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[ BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT NOTICE OF SPECIAL MEETING BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT SPECIAL MEETING THURSDAY, APRIL 15, 2021 4:30 P.M. COUNCIL CHAMBER, CITY HALL 2401 MARKET STREET, BAYTOWN, TEXAS 77520 Due to the COVID 19 Disaster and the CDC's recommendation regarding social distancing measures, the public may not be allowed to be physically present at this meeting, as there is a limited amount of space when maintaining the required 6-feet separation from others. For those members of the public that cannot or do not wish to be physically present at the meeting, they will be able to participate through two-way communications. For video conferencing, use the following website www.zoom.com, click on "join a meeting" on the top right-hand corner, and input the following Meeting ID: 830 9669 8684. For telephone conferencing please use the following toll-free number: 1-888-788-0099, Meeting ID: 830 9669 8684. Any person, who is participating through video/teleconferencing and is interested in speaking on any item on the agenda, must submit his/her request via email to the Assistant Secretary at cityclerk@baytown.org. The request must include the speaker's name, address, and phone number that will be used if teleconferencing as well as the agenda item number. The request must be received prior to the posted time of the meeting. The agenda packet is accessible to the public in both HTML and PDF formats at the following link: https://www.baytown.org/city-hall/city-clerk/agendas-minutes. After the meeting, a video recording of this meeting will be made available to the public at https://www.baytown.org/city-hall/city-clerk/agendas-minutes. For more information or questions concerning the teleconference, please contact the Office of the City Clerk at 281-420-6504. AGENDA CALL TO ORDER AND ANNOUNCEMENT OF QUORUM ]
WILL CALL THIS MEETING TO OF THE, UH, THE SPECIAL MEETING OF THE BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT TO ORDER.WE ARE IN CITY HALL COUNCIL CHAMBERS.
IT IS MY UNDERSTANDING ON ZOOM WE HAVE, UM, MR. POWELL AND MS. ALVARADO.
AND ALSO, UH, ON ZOOM WE ALSO HAVE DAVID DAWSON AND, UH, UH, ONE OTHER INDIVIDUAL.
[1. DISCUSSION..]
FIRST ITEM WE HAVE IS TO DISCUSS THE TIMEFRAME AND THE NEXT STEPS FOR THE HOTEL CONVENTION CENTER PROJECT.SO I'M ASSUMING THAT'S A DISCUSSION, AND THEN THERE'LL BE SOME ACTION ITEMS AFTER THAT.
IS THAT CORRECT? IT SAYS DISCUSS AND IT SAYS CONSIDER, UH, FOR ITEM TWO A.
SO FIRST, I GUESS WE'LL OPEN THAT UP FOR ITEM ONE A.
AND WHO'S, WHO'S THE LEAD ON THAT? DAVID DAWSON.
MR. UH, MR. DAWSON, THE FLOOR IS YOURS.
UH, SO THE PURPOSE OF THIS MEETING IS TO, UH, REVIEW, UH, THE BUDGET, UH, FOR THE OVERALL PROJECT IN LIGHT OF, UH, NEW DEVELOPMENTS THAT HAVE OCCURRED IN JUST THE LAST REALLY WEEK.
UH, STEVE ALRE WITH, UH, GARFIELD PUBLIC PRIVATE IS HERE TO TALK IN MORE DETAIL ABOUT THE PARTICULARS, UH, REGARDING, UH, WHAT OUR COST INCREASES FROM THE SUBCONTRACTORS, UH, ON THE PROJECT.
THE SITUATION THAT WE FIND OURSELVES IN IS THAT SUBCONTRACTORS, UH, HAD HELD THEIR BIDS THROUGH THE END OF MARCH.
UM, BUT GIVEN THE, UH, THE, THE DISLOCATION IN, UH, THE, THE MANUFACTURING MARKETS, UH, THE SUPPLY CHAINS, ET CETERA, PRICES HAVE GONE UP FOR A NUMBER OF, UH, SUBCONTRACTORS.
UM, SO, UH, THAT, THAT'S SOMETHING THAT, UH, THAT UH, UH, THAT RICK I KNOW IN, UH, IN THE WHOLE STAFFING TEAM AT AT BAYTOWN, UH, THOUGHT IT WAS IMPORTANT TO GET BEFORE YOU IMMEDIATELY TO, UH, TO, TO TALK ABOUT IT.
UM, WE ARE ON THE CUSP OF LAUNCHING THIS TRANSACTION, UH, BACK TO STANDARD AND COORS, WE RECALL THAT ONE YEAR AGO WE LAUNCHED THIS TRANSACTION AND SUBMITTED IT TO STANDARD AND POURS FOR THE RATING PROCESS.
PRETTY MUCH GOT THROUGH THAT PROCESS AND THEN COVID HIT AND EVERYTHING SHUT DOWN.
UM, SO HERE WE ARE RESTARTING THAT PROCESS, UPDATING THEM ON, ON THE PROJECT, NOT STARTING FROM SCRATCH, BUT JUST UPDATING THEM ON ALL OF THE DOCUMENTATION AS WELL AS, UH, THE BUDGET COST, DATA, ET CETERA.
UH, SO I'M GONNA LET STEVE TALK A LITTLE BIT ABOUT, UH, THIS COST ISSUE AND BUDGET ISSUE.
UM, AND THEN I'LL, UH, CONCLUDE BY SORT OF LAYING OUT WHAT THE REST OF THE TRANSACTION PROCESS IS TO GET FROM HERE TO CLOSING.
UH, SO STEVE, LEMME TURN IT OVER TO YOU.
UM, WE'VE WORKED HARD WITH THE MR. PRESIDENT.
IF I MAY, IF I MAY, MR. PRESIDENT, I WAS GOING TO GIVE YOU AN INTRODUCTION ON THE BUDGET.
SO STEVE, THANKS VERY MUCH FOR ATTENDING.
UM, IF YOU WOULDN'T MIND MAYBE FOLLOWING UP AFTER I GIVE THE INTRO ON THIS.
SO AS DAVID HAS MENTIONED, UH, WE HAD A LOOK AGAIN AT THE BUDGET.
UH, IF YOU REMEMBER AT, UH, YOUR PREVIOUS MEETING, YOU AGREED TO CERTAIN INCREASES IN BUDGETED LINE ITEMS, UH, THAT IS AS A RESULT OF A FUNDAMENTAL REVIEW OF THE OVERALL DEVELOPMENT BUDGET SINCE THEN, UH, WE KNOW OF THE CHALLENGES IN THE CURRENT CONSTRUCTION MARKET.
I THINK MANY OF YOU'RE PROBABLY AWARE OF THOSE WE'RE SEEING SIGNIFICANT INCREASES IN, UH, PRICES FOR STEEL, FOR INSTANCE, AND FOR LUMBER, UH, WITH A VIEW TO GETTING THIS PROJECT OVER THE LINE.
AND WE ARE ALMOST THERE AND I'M HOPING DAVID CAN TALK US THROUGH THE DETAIL OF THAT PROCESS, UH, OVER THE NEXT NUMBER OF WEEKS.
BUT WE ARE ALMOST THERE TO GET THERE.
WE NEED TO GET THROUGH THE RATING PROCESS WITH STANDARD AND PURE.
UH, TO DO THAT, WE HAVE TO HAVE A ROBUST FUNDING STRATEGY.
UH, THE REASON WE ARE COMING TO TODAY IS BECAUSE WE FEEL THAT IT IS NECESSARY TO INCREASE THE CONSTRUCTION CONTINGENCY TO SHOW THAT WE RECOGNIZE WHAT IS GOING ON IN THE CURRENT CONSTRUCTION MARKET.
UH, WE ARE NOT BEING BLASE IN DOING THAT.
THIS IS A CONTINGENCY, IT IS NOT A COMMITMENT TO ACTUALLY PAY ANY MONEY.
IT IS NOT RECOGNIZING THAT WE KNOW AT THIS STAGE THE PRICES HAVE GONE UP.
WE ARE JUST SAYING TO THE RATING AGENCY, WE'RE AWARE AND WE HAVE MADE PROVISION
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FOR ANY ADDITIONAL COST ESCALATION.THE MONEY IS NOT AN AD IN TERMS OF THE RESOURCES COMING FROM THE MDD.
WHAT WE ARE DOING IS WE'RE TAKING FUNDS WHICH HAVE BEEN SET ASIDE OVER PREVIOUS YEARS FROM THE DEBT FUND AND MOVING THAT FROM THERE INTO THE CONTINGENCY.
IT IS TECHNICALLY AN ADD TO THE DEVELOPMENT BUDGET.
THAT'S WHY IT'S ON THE SHEET FOR YOU TO LOOK AT TODAY.
BUT AS I SAY, I MEAN TO UNDERLINE THIS IN READ THREE TIMES, IT IS NOT A FURTHER INCREASE TO THE CALL ON THE RESERVES OR THE RESOURCES OF THE MDD.
STEVE, DO YOU WANT TO SPEAK AT THIS POINT JUST TO SOME OF THE, UH, THE, THE SPECIFIC COST ESCALATION FACTORS? AS I SAY, I'VE MENTIONED STEEL A NUMBER.
ARE THERE ANY OTHERS THAT YOU WOULD LIKE TO, TO FLAG AT THIS POINT? I, I THINK YOU AND DAVID TOUCHED ON THEM, IT'S, IT'S, YOU KNOW, MANY OF THESE ARE THINGS THAT YOU CAN SEE, UM, FROM COMMODITY COSTS, BUT, BUT A LOT OF IT IS TIMING RIGHT NOW.
AND SO, UH, WE AGREE WITH, WITH THE CITY THAT, UM, DOG EARING SOME ADDITIONAL CONTINGENCY SO THAT WHEN WE'RE PURCHASING THIS OUT, UM, IN, YOU KNOW, LET'S SAY JUNE, WE MAKE SURE THAT WE'VE GOT IT COVERED.
SO, SO SIR, THAT, THAT'S REALLY ALL, UM, I WANTED TO, TO BRING TO ATTENTION IN TERMS OF THE BUDGET.
I, I, AND JUST TO MAKE THE POINT AS TO SAY WE, WE ARE SO CLOSE, UH, THE, THE MORE WE DELAY AND PUSH THIS BACK, UH, THE UH, UH, THE MORE DIFFICULT IT BECOMES, YOU KNOW, WE NEED TO GET, UH, AS FAR UP THE, THE QUEUE AS WE CAN IN TERMS OF GETTING CONTRACTORS ON SITE AND, AND GET THE WORK UNDERWAY.
UM, WE ARE VERY, VERY CLEAR YOU ARE UTTERLY AND TOTALLY COMMITTED TO THIS PROJECT.
YOU SEE, UH, THE, DARE I SAY THE VERITABLE CORNUCOPIA OF ECONOMIC DEVELOPMENT BENEFITS, IT WILL BRING, UH, GIVEN THAT CLEAR DIRECTION FROM YOU, THIS IS US GETTING THIS OVER THE LINE FOR YOU.
OKAY, STEVE, DO YOU HAVE ANYTHING TO ADD TO THAT AT THIS POINT? JUST WANNA MAKE SURE NOTHING'S BEEN PRETTY CLEAR ON COSTS ASSOCIATED WITH STEEL AND MAYBE OTHER MATERIALS.
ANY, ANY QUESTIONS ON, ON, AT LEAST ON THAT? I WANNA MAKE SURE EVERYBODY IS COMFORTABLE AND UNDERSTAND AT LEAST THAT THE FIRST ITEM AND JUST PRESENTING KIND OF THE, THE SITUATION WITH, WITH BUILDING MATERIALS.
IF NOT, WE'LL MOVE ON TO ITEM TWO A, UH, WHICH WILL BE CONSIDERED RESOLUTION REPAIRING RESOLUTION 4 1 0 AND ADOPTING A REVISED BUDGET FOR THE BAYTOWN HOTEL CON, UM, CONVENTION MAY CENTER PROJECT.
CAN WE ALSO ASK DAVID TO GIVE US KIND OF THE SCHEDULE TWO THAT WAS PART OF ITEM NUMBER ONE, SO IF HE CAN KINDA GIVE US A SCHEDULE OF, OF DAVID, IF YOU DON'T MIND GETTING US A, A VERY BRIEF SCHEDULED TIMELINE OF NEXT STEPS.
UM, OUR BEST ESTIMATE OF CLOSING IS JUNE, JULY 1ST OF THIS YEAR.
HOW DO WE GET FROM HERE TO THERE? WE SUBMIT TO THE RATING AGENCIES ON MONDAY OR THEREABOUTS.
UH, WE GIVE THEM AND WE EXPECT THEM TO TAKE A PERIOD OF TIME.
UH, WE'RE GONNA ESTIMATE, UH, THROUGH, UH, ABOUT MAY 14TH TO GET BACK WITH US TO CONFIRM THE RATING.
WE THEN WILL AS QUICKLY AS WE CAN HOLD, UH, AN MDD MEETING, UH, TO APPROVE ALL OF THE SUBSTANTIVE DOCUMENTS FOR THIS TRANSACTION.
WE CAN'T DO THAT TILL WE HAVE A RATING, UM, AND, AND HAVE EVERYTHING BUCKLED DOWN.
SO, SO WE'RE SHOOTING FOR, YOU KNOW, MID, MID, LATE MAY ON THAT WE MDD MEETS.
WE APPROVE EVERYTHING AND THEN WE IMMEDIATELY GO INTO THE FINANCIAL MARKETS AND WE GIVE CITIGROUP THE TIME TO PROPERLY MARKET THIS.
UH, IT ALL DEPENDS ON MARKET CONDITIONS AT THAT TIME.
WE'RE OBVIOUSLY ALL HOPING THE FORMER, BUT IT COULD BE THE LATER.
SO WE BUILT IN THREE WEEKS OR SO TO MARKET.
WE THEN MOVE INTO THE CLOSING, UH, MODE, WHICH REALLY IS WORKING WITH THE OFFICE OF THE ATTORNEY GENERAL, UH, TO GET THEIR SIGN OFF ON THE FINAL EXECUTED DOCUMENTS.
AND THEN WE HAVE THE CLOSING PROCESS.
UM, THE ONLY OTHER SIGNIFICANT ITEM THAT'S HANGING OUT THERE THAT WE'RE WAITING ON IS SIGN OFF FROM THE, UH, THE COMPTROLLER AS TO THE EXEMPTION FROM SALES TAXES FOR CONSTRUCTION SUPPLIES.
YOU RECALL THAT, UH, IN A PRIOR MEETING I MENTIONED THAT THE COMPTROLLER HAD DISALLOWED THAT WITH OUR POC STRUCTURE AND SO WE MOVED TO HAVING THE MDD DO EVERYTHING WE GOT.
WE HAVE VERBAL CONFIRMATION THAT THEY'RE FINE WITH THAT STRUCTURE SO THAT THE $2.8 MILLION OR SO IN CONSTRUCTION SALES TAXES ON CONSTRUCTION SUPPLIES AND SERVICES, UM, IS EXEMPT.
UH, BUT WE WANT THAT IN WRITING.
UH, THEY EMAILED ME EARLIER TODAY, IN FACT, ABOUT
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AN HOUR AGO.THEY'RE WORKING ON THAT ANALYSIS RIGHT NOW.
WANTED TO SEE SOME ADDITIONAL DOCUMENTATION, WHICH WE'VE SENT THEM.
SO I'M EXPECTING SOMETHING, UH, VERY SOON ON THAT.
UH, KAREN, THAT'S MY, UH, THAT'S MY SUMMARY.
ANY, UH, ANY QUESTIONS EITHER FROM MR. PALM, MS. ALVARADO, OR HERE AT THE DICE? IF NOT, WE'LL MOVE ON TO ITEM
[2. PROPOSED RESOLUTIONS]
TWO A.UM, AND IT IS MY UNDERSTANDING, UM, THAT FIRST WE WERE GONNA HAVE TO HAVE A MOTION JUST TO RECONSIDER THIS PARTICULAR ITEM AND THEN WE WILL GO INTO THE ACTUAL MOTION, THE ACTUAL ITEM ITSELF OF APPROVAL OR DISAPPROVAL.
SO FIRST I'D ENTERTAIN A MOTION TO RECONSIDER ITEM OR I GUESS, UH, RELU RESOLUTION 4 1 0.
MOTION TO RECONSIDER ITEM TWO A SECOND.
WE HAVE A MOTION AND A SECOND FROM MR. LESTER.
ANY QUESTIONS OR DISCUSSION? AND SO, UH, WITH THAT, ALL THOSE IN FAVOR OF RECONSIDERATION OF OF RESOLUTION NUMBER 4, 1 0, PLEASE SAY AYE.
WE WILL NOW CONSIDER RESOLUTION, UM, REPEALING RESOLUTION 4 1 0.
WELL, LEMME MAKE SURE THIS IS RIGHT, THAT WE DIDN'T JUST DO THAT.
WELL FIRST WE HAD TO BRING IT TO THE TABLE.
SO WE WILL REPEAL RESOLUTION 4 1 0 AND ADOPT A REVISED BUDGET FOR THE BAYTOWN HOTEL CONVENTION CENTER PROJECT.
SO I'D ENTERTAIN A MOTION, UH, FOR ITEM TWO A AS PRESENTED.
MOTION TO APPROVE ITEM TWO, A SECOND MOTION AND MULTIPLE SECONDS.
ANY ADDITIONAL QUESTIONS OR COMMENTS ON THAT ITEM? IF NOT, ALL THOSE IN FAVOR, PLEASE SAY, OH, YES, IT SAYS REVISED BUDGET.
COULD YOU CLARIFY WHAT THAT? THE 1.8 MILLION IS THE REVISED BUDGET? YES, MR. PRESIDENT, THAT THIS INDEED IT ADDS 1.8 TO THE CONTINGENCY, UH, FUNDED FROM THE DEBT RESERVE FUND.
AS I SAID, THAT'S THE ONLY, THAT'S THE ONLY AMENDMENT TO THE BUDGET.
HIS HAND IS RAISED, IS HIS HAND RAISED.
UM, MR. POLL, IS YOUR HAND RAISED OR IS THAT JUST, THAT MAY JUST BE THE ICON.
I THINK IT'S A, UH, I THINK, I DON'T THINK SO.
I THINK WE FIGURED IT OUT HERE ON, ON, ON ONE OF OUR SCREENS.
IT LOOKS LIKE YOU'RE RAISING YOUR HAND, UM, FROM LIKE A ZOOM, LIKE A ZOOM RAISE HAND.
SO I JUST WANTED TO MAKE SURE THAT YOU DIDN'T HAVE ANY QUESTIONS.
BUT I THINK, I THINK IT'S JUST THE, I THINK IT'S JUST A CURSOR.
UH, ANY, ANY QUESTIONS IF NOT ALL THOSE IN FAVOR? ITEM TWO IS PRESENTED, PLEASE SAY AYE.
[3. MANAGER'S REPORT]
HAVE OUR MANAGED REPORT ITEM THREE A.NOW MUCH OF THE REPORT, UH, EXCEPT THERE'S A, THERE'S A LOT OF WORK THAT'S GONNA BE COMING DOWN THE PIKE VERY QUICKLY, BUT OUR NEXT SCHEDULED MEETING IS FOR MAY THE SIXTH AT FOUR 30 HERE.
AND THAT CONCLUDES MY LENGTHY REPORT.
UH, BE IT THAT THERE'S NO, UH, UH, OTHER ITEMS THAT WE'VE ADDRESSED.
ALL POSTED AGENDA ITEMS IS MEETING OF THE, THE SPECIAL MEETING OF THE BAYTOWN.