Missouri Development Finance Board

Transcription

1 CHAIR: Marie J. Carmichael MEMBERS: John D. Starr Larry D. Neff John E. Mehner L. B. Eckelkamp, Jr. Kelley M. Martin Reuben A. Shelton Patrick J. Lamping EXECUTIVE DIRECTOR: Robert V. Miserez Missouri Development Finance Board EX-OFFICIO MEMBERS: Peter D. Kinder Lieutenant Governor David D. Kerr Director, Economic Development Dr. Jon Hagler Director, Agriculture Sara Parker Pauley Director, Natural Resources MEETING MINUTES MISSOURI DEVELOPMENT FINANCE BOARD Governor Office Building 200 Madison Street, Room 1010 Jefferson City, Missouri APRIL 19, 2011 The Missouri Development Finance Board met in regular session on Tuesday, April 19, 2011, beginning at 10:30 a.m. Notice of the meeting was duly posted as required by RSMo Section at the MDFB principal office. The following members and officers of the Board were present or absent at the meeting as follows: Marie J. Carmichael Chair Present John D. Starr Vice Chairman and Member Present Larry D. Neff Secretary and Member Present* John E. Mehner Treasurer and Member Present* L. B. Eckelkamp, Jr. Member Present Kelley M. Martin Member Present Reuben A. Shelton Member Present Patrick J. Lamping Member Present* Peter D. Kinder Lieutenant Governor and Member Present David D. Kerr Director, Dept. of Economic Development and Member Present Jon Hagler Director, Dept. of Agriculture and Member Present Sara Parker Pauley Director, Dept. of Natural Resources and Member Present Robert V. Miserez Executive Director and Assistant Secretary Present *Participated via telephone conference call. Chair Carmichael called the meeting to order and declared a quorum was present. In addition to the above, those in attendance included: Board Staff: Board Counsel: Others Present: Kathleen Barney, Krystal Davis, Mike Golden, Dawn Holt, Kimberly Martin, Valerie Haller and Ryan Vermette David Queen Danette Proctor, Springfield, MO; Layne Ebers and John Stevens, ProEnergy Holdings; Linda Christle, Economic Development Sedalia; Kerri Church, CBIZ MHM, LLC; Randall Rhoads, Stephen Arbo and Allan Gray, City of Lee s Summit, MO; Brad Cox, Bud Hertzog, Machelle Riffe, Dan Hall, and 200 Madison Street, Suite 1000 P.O. Box 567 Jefferson City, Missouri Telephone: (573) Fax: (573) Visit our Web site at

2 Gary Hawkins, Lee s Summit Municipal Building Authority; Andy Scott, Green Light Projects; Mark Siettmann, Senator Will Kraus Office; Tony Grandison and Sallie Hemenway, Missouri Department of Economic Development; and Keith Wenzel, Polsinelli Shughart PC Chair Carmichael presented a service plaque to Danette Proctor and thanked her for her dedication and years of service as a member of the Board. Chair Carmichael announced that Mike Golden, MDFB staff, had accepted other employment and she thanked him for his financial expertise and wished him the best in his future endeavors. Mr. Miserez thanked Mr. Golden for his great work with the BUILD Program and for his positive professional relationship with the Department of Economic Development and the public. Lt. Governor Kinder also wished Mr. Golden the best. I. Secretary s Report Secretary Neff Secretary Neff presented for approval the minutes from the March 15, 2011 meeting. The minutes were included in the Board materials distributed in advance of the meeting. There being no questions, corrections or additions, Lt. Governor Kinder made a motion to approve the minutes as presented. Member Martin seconded the motion. The following roll call vote was recorded: Aye: Nay: Absent: Starr, Neff, Mehner, Eckelkamp, Martin, Shelton, Lamping, Kinder, Kerr, Pauley and Carmichael Hagler Chair Carmichael declared the motion passed. Director Hagler arrived at the meeting. II. Treasurer s Report Treasurer Mehner Treasurer Mehner presented for approval the Treasurer s Report as of and for the eight months ended February 28, The Treasurer s Report was included in the Board materials distributed in advance of the meeting. Treasurer Mehner referenced the $5 million grant to DED Workforce Development in the Executive Summary, and Krystal Davis reviewed the net assets and changes in funds assets of the financial statements. There being no questions, corrections or additions, Treasurer Mehner made a motion to approve the Treasurer s Report as presented. Member Eckelkamp seconded the motion. The following roll call vote was recorded: 2

3 Aye: Nay: Absent: Starr, Neff, Mehner, Eckelkamp, Martin, Shelton, Lamping, Kinder, Kerr, Hagler, Pauley and Carmichael Chair Carmichael declared the motion passed. Chair Carmichael recognized Krystal Davis and Dawn Holt for their work on the Board s Comprehensive Annual Financial Report and announced that the Governmental Finance Officers Association had awarded a Certificate of Excellence in Financial Reporting for the CAFR. This is the eleventh consecutive award received from GFOA for the CAFR. III. Department of Economic Development Report Director Kerr Director Kerr reported that the final report of the Strategic Initiative for Economic Growth was presented to the Governor on April 11. Director Kerr distributed the Executive Summary of the report and noted the final report identified eight strategic initiatives that we as a state must accomplish over the next five years to transform our economy into a high-growth and sustainable economy; identified tactical action plans necessary to implement the eight strategic initiatives; and identified seven targeted industries that are high-growth industries that exist in the state that are believed to be industries to grow the state s economic base as we move forward. Director Kerr reported that the State had aggressively applied for and received a grant from the U.S. Treasury Department for $27 million to assist entrepreneurials, start-up companies, and small businesses. Missouri was the fourth state to receive an allocation, but the U.S. Treasury Department had taken the state s application and used it as a model for other states to try to replicate. Director Kerr reported that the funds will be used for a non-traditional loan program and as an equity investment program to help fund small companies, entrepreneurial companies, and existing companies. The $27 million has been allocated into two different programs the Grow Missouri Program and the Innovation Development Entrepreneurial Advancement ( IDEA ) Program. Director Kerr noted that the Department has contracted with the Missouri Technology Corporation to administer the IDEA Program and to be used for pre-seed, seed, venture capital, and expansion programs for high technology companies; and the Grow Missouri Loan Program will be administered by DED. Director Kerr reported there is a requirement on the programs that there be a 9-to-1 match in terms of private equity or financial support. IV. Department of Agriculture Report Director Hagler Director Hagler reported that the Department had reached compromise language between the Missouri groups on animal welfare in terms of the care and treatment of dogs and the language has been sent to the General Assembly for consideration. 3

4 V. Department of Natural Resources Director Pauley Director Pauley reported that the Department s water fee extension bill, which affects regulated entities throughout the state, has seen good movement in the General Assembly. Director Pauley reported that in regards to the federal budget cuts, especially budget cuts to the EPA, the most significant portion of the budget affected are dollars allocated to the state revolving funds and other funds allocated to the states. Director Pauley commented that the state revolving funds are critical for all communities, but particularly small communities that cannot upkeep their drinking water/wastewater infrastructure without those dollars. Director Pauley reported the Department has begun accepting grant applications from communities in the state for the Recreational Trails Program. Director Pauley commented that the new bicycle pedestrian bridge across the Missouri River held its ribbon-cutting ceremony last week. VI. Lieutenant Governor s Report Lt. Governor Kinder Lt. Governor Kinder deferred his report. VII. Old Business A. Donald Danforth Plant Science Center Revenue Bonds Mike Golden Final Authorizing Resolution Mr. Golden reported the Board preliminarily approved at its February 2011 meeting tax-exempt Revenue Bonds in an amount not to exceed $6,250,000 for a three-phase greenhouse expansion project for the Donald Danforth Plant Science Center. Mr. Golden reported total project costs are approximately $8.25 million and the bonds will be purchased by Clayton Holdings, LLC, a subsidiary of Commerce Bank. Staff recommended approval of the Final Authorizing Resolution for Bonds not to exceed $6,250,000. Director Hagler made a motion to approve the following Final Authoring Resolution: RESOLUTION AUTHORIZING THE MISSOURI DEVELOPMENT FINANCE BOARD TO ISSUE ITS REVENUE BONDS (DONALD DANFORTH PLANT SCIENCE CENTER PROJECT) IN THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $6,250,000, FOR THE PURPOSE OF MAKING A LOAN TO DONALD DANFORTH PLANT SCIENCE CENTER, A MISSOURI NONPROFIT CORPORATION, TO PROVIDE FUNDS TO FINANCE OR REIMBURSE 4

5 THE COSTS OF CONSTRUCTING AND EQUIPPING A GREENHOUSE FACILITY; AND AUTHORIZING AND APPROVING CERTAIN DOCUMENTS IN CONNECTION WITH THE ISSUANCE OF SAID BONDS; AND AUTHORIZING CERTAIN OTHER ACTIONS IN CONNECTION WITH THE ISSUANCE OF SAID BONDS. Secretary Neff seconded the motion. Member Shelton disclosed that due to his company s association with the Center, he would be recusing himself from this matter. The following roll call vote was recorded: Aye: Nay: Abstain: Absent: Starr, Neff, Mehner, Eckelkamp, Martin, Lamping, Kinder, Kerr, Hagler, Pauley and Carmichael Shelton Chair Carmichael declared the motion passed. VIII. New Business A. ProEnergy Holdings, ProEnergy Affiliates, Inc. Mike Golden BUILD Resolution of Intent Mr. Golden presented the application from ProEnergy Holdings, ProEnergy Affiliates, Inc. for Missouri BUILD Bonds in an amount not to exceed $3,098,700. Mr. Golden noted the Board approved a project with the Company in late Mr. Golden reported the project will be an expansion of campus operations by adding a warehouse and new business complex of approximately 309,700 square feet in Sedalia, Missouri. Mr. Golden noted infrastructure costs are estimated at approximately $25 million, and the project will add 309 new jobs with annual wage paying just under $47,000. Mr. Golden introduced Tony Grandison, Project Manager with the Department of Economic Development. Mr. Grandison introduced the project representatives for the Company. Mr. John Stevens, ProEnergy VP of Sales, gave a brief PowerPoint presentation regarding the project and Company. Mr. Stevens noted each line of business and the services the Company provides. Mr. Stevens commented that the key to their success is to ensure they have equipment in place, to have all the talent and resources in-house that they are able to control their critical path, and also to execute a successful project. 5

6 Member Martin questioned if the Company grew internally or by acquisition. Mr. Stevens responded that ProEnergy grew by organic growth and was founded in Member Martin questioned if the corporate headquarters are located in Sedalia, Missouri, to which Mr. Stevens responded that yes, the corporate headquarters are located in Sedalia. Vice Chairman Starr asked about the debt, equity, and leverage of the Company. Mr. Stevens replied that the Company has very limited debt because income is reinvested and currently the Company s debt is less than $6 million. Secretary Neff made a motion to approve the following Resolution of Intent: RESOLUTION OF THE MISSOURI DEVELOPMENT FINANCE BOARD PRELIMINARILY APPROVING A PROJECT FOR PROENERGY HOLDINGS, INC. AND PROENERGY & AFFILIATES INC. OR A RELATED ENTITY AND DETERMINING THE INTENT OF THE BOARD TO ISSUE ITS BUILD MISSOURI REVENUE BONDS IN A PRINCIPAL AMOUNT OF APPROXIMATELY $3,098,700 TO FINANCE A PORTION OF THE COSTS OF THE PROJECT. Member Martin seconded the motion. The following roll call vote was recorded: Aye: Nay: Absent: Starr, Neff, Mehner, Eckelkamp, Martin, Shelton, Lamping, Kinder, Kerr, Hagler, Pauley and Carmichael Chair Carmichael declared the motion passed. B. City of Lee s Summit Arnold Hall Theater Robert V. Miserez Tax Credit for Contribution Application Mr. Miserez presented the application from the City of Lee s Summit for the benefit of the Arnold Hall Theater requesting $1 million in tax credits to raise up to $2 million in contributions. Total projects costs are estimated at approximately $5.4 million. Mr. Miserez reported the project consists of the renovation of a 6,000 square foot existing building in downtown Lee s Summit and doubling of its size to convert it into a performing arts theater. Mr. Miserez noted the application was for preliminary presentation only and that no action would be taken at the meeting. Mr. Miserez introduced Lee s Summit Mayor Randall Rhoads. Mayor Rhoads introduced the project representatives. Andy Scott, project coordinator, began the PowerPoint presentation and gave a brief project overview. 6

7 Mr. Scott detailed how the project is the restoration of a historic site and structure, a catalyst for downtown revitalization, infuses arts and cultural programming, and achieves economic development plus cultural arts/ripple effect benefits. Mr. Scott introduced Steve Arbo, Lee s Summit City Manager. Mr. Arbo thanked the Board for the opportunity to present the application and commented that the project is a great opportunity for Lee s Summit and its downtown and how it is an effort to grow the City s tax base. Mr. Arbo discussed the value of the project to the community s economic development and the City s supporting plans, studies and reports. The City s commitment to the project includes a resolution, funding of the project, assignment of building and land, and approximately $1 million total value committed to date. Mayor Rhoads introduced Brad Cox, President of the Lee s Summit Municipal Building Authority (the Authority ), and noted that the City owns the building, but created the Authority to facilitate this project. Mr. Cox commented that the City has made a substantial investment to its downtown and discussed supply and demand for such a project. Mr. Cox reported on the Authority s expertise and accomplishments, stewardship, and ability to ensure the project s future operations. Mr. Cox introduced Dan Hall, Martin City Melodrama (the MCM ) and Authority Board Member. Mr. Hall reported on the history of MCM and commented that the MCM wants to move its operations, shows and jobs back to Missouri. Mr. Hall commented that the MCM is a family and professional theater, it manages its operations from earned income from ticket sales, and that MCM has a very dedicated audience that has a regional draw from Kansas and Missouri. Member Shelton asked if when the MCM was in Overland Park, they saw the kind of economic development they hoped to see in Lee s Summit. Mr. Hall responded that MCM is located in Johnson County which is already well developed. Member Martin questioned if the MCM presents the same melodrama continuously or if it is changed. Mr. Hall responded there are six to seven new shows a year. Member Martin asked how long the shows run. Mr. Hall responded the shows run approximately six to seven weeks. Member Shelton questioned if there was ample secured parking. Mr. Arbo responded that the City has a 300-car parking garage that was built with the City Hall which is directly across the street from the facility. Member Martin questioned MCM s previous budget and how much of it was applied towards rent. Mr. Hall responded that when they were located in Martin City their annual budget applied towards rent was approximately $3,000- $3,500 per month and their gross receipts totaled upwards of approximately $200,000-$250,000 per fiscal year. Mr. Hall introduced Machelle Riffe, Authority Board Member and community leader. Ms. Riffe thanked the Board for the opportunity and stated she was the chair of the Arnold Hall fundraising committee, and the director of development for Summit Christian Academy which plans to use the Theater for extracurricular activities. Ms. Riffe discussed the opportunity and community need, personal 7

8 interest and leadership commitment to the project. Vice Chairman Starr requested the dollar amounts of committed contributions. Ms. Riffe responded they currently had $1 million in verbal pledges and many of the contributors had indicated they would increase their giving if tax credits were available. The tax credits would be leveraged to maximize the contributions beyond what had already been pledged. Ms. Riffe introduced Bud Hertzog, Authority Vice President and community leader. Mr. Hertzog thanked the Board for their time and gave a personal testimony of support for the project. Mr. Hertzog read and presented a letter of financial support from key local and regional philanthropic leaders in Lee s Summit. Mr. Scott commented that the economic impact analysis on the project is not significant, but the information submitted for the analysis was conservative. Mr. Scott and project representatives were available for questions. Member Martin asked how the facility would cover their operating expenses and what fees would be charged to other organizations. Mr. Cox responded that Arnold Hall will have its own entity to run the day-to-day operations. Member Martin commented that he had concerns with operational costs and the integration of other theatrical organizations, and also cautioned the use of state tax dollars to subsidize what could be portrayed as religious activities. Mr. Allan Gray, Lee s Summit Councilman, responded that as part of the process in submitting the application, the City met with major arts organizations in metropolitan Kansas City and as a result they found a need and desire by the arts organizations to have access to audiences is eastern Jackson County and are looking for opportunities to fund organizations like the Arnold Hall project. Ms. Riffe responded that the Summit Christian Academy would be leasing the facility at a fair market value. Chair Carmichael expressed her concern regarding the minimal amount of direct net economic benefit to the state for each dollar of MDFB and state historic credits issued. Director Kerr commented that in the state s challenging economic times, every dollar in tax credits that is given out is a dollar that has to be cut from education, or corrections, or economic development. Director Kerr noted that in terms of the economic impact analysis, the Department, in many of its programs before any tax dollars are expended, has the responsibility to ensure there is a net fiscal benefit to the state. Director Kerr commented that he struggles with the project in light of his strong commitment to the arts, but also the very tough financial times the state is in at this point and time. Mark Seittmann, Chief of Staff for Senator Will Kraus, commented that the regional aspect is important due to the fact there is no facility like this project and the attraction will be regional in eastern Jackson County, but also will be regional across the state line. Chair Carmichael thanked the project representatives for their presentation and time and reiterated that there would be no action taken at the meeting. 8

9 IX. Executive Director s Report Mr. Miserez referenced the various news articles, tax credit status report, and project activity report that were included in Board materials distributed in advance of the meeting as informational material. Mr. Miserez discussed the legislative update report that was included in Board materials distributed in advance of the meeting that would directly or indirectly impact the Board and its future revenues. Mr. Miserez reminded members regarding the Missouri Ethics Commission requirement to file a personal financial disclosure statement by the May 2 deadline. Mr. Miserez distributed a handout of the Seventh Street Garage budget, gave an update and status report on the project, and showed construction photos of the garage. Board Counsel David Queen gave brief historical background information and a status report on the Old Post Office litigation. X. Adjournment There being no further business before the Board, Chair Carmichael declared the meeting adjourned. [Secretary Neff s Signature] 9