring a new staff member to help out with some of the cash management and treasury functions of the City overall, and asked if the position would help in that regard, as far as MDD was concerned, and Mr. Brownlees answered in agreement to his statement. The vote for the motion on the table was as follows: Ayes: President Brandon Capetillo, Vice President Chris Presley, Director Suhey Rios - Alvarez, Director Mary Hernandez, Director Charles Johnson, Director Jacob Powell, Director Mike Lester, Director David P. Jirrels, Director Gary Englert Nays: None Other: Secretary Laura Alvarado (Not Present for Vote), Director Heather Betancourth (Absent) Approved RESOLUTION NO.436 MDD Board Regular Meeting Minutes November 4, 2021 Page 4 of 9 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT ADOPTING THE BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT'S INVESTMENT POLICY AND STRATEGY STATEMENT; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. 3. DISCUSSION a. Discuss internal and outsourced Economic Development Services for FY2022. General Manager Rick Davis provided background infonnation on the agenda item and stated that the Baytown West Chambers Economic Development Foundation ("EDF") contract is up for consideration and that as such, the format for agenda item 3.a., will be to provide the Board information about what is going on in terms of economic development at a community level, as well as the offerings of the EDF and offered the floor to Development Manager Brett Gardella. Development Manager Gardella presented an overview of the following updates to the Board: In regards to the Business Improvement Grant, Mr. Gardella stated that he had spoken to and sent out approximately twenty Business Improvement Grant applications to various members of the public and as of today's date, they had not received any submittals. On the Revolving Loan Fund side, Mr. Gardella noted it had been conveyed to him that he needed to be more aggressive in making the public aware of this incentive, however, it had been a struggle to get a financial institution on board. He stated that he was currently in discussion with three other institutions, including one that Mr. B.J. Simon had shared with him, and that he was hopeful that in the next week or two they would be able to bring a financial institution on board to administer the loan. Basically, all they have to do is service the loan, meaning that they would make sure the people are making the payments and notifying the City if they are not. Also, the City is willing to split the 4% with the financial institution, so they can snake 2% and the City would get the other 2% back into the loan. Hopefully, they will be able to get it done before the end of the year. Mr. Gardella noted that several months ago he had visited with three national developers and they were in discussions about the San Jacinto Boulevard District as well as some opportunities on the south side of the city. He was pleased to say that the discussions have been continuing over the last couple of months, including their coming back in a few weeks to have a little bit of a deeper discussion. At which point, they would probably want to meet with some of the board members and/or staff to sit down and talk a bit further on how we can get some of the actions that the Board wants to see in the San Jacinto area, as well some opportunities for commercial, retail, residential, or entertainment -related business on the south side of the city as well. MDD Board Regular Meeting Minutes November 4, 2021 Page 5 of 9 In regards to San Jacinto Boulevard, Mr. Gardella indicated that he believed a firm had been selected for Phase One of the preliminary engineering, which would include the extension of Hunt Road, starting to create the amenity lake that will happen behind Buc-ee's and give the City the ability to really start marketing the City Center area and the amenity lake. Part of that had also been to re-engage a conversation with a higher -end multifamily developer, who has been looking for about the last three or four years to be in that area, and was trying to work with the current property owners so, they might have some opportunities in the very near future. In the next six to nine months or so, they hoped to have a good-fonned direction and filling out the land plan that they created with the HRA about five or six months ago. Additionally, Mr. Gardella stated that they were working with Harris County Transit Services on a park -and -ride scenario and that they are willing to commit some financial obligation toward the project. At this point they are trying to figure out how they can make them collaborate with the engineering company that the City is hiring, so they can work together and the City can get the financial resources out of Harris County Transit, which would help offset some of the City's costs into this process. Mr. Gardella further noted that currently, there are five residential developers that are working on projects within the city and that sometime between November or December, the MDD Board or Council will see three (3) new Public Improvement Districts ("PID's") that will come through, two of which will include additional annexation into the City. Some of theirs will be very beneficial for the City, a continuation of known entities that are well -liked, but they have also encouraged the known entities to start to look at that higher price point and better product to help the City to continue growing the inventory of more of the $300,000 plus houses versus the $250,000 to $275,000, that are currently being seen. Recently, an annexation for a commercial piece along Thompson Road was completed, and the City is currently working through a water and sewer issue with theirs so that they can get them in a position to start construction. Mr. Gardella noted the City is working with a franchise developer right now for a nice franchise that would happen along Alexander Drive, and if successful, they would be a catalyst for other projects along Alexander. Mr. Gardella stated that recently he had been on several recruitment trips and a manufacturing conference in Chicago, and received about four leads that they were currently following up on, as well as a project -specific recruitment trip for some technology -based initiatives in California. He continually works with residents and small business owners, who have had challenges in working with the city and they have been able to resolve a lot of those issues out and get people down the track with what they need. In regards to the vacant property list, staff had been working diligently and they are down to approximately 70 properties that remain in the City's name, and hopefully, they will have the ability to sell these properties to get theirs back on the tax rolls, but still maintain what it is that they want to see in the community. Mr. Gardella further noted that marketing of a new web presence is in the process of being created for the Economic Development Foundation and that they had engaged with a professional that specifically deals with economic development web presences. MDD Board Regular Meeting Minutes November 4, 2021 Page 6 of 9 He also indicated that Ace Industrial Services had turned in their plans for the new building for their business to be located along Main Street and Wismer, and it will be one of several projects projected for them in the next three to five years. Furthermore, they also have two businesses in the Houston market that are in continuous discussions about the desire to relocate to Baytown and that part of their assistance with them is figuring out the water and sewer, which is currently underway with a study that Kimley-Horn & Associates, Inc. is working on for the southside of the city. Mr. Gardella also stated that the water and sewer study once complete, will also help them move forward with a residential development on the southside of the city, as well as developers immediately to the West of the golf course, and they had been in discussion with a developer who has been looking to do a little 17-acre development at the far end of Tri-City Beach Road. The developer who built the Family First ER just East of Garth Road, is getting close to being finalized with their land plan for the rest of their six acres that will include a family -friendly entertainment atmosphere, which will have indoor -seating bar type of area as well as a rather large extensive outdoor area that would be very attractive for families and, hopefully, they will have their plans done some time in the first quarter of next year so they can get under construction by spring time. In conclusion of the report Mr. Gardella entertained questions from the Board. President Brandon Capetillo questioned how many applications the City had received for the Business Improvement Grant and asked if the reason why they are not submitting applications is due to the criteria for the Grant. Mr. Gardella responded lie did not think the criteria is too stringent for them as they had allowed them to do interior work as long as it is life safety issues, such as plumbing, electrical, etc. They had been pretty broad, and are going to allow them to get up to $20,000; however, he felt the issue is people just are not taking the time to fill out the application. The second part is that it is a 50150 matching grant, which means they have to get approved into the program, do the work, spend the money, turn in the receipts, and then the City will give them the match back, and some people may not have the total amount of money to put into a particular project. However, he did explain that they can take it in bite -size pieces so the City is willing to get them into the program in order to get some momentum behind them and get some work done, but they just have not taken the time to fill out the application. President Capetillo noted that he just wants to ensure that it was flexible as possible and ensure that the program is set up correctly. Director Charles Johnson questioned if there was any way they could take the stipulation off of the interior work just being health, life, and safety, and Mr. Gardella stated that the criteria could be changed, if that was something the Board desired to do, however, they would want for it to be successful. Director Johnson clarified that he thought there may be more opportunity if allowed to do interior work outside of life, health, and safety and some people may even decide to turn in those things, so that was something they really should consider. Vice President Chris Presley followed up on Director Johnson's sentiments by stating that if the lack of applications continued, staff should look at the option of downscaling, or tweaking, the MDD Board Regular Meeting Minutes November 4, 2021 Page 7 of 9 program requirements so that they can ultimately receive more applications. Vice President Presley further noted that he did view it as an egregious use of taxpayer dollars if was in an area of town that the City is trying to target. President Capetillo agreed to Vice President Presley's sentiments by stating that the intent is not to have the scope so narrow that they cannot reach the targeted small businesses. In response Mr. Gardella stated that one of the reasons they kept the two programs structured the way they did, was that it allowed the applicant to receive up to $10,000 through the Revolving Loan Fund for any purpose, so they could buy furniture, fixtures, equipment, signage, purchase inventory and etc., so they kept that program broad for that purpose, however, the snatching grant program had a narrower scope. Unfortunately, as of today's date they had not been able to get a bank to sign on to manage these loans for the City, but once that happens, it should open the door for the City to really get out to some of these small businesses and help them to get into business. Director David Jirrels noted that if a small business is qualified for the grant and they are trying to expand their business, however, find out that they have to spend $20,000 of their own money upfront before they get reimbursed, it could be a showstopper for a lot of small businesses. Furthennore, he stated that they might not have the $20,000 in their checkbook to spend the money upfront and could possibly be the reason why the City had not received any applications. Should the Board decide to adjust that requirement in the future, it would possibly make it easier for the applicant. With there being no further comments or questions on behalf of the Board, Mayor Capetillo asked Mr. David Isaac, who signed up to speak on this agenda item, to provide his comments at this time. Mr. David Isaac stated that he just heard a great report from Mr. Gardella about the developments taking place in the Economic Development department and that one of the most important aspects of economic growth is the grant that they were discussing today, and as such, considering the lack of applicants received, the Board should consider changing the criteria to reach the small business that desire to start-up or expand. 4. REPORTS a. Receive and discuss the Economic Development Foundation's Fourth Quarter Report. Mr. B.J. Simon, President and CEO of the Baytown West Chambers County Economic Development Foundation, presented agenda item 4.a., by providing the Board with an overview of the two contracts that the Economic Development Foundation holds with the Baytown Municipal Development, which are the Basic Services and Special Services contracts. He noted that the intent today was to address any concerns or input from MDD as to their current services and any changes that would be made to the contract if, in fact, it was presented for approval, make some modifications at that point. MDD Board Regular Meeting Minutes November 4, 2021 Page 8 of 9 He then presented the 41h quarter Economic Development Foundation Report. However, prior to that, he wanted to mention that the Foundation has had a long-standing relationship with the City and they hoped to continue that partnership, which is embodied within and by a contract, but emphasized that hopefully MDD sees them as a partner, as compared to a contractor. Mr. Simon clarified that the Basic Economic Development Contract is fairly general and has been a long-standing with a few changes made in the last year to add address the change in staffing and direction that the City had taken by bringing in an internal resource and some verbiages that were added address the coordination of activities for potential changes associated with specific services that are associated with public policy and kind. Having giving the Board a general overview of the contracts, he offered any questions or concerns from the Board. General Manager Rick Davis noted that he had been working with Mr. Simon for quite a while now and that he viewed his assistance as being essential, especially since the City of Baytown competes for business not only on a regional basis, but also on a global basis, which would be challenging to do without the expertise of Mr. Simon, and especially in the industrial arena. He noted how beneficial it has been to the City's staff to have him, especially on the IDA and negotiation side, and was grateful for his continued willingness to work with the City. Furthermore, Vice President Presley voiced his praise to the Economic Development Foundation's for their efforts to the recent updates to EDF's website and he reiterated Rick's sentiments that he finds the EDF's assistance very helpful. Mr. Simon continued by presenting an overview of the Special Services Contract with some of the proposed changes to the various programs and marketing in general, and entertained the Board with any question that they might have. President Capetillo praised Mr. Simon for his expertise and noted he respected Mr. Simon's opinion because it is not only professional and rooted in the facts, but also it is non -political, which is a great resource to have. Mr. Simon proceeded to provide an overview of their activity report for the fourth quarter. Secretary Laura Alvarado questioned a collaborative partnership with the Baytown Chamber of Commerce and Mr. Simon responded that the sister organization, the Greater Houston Women's Chamber of Commerce, was noted in the report because it was the new outcome of the efforts to the program, the Brunson Entrepreneur Center, and their incubator and reiterated that the Economic Development Foundation provides support to all Chamber of Commerce Organizations, including the Baytown, Anahuac and Winnie Chambers of Commerce. President Capetillo asked Mr. David Isaac, who signed up to speak on this item, to present his comments at this time. Mr. David Isaac provided comments on Mr. Simon's report and noted that he compelled the Baytown Municipal Development District Board to provide resources and support towards the efforts to bring the battleship to the City of Baytown. Furthermore, Mr. Isaac also noted the need for the City to take advantage of Opportunity Zones that were recently passed by Trump's Administration that gained bipartisan support in the Senate. He stated that with that kind of incentive at play that the free market and the federal government are offering, he thought the MDD Board Regular Meeting Minutes November 4, 2021 Page 9 of 9 City should do their best to try to disseminate that information and get the private market involved. Vice President Presley responded that to his knowledge Opportunity Zones are based on previous capital gains and that unless someone has millions of dollars of capital gains that they need to reinvest, then you do not have an Opportunity Zone program or an incentive at all. Mr. Simon concurred with Vice President Presley's assessment and stated that unless there was existing capital or a 10131 Exchange, those kinds of rollovers that would help defray capital gains tax, nothing is going to happen. b. Receive the Baytown Municipal Development District's Quarterly Financial and Investment Reports for the Quarter Ending September 30, 2021. Director of Finance Victor Brownlees presented the Baytown Municipal Development District's Quarterly Financial and Investment Reports for the Quarter Ending September 30, 2021 and stated that there had been a phenomenal story of growth and development over the last year and that on the revenue side, sales tax had surged $2.4 million over the budget, almost $1.1 million in excess of the previous year. On the expenditure side, he noted they have delivered in the range of Parks and Recreation projects and they are currently building a Hotel and Convention Center on Bayland Island. As such, this is the upside and the downside is there was only about $220 dollars left in the Investment Fund, which is again, due to the construction of the Hotel and Convention Center. 5. MANAGER'S REPORT a. The next Baytown Municipal Development District meeting is scheduled for Thursday, December 2, 2021, at 4:30 p.m., in the Council Chamber located at City Hall, 2401 Market Street, Baytown, Texas, 77520. General Manager Rick Davis presented an update on the Hotel Convention Center, which the start of the project was October 201h, however, the commencement will be on November 8`h. He reminded the board members that their next regularly scheduled MDD meeting is scheduled for December 2"d at 4:30 P.M. 6. ADJOURN With there being no further business to discuss, President Capetillo adjourned the November 4, 2021, MDD Board Regular Meeting at 5:23 P.M. rm Angela Jdjcson, Assistant Secretary'` City of Baytown %., �„