Public Hearing

The mayor promptly convened a public hearing, following due published notice of same, on the creation of a modified tax increment district, entitled "Modification of Development District No. 1" and Clerk Joe Heinen passed out a condensed version of the plan that would specify the boundaries of Tax Increment District No.1-2. That boundary would run consistent with the first phase of the final plat of Freeport Industrial Park Plat 1. Fiscal consultant David Drown was on hand to explain the purpose of this new district and he informed all present that all property taxes generated within this district would be collected and placed in a separate fund from other taxes. All excess taxes not returned to an identified developer could be used by the city for certain public facilities costs, i.e., sewer, water, streets and storm drainage improvements within the new district, he stated.

Drown also reminded the council and the audience that the creation of this district had to include a determination that a need for additional employment and expansion of the tax base for a public purpose was necessary and the economic vitality for the city would be enhanced by such action and certain objectives would be spelled out in the pending plan.

The mayor then called for additional comments or questions from the audience or the council and after clarifying several issues upon answers provided by Drown, he declared the hearing adjourned at 7:50 P.M.

After minor discussion, Thelen moved to adopt Resolution No. 2002-21, a RESOLUTION APPROVING THE MODIFICATION OF DEVELOPMENT DISTRICT NO. 1, MODIFICATION OF THE DEVELOPMENT PROGRAM RELATING THERETO, THE ESTABLISHMENT OF TAX INCREMENT FINANCING DISTRICT NO. 1-2 AND THE ADOPTION OF THE TAX INCREMENT FINANCING PLAN RELATING THERETO, with a second offered by Heidgerken. On a voice vote, the motion was approved with all members voting aye.

Special Meeting

At 7:55 P.M., a special meeting followed the hearing with the primary purpose of this session dealing with certain EDA Board recommendations, after they had met at a regular meeting earlier in the day. Other parties on hand were Al, John and Tom Beste, Loren Meyer, representing the Freeport Roller Mills, and Traci Ryan of David Drown Associates. The clerk provided a summary of the action taken by the board and he detailed these items of verbal agreement that were to be considered for council ratification tonight. The agreement had been approved on a 3-0 vote by the board but was awaiting a final reply from the Bestes' as they would consider the proposal and give their final word on the matter tonight. The Bestes' indicated in the affirmative that they would accept these terms and conditions:

  • Freeport Roller Mills agrees to purchase 15 acres of land within the park for $8,000 per acre, accept $5,000 per acre in special assessments. They also agreed not to file a building permit for the construction of a $2.5M complex, with a limited market value of $306,000 before September 25, 2002, since the deal between both parties would require tax increment financing to be extended by the city. They would also provide for a utility easement to be put in place across the tract to allow the city to extend sewer and water services.
  • the city would grant first right of refusal for up to 15 additional acres of land lying adjacent to the initial site, with terms and conditions to be negotiated at the time of sale. The city would install sanitary sewer, storm drainage, water, curb, gutter and bituminous street, with a cul-de-sac for the developer's access unto the future public street. The city would also provide tax increment financing assistance for a period of up to nine years @ 90% of the fully developed property taxes at an estimated pay-as-you-go total of $132,000.

This agreement would be contingent upon the placement of the business complex being adequately configured within a parcel that would have, at a minimum, 900 feet of frontage along the I-94 right-of-way. It was also estimated that the Bestes' net cost for the acquisition of land and assessments levied would be $62,970 after all of the TIF reimbursements are factored in.

As a result, a motion was introduced by Councilmember Humbert to authorize the terms and conditions for the sale of land to the Freeport Roller Mills and direct staff to prepare the necessary TIF Development agreement. Heidgerken seconded the motion and with all members voting in the affirmative, the motion was approved.

After previously receiving a written proposal from the Freeport State Bank to purchase, at a minimum, $289,000 in G.O. Improvement Bonds, for the financing of the public facilities within the Industrial Park at an interest rate of 4.30% over a period of 15 years, Drown presented Resolution No. 2002-22, a RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF A $375,000 G.O. IMPROVEMENT BOND AND LEVYING A TAX FOR PAYMENT THEREOF after he had spent the past two weeks negotiating the terms and conditions of the increased face amount. The primary reason for the higher amount was due to the need for some up-front capitalized interest, since the city would not see collections of land and assessment payments as expected. In addition, the initial face amount from the bank did not take into account the engineering fees associated with the project as well as certain other eligible costs relating to legal and fiscal fees. The call provision had been removed; however, the city would not begin to make principal payments until the year 2005. Satisfied with these changes, Humbert moved for the adoption of the resolution, s/Boelter, and with five ayes and no nays, the motion passed.

With the pending sale of land to Freeport Roller Mills within the Industrial Park, Ryan appeared to discuss the need to set a public hearing to again modify the Tax Increment District No. 1-2, since the need for TIF reimbursements had been requested by that firm.

As a result, she indicated that a public hearing be set for September 25, 2002, to consider that modification and a Resolution No. 2002-23, a RESOLUTION CALLING FOR A PUBLIC HEARING ON MODIFICATION OF TAX INCREMENT DISTRICT NO. 1-2 AND THE MODIFICATION OF THE FINANCING PLAN RELATING THERETO, was introduced by member Heidgerken, s/Thelen. Upon being put to a vote, the document was ratified by a 5-0 margin.

Ryan also revealed that since the Freeport Roller Mill project would ultimately result in over $100,000 being reimbursed and when developers receive funds over this limit, the local unit of government is required to conduct a public hearing to hear details of a business subsidy agreement. She suggested that this hearing be held also on the evening of September 25th, in conjunction with the TIF District modifications also scheduled for that time. With that, Resolution No. 2002-24, a RESOLUTION CALLING FOR A HEARING ON A PROPOSED BUSINESS SUBSIDY AGREEMENT INVOLVING

FREEPORT ROLLER MILLS, was introduced and Heidgerken moved for its passage, s/Boelter. All members voted in the affirmative to approve this action.

Upon hearing that the EDA had received a request from Freeport Properties, LLC, for tax increment financing assistance in written form, the discussion focused on how to fairly treat that firm after the 3.38 acres of Lot 1, Block 1, Industrial Park, originally required them to pay $12,000 per acre for land and $16,000 for assessments. The EDA had suggested that their costs be reduced after the Freeport Roller Mills development would cause the assessments to drop significantly and the city would see a high source of revenue from unanticipated land sales than was projected. With some debate on this issue, a motion was made by Heidgerken, s/Boelter, to approve assistance to Freeport Properties, LLC, in the form of a reduction of the total $94,640 of land ($40,560) and assessments ($54,080) costs by an amount not to exceed $40,000. This would be accomplished by reducing the agreed upon assessments from $16,000 an acre to Approximately $10,000 per acre, for a net reduction of $18,000, based on 3.38 acres., and the remaining assistance of $22,000 to be provided in the form of annual pay-as-you-go increment payments equal to not more than 50% of the increment generated specifically by the Osendorf/Ellingson project over a period of not more than nine years or until the $22,000 is reimbursed, whichever occurs first. This motion was approved with a 5-0 vote.

After hearing again from Attorney Robert Vose, a revised Resolution No. 2002-24A, a RESOLUTION APPROVING THE CHANGE IN OWNERSHIP OF US CABLE OF COASTAL TEXAS was submitted by the clerk. With no discussion, Boelter moved for its adoption, s/Thelen, and with 5 ayes and no nays, the motion carried.

Upon receipt of the signed easement agreements from the Franklin Sign Company, a motion was introduced by Thelen, s/Humbert, to authorize the mayor and city clerk to execute on behalf of the city to allow them a designated access to a billboard site upon Lot 1, Block1, Industrial Park, while at the same time eliminate an existing easement that now intersects certain lands that would hamper the sale and development of other planned Lots within the park. All voted for its passage with a 5-0 vote.

At 9:10 P.M., the meeting was adjourned by unanimous consent.