RENO-TAHOE AIRPORT AUTHORITY BOARD OF TRUSTEES FINANCE AND BUSINESS DEVELOPMENT COMMITTEE Minutes from the Meeting December 6, :00 a.m.

Transcription

1 RENO-TAHOE AIRPORT AUTHORITY BOARD OF TRUSTEES FINANCE AND BUSINESS DEVELOPMENT COMMITTEE Minutes from the Meeting December 6, :00 a.m. In Attendance: Lisa Gianoli, Trustee* Jenifer Rose, Trustee ** Adam Mayberry, Trustee* Jessica Sferrazza, Trustee Bill Eck, Trustee** Rick Murdock, Trustee* Jerry Hall, Trustee* Ann Morgan, Fennemore Craig Marily Mora, President/CEO Dean Schultz, Executive Vice President/COO Rick Gorman, Chief Financial Officer Tina Iftiger, Vice President of Airport Economic Development Dave Pittman, Director of Facilities & Maintenance Tony Osendorf, Manager of Budget & Finance Alex Kovacs, Senior Financial Analyst Joyce Humphrey, Manager of Purchasing & Materials Management Patrick North, Senior Internal Auditor Lora Robb, Manager of Airport Economic Development Laurie Weeks, Senior Manager of Properties Aurora Ritter, Real Estate Supervisor Ken Moen, Property Specialist II Audelia Esquivel, Administrative Assistant II Michael Dermody, Chairman & CEO, Dermody Properties Douglas Lanning, CFO Dermody Properties Casey Kreck, Senior Vice President of Finance, Dermody Properties John Griffin, Griffin Company Ron Wheeler, RDW Automotive TOPICS DISCUSSED: * Denotes Finance Committee member ** Denotes Finance Committee alternate 1. APPROVAL OF MEETING MINUTES FROM NOVEMBER 8, 2016 A motion was made by Trustee Mayberry, Seconded by Trustee Murdock, and the Committee unanimously approved the minutes from the November 8, 2016 Finance and Business Development Committee meeting. 2. PUBLIC COMMENT Page 1 of 7

2 3. ITEMS PRESENTED TO THE FINANCE AND BUSINESS DEVELOPMENT COMMITTEE FOR INFORMATION a. Review of Operating Results through October 2016 b. Review of Budget Transfers c. Review of Contracts and Professional Service Agreements through November 2016 d. Review of Legal Expenses through October 2016 e. Review of Board Budget through October 2016 f. Review of Legislative Consultants Budget through October 2016 The Committee had no questions regarding the reports outlined above. 4. ITEMS TO BE PRESENTED TO THE FINANCE AND BUSINESS DEVELOPMENT COMMITTEE FOR REVIEW AND RECOMMENDATION TO THE BOARD: a. #16(12)-40 AUTHORIZATION FOR THE PRESIDENT/CEO TO NEGOTIATE FINAL TERMS AND EXECUTE A NEW 6-YEAR COMMERCIAL LEASE AGREEMENT BETWEEN RDW AUTOMOTIVE AND THE RENO-TAHOE AIRPORT AUTHORITY FOR 13,540 SQUARE FEET OF COMMERCIAL SPACE AT THE COMMERCIAL BUILDING LOCATED AT 1186 TELEGRAPH STREET Staff gave a presentation recommending the Authorization for the President/CEO to Negotiate Final Terms and Execute a New 6-Year Commercial Lease Agreement between RDW Automotive and the Reno-Tahoe Airport Authority for 13,540 Square Feet of Commercial Space at the Commercial Building Located at 1186 Telegraph Street. Trustee Sferrazza mentioned that a similar lease agreement was presented at the previous Finance Committee Meeting and inquired as to how the RTAA staff determined the lease rate for the property in question. Staff stated that a market analysis was conducted comparing rental rates for similar facilities in the surrounding market, and that the functionality and age of the building were also taken into account. Trustee Gianoli stated that the RTAA is fortunate that an existing tenant is able to expand his business and utilize an adjacent property that might not have been leased otherwise. Trustee Mayberry expressed his appreciation for RDW Automotive and congratulated Mr. Wheeler on the business success. Page 2 of 7

3 A motion was made by Trustee Murdock, seconded by Trustee Hall, and the Committee unanimously recommended this item [#16(12)-40] go to the Board for approval at the upcoming Board meeting. b. #16(12)-42 AUTHORIZATION FOR THE PRESIDENT/CEO TO NEGOTIATE FINAL TERMS AND EXECUTE AN EXCLUSIVE MASTER DEVELOPMENT AGREEMENT WITH DP RTA STEAD, LLC TO SERVE AS THE EXCLUSIVE MASTER REAL ESTATE DEVELOPER AT THE RENO-STEAD AIRPORT, AND NEGOTIATE FINAL TERMS AND EXECUTE A 50-YEAR PHASE 1 GROUND LEASE WITH DP RTA STEAD, LLC OR ITS NOMINEE AT THE RENO-STEAD AIRPORT Staff gave a presentation recommending the Authorization for the President/CEO to Negotiate Final Terms and Execute an Exclusive Master Development Agreement with DP RTA Stead, LLC (Dermody Properties) to Serve as the Exclusive Master Real Estate Developer at the Reno-Stead Airport (RTS), and Negotiate Final Terms and Execute a 50-Year Phase 1 Ground Lease with DP RTA Stead, LLC or its Nominee, at the Reno-Stead Airport. Trustee Gianoli congratulated staff on the extensive chronology leading up to the agreement and mentioned how useful the presentation had been in helping her understand the proposed action. Trustee Hall inquired if there is documentation in the Master Agreement that requires the developer to provide construction testing results on the entire infrastructure, specifically Moya Boulevard. Staff responded that in the Master Development Agreement, there is no language specifically requiring the developer to provide testing results. However, before commencing construction of any facility on the project site, the developer must submit to the RTAA for its review, as part of the Tenant Improvement Process, a proposed development plan together with a set of plans and specifications. This particular process for land development was created by Airport Economic Development in conjunction with the RTAA Engineering Department. For this reason, staff stated that there is an RTAA Engineer on staff that has committed to working as Construction Manager on this project. As the project continues, staff will then look into the scale of the project and decide at that point if working with an outside construction management firm or agent is more viable. Staff stated that in order to hire an outside firm to provide testing and inspections, it would be above the President/CEO signing authority, and therefore staff would seek Board approval of any contract. Staff also stated that as Dermody Properties performs construction, inspections and acceptance of the infrastructure will need to be completed by the City of Reno and the appropriate utility company. Page 3 of 7

4 Trustee Hall asked if there is a process to evaluate and estimate the costs of the RTAA providing oversight or inspections to the buildings as they progress. Staff stated that the City of Reno Building Inspector will be inspecting the buildings for Certificates of Occupancy to be issued and that Dermody Properties is not just funding and constructing the facilities, but will also own and operate the facilities. Therefore, it is in their best interest to ensure high quality construction. Staff does not foresee any additional RTAA staffing resources being needed in the next couple of years; however, this situation could change if the RTAA benefits from a stronger economy, significant interest in new development, or there is major construction in progress. Trustee Hall inquired about the timing and deadlines to secure the initial infrastructure funding for the development. Staff stated the deadline for funding is July 1, Trustee Hall inquired if there are any other risk management issues that should be identified. Staff stated that as part of the agreement negotiation process, insurance terms and conditions were shared with the RTAA s insurance broker and both sides had their risk management advisors and legal teams review the agreement. Staff and Legal Counsel feel that there are no risk management issues at this time. Trustee Sferrazza disclosed that she worked as a consultant for Dermody Properties in early 2015, but has no financial interest at this time. Trustee Sferrazza asked about the status of infrastructure improvements for Moya Boulevard being handled by the Regional Transportation Commission (RTC). Trustee Sferrazza asserted that getting involved early with the RTC will make a significant difference when seeking funding from the State or Federal governments, or even from the RTC. John Griffin, of the Griffin Company, representing Dermody Properties, mentioned that he has been in discussions with both the Nevada Department of Transportation (NDOT) and the RTC, and as far as he is aware the RTC does not have that information in their Capital Improvement Plan (CIP) right now. In regard to the NDOT, Mr. Griffin mentioned that they are largely unaware of what is happening in the North Valleys, but that NDOT would like the opportunity to work with the RTAA. He also noted that there are more discussions that need to occur due to entitlement issues associated with railroad tracks that serve the Reno-Stead site. Trustee Sferrazza mentioned that the RTAA should coordinate with the other agencies involved in getting infrastructure projects incorporated into their ten (10) year CIP plan. She also mentioned that the infrastructure improvements need to be completed in order for this master development project to work. Page 4 of 7

5 Trustee Sferrazza also noted that the Regional Plan completed by the Truckee Meadows Regional Planning Authority indicates that there are not enough industrial properties in the region proposed and asked what this particular project would do as far as those calculations. Staff stated that the Reno-Stead Airport is identified in the regional plan and is included in the regional plan calculations already. NDOT has these calculations, but had not updated its future projects because this particular development project was not imminent. The data was given to them a year or so ago. Trustee Sferrazza suggested getting this information on the NDOT s radar with regard to the infrastructure improvements that will be required to I-395 and the Spaghetti Bowl area. Mr. Griffin stated that Dermody Properties is hesitant to put out any information publicly as far as the RTC and the City of Reno are concerned until RTAA Board approval of the Master Development Agreement is received. Trustee Sferrazza asked if this project has all the entitlements needed. Staff stated that all the zoning is in place; however, if a project is determined to be a project of regional significance then acquiring additional entitlements will be necessary. At that point, there may be some discretionary processes with the local jurisdiction. Trustee Sferrazza asked if there is a ground rent deferral on the second phase of the project, since there happens to be one on the first phase. Staff stated no, there is no rent deferral on the second phase, only on the first phase. If a rent deferral was requested, then that issue would have to be brought back to the Board of Trustees for consideration. Trustee Sferrazza mentioned what a great opportunity this project will be for employment for the region and thanked Ann Morgan, General Counsel, and staff for all their efforts in getting to this point. Trustee Mayberry asked if there will be a building completed and a new tenant in place in fiscal year Staff stated that the assumption is that on January 1, 2020, there will be a tenant on RTS property paying rent to Dermody Properties, who will in turn be paying ground rent to the RTAA. Staff mentioned that Dermody Properties is obligated to pay rent to the RTAA regardless of whether the property is rented or not by said date. Trustee Mayberry asked about the current outlook for prospective tenants. Staff stated that the RTAA has received some unsolicited inquiries. Mr. Griffin also mentioned that through Dermody Properties he has received a healthy mix of inquiries and interest from Fortune 500 tech companies, data centers, and some much larger clients. He noted that some of those companies are here now; others he foresees as being out five (5) or more years. Page 5 of 7

6 Trustees Mayberry, Murdock, and Gianoli congratulated and thanked the entire team for working on this significant and potential historic agreement, and for a job well done. A motion was made by Trustee Murdock, seconded by Trustee Mayberry, and the Committee unanimously recommended this item [#16(12)-42] go to the Board for approval at the upcoming Board meeting. c. #16(12)-43 ADOPTION OF RESOLUTION NO. 530: A RESOLUTION RESCINDING RESOLUTION NO. 510, TO SET THE NEW COMMERCIAL GENERAL AVIATION MINIMUM STANDARDS FOR THE PROVISION OF COMMERCIAL GENERAL AVIATION SERVICES AT RENO-TAHOE INTERNATIONAL AIRPORT Staff gave a presentation for the Adoption of Resolution No. 530: A Resolution Rescinding Resolution No. 510, to set the New Commercial General Aviation Minimum Standards for the Provision of Commercial General Aviation Services at Reno-Tahoe International Airport (RNO). Trustee Murdock thanked Ms. Morgan, RTAA staff, and the entire Committee on a job well done and asked whether the General Aviation Minimum Standards (GAMS) apply to both RNO and the Reno-Stead Airport (RTS). Staff answered no, the GAMS at this point apply only to RNO, although staff is working on establishing GAMS for RTS as well. Trustee Mayberry requested that the preamble of the GAMS document include the wording outlined in the presentation regarding flexibility to update the document as needed for the time or changes in technology and the general aviation environment. Both Trustees Sferrazza and Murdock agreed with this suggestion and staff agreed to make this change in the document before consideration by the Board of Trustees at the upcoming Board meeting. A motion was made by Trustee Mayberry, seconded by Trustee Murdock, and the Committee unanimously recommended this item [#16(12)-43] go to the Board for approval at the upcoming Board meeting, with the amended language adjustment. d. #16(12)-44 APPROVAL OF PASSENGER FACILITY CHARGE (PFC) APPLICATION C-00-RNO, IN THE AMOUNT OF $16,222,817, TO CONSTRUCT/ACQUIRE VARIOUS CAPITAL ASSETS FOR THE RENO- TAHOE INTERNATIONAL AIRPORT Staff gave a presentation requesting the Approval of Passenger Facility Charge (PFC) Application C-00-RNO, in the amount of $16,222,817, to Construct/Acquire Various Capital Assets for the Reno-Tahoe International Airport. Page 6 of 7

7 Trustee Murdock asked about the reaction by the airlines and if they are in agreement with the projects being funded as outlined in the presentation. While a formal PFC consultation meeting with the airlines is scheduled for December 15, 2016, staff indicated the proposed projects benefit all users of the RNO airfield. In addition, use of passenger facility charges to fund the projects eliminates any project costs being recovered through airline rates and charges, either directly or indirectly through a lower revenue sharing. A motion was made by Trustee Mayberry, seconded by Trustee Hall, and the Committee unanimously recommended this item [#16(12)-44] go to the Board for approval at the upcoming Board meeting. 5. ITEMS PRESENTED TO THE FINANCE AND BUSINESS DEVELOPMENT COMMITTEE FOR APPROVAL 6. ITEMS PRESENTED TO THE FINANCE AND BUSINESS DEVELOPMENT COMMITTEE FOR DISCUSSION 7. GENERAL MEMBER COMMENTS, QUESTIONS AND ITEMS FOR FUTURE COMMITTEE MEETINGS 8. PUBLIC COMMENT 9. ADJOURNMENT LG: RG/ae The meeting was called to order at 9:02 a.m. and was adjourned at 10:18 a.m. Page 7 of 7