Industrial Development Authority

MINUTES OF THE TOWN OF GILBERT, INDUSTRIAL DEVELOPMENT AUTHORITY SEPTEMBER 26, 2022, 8:00AM MEMBERS PRESENT: Kevin DeRosa, Robert Elmer (via Teams), Val Gale (via Teams), Emilio Gonzalez, Alan Kranzberg, Keith Lamparter, Brent Yap, and Eric Zite MEMBERS ABSENT: Christopher Smith STAFF PRESENT: Dan Henderson, Jennifer Graves, John Baird (via Teams), Jocelyn Smith COUNCIL LIAISON PRESENT: Councilmember Kathy Tilque CALL TO ORDER AND ROLL CALL: President Lamparter called the meeting to order at 8:00 a.m. and declared a quorum present. COMMUNICATIONS FROM CITIZENS President Lamparter opened the floor to the public for any comments or communications for items not on the agenda. No communication from citizens. 1. Minutes—Consider approval of the September 20, 2021 meeting minutes A MOTION was made by Secretary Kranzberg and seconded by Vice President DeRosa to accept and approve the minutes of September 20, 2021. Motion passed 8-0. 2. Election of Officers—Conduct annual election of officers A MOTION was made by Director Gale and seconded by Secretary Kranzberg to nominate Keith Lamparter as President, Kevin DeRosa as Vice President, Alan Kranzberg as Secretary, and Brent Yap as Treasurer. Motion passed 8-0. 3. Annual Financial Report – Acceptance of annual financial report for fiscal year ending June 30, 2022 Jennifer Graves provided an update on the report. The IDA has a separate account for funds received for applications and bond issuances. The unreserved fund balance started with $17,158 and for the period of June 30, 2022, the account ended with a balance of $17,109. The difference would be the fees on the account. GIDA Minutes, dated 9/26/22 1|Page  A MOTION was made by Vice President DeRosa and seconded by Secretary Kranzberg to approve the FY 2022 financial report. Motion passed 8-0. GIDA Minutes, dated 9/26/22 2|Page From members of the Authority on current & future events Director Gonzalez – With the changes in rates, is Gilbert starting to see more of an uptick or more interest by applicants? Jennifer Graves responded that we haven't had any applicants that have had some interest, but most recently one of our local newer manufacturers expressed some interest in taking advantage of the IDA funds. We invited our bond counsel to talk with them about the process, and they were evaluating whether they wanted to move forward with that. The manufacturer is looking to expand their production line so more of that machinery and equipment type of cost. Director Gonzales – We are at the point now where we are competitive. Dan Henderson responded where the interest rates are and where they are likely to head, we do anticipate seeing more interest in the IDA program. The fees will continue to be a component that people will evaluate as to whether it does or does not make sense. In this economy and with these types of rates, that's where these programs begin to shine. Director Gonzalez –Are future tenants able to utilize the IDA to build out their spaces? Jennifer Graves responded that yes there are different types of ways that the IDA can be used. You can also use the IDA to purchase equipment and expand a company. Jennifer Graves – once Gilbert’s Office of Economic Development’s marketing person is on board, we plan on increasing the Town’s web presence to better promote Gilbert’s IDA. Councilmember Tilque – Could the IDA host an event to have business owners come in and learn more about how the IDA funding can be used? Vice President DeRosa – With the change in the economy over the past nine months or so, has Gilbert had a company change its mind about coming to Gilbert? Dan Henderson – From a typical business development pipeline perspective, there has not been a company that said we're coming to Gilbert and then because of the economy decided not to come to Gilbert. Inventory has historically been Gilbert’s issue with a 1.4% vacancy finding a space is the difficult part. Inventory is a critical component in the site selection process. In this economy, the build-to-suit options are not what clients are interested in. We GIDA Minutes, dated 9/26/22 3|Page have a lack of inventory; we are at a 1.4% vacancy. The client in the current climate is not changing. We see it more so in the small office. We are at 12% in office space vacancy. Jennifer Graves – We have about 1.1M square feet under construction in light industrial and about 1/3 is already spoken for. We have 12,000 square feet of light industrial coming online, which would be helpful for our smaller companies and folks that have smaller needs. GIDA Minutes, dated 9/26/22 4|Page From Council and staff liaison on current & future events Councilmember Kathy Tilque gave a Council update:  There are important aspects of industrial and what that means for the Town of Gilbert. We are looking at those high-paying jobs and clean industries here in Gilbert.  Council is working on getting information out to the public on the infrastructure that we put in place about the Water Plan.  Council Election coming up. There is one Council seat that will be up in November. It’s important to learn about the candidates and vote. Dan Henderson gave an Economic Development update. Gilbert’s economic development efforts are focused on increasing STEM and STEM-related employment opportunities. We have seen a lot of growth and a lot of expansion in the industrial sector. Not nearly as much with office. As it stands today, Gilbert’s land use mix is approximately 57% existing residential with about 14% non-residential. Of the non-residential land use, 8% is identified as commercial (largely associated with retail uses) and 6% is identified as employment (largely associated with office and industrial uses). Office-oriented employment developments in Gilbert total 5.7M square feet, with a 12% vacancy rate. Industrial uses almost entirely dominate our economic development pipeline. Most of what our focus and activity are on bringing in those employment uses. Particularly in the Southeast Valley, industrial is very popular. We are seeing an increasing number of jobs in the industrial sector. We’ve got Northrop Grumman looking to possibly expand. These require an industrial type of use, but those wages exceed $150,000 annual salary. Our pipeline for new business attraction projects over the past 2 years is almost entirely comprised of employment industrial-oriented projects. With the Town’s recent infrastructure expansion on the 202 at Lindsey Interchange, there is a significant commitment by not only the Town but our Town leadership and certainly our GIDA Minutes, dated 9/26/22 5|Page resident base, we are seeing a lot of that infrastructure being utilized. We categorize that infrastructure in terms of for every dollar that goes into public infrastructure, we hope to see $7.00 of commercial investment, or nonresidential investment, coming back into the Town. We are excited to see two land masses adjacent to the Lindsay Interchange come online. We have two major General Plan amendments going through that we are focused on. One is called the Ranch over at Morrison Ranch, and the other is the 90-acre site just south and east of the 202. Employers like Northrop Grumman, Silent Aire, Li-Cycle, and Corning, have all made manufacturing investments in Gilbert. Corning was a recent announcement. They are locating at about 315,000 square feet bringing about 300 jobs. In terms of upcoming events, we have a couple of new activities that are taking place in the Town.  October 6 - Concerts in the Park that start at 6:30 PM  October 21 - Gilbert Glow Run that starts at 6:00 PM  October 22 - Make a Difference Day for the Gilbert community ADJOURNMENT A MOTION was made by Vice President DeRosa and seconded by Secretary Kranzberg to adjourn. Meeting adjourned at 8:24 a.m. __________________________________ Keith Lamparter, President GIDA Minutes, dated 9/26/22 6|Page