06-01-2012 Special Called Mtg MinutesSSCCIH[lC1Rl~C'7L
ECONOMIC DEVELOPMENT
MINUTES
CITY OF SCHERTZ
ECONOMIC DEVELOPMENT CORPORATION
BOARD OF DIRECTORS
Special Called Meeting
June 1, 2012
The City of Schertz Economic Development Corporation (SEDC) Board of Directors rnet for a Regular
Meeting on Friday, June 15Y, 2012 at 3:00 pm. in the City Council Chambers, 1400 Schertz Parl~vay, Schertz,
Texas.
1. Call to order
President called the meeting to order at 3:00 p.m. and welcomed everyone in attendance.
2. Roll Call
Board of Directors:
Harry Whitney, President
Angelina Kiser, Vice President
Tim Brown, Treasurer/SecretaLy
Marvin Thomas
Matthew Duke -Arrived at 3:03 p.m.
Staff
David Gavin, SEDC Executive Director
Rene Zarate, Finance Analyst
Kyle Kinateder, EDC Analyst
Patty Horan, Administrative Assistant
Board Members Absent:
Roy Richard
Rosemary Scott
Others Present:
None
3. Public comment
None
ITEMS FOR INDIVIDUAL CONSIDERATION:
4. Consider/Discuss/Act on a request to subordinate the lien on an existing loan to Schertz Parkway
Ventures, LLC (SPV) Professional Medical Plaza in the amount of $150,000 (D. twin/SEDC Exec.
Director)
Mr. Whitney opened discussion of this agenda item by providing historical background on development incentives
given to SPV Ventures, LLC for the development of the medical professional plaza located off of Schertz
Parl~vay. Mr. Gavin presented the following overview:
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In February 2010, SPV Ventures received a loan from the SEDC for X150,000 with an interest rate of 0% for a
period of 20 years. This loan was made in connection with a Schertz Bank & Trust loan of X2,493,975. In June of
2011, the Schertz Bank & Trust loan was retired by a new loan from Frost National Bank. At the time of
refinancing, additional funding was obtained to construct two additional buildings. The SEDC loan remained
subordinate to the new loan from Frost National Bank. As of May 31, 2012, $29,920 has been repaid from the
SEDC's loan of $150,000, leaving a loan balance of x$120,080 for the SEDC loan. Currently, SPV Ventures is
asking the SEDC to subordinate its existing loan to an additional construction loan of $1,176,000 from Frost
National Bank. This would subordinate SEDC's position below the existing Frost National Bank loan of
$3,800,000 and a new Frost Bank Loan of $1,176,000. The new loan will be used to construct Building 500 in the
Schertz Parkway Professional Plaza. Mr. Gavin gave an assessment on the risk associated with this request and
presented a site map showing the current development, status on tenants, and structure construction.
Mr. Duke requested clarification on the $200,000 dollar loan that was approved for SPV a year ago. Mr. Gavin
responded by explaining that the developer requested the loan to cover additional cost for infrastructure in the
back of the property, but did not act on that loan. Since a significant amount of time has lapsed, that loan will
have to be brought back to the Board for re-consideration. Mr. Duke agreed and expressed concerns relating to
the loan repayment terms and payback schedule of the EDC's investment in this project.
A motion to approve a request to subordinate the lien on an existing loan to Schertz Parkway Ventures, LLC
(SPV) Professional Medical Plaza in the amount of $150,000 was made by 1VIr. Whitney with votes in favor
from: Ms. Kiser, Mr. Brown and Mr. Thomas. Against: Mr. Duke. Motion passed.
5. ADJOURN
President adjourned the meeting at 3:30 p.m.
PASSED AND APPROVED THIS 28~ DAY OF JUNE, 2012.
arry Wh' ey -President
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Tim Brovi - ecretary/Treasurer
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SEDC Reg. Mtg. Minutes 06-1-2012