Local Development Finance Authority

CITY OF STERLING HEIGHTS Regular Meeting of the LOCAL DEVELOPMENT FINANCE AUTHORITY 40555 UTICA ROAD 586-884-9322 CITY COUNCIL CHAMBERS December 19, 2012 5:30 PM MEETING CALLED TO ORDER PLEDGE OF ALLEGIANCE ROLL CALL APPROVAL OF AGENDA APPROVAL OF MINUTES OF November 14, 2012 Special Meeting NEW BUSINESS 1. To approve the Lease Agreement between the Michigan Small Business and Technology Development Center, and the Local Development Finance Authority (LDFA). 2. To approve the Lease Agreement between Golden Products and Services LLC, and the Local Development Finance Authority (LDFA). 3. To approve the Lease Agreement between KTISIS LLC, and the Local Development Finance Authority (LDFA) 4. To Receive the Velocity Vacancy Rate Report 5. To establish a work group of LDFA members to assist in the development of a “Services Contract” between the LDFA and Oakland University for the Macomb-OU Incubator. OLD BUSINESS BOARD MEMBERS REPORT PUBLIC COMMENT ADJOURNMENT  CITY OF STERLING HEIGHTS LOCAL DEVELOPMENT FINANCE AUTHORITY MINUTES OF THE SPECIAL MEETING November 14, 2012– 5:30 p.m. 40555 Utica Road, Sterling Heights, MI 48313 586-446-2489 City Council Chambers Victor Martin called the meeting to order at 5:30 p.m. Pledge of Allegiance Members present at roll call: David Corba, Lori Doughty, John Lamerato, Victor Martin, Casey Sobczak, David Wilson, Orest Zachary Members absent: Richard Kincaid (excused), John Lettang (excused), and Stephan Cassin Also in attendance: Kasey Green, Economic Development Manager Motion to Approve the Agenda Moved by Wilson, supported by Doughty, to approve the agenda as presented. Ayes: All Nays: None Motion carried. Motion to Approve the Minutes of October 17, 2012 Regular Meeting Moved by Wilson, supported by Zachary, to approve the agenda as presented. Ayes: All Nays: None Motion carried. New Business Ms. Green gave a brief explanation of the changes to the standard lease, and the executive in residence lease. Motion to approve the Standard Lease Agreement and Standard Lease Agreement (Executive in Residence) for tenants of the Macomb-OUIncbator located at 6633 18 Mile Road. Moved by Sobczak, supported by Wilson to approve the motion Ayes: All Nays: None Motion carried. Ms. Green gave a brief overview of Brar Technology, and CFO Leasing, regarding the relocation of offices within the incubator. Motion to approve the Lease Agreement between Brar Technology and CFO leasing, and the Local Development Finance Authority (LDFA) Moved by Lamerato, supported by Zachary to approve the motion Ayes: All Nays: None Motion carried. Ms. Green gave a brief overview for the lease arrangement for the Executive in Resident Program as it pertains to this lease. Mr. Martin asked if the lease was for just a desk. Ms. Green clarified that this particular lease is a full suite. Mr. Corba asked what the building occupancy rate would be after this meeting. Ms. Green responded, that she did not have that information today, but we will have an occupancy report for the board at the next meeting. Mr. Zachary questioned who would be tracking the 16 hours in kind services, and would this be justified to the regular rate of rent. Ms. Green replied that Macomb OUIncubator will be determining if the services being provided are sufficient of the in kind services agreed to. Motion to approve the Lease Agreement between Baker and Company Enterprises, Inc (d.b.a. AdviCoach of Michigan), and the Local Development Finance Authority (LDFA) Moved by Doughty, supported by Zachary to approve the motion Ayes: All Nays: None Motion carried. Ms. Green provided a brief overview of The Metiss Group. Mr. Corba questioned if this is a full suite, and will this be their only location. Ms. Green stated that this is a satellite office. Mr. Martin questioned what are allowable businesses for these spaces, he thought that this was for start-ups, and what are the guidelines for deciding how we are filling these spaces. Ms. Green stated that it is allowable and that Ms. Gustafson would be better to answer that question, as they have the lead in filling the building. Mr. Martin stated that he understands how this company fits, but he is worried that if we fill the building with non-start-ups that we will not have room for target tenants. Mr. Corba stated that he understood the need to fill the building with tenants, but expressed concern that this path was not the ideal situation for the mission of the building. Mr. Martin would like to see what the ratio of businesses that are start-ups vs. service providers are in the building. Ms. Green stated that we would provide that at the next meeting. Mr. Sobczak stated that he thinks the EIR would be the first business to leave in order to bring in the start-ups. Mr. Wilson also agreed that we need to see the current make up of the tenants and wanted to make sure that we really have room for the start-ups. Ms. Doughty questioned if the lease was not approved tonight, then what would that mean for the company. Ms. Green stated the next move in date would be January 1st and they have requested quick occupancy. Also at the request of the board we are not allowing temporary occupancy and all tenants are not allowed to occupy until the board has approved the lease. Ms. Green did state that there are plenty of spaces available currently. Ms. Doughty does not want to turn away any businesses at this time. Motion to approve the Lease Agreement between The Metiss Group, and the Local Development Finance Authority (LDFA) Moved by Sobczak, supported by Corba to approve the motion Ayes: All Nays: None Motion carried. Ms. Green gave a brief overview of Bianco and Company. Mr. Zachary questioned how many employees does Bianco and Company have at the current location. Ms. Green stated less than six. Mr. Zachary will this entire suite be utilized. Ms Green stated that it only has two cubicles and they will be occupied. Mr. Lamerato question if this lease has in kind services as in the last agreement. Ms. Green stated that is was the same 16 hours of in kind services. Motion to approve the Lease Agreement between Bianco and Company, PLC, and the Local Development Finance Authority (LDFA) Moved by Zachary, supported by Wilson to approve the motion Ayes: All Nays: None Motion carried. Old Business None Board Members Report None Public Comment Mr. Martin questioned what new items are coming down the pipeline. Ms. Green stated prospective tenants, and working with the Small Business Center to arrange a lease at Velocity. Adjournment Moved by Wilson supported by Zachary to adjourn. Ayes: All Nays: None Motion carried. The meeting adjourned at 5:53 pm TJ Minutes Approved 12/19/2012 John Lettang Secretary  LDFA Business Sterling Heights, Michigan 12/19/12 AGENDA STATEMENT OMB AS03 Rev. 11/04 Item Title: To approve the Lease Agreement between the Michigan Small Business and Technology Development Center, and the Local Development Finance Authority (LDFA) Submitted By: Kasey Green, Economic Development Manager, 884-9327 Executive Summary Attached for LDFA review is a January 1, 2013 to December 31, 2013 lease agreement between the Michigan Small Business and Technology Development Center (SBTDC) and the LDFA. The SBTDC have signed the standard lease agreement for space #1-D & #1-E in section 1 of the building containing approximately 605 square feet of space. Monthly rent will be subsidized by Macomb County $500.00 until the end of 2013 only subject to availability of funds. As an initiative of the Small Business Administration, the MI-SBTDC is a federal, state and local collaboration designed to develop entrepreneurial talent and support the start-up and growth of new ventures in Michigan. The Michigan Small Business and Technology Development Center (MI-SBTDC) offers Michigan’s most comprehensive entrepreneur and small business development program. They provide counseling, training, research and advocacy for new ventures, existing small businesses, and innovative technology companies, including technology counselors to provide more in-depth support and a road mapping tool that helps clients evaluate the direction of their technology, departmentalize concepts, and chart strategic direction. The MI-SBTDC has 12 regional centers and over 30 locations throughout Michigan to serve entrepreneurs statewide, offering training workshops, one-on-one counseling and market research tools at no or low cost. State funded programs include delivering the Kauffman FastTrac series statewide and specialized technology road mapping and commercialization counselors with the expertise to assist in securing equity financing. Suggested Action: MOVED BY: SECONDED BY: RESOLVED, to approve the Lease Agreement between the Michigan Small Business and Technology Development Center and the Local Development Finance Authority (LDFA).  LDFA Business Sterling Heights, Michigan 12/19/12 AGENDA STATEMENT OMB AS03 Rev. 11/04 Item Title: To approve the Lease Agreement between Golden Products and Services, LLC, and the Local Development Finance Authority (LDFA) Submitted By: Kasey Green, Economic Development Manager, 884-9327 Executive Summary Attached for LDFA review is a January 1, 2013 to December 31, 2013 lease agreement between Golden Products and Services, LLC and the LDFA. Golden Products and Services has signed the standard lease agreement for space #3-L in section 3 of the building containing approximately 235 square feet of space. Monthly rent will be $185.00. Golden Products and Services are an Engineering product design, development and services startup business, focusing on patented continuous variable transmission (CVT) for non- automotive applications. Suggested Action: MOVED BY: SECONDED BY: RESOLVED, to approve the Lease Agreement between Golden Products and Services, LLC, and the Local Development Finance Authority (LDFA).  LDFA Business Sterling Heights, Michigan 12/19/12 AGENDA STATEMENT OMB AS03 Rev. 11/04 Item Title: To approve the Lease Agreement between KTISIS LLC, and the Local Development Finance Authority (LDFA) Submitted By: Kasey Green, Economic Development Manager, 884-9327 Executive Summary Attached for LDFA review is a January 1, 2013 to December 31, 2013 lease agreement between KTISIS, LLC and the LDFA. KTISIS has signed the standard lease agreement for space #2-B in section 2 of the building containing approximately 633 square feet of space. Monthly rent will be $580.00. KTISIS provides creative solutions to technical and business challenges using advanced engineering and manufacturing technologies along with strategic management, for the automotive, alternative energy and innovation markets. Suggested Action: MOVED BY: SECONDED BY: RESOLVED, to approve the Lease Agreement between KTISIS LLC, and the Local Development Finance Authority (LDFA).  Velocity December 1, 2012 Lease Summary LEASE DETAIL (As of 12/1/2012) SUITE Square footage Current Lease Rate Set Lease Rate Leasee # of Work Stations Lab 1A 99.0 SH Staff 1 Lab1B 99.0 SH Staff 1 Lab 1D 237.2 $ 500.00 $ 275.00 Macomb County ED&P 2 Lab 1E 370.1 $ 425.00 3 Lab 1F 343.9 $ 395.00 $ 395.00 Brar Tech/CFO Leasing 3 Conf. 1 H 205.0 OU Staff Lab 1J 206.0 OU Staff Manager 1O 99.0 OU Staff Office 1P 99.0 OU Staff Total sq ft Sec 1 1758.2 $ 895.00 $ 1,095.00 Square footage Lab 2A 830.5 $ 484.46 $ 693.00 Kosch 5 Lab 2B 633.2 $ 580.00 OU Staff 3 Lab 2C 592.8 $ 544.00 $ 544.00 MangoTree 2 Lab 2D 867.5 3 Lab 2E 906.7 $ 400.00 $ 756.00 Terra-Telesis 5 Lab 2F 823.8 $ 687.00 $ 687.00 Coliant 6 Lab 2G 1554.3 $ 1,295.00 8 Lab 2H 845.4 $ 704.00 2 Lab 2I 798.5 $ 666.00 5 Lab 2K.1 168 $ 185.00 1 Lab 2K.2 168 $ 185.00 1 Total sq ft Sec 2 8188.7 $ 2,115.46 $ 6,295.00 Square footage Lab 3A 784.0 $ 653.00 AdviCoach of Michigan 4 Lab 3B 632.2 $ 579.00 Michigan Defense Center 2 Lab 3C 652.2 $ 598.00 2 Lab 3D 966.8 $ 806.00 $ 806.00 Metiss Group 4 Lab 3E 814 $ 678.00 5 Lab 3F 831.7 $ 693.00 4 Lab 3G 951.2 $ 793.00 CRUS 5 Lab 3H 694.6 $ 637.00 2 Lab 3I 832.6 $ 694.00 Bianco & Co. 2 Lab 3J 809.8 $ 675.00 5 Lab 3L.1 235.1 $ 185.00 1 Lab 3L.2 235.1 $ 185.00 1 Total sq ft Sec 3 8439.3 $ 806.00 $ 7,176.00 Staff=Blue, Service Provider = Orange, Client Tenant = Green LEASE SUMMARY % of Total Leaseable Square Feet Sq. Ft. for Staff Space 1,440.20 7.8% Sq. Ft. for Service Providers 5,827.30 31.7% Sq. Ft. for Client Tenants 2,074.40 11.3% Total Leased or Occupied 9,341.90 Total leasable Sq Ft* 18,386.20 Occupancy Rate 51% Current Monthly Rental Income $ 3,816.46 *Does not include Kitchen  LEASE DETAIL (As of 1/1/2013) SUITE Square footage Current Lease Rate Set Lease Rate Leasee # of Work Stations Lab 1A 99.0 SH Staff 1 Lab1B 99.0 SH Staff 1 Lab 1D 237.2 $ - $ 275.00 SBTDC 2 Lab 1E 370.1 $ 500.00 $ 425.00 SBTDC 3 Lab 1F 343.9 $ 395.00 $ 395.00 Brar Tech/CFO Leasing 3 Conf. 1 H 205.0 OU Staff Lab 1J 206.0 OU Staff Manager 1O 99.0 OU Staff Office 1P 99.0 OU Staff Total sq ft Sec 1 1758.2 $ 895.00 $ 1,095.00 Square footage Lab 2A 830.5 $ 484.46 $ 693.00 Kosch 5 Lab 2B 633.2 $ 580.00 $ 580.00 KTISIS 3 Lab 2C 592.8 $ 544.00 $ 544.00 MangoTree 2 Lab 2D 867.5 $ 723.00 3 Lab 2E 906.7 $ 400.00 $ 756.00 Terra-Telesis 5 Lab 2F 823.8 $ 687.00 $ 687.00 Coliant 6 Lab 2G 1554.3 $ 1,295.00 8 Lab 2H 845.4 $ 704.00 OU Staff 2 Lab 2I 798.5 $ 666.00 5 Lab 2K.1 168 $ 185.00 1 Lab 2K.2 168 $ 185.00 1 Total sq ft Sec 2 8188.7 $ 2,695.46 $ 7,018.00 Square footage Lab 3A 784.0 $ 653.00 AdviCoach of Michigan 4 Lab 3B 632.2 $ 579.00 Michigan Defense Center 2 Lab 3C 652.2 $ 598.00 2 Lab 3D 966.8 $ 806.00 $ 806.00 Metiss Group 4 Lab 3E 814 $ 678.00 5 Lab 3F 831.7 $ 693.00 4 Lab 3G 951.2 $ 793.00 CRUS 5 Lab 3H 694.6 $ 637.00 2 Lab 3I 832.6 $ - $ 694.00 Bianco & Co. 2 Lab 3J 809.8 $ 675.00 5 Lab 3L.1 235.1 $ 185.00 $ 185.00 Golden Products & Services, LLC 1 Lab 3L.2 235.1 $ 185.00 1 Total sq ft Sec 3 8439.3 $ 991.00 $ 7,176.00 Staff=Blue, Service Provider = Orange, Client Tenant = Green LEASE SUMMARY % of Total Leaseable Square Feet Sq. Ft. for Staff Space 1,440.20 7.8% Sq. Ft. for Service Providers 6,197.40 33.7% Sq. Ft. for Client Tenants 2,309.50 12.6% Total Leased or Occupied 9,947.10 Total leasable Sq Ft* 18,386.20 Occupancy Rate 54% Current Monthly Rental Income $ 4,581.46 *Does not include Kitchen  LDFA Business Sterling Heights, Michigan 12/19/12 AGENDA STATEMENT OMB AS03 Rev. 11/04 Item Title: To establish a work group of LDFA members to assist in the development of a “Services Contract” between the LDFA and Oakland University for the Macomb- OU Incubator. Submitted By: Kasey Green, Economic Development Manager Executive Summary City Administration is seeking to form a work group comprised of LDFA members to assist in the development of a new Services Contract between the LDFA and Oakland University for the operation of the Macomb-OU Incubator. This new Services Contract is intended to take effect on July 1, 2013, subject to approval from both parties. Final approval of any such agreement will require action from the full LDFA and the work group will not have authority to approve any contracts or agreements. However, participation of members of the LDFA in a work group is considered to be important and essential to ensuring that LDFA input is provided directly from members in the process. The need to establish a formal Service Contract stems from two primary issues: 1) the need to update and clarify the roles of the LDFA and Macomb-OU Incubator and to provide for clearly defined objectives, performance expectations, and reporting requirements in a mutually agreed upon manner; and 2) to provide a formal mechanism for the distribution of anticipated Tax Increment Funds (TIF) that are expected to be available in FY 13/14. Thus far, there has not been sufficient funding through available TIF to do more than pay for building expenses necessary to minimally operate the Velocity Collaboration Center in which the Macomb-OU Incubator operates. Starting in FY 13/14, it is anticipated that additional funds will be available to subsidize the Macomb-OU Incubator and provide funds for various programming. A Service Contract will set forth the manner in which the funds will be distributed and specify the terms and amounts. Therefore, it is recommended that a work group be established comprised of three (3) current members of the LDFA, Kasey Green, LDFA Board Liaison, and Jeffrey Bahorski, City Attorney. The work group would generate an initial draft to serve as a starting point for discussions with Oakland University. Members of the work group would be asked to review contract documents and provide feedback, and to participate in at least one work group meeting to establish a draft. Additional meetings may be required during negotiation. Suggested Action: Move, to form a work group comprised of Kasey Green, Jeff Bahorski, ______________________, ____________________, and ___________________ for the purpose of developing a Services Contract between the LDFA and Oakland University for the Macomb OU- Incubator. MOVED BY: SECONDED BY: