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June 13, 1996 SCHERTZ ECONOMIC DEVELOPMENT COMMISSION MEETINGS MINUTES JUNE 13, 1996 SCHERTZ MUNICIPAL COMPLEX The Schertz Economic Development Commission meeting convened at 7:00 p.m., Thursday, June 13, 1996, in the Municipal Complex Conference Room, 1400 Schertz Parkway, Schertz, Texas. THOSE PRESENT: THOSE ABSENT: Tony Moreno Harry Richburg Eric White Ben Davis Wanda Sweatt Jeff Zunker Henry Gutierrez Jackie Jones Byron Williams Bob Vallance Lew Borgfeld STAFF: Kerry Sweatt, City Manager Mark Marquez, ED Coordinator Earleen Ehlers, Recording Secretary CALL TO ORDER: Lew Borgfeld, Chairman, called the meeting to order at 7:00 p.m. APPROVAL OF MINUTES (03-28-96 & 02-16-96): Forego approval of minutes. Not all sets were available. APPOINTMENTS/REAPPOINTMENTS: Several commissioners' terms have expired and are up for reappointment. Mr. Marquez made the recommendation that Mr. Tim Fetter be appointed to the Board. Mrs. Sweatt submitted Stacey Ware, the Farmers Insurance Representative in Schertz. Mr. Borgfeld, Mr. White, Ms. Jones, Ms. Sweatt, are up for reappointment. Mr. Thorn and Mr. Hammersla have declined. Byron Williams made the motion to appoint Mr. Fetter as a new member and reappoint Mr. Borgfeld, Mr. White, Ms. Jones and Ms. Sweatt. Motion was seconded by Mr. Bob Vallance, vote carried unanimously. JULY 4TH: Will have the booth again this year. Merchandise will be tagged with prices, and it is essentially the same as last year. The booth will be open from 12:00 noon until 6:00 p.m. and volunteers are requested to help man it. Mark Marquez volunteered to take the first and last shifts, 12:00 noon to 1:00 p.m. and 5:00, p.m. to 6:00 p.m.; Lew Borgfeld volunteered from 1:00 p.m. to 2:00 p.m.; Henry Gutierrez from 2:00 p.m. to 3:00 p.m.; and Byron Williams from 3:00 p.m. to 4:00 p.m. Mr. Richburg left a phone message with Mrs. Ehlers, that he would volunteer some time. If needed, each shift may be extended to one hour fifteen minutes to cover total time. BUSINESS APPRECIATION DINNER: Ideas for speaker for the dinner were discussed. Mr. Vallance said that the speaker for the father's day luncheon gave a speech on family values that was very good. Mr. Marquez said that Ron Mills and Pat Brewer who run Security Capital might give a good prospective on growth and economic development. State Highway Department might give a good speech regarding 78 and expansion of 35. Mr. Sweatt added that 78 is funded for construction letting in 97-98 fiscal. The district engineer, John Kelly would possibly be able to cover both topics. The Governor as speaker was mentioned. Mr. Borgfeld thought that Mr. Kelly as speaker would be more feasible and that Mr. Bush's schedule would probably not be open with such short notice. Mr. Borgfeld made a motion that the business appreciation dinner be moved to Thursday, October 10th and be at the Ramada Ltd. Mr. Gutierrez seconded the motion, which carried unanimously. Mr.. Borgfeld stated that since Ms. Sweatt has always done an excellent job with the appreciation dinner that he would appreciate her continued involvement. The Board unanimously agreed. ENTERPRISE ZONE/TIF: Mr. Marquez made a brief presentation on zones. Enterprise Zones: Zones are geographically defined areas with specific purposes. One we deal with is a reinvestment zone, which can be used for tax abatements, tax increment financing and as enterprise zones. Enterprise zones are zones whereby you are entitled, if the company is recommended by City Council as an enterprise zone project, to take advantage of several state incentives. Schertz has a State enterprise zone which was approved by the Texas Department of Commerce in April, 1995. In our case, the zone is very large (almost ten square miles) and covers both Guadalupe and Comal Counties as well as some extraterritorial jurisdiction outside our city limits. Even if not identified by Council as a enterprise zone project, you are automatically included as a reinvestment zone. This zone is good for seven years and cannot be renewed. State Enterprise Zones are governed by federal low to mod standards. We have one low to mod (income/employment levels) area here so we qualified. We have -all industrial areas and potential industrial areas included in that zone (over five thousand acres). That includes a thousand feet on either side of 3009. Tax Increment Financing Zone: Schertz Parkway was built in 1986 (for about a million dollars) primarily by private developers who made an agreement with the City for a Platting Fee Ordinance whereby anybody who built within five hundred feet of the right of way on either side of Schertz Parkway had to pay a fee. It was paid to the City and half would go into a fund (to widen the road) and half would go back to the developers. After the real estate bust the Platting Fee Ordinance got to be onerous because it cost more for the fee than the property was worth. Council with Planning .and Zoning agreed to get rid of the Ordinance. In its place the Tax Increment Financing Zone was created to be able to widen and provide other infrastructure to Schertz Parkway. The Zone has a Board of Directors, Charter, Bi-Laws to govern the expansion of Schertz Parkway including sewer, water where necessary, widening of roadway, signs and landscape. Funding is as growth occurs on Schertz Parkway (increases in assessed valuation of the property). The Zone is entitled to 75~ of the increase in valuation. It is a 25 year program. We anticipate that it will be funded out closer to 10 instead of 25, meaning that the roadway can be built, bonded out and the Parkway Zone essentially will go away. No tax abatements can be given in this zone. It runs 1000 feet on either side of Schertz Parkway from the right of way. It is an 86 foot right of way road all -~.l~e..~.way down past Live Oak Road about 200 feet. This is also a reinvestment zone under State law. It is basically tax abatement in reverse. This is a very important long term project for the City of Schertz. Discussion on TIF Board members, commercial and residential growth. Foreign Trade Zone: All of the Tri-County Business park is a foreign trade zone. Major advantage is cash flow. You can bring import from a foreign country into the zone without paying duties until it is sold in the U.S. No expiration on this zone, although there are some reporting requirements. U.S. Department of Commerce can take away acreage from the zone if there is no activity. The process to do that is very long. This is totally a Schertz operation. Merchandise is taxable when you sell it or move it to another location out of the zone. One advantage is for light assemblers of electronic material. They can bring in parts from all over the world, assemble them there and pay duty on finished products sold in the U.5. Breakage is a write off. There are some significant cash/ advantages for anyone in that market. NAFTA is not something that is going to happen overnight, it is a fifteen year process. Having the Foreign Trade Zone is still beneficial for a company from Mexico or Canada to do business here. Freeport Tax: Schertz is one of the few areas in the State that have exempt Freeport tax at the City level, in both Counties, and both School Districts. Freeport tax is an inventory tax on goods that are in situs as of January 1 and have been there for at least 175 days. We have exempted that which is a plus for those companies who maintain a large inventory. There is still an inventory tax, but not the Freeport Tax. This is a significant tax savings. Chairman Borgfeld called for any questions, there were none. FAMILIARIZATION TOUR: Discussion of familiarization tour. Size of City, what's going on in the City. Mr. Sweatt discussed purpose saying that they wanted members to recognize the growth and needs of the community. Emergency services are straining at the seams. The police services' need for a facility. The central fire station needs for enlargement. Where is the growth going, and where it can grow. What the needs are. What legacy are we going to leave for the next generation. Are we satisfied or do we need to think about what growth areas to look at and be prepared for the next twenty years. Property areas were discussed. Randolph Air Force Base was discussed. Noise areas were discussed and uses for such; recreational facilities, parks, golf courses, soccer fields. We need to start planning and thinking what we need to do. Our City could go from 24 square miles to 46 square miles. Financing and needed improvements should be considered. Ms Sweatt asked if the annexation map might be brought to the next meeting, Mr. Sweatt said he would. Mr. Moreno discussed scheduling of what can be done as soon as possible. We need something around IH-35 that will be compatible as a central park. We need to connect IH-35 down to IH-10 so that we can have some green spaces, places to walk and play. We need to look at what's happening in surrounding areas as well as what's happening within the City. Ms. Sweatt said that this discussion was to get us ready to meet with the other Boards involved. Mr. Sweatt said that the Mayor and City Council wants to hear what ideas all the Boards have. They would like to see us thinking and planning together and also trying to find out ways to finance some of the needs of the City. Bond issues are the most likely means, we need to be prepared to start thinking about it. Mr. Williams said that the general public does not understand the needs of the City. He personally did not understand the needs prior to the tour. He feels that the major issue will be educating the public. The public needs to know how big Schertz is and the obligations that the different services have. Mr. Borgfeld added that the tour was very well put together. It gave information from the City's prospective as to what is involved in making the services available in the future. He recommended that if maps were available they be brought to the next meeting. He said that meetings need to be on a more regular basis. Ms. Sweatt reiterated Mr. William's statement that the education of the citizens of Schertz is very important. Chairman Borgfeld said that the Board needs to follow up with this and then discuss it at the next meeting. Called for comments from the Board. COMMISSION MEMBER COMMENTS: Mr. Sweatt suggested that a follow-up meeting should be held sometime in the next thirty days to try to get a joint group or some representatives back together. So when you are contacted, I urge that you attend the joint meeting. No other comments. STAFF COMMENTS: Mr. Marquez said that meetings need to be on a more regular basis. Alot is happening, for instance H.E.B. will break ground in September, 96 and open in March, 97. Randolph Brooks Credit Union breaking ground on 3009 shortly, behind Bill Millers. Every third Thursday of each month is how it was initially set up. Mr-.----~•- Borgfeld called for a motion that the Board meet on the third Thursday of each month. Mr. Vallance made the motion with an aside that the Board take care of the appropriate business in a prompt and efficient manner. Second by Ms. Sweatt. Motion carried unanimously. Mr. Marquez said that if there were any questions or concerns that need to be on the table for discussion to contact Mr. Borgfeld or Mr. Marquez and it will be put on the agenda. CHAIRMAN'S COMMENTS: Discussed Schertz Business Park, Pyka Properties, Inc., production office for aircraft. Mr. Vallance added that his temporary tennant will be moving out by the end of July, they have 60 days to remodel and the permanent medical people will be moving in there by September (Primary CareNet). Another group of doctors are talking about building another small building. He also wanted to discuss the next door neighbor's unsightly lot. They are dumping rock and asphalt all over the lot. The weeds are very high and people driving by have made reference to him about the aesthetics. This does not help the value of the adjoining properties. Mr. Sweatt said that they would have to look into deed restrictions and covenants. He did not think any city ordinance had been violated and felt it would be dealt with best through the deed restrictions and convenants. Mr. Borgfeld said that he would bring this up at the next Foundation meeting. He asked for additional comments, there were none. NEXT MEETING SCHEDULED: Mr. Borgfeld said that the next meeting date was set by prior motion and that it would be held July 18, 1996 at 7:00 p.m. ADJOURNMENT: Mr. Moreno made the motion to adjourn, Mr. Vallance seconded the motion. Motion carried. Lew Borgfeld arleen Eh ers Chairman Recording Secretary SCHERTZ DEVELOPMENT COMMISSION JUNE 13, 1996, 7:00 P.M. SIGN-IN SHEET 2 . ~J lLGl~fh'vt .s 3 . .l%~ r' ' 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24.