INDUSTRIAL DEVELOPMENT AUTHORITY
OF THE
COUNTY OF PRINCE WILLIAM
February 4, 2019
Approved Minutes
The Regular Meeting of the Industrial Development Authority of the County of Prince William was called to order by Lorna Wallen, presiding as Chairman at 6:30pm in the Occoquan Conference Room of the Prince William County James J. McCoart Administration Building located at One County Complex Court, Prince William, Virginia 22192.
Present were: Lorna Wallen, Vice Chairman
Laurie Wieder, Secretary/Treasurer
Steve Dawson, Assistant Secretary/Treasurer
Andrew Taylor
Doug Taggart
Absent were: Patrick O’Leary, Chairman
Paul O’Meara
Scarlett Barbee attended to provide administrative support.
Tom Flynn, Business Development and Investment Director with the Prince William County Department of Economic Development, attended to present the Performance Agreement between Clarke Hook Venture-I, LLC, DBA Brickyard and the Industrial Development Authority of the County of Prince William.
PLEDGE OF ALLEGIANCE
CITIZEN’S TIME:
NEW BUSINESS: Vice Chairman Lorna Wallen recognized Tom Flynn, Business Development and Investment Director with the Prince William County Department of Economic Development (DED). Mr. Flynn began by discussing the appeal of co-working spaces such as the one Brickyard will be bringing to Prince William County. Co-working spaces provide individual small offices or desk space to start-up and existing companies. In addition to office space, Brickyard offers camaraderie with other businesses by providing shared conference rooms, kitchen facilities and other amenities that are desired by entrepreneurs. Adjunct business services including seminars and workshops will also be offered. Brickyard Woodbridge will be located in Neabsco Commons. Neabsco Commons is located next to the Regional Center for Workforce Education and Training adjacent to the Woodbridge campus of Northern Virginia Community College (NVCC) and across Neabsco Mills Road from Freedom High School. Brickyard will be located on the ground floor of a residential unit. It will be in close proximity to the existing Hilton Garden Inn and the Homewood Suites. The grocery chain, Lidl, expects to build a future store on the site. Brickyard’s representatives looked at many locations throughout the County and selected this site due to the proximity to Northern Virginia Community College and the mixed-use aspect of the site. Laurie Wieder asked if Brickyard will be affiliated with the Regional Center for Workforce Education and Mr. Flynn responded that there is no affiliation at this time. However, Brickyard is very interested in working with NVCC in the future. Currently, NVCC does not offer a degree or certification in entrepreneurship, but they do offer selective courses in the subject. Brickyard is currently considering how it might bring NVCC into the co-working space to assist entrepreneurs with the start-up process. DED worked with Brickyard and the developer/owner of Neabsco Commons to come up with a plan. There was a gap in the overall deal regarding the costs to upfit the space to make it suitable for Brickyard’s use. Brickyard originally requested $500,000 as an incentive grant and that request was negotiated down to $400,000 with several provisions placed on the funding. Brickyard expects to create 40 new jobs and invest $664,000. The upfit must be completed and Brickyard must obtain a certificate of occupancy before any payment is received. Brickyard’s representatives have produced a marketing plan and are currently in the upfit permitting process within the County’s Development Services Department. Brickyard expects to open in late summer with a formal ribbon cutting ceremony.
The Performance Agreement that the IDA is considering includes claw-back provisions in the event of Brickyard’s bankruptcy. Brickyard’s parent company, Clarke Hook, has been active in commercial building development in the Washington metro area for a long time and the County would seek to recoup its grant funds from the parent company. Doug Taggart noted that the IDA’s Performance Agreement is with Brickyard and the parent company, Clarke Hook, is not a signatory to it. He asked if this could present some issues in the event of a bankruptcy by Brickyard. Mr. Flynn responded that the County’s attorneys reviewed the clause and were confident that the County had legal standing if it became necessary to pursue repayment. Laurie Wieder noted that this Performance Agreement is very different from most that come before the IDA. In this Agreement, all of the funds are being given upfront rather than in stages as is the usual protocol. Also, this grant is to develop a site and put together a plan but does require the delivery of a specific product. Ms. Wieder asked if Brickyard will offer seminars and Mr. Flynn responded affirmatively. The paying tenants that Brickyard wants to attract want the seminars and DED also wants seminars to be offered. Ms. Wieder noted that the Performance Agreement simply says that Brickyard must provide a plan for entrepreneurial events and seminars and file taxes. It does not state that Brickyard actually has to deliver the services. Mr. Flynn agreed that it is a very different Performance Agreement and the IDA may be seeing more of this type of Agreement as the County works on product development and redevelopment opportunities in the eastern part of the County. He stated that it is a little riskier than some Performance Agreements. Ms. Wieder noted that there are no ROI figures and, when spending taxpayer funds, she prefers to see those numbers. She noted however, that the IDA is not a policymaking board and she knows the Board of County Supervisors considered those issues. Ms. Wieder asked about the results of Brickyard’s experience in Loudoun County. Mr. Flynn responded that Brickyard has been very successful. It opened in Loudoun in a 3,000-square-foot space, expanded to 6,000 square feet and currently occupies 9,000 square feet. It is financially viable in Loudoun. Lorna Wallen asked what the employment numbers are in Loudoun. Mr. Flynn did not have that information but will obtain it after the meeting. Ms. Wallen also inquired about the retention rate of those jobs. Mr. Flynn explained that in a co-working space, the object is to move occupants out of Brickyard and into their own commercial space. Ms. Wallen is asking about those companies that do move out but remain in the region in commercial space. Ms. Wieder noted that a previous business incubator located on George Mason University’s SciTech Campus eventually turned the space over to the Serious Games Institute because it could not find enough entrepreneurs to occupy the space. Mr. Flynn stated that his understanding is that there was never a buzz at that location and it is important to have a certain atmosphere to create entrepreneurship. Co-working companies looking at the Innovation area did not feel that it was ready yet for such an undertaking. Brickyard was seeking more of an urban feel and a mixed-use area and they believe they have found it in Neabsco Commons. Ms. Wieder noted that having a private sector firm doing the marketing may also be more beneficial than what a university might be able to do, although she noted that George Mason’s incubator in Fairfax has been successful and that its success in factor may be due to what Mr. Flynn described as the buzz factor in that location. Mr. Flynn stated that DED is currently working with George Mason’s Small Business Development Center program as a potential provider of small business services. Mr. Dawson noted that Page 2 of the Performance Agreement states that desk space will be provided for the Flory Small Business Center, which is in the process of closing. Mr. Flynn responded that the Agreement was written last October and the Staff Report, written recently, corrects that error. He called attention to Page 2 of the Staff Report, Item B(2) states that Brickyard will establish dedicated desk space for a Prince William County staff member that also can be used by the County’s contracted entrepreneurial and small business support organization. The County is receiving office space for its small business provider in the eastern portion of the County. Brickyard engaged in substantial negotiations with the builder/developer of the site, which originally wanted to apply all condominium fees and covenants to Brickyard. The Agreement was not signed by Brickyard until November when this issue was resolved.
Mr. Flynn stated that he is going to ask Brickyard for a side letter to clarify that there is a requirement to implement entrepreneurial events and seminars rather than only having a plan for them. Mr. Taggart stated that his understanding is that the incentive funding is being granted to provide tenant improvements and purchase office equipment. Ms. Wieder stated that she would like to see results in addition to the build-out. Mr. Taggart ‘s understanding is that the Board of County Supervisors wants to create opportunities in the eastern region of the County. This agreement provides initial tools and leaves it to Brickyard to put together and implement a plan. Mr. Flynn wants Brickyard to be successful by delivering programs. Ms. Wieder would also like to see that Brickyard is planning to market the space to get occupants into the building. Mr. Flynn responded that Brickyard must attract occupants for the space to be financially viable.
Following this discussion, Steve Dawson made a motion to approve the Performance Agreement between the Industrial Development Authority of the County of Prince William and Clarke Hook Venture-I, LLC DBA Brickyard to provide $400,000 as an Economic Development Opportunity Fund grant to Brickyard in accordance with the terms of the Performance Agreement. The motion was seconded by Laurie Wieder and passed unanimously with Lorna Wallen, Laurie Wieder, Steve Dawson, Andrew Taylor, and Doug Taggart each voting aye. Mr. Flynn thanked the IDA for their thoughts and questions. There was a brief delay of two minutes while Lorna Wallen and Laurie Wieder signed the Performance Agreement.
MINUTES OF THE JANUARY 7, 2019 PWC IDA MEETING: Ms. Wallen asked if there were any questions or concerns regarding the Proposed Minutes from the January 7, 2019 meeting. Hearing none, Laurie Wieder made a motion to approve the January 7, 2019 minutes as presented, seconded by Steve Dawson. The motion passed with Lorna Wallen, Laurie Wieder, Steve Dawson, and Andrew Taylor, each voting aye. Doug Taggart abstained from the vote as he was not a member of the IDA at the January 7, 2019 meeting.
TREASURERS REPORT: Laurie Wieder stated that George Mason has been invoiced for its administrative fee. There is no collection report this month because all administrative fees that are due have been collected. There is no check register for the incentive account or the incentive SWEEP account because there were no transactions in January. The final FY17-18 IDA Audit was received and distributed electronically to the Clerk of the Board of County Supervisors and the County’s library system. The meeting among Laurie Wieder, Donna Flory, and representatives of the Department of Economic Development regarding financial procedures has been postponed until February 8. Mr. Dawson asked if there had been any recent disbursements to Neabsco Creek, LLC. Ms. Wieder responded that the last disbursement was on December 20, 2018. Then Ms. Wieder read from Paul O’Meara’s email report dated January 31, 2019, reporting on the Neabsco Creek meeting. These are the details from the email: Four individuals attended: Tom Flynn; a Stantec rep; Terry Hill; and Paul O’Meara. Melissa from the Virginia Port Authority was on the phone. Melissa talked about requirements necessary to release funds. Paul confirmed with Melissa that it is a requirement to show transactions as they are received and disbursed to Neabsco Creek, LLC. The Virginia Port Authority needs to ensure chain of custody. Three sets of books, one each kept by the County, Stantec and Terry Hill, are tied to payments and invoices. Mr. Hill confirmed with Stantec and the County that their numbers closely match his. The County’s anticipated exposure is $776,800, which would result in reimbursement from the Port Authority in the amount of $194,200. Some of the $776,800 might not be acceptable to be reimbursed. Approximately $98,000 of the original $750,000 County funds remain encumbered to the Neabsco Creek Dredging Project. Ms. Wieder noted that the IDA shows that there is $133,000 remaining but that is likely because there are some receipts that have not yet come to the IDA for reimbursement. Once Mr. Hill pays invoices through January, he should have approximately $70,000 left in the Neabsco Creek operating account. He will have to pay the trucking company. Landfill fees are not due until March 1. Mr. O’Meara sent a second email today with an accounting sheet attached that was received from Mr. Hill. This is the same sheet that Mr. Hill provided to Stantec and to the County. The remaining work includes dredging the channel an additional foot – from 5 to 6 feet – and dredging the fairways as approved by the Supervisors and the IDA. The County will want receipts that show the IDA received the funds and passed them through to Neabsco Creek. Ms. Wieder will forward the Paul O’Meara’s email to the other IDA members. Mr. Taylor clarified that that the difference between the $98,000 and the $133,000 is likely a timing issue. Mr. Dawson noted that the IDA does not see actual receipts from the dredging project. Stantec reviews the receipts and then the County advises the IDA when it is time to generate a payment invoice. The IDA is at the end of the payment process. Ms. Wieder questioned whether it is going to be possible to complete the amount of dredging outlined in Alternative C that was approved by the BOCS and the IDA because it appears that the estimates are $30,000 short of the $1,000,000. Mr. Hill previously indicated that he thought the cost estimates put forward by DED were higher than what would actually be needed so it may be possible to perform all the dredging for $970,000. Mr. Dawson is concerned with facilitating the transfers in a timely fashion as it is taking a week to complete transfers. Following this discussion, Doug Taggart made a motion to accept the Treasurer’ Report, seconded by Steve Dawson. The motion passed unanimously with Lorna Wallen, Laurie Wieder, Steve Dawson, Andrew Taylor, and Doug Taggart each voting aye.
CHAIRMAN’S REPORT: Ms. Wallen noted that Ms. Wieder covered the Neabsco Creek Dredging Project update during the Treasurer’s report.
Rules and Procedures Section 6.2 Report: Ms. Wieder reported that currently there are approximately $306,630,000 in outstanding bonds on which the IDA assesses annual administrative fees. These include three for American Water totalling more than $3 million, Sentara at almost $37 million, Novant at $136 million, two for George Mason University projects totalling almost $50 million, the Diocese of Arlington at $13 million, Westminster at Lake Ridge at more than $45 million, and two for Glen Arbor at nearly $22 million. In addition, there is bonding for the Prince William County Policy Station; its original offering was more than $26 million, but we do not know its outstanding balance as we do not calculate an annual administrative fee for that project. There is $725,000 in outstanding incentive grants approved prior to November 2017. These include $25,000 for Ventech Solutions and $700,000 for US Foods. Additionally, the Iron Mountain data center has $250,000 in outstanding water credits, bringing the value of the total outstanding incentive grants approved prior to November 2017 to almost $1 million. After November 2017, there is almost $544,000 remaining in incentive grants to be passed through including almost $384,000 for the Neabsco Creek project, $20,000 for Dulles Glass & Mirror, $15,000 for IsoThrive #3, $25,000 for Medliminal and $100,000 for the U.S. Tennis Center.
Flory Small Business Center: Pat O’Leary met with Chris Price on January 11 to discuss several topics. The Flory Center is ceasing operations. Mr. O’Leary is seeking a location for storage of the IDA’s physical files. For the time being, the IDA will pay the State Corporation Commission annual fee of $25 to maintain the Flory Center’s corporate structure.
OLD BUSINESS: IDA and BOCS Agreement update: Andrew Taylor discussed the Agreement with Jeff Kaczmarek, former Executive Director of the Department of Economic Development but Mr. Kaczmarek has since retired. Ms. Wieder believes that Mr. O’Leary is planning to follow up with Chris Price regarding this topic.
Changes to the IDA’s website: Ms. Barbee noted that 2019 meeting dates and a current list of IDA members have been posted to the IDA’s website.
NEW BUSINESS: Google Drive Account: Ms. Wieder has asked Ms. Barbee to set up a Google Drive account. This will allow various documents to be created to outline operational procedures as well as questions that need to be addressed on the way in which the IDA will operate given that it is no longer housed in and contracting with the Flory Center. Ms. Wieder envisions this to be solely for operational purposes and for use by the Chairman, Vice Chairman, Secretary/Treasurer, Assistant Secretary/Treasurer, and the administrative independent contractors.
IDA Cell Phone: Ms. Wieder suggested purchasing a cell phone as the official phone number for the IDA. To begin discussion, Ms. Wieder made a motion to authorize the purchase of a cell phone as the IDA’s official phone, seconded by Steve Dawson. Mr. Taylor asked how the IDA’s phone is currently being handled. Ms. Wieder responded that the Flory Center’s phone number is being used and Brian Gordon’s cell phone number is on the IDA’s website. Mr. Dawson previously utilized his cell phone as the contact number. Ms. Wieder stated that it would be appropriate for Ms. Barbee to have possession of the phone, but Mr. O’Leary, Ms. Wieder and Donna Flory should also be able to call in and check messages, etc. Several thoughts followed: Ms. Wallen suggested getting an unlocked phone from Amazon and checking on a Metro PCS plan, which costs about $30 a month. She also suggesting getting prices from Boost and T Mobile, as they offer little or no fees in addition to a monthly cost. Ms. Wieder noted that Donna Flory uses her own phone to check email because she has to respond quickly when the County requires a funding transfer. Mr. Taggart suggested utilizing a County extension that could be auto forwarded to any phone. Ms. Wieder noted that the IDA tries to maintain some distance between the IDA and the County. Ms. Wallen asked if the current Flory Center line could be kept and call-forwarded to a personal phone. Ms. Wieder prefers Verizon or a similar major carrier. Ms. Wieder requested Scarlett Barbee undertake research into available phone services and carriers and present it at the special meeting scheduled for February 14, 2019. Mr. Taggart reminded it would be important for the recovery phone number for the IDA’s emails to be changed to any new member, assuming that the current recovery number is the Flory Center’s number. Ms. Wieder’s motion was tabled and Ms. Barbee will gather information so that a decision on a phone provider can be made at the February 14, 2019 IDA meeting.
Electronic Cloud Storage: Ms. Wieder noted that there is a need for the IDA to determine how it will store its electronic records and suggested exploring cloud storage. Ms. Wieder has it where she works but it was set up by her company’s IT department. Mr. Taggart stated that he has cloud storage that his IT people set up and it is also tied to the phone system. Mr. Taylor suggested Google Docs. Ms. Wieder remarked that Google Docs are difficult to use. Mr. Taylor uses a service called Virtual File Cabinet at his law firm but it is expensive, costing a few thousand dollars per month. Mr. Taylor said VFC allows clients to access confidential documents securely but that the IDA may not need that level or service nor have documents as extensive as his law firm. Mr. Taggart noted that the challenge would be to have someone set up the file structure so that it is more than just a place to put the documents. Mr. Taggart noted that those can be partitioned. Mr. Taylor suggested that Google Docs would be sufficient if that space is just being used for storage and not for communication. Ms. Wieder would like to get some IT recommendations that are easy to access and more user-friendly than Google docs. Mr. Taggart will forward information on the service his company uses to Ms. Wieder.
OTHER MATTERS TO COME BEFORE THE AUTHORITY/INDIVIDUAL MEMBERS TIME:
The next meeting of the IDA is scheduled for Thursday, February 14, 2019 at 10:00am.
There being no further business to come before the Authority, the meeting was adjourned at 7:50pm on the motion of Laurie Wieder, seconded by Steve Dawson.
Approved March 4, 2019