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MIN 07.07.2003 CC-WThe City Council of the City of Georgetown, Texas, met in Regular Session on the above date with Mayor Gary Nelon presiding. Council Present: ;;Council Absent: Patty Eason, Gabe Sansing, Doug Smith, Jack Ken Evans, FarleySnell ';Noble, John Kirby Staff Present: Paul Brandenburg, City Manager; Tom Yantis, Assistant City Manager; Jim Briggs, Assistant City Manager for Utility Operations; Trish Carls, City Attorney; Sandra Lee, City Secretary; Micki Rundell, Director of Finance and Administration ------ ,---- Minutes Called to order at 4:00 p.m. A Wolf Ranch Development Agreement -- Tom Yantis, Assistant City Manager; Jim Briggs, Assistant City Manager for Utility Operations; Micki Rundell, Director of Finance and Administration; and Trish Carls, City Attorney Councilmember John Kirby recused himself and left the dais Yantis gave Council some clarifications regarding an article written in the local newspaper regarding a Simon project in Bowie, Maryland. He said he spoke to the City Manager of Bowie and found that the issues were not the same as here in Georgetown. He noted that due diligence was done on Simon projects done here in Texas where similar arrangements were made as are being requested here. He introduced Bili Hammer of Simon Properties. Hammer gave Council an explanation of the project in Bowie and other Simon projects in Texas. Yantis recalled the issues upon which the Council agreed in the resolution passed by the Council on May 27, 2003. He noted a few minor wording changes to the draft development agreement that was provided in the Council packet. He talked about the "triggering" mechanisms in the Agreement and did a brief overview of Section 3. Smith asked what would happen if the Texas Department of Transportation (TXDOT) didn't go through with their proposed obligations. Yantis said there is an advanced funding agreement between the City and TXDOT, and if TXDOT doesn't go through with it, the City is not responsible. It was noted that the City of Round Rock is also involved in an agreement with TXDOT to pay to move a waterline that was installed in the right of way. Smith said he feels that the City will eventually pay to have the improvements done if TXDOT backs out. Smith said he wanted Simon, not the City, to be responsible if TXDOT fails to do their share. Noble asked for clarification as to why those particular road improvements would be done, and Yantis explained that the project is a catalyst that caused TXDOT to suggest that they would make certain improvements. Regarding the public utility improvements, Yantis noted that the City and Simon had specifically agreed that City Council Meeting Minutes/July 7, 2003 Page 1 of 3 Pages the City would not have more than $3.5 million in costs and if the costs exceed the $3.5 million, Simon is responsible for funding the remainder of those costs. Nelon asked and Briggs explained the advantages of being able to extend the wastewater system on SH29 west of the project on SH29 where none exists today. He said it will also allow existing lift stations to flow by gravity rather than being pumped; and, he said there will be a much better environmental impact on the Aquifer Recharge Zone. Regarding the public on-site improvements, Yantis pointed out that the agreement states that the City is not responsible for any more than $15 million, and if the project comes in at less than projected, there is a cost savings arrangement to allow the City, after the initial savings that go to Simon, to share equally in any savings after that. Yantis noted that Carol Polumbo had verified that the on-site improvements, such as the parking and landscaping, meet the public improvement test. He said Palumbo sited a Simon project in Grapevine where the City of Grapevine filed a validation suit whereby the Attorney General decides whether or not the improvements listed meet the "public improvements" test. He said their improvements were validated and were substantially similar to the Georgetown improvements list. Yantis said Simon has talked to staff about using an incentive to increase the 10% to 10.5%. Eason asked and Bill Hammer of Simon was asked to respond, and said that the amount needs to be 10% based on the cost of money and being able to provide adequate profit for stockholders. Nelon said the project will be "risk-free" because nothing but sales tax will be used to pay that 10%, and there is a refinancing opportunity in the agreement that would allow the percentage to be negotiated beyond the first three years. Smith shared some research he has done regarding the cost of land in the area. He said he thinks the Council is setting a "dangerous precedent" if the Council subsidizes Simon using the rationale that the subsidy is what it takes for Simon to be profitable. Nelon pointed out that the 10% figure was included in the amount agreed to by the Council on May 8. Sansing said he thinks the Economic Development Commission is working on criteria for other developments to be able to have guidelines set forth whereby the City could share in revenues. He said he doesn't consider sales tax sharing a subsidy, especially when it is being generated from the project. He said he encourages staff and Simon to stay with the 10% and not increase to 10.5%. Yantis explained the section of the Development Agreement regarding creation of a public improvement district and/or a tax increment financing district. Nelon suggested that Yantis talk about the Neighborhood Empowerment Zone that would benefit downtown. There was discussion. Yantis said staff would bring back further information about the zone for the Council in August. Under Sec. 2.12. Cooperative Marketing, Eason asked that "downtown Georgetown" be specifically added to the language regarding "other locations of interest." There was discussion. Yantis pointed out that there still has been no agreement reached regarding assignability. Nelon asked for some protective language to be added in that section. There were further questions from Council. Sansing and Nelon noted that it is good for the City to be able to receive revenue from the electric service to the project as well as a negotiated service area for a Simon project in Round Rock. Yantis said there would be a special meeting on Wednesday, July 16, for Council to take action on all of the related agreements for Simon. B Council Calendar - Special Council Workshop on Impact Fees on July 8, 2003, at 5:00 p.m. in the San Gabriel Room, Georgetown Municipal Complex, prior to the Regular Council Meeting at 6:00 p.m. - Regular Council Meeting on Tuesday, July 8, 2003, at 6:00 p.m. in the San Gabriel Room, Georgetown Municipal Complex - Special Council Meeting on Wednesday, July 16, 2003, at 5:00 p.m. in the San Gabriel Room, Georgetown Municipal Complex, to consider action on the Wolf Ranch Development Agreement - Open House at the Georgetown Municipal Complex on Wednesday, July 23, 2003, from 5:00 p.m. to 7:00 p.m. 5:05 p.m. -- recessed 5:20 p.m. -- convened Executive Session Execrative Session In compliance with the Open Meetings Act, Chapter 551, Government Code, Vernon's Texas Codes, Annotated, the City Council Meeting Minutes/July 7, 2003 Page 2 of 3 Pages items listed below will be discussed in closed session and are subject to action in the regular session that follows. C Sec.551.071 consultation with attorney - Pending Litigation - Thomas L. Suarez, Jr. vs. city of Georgetown, Texas, City of Georgetown Police Department, Georgetown Police Sgt. Kelly Devoll, Georgetown Police Officer Jack Lacey, Matt Painter, Brian Grubbs, Cause No. 03-113-C368 in the 368th Judicial District Court of Williamson County, Texas - Matthew Painter and Brian Grubbs, Plaintiffs v. David Morgan, Individually and in his Official Capacity as Chief of Police of the Georgetown Police Department; Robert Hernandez, individually and in his Official Capacity as Captain of the Georgetown Police Department; Gary Todd Terbush, Individually and in his Official Capacity as Lieutenant of the Georgetown Police Department; Georgetown Police Department; and the City of Georgetown, Defendants, Cause No. A03-CA-014JN, In the United States District Court for the Western District of Texas, Austin Division. - Potential Litigation/Settlement Offers - John Simmons, d.b.a. Georgetown Aviation Facilities Complaint to FAA - TXU Gas Company Statewide 2003 Rate Case, Railroad Commission of Texas - Legal Advice Regarding Agenda Items and other Matters - Legal issues related to the proposed SIMON Development Agreement and Memorandum of Understanding, and/or Advanced Funding Agreement for Wolf Ranch Project 5:45 p.m. -- resumed Open Session and adjourned The meeting was adjourned at 05:45 PM. Apprred Attest: .0 tlayor ary Nei an City Secreta City Council Meeting Minutes/July 7, 2003 Page 3 of 3 Pages