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 November 15, 2016 8:00 AM MEETING CALLED TO ORDER PLEDGE OF ALLEGIANCE ROLL CALL APPROVAL OF AGENDA APPROVAL OF MINUTES OF August 30, 2016 Special Meeting NEW BUSINESS 1. To approve the Reimbursement Agreement between the Local Development Finance Authority and FCA US LLC and authorize the Chairperson to sign, as applicable, all documents required in conjunction with this approval. 2. To approve the Sub-Lease Agreement between Macomb County Department of Planning and Economic Development, ABBS Ltd and the Local Development Finance Authority (LDFA). 3. To approve the Sub-Lease Agreement between Macomb County Department of Planning and Economic Development, Racer Machinery International, Inc. and the Local Development Finance Authority (LDFA). 4. Presentation and update on the operations of the Macomb OU-INCubator. OLD BUSINESS PUBLIC COMMENT ADJOURNMENT  CITY OF STERLING HEIGHTS LOCAL DEVELOPMENT FINANCE AUTHORITY Draft MINUTES OF THE SPECIAL MEETING August 30, 2016 – 8:00 a.m. 40555 Utica Road, Sterling Heights, MI 48313 586-884-9322 City Council Chambers Phil Hunsberger called the meeting to order at 8:02 a.m. Pledge of Allegiance Members present at roll call: David Corba, Stephanie Eagen, Ellanore Evans, Phillip Hunsberger, Laurel Johnson, Richard Kincaid, John Lamerato, Camille Silda Members absent: Lori Doughty, John Lettang, Victor Martin, Fred Molnar, Jill Tomyn, Orest Zachary Also in attendance: Denice Gerstenberg, City Development Director – City of Sterling Heights; Larry Herriman, Interim Executive Director – Macomb OU-INCubator; Joan Carleton, Marketing & Communications Manager – Macomb OU-INCubator; Mark Ignash, Client Support Administrator and Strategist – Macomb OU-INCubator; Kathryn Quell, Building Services Specialist – City of Sterling Heights; Luke Bonner, Senior Economic Development Advisor – City of Sterling Heights Motion to Approve the Agenda Moved by Silda, supported by Kincaid, to approve the agenda as presented. Ayes: All Nays: None Motion carried. Motion to Approve the Minutes of June 15, 2016 Special Meeting Moved by Lamerato, supported by Kincaid, to approve the minutes as presented. Ayes: All Nays: None Motion carried. New Business To accept the Proposal from Hubbell, Roth and Clark, Inc. for Construction Plans & Engineering Services for Signage & Intersection Improvements within the LDFA/Smartzone District. Ms. Gerstenberg provided a summary of the presentation of June 15, 2016 and scope of work contracted with Hubbell, Roth and Clark regarding signage and intersection improvements. The LDFA captures TIF money to be used for improvements to the corridor. Some of the money allocated to BAE was not used and that unused money has been reallocated to the LDFA. The City of Sterling Heights is moving forward to evaluate the corridor with the work and bids from Hubbell, Roth and Clark. It is anticipated that the work will commence in the spring of 2017. To approve the Lease Termination Agreements between Coliant Corporation and the Local Development Finance Authority (LDFA) for spaces #2-E and #2-F. Coliant Corporation has graduated from the Macomb OU-INCubator and is now leasing a building in Sterling Heights to continue their business endeavor. The City is releasing Coliant from their lease obligations for space #2-E and #2-F. Moved by Kincaid, supported by Lamerato to approve the Lease Termination Agreements between Coliant Corporation and the Local Development Finance Authority (LDFA) for spaces #2-E and #2-F. Ayes: All Nays: None Motion carried. To approve the Lease Agreement between SAPA Transmissions and the Local Development Finance Authority (LDFA). Ms. Quell stated that SAPA Transmissions is the oldest defense company established in Spain. SAPA began its activities in the armoured vehicle transmission industry. SAPA has developed and manufactured an upgrade kit to increase input power in armoured vehicles. The transmission performance has been tested according to Spanish requirements and is now in production. SAPA is currently working with the U.S. army and General Dynamics. Moved by Silda, supported by Lamerato to approve the Lease Agreement between SAPA Transmissions and the Local Development Finance Authority (LDFA). Ayes: All Nays: None Motion carried. Presentation and update on the operations of the Macomb-OU INCubator. Mr. Herriman presented a review and updates on the operations of the Macomb-OU INCubator. He then introduced Joan Carleton, Marketing and Communications Manager, who presented on clients, an onsite client that graduated from the Macomb-OU INCubator, and her marketing initiatives to promote and assist clients and programs. Old Business Board Members Report Public Comment None Adjournment Moved by Eagen, supported by Kincaid to adjourn. Ayes: All Nays: None Motion carried. The meeting adjourned at 8:50 am. Kq  Business of the Local Development Finance Meeting: 11/16/16 Authority Sterling Heights, Michigan AGENDA STATEMENT OMB AS03 Rev. 11/04 Item Title: To consider the Reimbursement Agreement between FCA US LLC and the Local Development Finance Authority for reimbursable activities not to exceed $900,000 at 38111 Van Dyke Avenue (Presentation - Luke Bonner, Senior Economic Development Advisor). Submitted By: Office of Assessing Contact Person/Telephone: Luke Bonner, Senior Economic Development Advisor Administration (initial as applicable) Attachments City Clerk x Resolution Minutes Finance & Budget Director Ordinance Plan/Map City Attorney (as to legal form) x Contract x Other City Manager † Check box if this agenda item requires billing/revenue collection (fees, etc.) by Treasury Office Executive Summary: FCA US LLC, a Delaware limited liability company (Applicant), is a major automotive manufacturer that owns and operates the Sterling Stamping Plant and Sterling Heights Assembly Plant (SHAP) in Sterling Heights. Applicant is seeking $900,000 in Local Development Finance Authority (LDFA) incentives for a new real property investment of $72,300,000 at the site of the old SHAP, commonly known as 38111 Van Dyke. Applicant is substantially renovating the old paint shop and portions of the old assembly facility to facilitate the relocation of production of the RAM 1500 pick-up truck to SHAP. The Applicant is seeking reimbursement for LDFA eligible activities related to the demolition of the on-site waste water treatment facility, and environmental remediation required to complete construction of a 150,000 s.f. test track facility. On December 6th, 2016, the City Council will consider transferring $900,000 of general fund dollars, previously trademarked for “redevelopment projects” in past city budgets, to the LDFA in order to complete this partnership with FCA. In addition to this real property investment, Applicant will be equipping the new facility with personal property valued at approximately $1,012,300,000. As a direct result of these new investments, 700 new jobs are expected to be created in Sterling Heights, which will generate an overall positive economic impact for the regional economy of $112,000,000, annually (Multiplier Factor of 4 x Wages of $40,000/job created x 700 jobs). The reimbursement of eligible activities through the LDFA is part of the overall incentive package provided to FCA by the City of Sterling Heights and State of Michigan in order to secure both the jobs and investment securing SHAP’s long term viability. A memorandum outlining the major points of the Reimbursement Agreement is attached along with the Draft Reimbursement Agreement. Suggested Action: MOVED BY: SECONDED BY: RESOLVED, to approve the Reimbursement Agreement between the Local Development Finance Authority and FCA US LLC and authorize the Chairperson to sign, as applicable, all documents required in conjunction with this approval. TO: Phil Hunsberger, Chairman Sterling Heights LDFA FROM: Luke Bonner, Sr. Economic Development Advisor CC: LDFA Board Members Denice Gerstenberg, City Development Director Jeffery Bahorski, Assistant City Manager Mark Vanderpool, City Manager DATE: November 7, 2016 RE: FCA Reimbursement Agreement Summary • FCA US LLC is the owner of real property situated in the LDFA District commonly known as 38111 Van Dyke, Sterling Heights, County of Macomb, and State of Michigan. • The SHLDFA has $900,000 of LDFA funds available to reimburse FCA US for costs incurred in conducting Eligible Activities at the Project Site. • FCA US shall have sole responsibility to advance the funds to pay for the completion of Eligible Activities. • Reimbursement of eligible activities shall not exceed $900,000.00 • LDFA eligible activities in the Development Plan include storm water, sanitary, and sewer improvements, and environmental and engineering (LDFA Development Plan page 19.) • FCA US shall submit to SHLDFA a Request for Cost Reimbursement for Eligible Activities paid for by FCA US. • The Reimbursement Request shall describe each individual activity claimed as an Eligible Activity and the associated costs of each individual activity. • Documentation of the costs incurred shall be included with the Reimbursement Request, including proof of payment and detailed invoices for the costs incurred sufficient to determine whether the costs incurred were in payment of Eligible Activities. • Interest on FCA US’s reimbursable costs shall not be reimbursable.  • Within thirty (30) days after submission of a Reimbursement Request, SHLDFA shall either approve the Reimbursement Request or identify in writing to FCA US any costs deemed ineligible, in which FCA will have (30) days to provide supplemental information. • Payment of Reimbursement Requests approved by the SHLDFA will be issued to FCA US within forty-five days after approval by SHLDFA. • FCA US shall be in default under this Agreement (“Default”) if it fails to discharge any duty or obligation under this Agreement or and such Default is not cured within thirty (30) days, unless the cure of default will take longer than 30 days and FCA notifies the SHLDFA as such. • The SHLDFA shall be in “Default” under this Agreement if either fails to discharge any duty or obligation under this Agreement and such Default is not cured within thirty (30) days after written notice of such Default has been delivered to SHLDFA, unless the cure of default will take longer than 30 days and FCA notifies the SHLDFA as such. • The term of this Agreement shall commence on the Effective Date and shall expire eighteen (18) months after the Effective Date. Senior Economic Development Advisor  LDFA Business Sterling Heights, Michigan 11/15/16 AGENDA STATEMENT OMB AS03 Rev. 11/04 Item Title: To approve the Sub-Lease Agreement between Macomb County Department of Planning and Economic Development, ABBS Ltd. and the Local Development Finance Authority (LDFA) Submitted By: Kathryn Quell, Building Services Specialist Executive Summary Attached for LDFA review is an October 1, 2016 thru March 31, 2017 sub-lease agreement between Macomb County Department of Planning and Economic Development, ABBS Ltd. and the LDFA. This tenant will occupy the International Landing Zone. The company is based out of the UK. Advanced Blast and Ballistic Systems Ltd holds a portfolio of about 15 patents and outstanding patent applications covering all aspects of active blast mitigaiton for military ground vehicles. The products developed by ABBS are now under final testing by various government agencies, including the US Army and various miltary vehicle manufacturers. Suggested Action: MOVED BY: SECONDED BY: RESOLVED: to approve the Sub-Lease Agreement between Macomb County Department of Planning and Economic Development, ABBS Ltd and the Local Development Finance Authority (LDFA).  LDFA Business Sterling Heights, Michigan 11/15/16 AGENDA STATEMENT OMB AS03 Rev. 11/04 Item Title: To approve the Sub-Lease Agreement between Macomb County Department of Planning and Economic Development, Racer Machinery International, Inc. and the Local Development Finance Authority (LDFA) Submitted By: Kathryn Quell, Building Services Specialist Executive Summary Attached for LDFA review is an September 21, 2016 thru March 26, 2017 sub-lease agreement between Macomb County Department of Planning and Economic Development, Racer Machinery International, Inc. and the LDFA. This tenant will occupy the International Landing Zone. Racer Machinery International, Inc. is a North American OEM machine tool builder of CNC machining centers, conventional lathes and industrial saws. Patented technology allows their machines to cut quicker and more precisely, while also extending tool life. Suggested Action: MOVED BY: SECONDED BY: RESOLVED: to approve the Sub-Lease Agreement between Macomb County Department of Planning and Economic Development, Racer Machinery International, Inc. and the Local Development Finance Authority (LDFA).  Presentation for the City of Sterling Heights Local Development Finance Authority Larry Herriman Interim Executive Director November 2016 1  Recap - June 2016 Meeting #1 - How we develop pipeline; Prof. Events, Media, Monthly/staff-led #2 - New Beeline to Commercialization brand; via existing pieces #3 - Michigan Cyber Range Event; coverage 52M; videos #1 - Meet Mark Ignash; Blackbourne Worldwide; Adopt-a-biz Cyber #2 - Vizbe; Software platform; BAF $14K, landed Quicken, T. Reuters #3 - OU Faculty (Dr. Liu); Biology Department; Technology Transfer of Research; incorporated, filed international patent, US underway 2  Recap - August 2016 Meeting #1 - Leadership Transition and New Reporting Structure; Dr. Stone #2 - SAE/Battelle Cyber Auto Challenge; City Council & feedback #3 - OU Cyber Security Interns & their full-time job offers #1 - Coupon Wallet and Corp! Magazine’s four-page spread #2 - Coliant graduation & new 15,000 sq.ft. space in Sterling Heights #3 - Intro to Joan Carleton, Communications & Marketing Manager 3  Same Presentation Format: Three “Three Operations & Three Clients” & 3 Format: devised to communicate large amounts of information efficiently, logically and timely 4 INCUBATOR OPERATIONS 5  Without Client Support Administrator and Strategist Mark Ignash resigned; last day was September 9, 2016 New position with the University of Michigan Project Manager at Institute for Research on Labor, Employment and the Economy; Defense Manufacturing Assistance Program (D-MAP) Duties handled by Executive Director; grant funded position; replacing; interviews down to two candidates 6  Quick Look at Outputs and Economic Impact Updated Incubator Dashboard (last in April 2016) Comprehensive = inception through October 2016 As reported by individual clients via surveys Reflects what was reported and measured by the MEDC - which roles into the Governor’s Dashboard Now, housed on Incubator’s website 7 8  Outputs, Impact and Highlights (continued) Trend analysis, analyze “deltas” ∆ In six months… +19 High Tech Jobs Created + 57 High Tech Jobs Retained + $15 million in Follow-on Funding +890 Small Business Event Attendee Added… (aggregate) New High-tech Companies Created (41), https://www.oakland.edu/macombouinc/ & New Patents Filed (117) 9  Compiling a Comprehensive Report Constructing a Comprehensive Report Captures Economic Impact Describes programs & operations Features clients and volunteers Approximately 40 pages 10 INCUBATOR CLIENTS 11  Did You Know? …or, how about “Do You Remember?” (January 2016) The Macomb-Oakland University Incubator helps a client that has developed a robot-mobility base and control system which works in conjunction with the Baxter robot platform (Rethink Robotics). The client competed in the 2015 “Amazon Picking Challenge” and took third place behind a team from Germany (first place), and MIT (second place). 12 Dataspeed 13  CLICK: Baxter Video Micho Radovnikovich, near the robot, and Lincoln Paul Fleck, Dataspeed CEO and County Executive Lorenz, seated at the desk, work on their robot entry Mark Hackel with the Baxter Robot to the Amazon Picking Challenge 14  Dataspeed Update: Competed in the second Amazon Picking Challenge; (Now called Amazon Robotics); 2016 = Invite only, 8 teams, RoboCup in Germany. Working with Ford, developed an Advanced Drive Assistance System (ADAS); Vehicle kit for the Lincoln MKX. On September 27, 2016, opened a new facility in Rochester Hills. 15 Dataspeed Update (continued): 16  Did You Know? The Macomb-Oakland University Incubator … recently on-boarded a new “Affiliate” client which is developing an business that matches a patient with an experienced physical therapist/occupational therapist, available 24 hours a day - 7 days a week closest to your home while providing one-to-one quality care. 17 Spineapple 18 Venk Dhanapal, President and CEO Parent company = Resourscience Oakland University, School of Health Science faculty assisting 19  Did You Know? The Macomb-Oakland University Incubator … has on-boarded a new affiliated client which works with composites and develops a product that focuses on weight reduction, improved performance, environmental effects and cost savings by utilizing Bamboo Reinforced Plastics (BRP). 20 Innovium LLC 21  Kylee Guenther, CEO Featured in Composites World Magazine “Natural Fiber Composites; Market Share, One Part at a Time” - Michael R. LeGault Raju Patil, Managing Engineer Auto industry alternatives (low cost, low density) hemp, flax, others with polypropylene and resins 22  Even more client facts and progress tracking can be found in the Macomb-OU INC’s monthly newsletters at: http://wwwp.oakland.edu/macombouinc/news 23