Industrial Development Authority

MINUTES OF THE TOWN OF GILBERT, INDUSTRIAL DEVELOPMENT AUTHORITY SEPTEMBER 27, 2023, 8:00AM MEMBERS PRESENT: Kevin DeRosa, Robert Elmer, Val Gale (via Teams), Emilio Gonzalez, Alan Kranzberg (via Teams), Christopher Smith, Brett Thorpe, and Eric Zite STAFF PRESENT: Dan Henderson, Jennifer Graves, Chris Payne, Jocelyn Smith COUNCIL LIAISON ABSENT: Councilmember Kathy Tilque OATHS OF OFFICE: Robert Elmer, Kevin De Rosa, and Brett Thorpe were sworn in and appointed as Directors by Jennifer Graves, GIDA Staff Liaison. CALL TO ORDER AND ROLL CALL: Vice President DeRosa called the meeting to order at 8:03 a.m. Jennifer Graves did the roll call and declared a quorum present. COMMUNICATIONS FROM CITIZENS Vice President DeRosa 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 26, 2022 meeting minutes A MOTION was made by Secretary Kranzberg and seconded by Director Smith to accept and approve the minutes of September 26, 2022. 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 Kevin DeRosa as President, Alan Kranzberg as Vice President, Emilio Gonzalez as Secretary, and Robert Elmer as Treasurer. Motion passed 8-0. 3. Annual Financial Report – Acceptance of annual financial report for fiscal year ending June 30, 2023 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 $17,109 and for the period of June 30, 2023, the account ended with a balance of $17,104. The difference would be the fees on the account. A MOTION was made by Vice President Kranzberg and seconded by Treasurer Elmer to approve the FY 2023 financial report. Motion passed 8-0. GIDA Minutes, dated 9/27/23 1|Page From members of the Authority on current & future events President DeRosa - Requested an update on the following items mentioned in the September 26, 2023 minutes.  The status of the business interested in pursuing the use of the IDA program to fund their business. Jennifer Graves responded that Gilbert followed up several times and the business did not pursue the idea.  The status of hiring a new marketing person for Gilbert’s Office of Economic Development. Jennifer Graves responded that we hired a new marketing person in May. Michelle Streeter comes with most recently having spent 15 years in destination marketing with Visit Mesa. In the next couple of months, Michelle will be promoting a marketing campaign about our business assistance programs and the IDA is one of them for growing businesses.  The status of hosting an IDA event. Dan Henderson responded that we did not specifically hold an IDA event, but we do meet with The Chamber and business community regularly where the IDA program is discussed. Vice President Kranzberg – He spoke with one of the vendors at the Farmer’s Market earlier this year, and they informed him that they are interested in a retail location in Gilbert. They currently have a commercial kitchen in Chandler. There may be an opportunity to look at businesses in the Farmer’s Market to potentially grow their business in Gilbert. Jennifer Graves - Mike Martella from the Economic Development team has been speaking with that business on some leads and opportunities. Vice President Kranzberg - Another popular vendor at the Farmer’s Market is Benny Blanco Tortillas. Jennifer Graves - Hayden Flour Mills moved into the Northwest Employment Area. Barrio bread comes from Tucson to that location to make bread. Gilbert just did a feature on them. There are some opportunities for partnerships in that space if a business is interested. President DeRosa - How did the feature go out? Jen Graves responded that it was sent on social media. President DeRosa asked if this is something that goes on Gilbert Digital? Jennifer Graves responded that yes it does. Vice President Kranzberg – It would be beneficial for Gilbert HOA’s to have their management companies have local offices made available for meetings. That would be a potential business GIDA Minutes, dated 9/27/23 2|Page  MINUTES OF THE TOWN OF GILBERT, INDUSTRIAL DEVELOPMENT AUTHORITY SEPTEMBER 27, 2023, 8:00AM that can be brought to Gilbert. Currently use HD South and McQueen Activity Center to conduct meetings. Director Smith - As a refresher, what can the IDA do and the businesses that the IDA can help? Dan Henderson – The IDA is essentially a congressional program with specific guidelines for who can access this program. Generally, not-for-profits, industrial users, and multi-family residential are projects that are eligible. Nationally, there are port authorities that administer them as well. Upon the establishment of the authority, Gilbert passed a resolution that suggested that the Gilbert IDA would not fund multi-family projects. Gilbert is restricted to industrial users and not- for-profit. Generally, the not-for-profits that use these programs are charter schools. The outreach for the Gilbert IDA has predominately been to those industrial groups and educational users who can benefit from the program. Gilbert is in competition locally and nationally with other IDAs from the State, County, and Phoenix. Gilbert IDA has not had a lot of businesses that have used this program during its life cycle. A primary audience is those legal and accounting groups that help their businesses structure their financing. Director Smith – The board was expanded so that when a project does come along, the IDA can get together and act quickly. Jennifer Graves – Gilbert would like to get some more users. As we continue to grow our higher education initiatives, there may be a potential opportunity. As interest rates continue to rise, the IDA may become more attractive. President De Rosa requested that the IDA Directors introduce themselves and provide a little background on what they do for a living. Jennifer Graves gave an Economic Development update.  Working on increasing our industrial inventory. Industrial is really moving right now. Gilbert is interested in high-value manufacturing and clean technology.  Economic Development just redid their Strategic Plan and reoriented some of our target industries adding photonics and optics given sensors and some of the supply chain for the semiconductor industry. Beefed up on clean technology that spans the gamut of GIDA Minutes, dated 9/27/23 3|Page  industries and then certainly office and professional business services continue to be a focus.  There is a lot of available office space right now; probably the highest in terms of vacancy rate, but industrial is lean, with 1 to 2% vacancy. Even with industrial when the new product comes online in Mesa and Gilbert, that product is being taken up pretty quickly.  There is a lot of warehouse and distribution. The extension of the 202 Loop around South Mountain to connect to Interstate 10 has really opened up the East Valley. With this extension, there are more leads and interest in warehousing and distribution, but it's more localized and small-scale.  There are two projects that went through the Major General Plan amendment process over the last year and a half. One project was Lindsey and Germann at the new 202 interchange; privately owned. It was rezoned from business park to light industrial. Our Economic Development team is actively trying to find a developer for that site. The other project is The Ranch project which Economic Development has been working with since the Fall 2021. It took until 2023 to get through the process with a lot of hard work from residents, Town Staff, and the Developer group. The Ranch was reconfigured, but we will most likely not see industrial product delivered until the 2nd quarter of 2025.  Power Road Corridor - small light industrial Power and Elliott; Warner Commons provided 600,000 sf of space and almost full. Industrial is still viable, but we don’t have a lot of product to deliver. Gilbert Spectrum northwest employment area – Building 3 and one more space on their site for a 100,000 sq foot building.  Office is challenging. We are communicating with Rivulon and office space in the Heritage District.  On the Business Development and Marketing side, we are fully staffed with a new marketing person and Madyson Bradford, Economic Development’s new Data Scientist, joined us in January.  Leads coming from the Greater Phoenix Economic Council (GPEC), and the Arizona Commerce Authority. Arizona has a lot of users looking for mega sites. Not every state can support each mega site. We are lean on the power grid – APS and SRP are 18-24-36 months out if you need a transformer and a new substation. Economic Development is focused on the smaller user and solicit leads for business retention and expansion. Treasurer Elmer – what is the office space being repositioned into? Jennifer Graves – right now, it’s not. The owners are looking at opportunities to split the larger space down into smaller spaces. Dan Henderson – there is a lot of office space in Rivulon and in the Heritage District. Neither space is inexpensive. GIDA Minutes, dated 9/27/23 4|Page  MINUTES OF THE TOWN OF GILBERT, INDUSTRIAL DEVELOPMENT AUTHORITY SEPTEMBER 27, 2023, 8:00AM Director Zite – Asked if the consolidation of offices and a smaller footprint have something to do with working remotely. Dan Henderson and Jennifer Graves responded yes. President DeRosa – What is the timeline for the 9-acre parcel? Dan Henderson responded that we are currently in discussions on the timing. Treasurer Elmer – how much of the project is office space? Dan Henderson – a little more than 100,000 square feet identified as office. The Office building will provide a parking structure, a considerable component of that development. President DeRosa – What about data centers in Gilbert? Dan Henderson responded that we are open to listening to concepts on data centers. Chris Payne responded that Council passed a Water Allocation Policy creating different levels – Tier 1, Tier 2, and Tier 3. A Developer comes in and falls into a tier and basically brings their own water. The data center would have to provide water rights to the Town. Under the Water Allocation Policy, Council has the discretion. Dan Henderson also stated that the semiconductor is still a supply that we are interested in. The supply chain for a semiconductor would be a better fit for Gilbert and has seen a lot of opportunity and successes in that area. ADJOURNMENT A MOTION was made by Vice President Kranzberg and seconded by Director Smith to adjourn. Meeting adjourned at 8:56 a.m. __________________________________ Kevin DeRosa, President GIDA Minutes, dated 9/27/23 5|Page