AGENDA. Property related to downtown development CERTIFICATION

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1 City of New Braunfels Industrial Development Corporation Board of Directors Regular Meeting New Braunfels City Hall, Council Chambers 550 Landa St., New Braunfels, Texas January 19, :00 P.M. Call to Order: January 19, 2017, 5:00 p.m. Call of Roll AGENDA 1. Call to Order. 2. Citizens Communications. 3. Approval of the minutes from the December 15, 2016 regular meeting. 4. Approval of the Treasurer s Report. 5. Presentation and discussion of Advisory Team report. 6. Discussion and possible action adopting a schedule of regular meetings for calendar year Discuss and consider approval of material loan terms for a previously approved expenditure to ASA Properties, LLC and its related assigns. 8. Public hearing, discussion and possible action on an expenditure of up to $450,000 to the City of New Braunfels for a project to operate and maintain Landa Park Golf Course at Comal Springs facilities. 9. Executive Session: a. Deliberate Issues Regarding Economic Development Negotiations in accordance with Section of the Texas Government Code. Project Saturn Six Project Star Tech Project Phoenix b. Deliberate and consider the purchase of, exchange, lease or value of real property in accordance with Section , of the Texas Government Code, including but not limited to: Property related to downtown development 10. RECONVENE INTO OPEN SESSION AND TAKE ANY NECESSARY ACTION RELATING TO THE EXECUTIVE SESSION AS DESCRIBED ABOVE. 11. Adjournment. CERTIFICATION I hereby certify the above Notice of Meeting was posted on the Bulletin Board at the New Braunfels Municipal Building on January, 2017 at A.M / P.M. Patrick Aten, City Secretary

2 Faf Agenda Item Memorandum January 19, 2017 TO: FROM: RE: NBIDC Board Jeff Jewell, Economic Development Manager Agenda Item #3 Approval of minutes. The minutes from the December 15, 2016 regular meeting are attached. Fiscal Impact: None Attachments: December 15, 2016 regular meeting minutes TEL FAX LANDA ST. NEW BRAUNFELS, TEXAS 78130

3 Minutes New Braunfels Industrial Development Corporation Regular Board Meeting 5:00 p.m., Thursday, December 15, 2016 City Hall 550 Landa Street The meeting was called to order by President Hansmann at 5:07 p.m. Present: President Stuart Hansmann, Vice President Ashley Davison, Secretary Neal Linnartz, Treasurer Jim Poage, Director John Archer, and Director Brian Cox. Director Kathy Meurin arrived at 5:10 p.m. due to access issues. Chamber staff present: Rusty Brockman and Michael Meek. City officials and staff present: Val Acevedo, Kristi Aday, Robert Camareno, Travis Cochran, Stacey Dicke, Chad Donegan, Jeff Jewell, Martie Simpson, Jared Werner, and Ken Wilson. Item No. 2 was Citizens Communications. Hansmann announced this item. No one was present to speak. Item No. 3 was approval of the minutes from the November 17, 2016 regular meeting. Poage moved to approve the minutes with a second from Davison. The motion was approved 6-0. Item No. 4 was the Treasurer s Report presented by Simpson using the information provided to the board for the month ending September 30, Simpson indicated sales tax was up 6.5% in October over the same time in 2015 and 6.9% year-to-date over Poage moved to approve the Treasurer s Report with a second from Davison. The motion was approved 7-0. Item No. 5 was presentation and discussion of the Advisory Team Report. Meek called attention to the handouts provided to the board. The Advisory Team Briefing Summary from December 2 was reviewed. Meek also presented the 2016 Demographic Profile and the 2016 Economic Benchmarks which are finalized and had been presented to City Council on December 12, The final printing of the Benchmarks is in process and will be ready for distribution by January 3, Meek thanked Holly Covington for her work on these two data pieces. Item No. 6 was approval of an expenditure of $5,000 for a Gold Sponsorship at the Alamo Area Growth Summit November 9, 2016 at the Pearl Stables. Meek explained the importance of this event sponsored by the San Antonio Business Journal. He indicated there is money in the miscellaneous line item of the Chamber s contract budget with the NBIDC. Meek indicated that line item has $10,000. There was no discussion. Linnartz moved to approve the request and Davison seconded the motion. The motion was approved 7-0. Item No. 7 was presentation and discussion concerning the operations and financial position of the Landa Park Golf Course at Comal Springs. This item was introduced by City Manager Robert Camareno using a PowerPoint. He then introduced Parks and Recreation Director Stacey Dicke to give the history of the golf course project (also using the PowerPoint). Dicke then introduced Chad Donegan, Golf Course Pro, to review course usage data. Jared Werner, Assistant City CFO, then reviewed the financial position of the golf course which did not meet revenue projections in the fiscal year. The request of staff was for $450,000 to cover debt service. Camareno wrapped up the presentation answering questions and offering to meet individually with NBIDC board members. He has retained a consultant to make recommendations on the future operations of the course. He also asked that this item be placed on the January 19, 2017 regular meeting of the NBIDC for public hearing and possible action.

4 Item No. 8 was public hearing, discussion and possible action concerning a project expenditure of up to $25,000 for a Professional Services Agreement for legal services related to the broadband study program. Kristi Aday, Assistant City Manager, presented this item. She indicated this was necessary since the study was now at a point needing legal counsel to proceed with the development of an RFP being done by Magellan. She indicated Baller Stokes and Lide, PC was a firm highly respected in this type of work and had been used by NBU. Aday answered questions from the Board. Davison moved to approve the motion and Director Cox seconded. The motion was approved 7-0. Item No. 9 was Executive Session. Hansmann announced there was no items for an Executive Session. The meeting was adjourned at 7:02 p.m. Approved by: Stuart Hansmann President Attest: Neal Linnartz Secretary

5 New Braunfels Industrial Development Corp. Financial Statement As of December 31, 2016 FY Adopted Budget FY Amended Budget Approved Projects (Balance BOY) Fiscal YTD Approved Projects (Remaining Balance) Beginning Fund Balance $ 13,178,241 $ 13,178,241 $ 13,178,241 Revenue: Sales Tax $ 6,176,665 $ 6,176,665 $ 446,721 Interest Income 30,000 30,000 12,500 Downtown Restroom Donations 52,500 Reimbursements 3,100 Loan Payments 64,000 64,000 24,990 Total Revenue $ 6,270,665 $ 6,270,665 $ 539,811 Total Available Funds $ 19,448,906 $ 19,448,906 $ 13,718,052 Expenditures: Administrative and Promotional Expenditures City of New Braunfels Contract $ 137,500 $ 137,500 $ 6,064 Miscellaneous - Annual License $ 5,000 $ 5,000 Chamber of Commerce Contract 430, ,623 58,421 National Development Council Contract - 12,000 6,000 Downtown Parking Lease 13,500 13,500 1,500 Program Expenditures Current Projects/Incentives Airport Utility Extensions - Hangar/Taxiway 2,300,000 2,258,327 2,258, ,257,842 Airport Utility Extensions - Water/Sewer/Road 261, ,309 6, ,441 Alamo Area Academies ( ) 69, , , ,000 ASA Properties 1,600,000 1,600,000 1,600,000 CBE Companies, inc. 250, , , ,000 Center for Entrepreneurship , , ,359 - Center for Entrepreneurship - Improvements 46,000 46,000 46,000 CGT U.S. Limited 100, , ,000 CTTC Expansion - Phase II 147, , , ,333 HEB 800, , ,000 IBEX 200, , , ,000 Land Acquisition 185, , ,969 Land Acquisition 900, ,000 27, ,801 Landa Street - Transportation Enhancement 160, , ,210 40, ,543 Loop 337 Expansion 1,500,000 1,500,000 1,500,000 1,500,000 Magellan - Feasibility Study (Phase 2) 57,200 56,977 51,990 7,901 44,089 Main Street Partners - Landa Bridge 109, ,312 Nexus Medical Consulting, inc. 185, , ,428 37,143 74,285 Pegasus Planning and Development - 21,000 12,000 9,000 Stream Realty 500, , , ,000 Titan Enterprises (Secondary) 600, , , ,000 VBM New Braunfels Acquisition Infrastructure 85,000 85,000 85,000

6 New Braunfels Industrial Development Corp. Financial Statement As of December 31, 2016 FY Adopted Budget FY Amended Budget Approved Projects (Balance BOY) Fiscal YTD Approved Projects (Remaining Balance) Strategic Budget Initiatives Community Recreation Center - Aquatics 2,500,000 2,500,000 2,500,000 2,500,000 Community Recreation Center - Gym 3,200,000 3,200,000 3,200,000 3,200,000 Community Recreation Center - Party Room 100, , , ,000 Amateur Sports Complex Feasibility Study - 28,230 28,230 18,130 10,100 Downtown Master Plan (Castell/Garden Area) 146, , ,502 32, ,124 County Line Trail Extension 49,150 49,150 49,150 Downtown Restrooms 470, , , ,000 Debt Service Payments Debt Service Reserve - Park Improv Proj 611, ,154 CO Series 2012 CO Series ,759 76, Refunding 244, , Certificates of Obligation 311, , Refunding 7,228 7, Refunding 431, ,275 Total Expenditures 14,655,916 18,772,495 16,116, ,115 15,822,989 Ending Fund Balance $ 4,792,990 $ 676,411 $ 13,352,937

7 New Braunfels Industrial Development Corp. Approved Projects December 31, 2016 NBIDC Date Approved Council Original Amount Approved Amount Remaining Beginning of Year Fiscal YTD Balance Remaining Current Projects/Incentives Airport Utility Extensions - Hangar/Taxiway October 22, 2015 November 9, ,400,000 2,258, ,257,842 Airport Utility Infrastructure July 23,2015 August 10, , ,309 6, ,441 Alamo Area Academies ( ) October 22, 2015 November 9, , , ,000 ASA Properties February 18, 2016 February 22, ,600,000 1,600,000 1,600,000 CBE Companies, inc. July 31, 2014 September 8, , , ,000 Center for Entrepreneurship July 23, 2015 October 12, , Center for Entrepreneurship July 21, 2016 September 12, , , ,359 - Center for Entrepreneurship - Improvements August 18, 2016 September 12, ,000 46,000 46,000 CGT U.S. Limited July 21, 2016 September 12, , , ,000 CTTC Expansion August 3, 2015 August 10, , , ,333 HEB August 3, 2015 August 24, , , ,000 IBEX September 26, 2013 September 30, ,050, , ,000 Land Acquisition June 30, 2016 August 1, ,500, , ,969 Land Acquisition October 4, 2016 October 10, , ,000 27, ,801 Landa Street Transportation Enhancement May 23, 2016 May 23, , ,210 40, ,543 Loop 337 Expansion August 3, 2015 August 10, ,500,000 1,500,000 1,500,000 Magellan - Feasibility Study (Phase 2) February 11, 2016 April 11, ,200 51,990 7,901 44,089 Magellan - Legal December 15, 2016 January 9, ,000 - Main Street Partners - Landa Bridge June 30, 2014 July 28, , , ,312 Nexus Medical Consulting, inc. June 4, 2014 June 23, , ,428 37,143 74,285 Pegasus Planning and Development July 21, 2016 August 22, ,000 21,000 12,000 9,000 Stream Realty(USRLP I-35 Logistics) February 11, 2016 February 22, , , ,000 Titan Enterprises (Secondary) December 10, 2015 December 14, , , ,000 VBM New Braunfels Acquisition Infrastructure October 22, 2015 November 9, ,000 85,000 85, Strategic Budget Initiatives - Community Recreation Center - Aquatics and Improv April 14, 2015 April 27, ,500,000 2,500,000 2,500,000 Community Recreation Center -Gym and Improv April 14, 2015 April 27, ,200,000 3,200,000 3,200,000 Community Recreation Center -Party Room and Improv April 14, 2015 April 27, , , ,000 Amateur Sports Complex Feasibility Study August 3, 2015 August 10, ,000 28,230 18,130 10,100 Masterplan Service for City Hall Property October 22, 2015 November 9, , ,502 32, ,124 County Line Trail Extension September 17, 2015 October 12, ,000 49,150 49,150 Downtown Parking Study October 22, 2015 November 9, , Downtown Rotary - Restrooms July 21, 2016 August 22, , , ,000 Total Commitments 22,741,641 16,116, ,130 15,822,989

8 Balance Sheet YTD ASSETS Cash & Marketable Securities $ 13,868,527 Current Sales Tax Receivable $ 653,015 CURRENT ASSETS $ 14,521,542 Long term assets Land held for investment $ 4,050,000 Equipment $ 650,000 Accumulated Depreciation $ (90,000) Notes Receivable $ 3,459,536 Three year sales tax receivable $ 19,118,128 TOTAL ASSETS $ 41,709,206 LIABILITIES AND NET WORTH Current Liabilities Accounts Payable & Accrued liabilities $ 365,623 Incentives/Projects payable $ 15,100,255 CURRENT LIABILITIES $ 15,465,878 Long Term Obligations $ 16,028,455 Less: Current Portion of Debt $ (1,683,079) TOTAL LIABILITIES $ 29,811,254 Shareholder's Equity $ 11,897,952 TOTAL NET WORTH $ 11,897,952 TOTAL LIABILITIES AND NET WORTH $ 41,709,206

9 Fa Agenda Item Memorandum January 19, 2017 TO: FROM: RE: NBIDC Board Jeff Jewell, Economic Development Manager Agenda Item #6 Discussion and possible action adopting a schedule of regular meetings for calendar year The NBIDC board is scheduled to meet the third Thursday of every month in 2017 with the exception of two possible meeting dates. This agenda item provides official notice as to any proposed changes to that schedule for inclusion in the official calendar of meetings. For calendar year 2017, these meetings will be held: January 19 February 16 March**** (TBD) April 20 May 18 June 15 July 20 August 17 September 21 October 19 November 16 December 14 March 2, 2017 would be two weeks after the February meeting. March 16, 2017 would take place during Spring Break. March 23, 2017 is the same evening as the Texas Legislative Conference. March 30, 2017 would be three weeks before the April meeting. This is the second Thursday of the month so as not to conflict with the holidays. Attachments: None TEL FAX LANDA ST. NEW BRAUNFELS, TEXAS 78130

10 Faf Agenda Item Memorandum January 19, 2017 TO: FROM: RE: NBIDC Board Jeff Jewell, Economic Development Manager Agenda Item #7 Discuss and consider approval of material loan terms for a previously approved expenditure to ASA Properties, LLC and its related assigns. Background: The Veramendi Water Improvement District (Veramendi) is a 2,400 acre mixed-use development to be developed in compliance with the Development Agreement approved by City Council on February 25, 2013 in the City s consent to the creation of the Comal County Water Improvement District No. 1 (WID). The subject property is located within Veramendi, north of Loop 337 and east of the Oak Run subdivision. Sector Plan 1 is the first sector plan for Veramendi and is facilitating the development of the elementary school approved in the 2015 bond election for the New Braunfels Independent School District (NBISD). The City Council agreed to accept Sector Plan 1 as a first phase in what will ultimately be a 100 acre sector plan. This sector plan includes approximately acres and will be developed in compliance with the DDCD. Additionally, NBISD is requesting that approval of the Sector Plan be subject to two conditions: 1) that a temporary construction road or haul road be built for construction vehicle access to the school site; and 2) that the Sector Plan include provisions for an additional public roadway for vehicular access to the completed Elementary School. On Attachment C, the road is shown as Roadway B. At its meeting on February 18, 2016, the NBIDC Board of Directors unanimously voted to provide a loan up to $1.6 million to ASA Properties to design and construct a portion of the road that will ultimately connect at the intersection of Oak Run Parkway and Eskola. The NBIDC s contribution is limited to that portion of the project within the Mixed Use TEL FAX LANDA ST. NEW BRAUNFELS, TEXAS 78130

11 Faf Employment and Large Format Retail Planning sub areas as depicted on the Master Framework Plan. On Attachment C, this portion is delineated in red as the commercial section. This road extension is approximately 1,800 feet from Loop 337 through the extent of these planned business land uses. The final design and cost of the roadway is not known with certainty at this juncture so the NBIDC and developer are both proposing a due diligence period to undertake further studies. Since approval by City Council in February 2016, ASA has continued to prepare the final land use and master plans that would finalize the road s alignment. They are prepared to move into final design with their engineering team and have requested the loan now be funded. Loan Terms: The loan terms are detailed in Attachment A, but the significant terms are as follows: Amount: $1,600,000 Security: Term: Interest: Principal Repayment: Deed of trust for real property located within the Veramendi project, as confirmed by independent appraiser, with value of $1.6 million. The NBIDC will maintain a first lien position. If the secured land is sold, a replacement security must be provided thirty (30) days prior to the sale. 10 years from the date of signature. The parties shall endeavor to complete and execute all necessary documents prior to February 28, First 5 years, no interest assessed. Years 6-10, 100 basis points below fixed prime. The prime rate shall be the WSJ Prime Rate at the close of business on February 1, Interest payable within thirty (30) days of the loan s anniversary. The loan is interest only and principal repayment will not occur except at the lump sum repayment at the end of the loan term. TEL FAX LANDA ST. NEW BRAUNFELS, TEXAS 78130

12 Faf Repayment: Annual lump sum payment of principal and interest. Default: Failure to make interest and principal payment according to the terms above shall constitute a default. If default extends for 60 days, the lender can exercise its security, Cost of exercising security to be withheld from sales proceeds if secured land is sold by Lender. Fiscal Impact: As opposed to a full distribution up front, up to $1,600,000 will be provided to ASA as the work is completed. Payment to be made upon provision of invoices which show costs attributable to commercial portion of Borchers Blvd. Where survey, engineering or construction costs incurred under a single cost relates to the whole of Borchers Blvd, the proportion attributable to the commercial section will be identified in any drawn down by the Borrower. The attributable portion shall be certified by the design engineer and approved by the City Engineer or his designee prior to the approval and payment of a loan distribution. Attachments: Attachment A- draft terms sheet Attachment B- NBIDC resolution Attachment C- Road exhibit TEL FAX LANDA ST. NEW BRAUNFELS, TEXAS 78130

13 Proposed Term Sheet ASA Properties, LLC/Veramendi PE-Brisbane, LLC This term sheet sets forth the principal terms proposed for the loan to Veramendi PE-Brisbane LLC., a registered Texas Limited Liability Company ( the Company ). No legally binding obligations will be created by this Term Sheet until definitive agreements are executed and delivered by all parties. This Term Sheet is not a commitment to invest any public funds and is conditioned on the final approvals of New Braunfels Industrial Development Corporation ( NBIDC). Project: Requested Incentive: Security: Term: Interest: On February 18, 2016, the NBIDC Board of Directors voted to provide a loan up to $1.6 million for the Veramendi project for the design and construction of a portion of the road that will connect at the intersection of Oak Run Parkway and Eskola. The NBIDC s contribution is limited to that portion of the project within the Mixed Use Employment and Large Format Retail Planning sub areas as depicted on the Master Framework Plan. ASA Properties has requested that the related development entity, Veramendi PE-Brisbane, LLC, be the entity receiving the loan and responsible for repayment and fulfilling the conditions as detailed in this terms sheet. The City Council approved this project expenditure on February 22, The Company is requesting a loan to fund the approximate 1,800 feet from Loop 337 through the extent of the planned business land uses. The previously approved loan amount is $1,600,000. Deed of trust for real property located within the Veramendi project, as confirmed by independent appraiser, with value of $1.6 million. The NBIDC will maintain a first lien position. If the secured land is sold, a replacement security must be provided thirty (30) days prior to the sale. 10 years from the date of signature. The parties shall endeavor to complete and execute all necessary documents prior to February 28, First 5 years, no interest assessed Years 6-10, 100 basis points below fixed prime. The prime rate shall be the WSJ Prime Rate at the close of business on February 1, 2017.

14 Interest payable within thirty (30) days of the loan s anniversary. Principal Repayment: Repayment: Drawdown conditions: Default: The loan is interest only and principal repayment will not occur except at the lump sum repayment at the end of the loan term. Annual lump sum payment of principal and interest. Payment to be made upon provision of invoices which show costs attributable to commercial portion of Borchers Blvd. Where survey, engineering or construction costs incurred under a single cost relates to the whole of Borchers Blvd, the proportion attributable to the commercial section will be identified in any drawn down by the Borrower. The attributable portion shall be certified by the design engineer and approved by the City Engineer or his designee prior to the approval and payment of a loan distribution. Failure to make interest and principal payment according to the terms above shall constitute a default. If default extends for 60 days, the lender can exercise its security, Cost of exercising security to be withheld from sales proceeds if secured land is sold by Lender. Authorizing Statute The NBIDC is permitted to undertake this project under Texas Local Government Code Chapter Agreed and Accepted: By: ASA Properties, LLC By: Veramendi PE-Brisbane, LLC. By: By:, Date: / /2017, Date: / /2017

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18 Faf Agenda Item Memorandum January 19, 2017 TO: FROM: RE: NBIDC Board Jeff Jewell, Economic Development Manager Agenda Item # Public hearing, discussion and possible action on an expenditure of up to $450,000 to the City of New Braunfels for a project to operate and maintain Landa Park Golf Course at Comal Springs facilities. The City is requesting this item be postponed to a later date, to be determined. The City Council will receive the results of a consultant study in early February and will provide policy direction to staff on the future direction of the golf course. With that information, staff will be better able to refine the request and answer NBIDC s questions about the future of the golf course. Fiscal Impact: None Attachments: None TEL FAX LANDA ST. NEW BRAUNFELS, TEXAS 78130