Economic Development Authority

INDUSTRIAL DEVELOPMENT AUTHORITY of the CITY OF HAMPTON, VIRGINIA Minutes – Regular Meeting February 21, 2012 – 8:30 A.M. IDA Conference Room CALL Chair Joseph called the meeting to order at 8:30 a.m. TO ORDER DIRECTORS James R. Joseph, Anne W. Shuford, Wallace C. Arnold, Dr. Lewis PRESENT J. Bellinger, Perry T. Pilgrim, Leonard L. Sledge and Ben A. Williams, III. Also present were Secretary-Treasurer James L. Eason and IDA Attorney S. Frear Hawkins, II. STAFF Pete Peterson, Vanessa Valldejuli, Terry O’Neill, Susan Borland, PRESENT Michael Yaskowsky, Daniel Girouard and Teresa Hudgins GUESTS Robert E. Lindberg - NIA PRESENT Tevan Green – Citadel Logic Richard Lally – Innovate!HamptonRoads MINUTES Chair Joseph stated the Minutes of the January 17, 2012 IDA board meeting were distributed. A motion was made by Mr. Sledge and seconded by Ms. Shuford to approve the minutes as presented. The motion carried. LOAN Mr. Pilgrim reported the Loan Review Committee met on January PROGRAM 30, 2012. The Loan Status Report reflects one delinquency, Bobby’s Auto Shop, which has since been paid in full. The Committee considered three loan applications: Green Apple Concepts, a graphic design and printing firm located at 199 Queens Way, applied for a $200,000 loan to purchase new equipment. The Committee deferred action on this request until the applicant clarifies the source of collateral. Unitech, LLC, an advanced materials solution provider located at 228 Patterson Avenue, applied for a $400,000 loan to purchase equipment, materials, perform upgrades to existing facility, marketing and hire two employees. Unitech was one of the first incubator tenants and has expanded its business in Hampton since 1998. The existing IDA loan has been paid as agreed over the last five years. The Committee recommends the loan for approval based on the following terms and conditions:  Loan Amount: $275,000 Interest Rate: 3% Loan Term: Five years Amortization: Ten years Collateral: A first lien security interest in equipment to be purchased and other equipment currently owned by applicant Conditions: Loan payments set up on an automatic draft, copy of current lease and a landlord’s lienwaiver Dr. Bellinger asked several questions about this loan application. He also commented that the IDA should think about the loan process and types of loans being made. Mr. Pilgrim responded the Committee met with the applicant and reviewed the application along with all supporting documents. Additionally, the applicant is an established technology based company and existing loan client. Mr. Pilgrim further stated the Committee will be meeting to discuss the intent of the program, types of loans being made and effectiveness of the program. A motion was made by Mr. Pilgrim and seconded by Ms. Shuford to approve the loan as presented. A roll call vote was taken which resulted as follows: Ayes: Arnold, Bellinger, Pilgrim, Sledge, Williams, Shuford and Joseph Nays: None The C & D Store Development loan request will be considered after Closed Session. Ms. Newman with I Love Your Style attended the meeting to update the Committee on the status of her business closure in Coliseum Central. The Committee will continue to monitor this situation and take appropriate action. ECONOMIC Mr. Eason stated the updated Status Report on IDA Actions was DEVELOPMENT included in the package. Several items will be discussed in Closed REPORT Session. Other items of interest: ¾ The wetlands permit for Hampton Roads Center North has been extended until December 31, 2027 ¾ Hampton Roads Center South & Central maintenance has been accepted by the Hampton Roads Center Owners Association ¾ As a follow-up to questions on the financial statements ending June 30, 2011 regarding land values, a memo with schedules was included in the package. We will continue to work with Finance and report any progress in reconciling the differences 2  as reflected in the financial statements prepared by the Finance Department and the detailed listing maintained by the Economic Development Department and included in this package. HAMPTON Dr. Lindberg with the National Institute of Aerospace responded SCIENCE PARK to questions submitted by Dr. Bellinger in response to Phase I STUDY of the study. Dr. Lindberg also outlined the scope of services for Phase II of the study which includes management, marketing and financing options. A motion was made by Ms. Shuford and seconded by Mr. Sledge to proceed with Phase 2 of the Hampton Science Park Study. A roll call vote was taken which resulted as follows: Ayes: Arnold, Bellinger, Pilgrim, Sledge, Williams, Shuford and Joseph Nays: None RESOLUTION Mr. Girouard presented a Resolution of the Industrial Development REALLOCATE Authority of the City of Hampton, Virginia requesting the City FUNDS Council reallocate $43,750 of uncommitted funds from the Hampton Manufacturing Assistance Grant Program to the Hampton Economic Gardening Program. Mr. Girouard provided an overview of the program and guidelines. Mr. Richard Lally with Innovate!Hampton Roads and Mr. Tevan Green spoke about how this program is assisting existing businesses. Dr. Bellinger expressed his concern about reallocating funds from the Manufacturing Assistance Grant Program. He suggested staff evaluate the existing program and why manufacturing companies are not taking advantage of it. A motion was made by Mr. Sledge and seconded by Mr. Williams to approve the Resolution as presented. A roll call vote was taken which resulted as follows: Ayes: Arnold, Pilgrim. Sledge, Williams, Shuford and Joseph Nays: Bellinger with the comment he supports the program but not the reallocation of funds from the Manufacturing Assistance Grant Program RESOLUTION Mr. Eason presented a Resolution of the Industrial Development SEI GROUP Authority of the City of Hampton, Virginia approving the First Amendment to the Purchase and Sale Agreement with the SEI Group, LLC. The Amendment will grant an extension of the closing date to allow sufficient time to obtain necessary governmental permits and approvals. A motion was made by Mr. Arnold and seconded by Mr. Williams to approve the Resolution as presented. A roll call vote was taken with resulted as follows: 3  Ayes: Arnold, Bellinger, Pilgrim, Sledge, Williams, Shuford and Joseph Nays: None CLOSED Chair Joseph stated a Closed Meeting will now be held in MEETING accordance with Section 2.2-3711 A.3 and A.7 of the Code of Virginia to discuss or consider the disposition of publicly held real property where discussion in an open meeting would adversely affect the bargaining position or negotiating strategy of the Authority and to consult with legal counsel regarding specific legal matters requiring the provision of legal advice by such counsel. A motion was made by Ms. Shuford and seconded by Mr. Williams to go into the Closed Meeting. A roll call vote was taken which resulted as follows: Ayes: Arnold, Bellinger, Pilgrim, Sledge, Williams, Shuford and Joseph Nays: None CERTIFICATION Chair Joseph stated it was now appropriate to take a Roll OF CLOSED Call vote and that to the best of our knowledge (i) only public MEETING business matters lawfully exempted from open meeting requirements under this chapter, and (ii) only such public business matters as were identified in the motion by which the Closed Meeting was convened were heard, discussed, or considered in the Closed Meeting. Any member who believes there was a departure from the requirements of subdivisions (i) and (ii) shall so state prior to the Roll Call vote, indicating the substance of the departure that, in his/her judgment has taken place. Such statements shall be recorded in the Minutes. Chair Joseph asked for any statements. There were none. A motion was made by Mr. Pilgrim and seconded by Dr. Bellinger to conclude the Closed Meeting and return to the Meeting. A roll call vote was taken which resulted as follows: Ayes: Bellinger, Pilgrim, Sledge, Williams, Shuford and Joseph Nays: None Note: Mr. Arnold left the meeting early and was not present for the vote A motion was made by Mr. Pilgrim and seconded by Mr. Williams to approve the Resolution of the Industrial Development Authority of the City of Hampton, Virginia authorizing the execution of Lease with Michael P. Long and Sublease with Old Point National Bank of Phoebus for property known as 24 Wine Street, Hampton, Virginia. A roll call vote was taken which resulted as follows: 4 Ayes: Bellinger, Pilgrim, Sledge, Williams and Joseph Nays: None Abstain: Shuford Ms. Shuford did not participate in the discussion. A motion was made by Mr. Williams and seconded by Mr. Pilgrim to approve the Resolution of the Industrial Development Authority of the City of Hampton, Virginia approving an option agreement between the Industrial Development Authority of the City of Hampton, Virginia and Liberty Property Limited Partnership for the purchase of 5.00 acres of land, more or less, in Hampton Roads Center. A roll call vote was taken which resulted as follows: Ayes: Bellinger, Pilgrim, Sledge, Williams, Shuford and Joseph Nays: None A motion was made by Mr. Williams and seconded by Mr. Sledge to adopt a Resolution for C & D Store Development to modify the terms and conditions of the Note and Deed of Trust to include waiving all but $20,000 of accrued interest upon payment in full of the Loan and the Note. A roll call vote was taken which resulted as follows: Ayes: Bellinger, Pilgrim, Sledge, Williams, Shuford and Joseph Nays: None A motion was made by Mr. Pilgrim and seconded by Mr. Williams to approve a loan to C & D Store Development based on the following terms and conditions: Loan Amount: $58,000 Interest Rate: 5% Loan Term: Three years Amortization: Ten years Collateral: A second Deed of Trust on 3.69 acres located in Langley Research & Development Park Conditions: Approval of deal points A roll call vote was taken which resulted as follows: Ayes: Bellinger, Pilgrim, Sledge, Williams, Shuford and Joseph Nays: None A motion was made by Mr. Williams and seconded by Dr. Bellinger to adopt a Resolution to enter into an agreement with the NIA or its designee to operate an incubator within the City of Hampton for the period March 1, 2012 through June 30, 2012 and to contribute $140,000 for this purpose. 5  Ayes: Bellinger, Pilgrim, Williams, Shuford and Joseph Nays: None Abstain: Sledge A motion was made by Mr. Williams and seconded by Mr. Pilgrim to adopt a Resolution to utilize funds which were previously appropriated by City Council for the operation of a business incubator to fund the NIA Hampton incubator. A roll call vote was taken which resulted as follows: Ayes: Bellinger, Pilgrim, Williams Shuford and Joseph Nays: None Abstain: Sledge OLD Mr. Hawkins reported the board approved the Agreement for BUSINESS sharing 501(C)(3) Bond Administrative Fees at the meeting in January, however, there were several modifications to the agreement. A motion was made by Mr. Williams and seconded by Mr. Sledge to approve the Resolution of the Industrial Development Authority authorizing the execution by the Authority of an Agreement for sharing 501(C)(3) Bond Administrative Fees between the Virginia Small Business Financing Authority (VSBFA) and Local Industrial and/or Economic Development Authorities. A roll call vote was taken which resulted as follows: Ayes: Bellinger, Sledge, Williams, Shuford and Joseph Nays: None Absent: Mr. Pilgrim left the meeting early and was not present for this vote. ADJOURNMENT There being no further business, the meeting was adjourned at 11:00 a.m. Respectfully submitted, James L. Eason Secretary-Treasurer 6