Planning and Zoning Commission - Regular Meeting

you would stand we'll pray please. Lord, we pause before you this evening. So very thankful for the opportunity to have both council and the commissioners here uh that care so much for the city and for the county and that feel led and called to ser. We ask that you remind each of us of that calling this evening as we go about the city and countyy's business. We ask that we put you your your your word and your way of life and your uh your will ahead of our own as we continue to serve. We thank you for all things and we thank you for the blessings that you've given us and we thank you for being here in Mount Pleasant Titus camp. We ask your son's name to the flag United States of America. Mayor. So, um, because of our streaming situation here, if you're going to speak, we kindly ask that you go to that microphone that's at the podium because it will be hot for the entire meeting.

All right. Public comments. The city council welcomes citizen participation and comments at all city council meetings. Citizens comments are limited to three minutes out of respect for everyone's time. The council is not permitted to respond to to your comments. The Texas Open Meetings Act requires that the topic of discussion deliberation be posted on the agenda no less than 72 hours in advance of the council meetings. If your comment relates to the topics that is on the agenda, then the council will discuss the topic on the agenda at the time that the topic is discussed and delivered.

All right. Um, my name is Kyle Moing. I don't have to give a address. All right. I am the primary complainant in a federal whistleblower investigation and the authorized representative in an active OSHA investigation involving Walmart store 131. I want to ask you a question tonight, a simple question. Who protects the public when the city protects one of his biggest sales tax generators? Because here's what I've learned from about Mount Pleasant. When a working family lets their grass grow a little too long, the city finds t time to file a lean. Over 160 leans filed by the city for weeds and grass violations last year alone. That's how closely the city watches its hardworking residents. But when Walmart conducts demolition without a permit, not once but twice, the city looks the other way. The first time Walmart paid the permit fee, only after the roof demolition had already begun and only after I had requested records for the scope of work. No fine for the violation. The second time in October, I reported it myself. I confirmed with city staff. No permanent on file. The city visited the site and you know what happened? No fee, no fine, no consequence. When state health inspectors documented multiple active violations at Walmart store 131, no sanitizer, live flies, and handwashing sinks without hot water, the city's inspection record for that same day said one word, passed. Between 2021 and 2025, Walmart store 131 received exactly two fire inspections from Mount Pleasant Fire Department. Two in four years. The 2021 inspection found 10 violations. The 2024 inspection found violations still persisting. and yet no documented follow-up, no enforcement that matched the seriousness of what was found. So I started asking questions and suddenly records got revised, inspectors disappeared, forms got updated, policies got rewritten. And what I received over and over was incomplete documentation, reports that site violations with no measurements, no corrective deadlines, action fields blank, correct by fields blank. And when I started asking about those reports, the health inspector's name disappeared from the city's website. Why on December 29th did the city quietly replace its construction permit application with a new version? One that now asked about commercial projects, demolition, and asbestous surveys. That's a curious update considering my substantiated complaint

about asbestous issues at Walmart and the fact those surveys were not clearly required or documented before major work proceeded. I have filed formal ethics complaints against city officials. City manager Robbine has not provided a written acknowledgement or response. The city council has not addressed them. They passed an ordinance restricting public public records access. They thought if they slowed me down, I would stop. It only made me want to dig deeper. The city can keep ignoring my inquiries. They can keep delaying my public records request, but I will keep showing up every meeting using every three minutes of public comment I am allowed until my ethics complaints receive written findings and the city adopts transparent, enforcable standards that protect workers and the public, not of corporate interests. Because someone has to ask the question the city refuses to answer. Who protects the public when the city protects one of his biggest sales tax generators? The irony isn't lost on me. I spent two and a half years catching shoplifterss. People who thought the rules didn't apply to them. People who thought if no one was watching, there'd be no consequences. Turns out they weren't the ones I should have been worried about. Hello, my name is Terry Carter. I live in the county at 96 County Road 3350. I just want to bring something to everybody's attention that this affects the county especially, but it affects everybody in this county, including Mount Pleasant. Thursday evening, TRMC board of managers is going to have a meeting and part of the agenda is to consider the sale, lease or partnership of Titus Regional Medical Center with a third party. I've been in on their meetings and I' I've voiced my opinion with them. I don't feel it's legal. It's not in accordance with their chapter the

chapter 1107 and it is definitely not in in accordance with the self and safety safety statute of Texas 263.029 where it specifically lays it on the county commissioner's court to hold public hearings and take a vote on whether they can sell or lease that hospital. They plan on doing it anyway. They do not recognize that this county commissioner court has any authority over them or anybody else. So, I just want to put that on the record and let everybody know that they're trying to do this that there can be There should be a vote. These citizens, the citizens of this county voted in 1950 to open that hospital and now these guys are going to try to sell it out without a vote from the citizens of this county who own it. Okay? And they plan on keeping that property tax rolling after they sell it. Just keep that in mind. Thank you. I appreciate Mayor, if we if we could let's move into effective session briefly and then we we will come out and and the bulk of our business will be in the public. Mayor, Mayor, could you could you read the

executive session? Yeah, I know it's hard. All right, moving into executive session. Pursuant to the Open Meetings Act, chapter 551, Texas Government Code, the City Council and Titus County Commissioners will recess into executive session to discuss the following deliberations regarding economic development negotiations, Texas Government Code 551.087 and consultation with attorney Texas Government Code 551.071 071 concerning assistance and economic development packages, including possible agreements under chapter 380 and or 381 of the Texas Local Government Code with Anderson Town Crossing Partnership LLC.

Okay.

It's All right, we're reconvening into the workshop session. In accordance with the Texas Government Code, chapter 551, the city council and Titus County Commissioners will reconvene into special session to consider actions, if any, on matters discussed in executive session. Uh, number one, discuss and consider assistance in economic development packages, including possible agreements under chapter 380 and or 381 of Texas Local Government Code with Anderson Town Crossing Partnership LLC. Mayor, Mayor Pro, members of council, judge, and commissioners, I'd first like to thank everyone for being here this evening. Um, it's always exciting when you get commissioners and council together to work on a project, a joint project. Um, and this is an exciting project, I think. So, before we start, I would like to have Jason Klanch, who's with Catalyst Commercial, have him come up here. He is going to talk about the project. We will be referring to this um this store as the anchor store this evening. We'll let him talk about the project and then I have a presentation about what is an anchor store. about what is it 380 381 and then the specific terms of this proposed bas

county commissioners and city council and city manager mayor. Uh we really appreciate uh the opportunity to be here. I do realize this is unique and uh I'm glad that we were able to get you guys together for this discussion and we really really appreciate your time and consideration. Um, I also want to certainly thank staff and and also county staff for sort of organizing this discussion. Uh, again, my name is Jason Clunch uh 383801, Dallas, Texas 75205. Um, we've been working on uh this project on behalf of the development group for some time. We were involved in um procuring uh the hospital that's now under construction uh well underway and the rest of the project. Um, we've got a laundry list of of tenants and anchors that we have generated interest in the project, but we think this anchor is the best catalyst for the project. Um, this is a group that um, we identified and and we pursued. I think this is a user that would be very interesting uh, from the city standpoint that services a need. Uh, just to give you a little bit of background, this is a Texas based anchor that specializes in sporting goods and outdoor retail. Uh it square footage is around 50,000 square feet. Um it will generate at least 50 to 60 jobs uh upon maturation. Um this user has about 301 stores and about 22,000 employees. So it's a very sizable user. Um and currently it's producing about $5.9 billion in revenue. So again, a very substantial group and anchor. Um it's one of the fastest growing retail uh retailers in Texas and right now they're on an expansion uh path to open up about 160 to 180 stores through now through the end of 2028. So um the spacing for this works perfectly. They're in Texas and Greenville. We think that the u type of retail certainly fills a market that you don't

have and we know uh based on the location um and the attributes that this would certainly generate interest. We've got several other tenants that have expressed interest in coming here subject to the store being there. Um when they approached us um and we've got uh the ability to move forward, they really gave us two sort of ultimatums. Uh and this happened very quick this fall. That's why we're meeting so soon. Um we had to commit to open the store on or before uh November of this year, which is extremely quick knowing that we just got the project approved. uh tentatively if we can deliver it uh you know November of last year and the second thing is they recognize they're on a very aggressive growth path and they uh proposed a very aggressive rent to us and they recognize that they would likely need city participation and so we just said yes and work backwards. Um certainly there's no obligation tonight uh for either group to advance this project but uh we do recognize that I think this is a critical moment in time to um to address their needs. Um ultimately the project will sit on about 5.2 acres of Anderson Town Crossing. Um uh it'll be a capitalization of at least 11 million in private investment and ultimately once the store opens we anticipate that it would generate around $13 million in annual sales tax uh sort of kick off the project. So um there were other locations in town. they favored this location because it would be synergistic and create synergy with them. Um, we also think this town makes sense or the site makes sense from the town's perspective and the county's perspective because there's more juice out of the project if they are catalytic and there's additional value that this project will create. Um, that's not in play and it's not under consideration tonight for additional incentives. So, um, we think it, you know, creates the best lit for the city. And again, tonight is only focused on the one anchor. Um, but we'll continue to work

on the remainder of the project. Um, we certainly appreciate your consideration. I know Mr. Vine's got a brief presentation. Um, I've got, uh, our council here that's been working on the agreement with staff here available for any technical questions. Um, hopefully there won't be too many, but um, and I've also got one of the development partners here um, if there's any specific questions regarding the material, anything, you know, that's needed. So, thank you for your consideration. I'll let uh Mr. Vine present his u informative piece and if there's any additional questions, we'll certainly be free to answer those. Thank you.

Thank you, Jason. Jason was wrong about one thing. I do have a presentation, but it's not brief. Um but it will be thorough. Um so, I But I'd be allowed to uh to present it. I made it very very basic. Um if you can pull that up for me, please. Hopefully it will answer a lot of your questions, but we do have time at any point. Uh feel free, but uh if you would just exercise a little patience, I try to include uh or guess what your questions would be and and and have the information ready for that. As soon as we have that pulled up, we'll start. I promise to be uh as brief as I can be. Um but this is an important decision. So we want to take our time to make sure cover While we're waiting, we do have a few folks online. Uh we have Mr. Jim Sabonis with Hilltop Security, who the city financial consultant. Also, we have Mr. John Martin with Hilltop Security, who the county financial consultant, and we have Mr. Frank Garza with DTRG law firm work as well.

There we go. So again, this is a joint council workshop, council commissioners workshop. So, there's three things I'd like to focus on this evening. The first is what is an anchor store? You will hear that term over and over and over again, anchor store. The second is what is a 380 or a 381 agreement and what are the specific terms of the proposed agreement. First of all, I'd like to talk about where we're talking about. Uh, everyone knows I believe where Lake is Anderson Town Crossing. If you look at the Atwood Atwoods is there. If you look at the that is circled that is the proposed anchor store site and you see the proposed other padlex that would come thereafter an anchor store an anchor store is a large well-known retailer much like a box store it's your Walmart Home Depot Lowe's target and just for you listening we are not getting a target but they are a box store so or an anchor store so that's what we're looking at that type of store not a smaller store what is an anchor store do it's a traffic driver. Their primary role is to bring large diverse customer base to the shopping center or to in this case like the strip mall. And the benefits of an anchor store is they provide stability. They attract other tenants and they reduce the marketing burden on smaller shop. If I'm a smaller shop, I want to be next to the anchor store because I know they're going to generate traffic and I might get some of the crumbs to fall off their table. Why anchor stores are so important? We talked about that that the smaller stores will benefit from that. There is a draw for shoppers. People go to the anchor store. They see other shops and they might also visit them as well. They provide lease stability. Their strong

presence and long leases offer consistent revenue for landlords often in exchange for lower rents. Uh they they are provide a retail ecosystem. They are fundamental to the modern shopping center model. Uh we no longer have malls. We have little little shops that just pop up in little areas, but there's usually an anchor. There's one reason, big reason to go there. Uh, and that's what we're looking at is this one anchor. This anchor store in particular, uh, their total investment with the building, parking lot, infrastructure, grounds will be between 11 and 12 million. That's with parking lot, lighting, everything included. The job creation, I believe Jason mentioned this, that 60 50 to 60 full-time jobs in 36 months. estimated sales just in their first year of operation is 13 million. In 15 years, it's expected to be 20 million. So when that happens, just in their first year, they are already will be in the top three uh sales tax produced property tax 13,000 for the city and 12,000 for the county annually. Over 15 years, the city would get 100 approximately 196,000 with the county receiving approximately 194,000. Over 15 years and 10 years, you get 129, 13. That's in your head. What is a chapter 380 agreement? A chapter 380 agreement is a contract allowing cities, municipalities to offer economic development, growth in sector development incentives to businesses to stimulate growth. It often involves sales tax rebates tied to project performance. It bypasses upfront cost and only only activating when the business operates. And it's detailed in

the Texas local government code chapter 380 and also it's t tracked by the Texas comprollers office. The key aspects of the 380. I'll talk about the 380 next, but it pretty much mirrors the 380. The key aspects of the chapter 380 agreements, the purpose to promote local economic development, create jobs, and boost business commercial activity. the mechanism instead of direct upfront subsidies or upfront money. Uh these agreements often involve rebating a portion of the sales tax generated by the new business back to the developer for approved project performance based. I think this is key. Incentives are usually triggered once the business meets performance benchmarks such as opening and then generating revenue. No different in this agreement. The authority the cities must establish government must establish programs and review their charters to offer these incentives under the chapter 380 of the tech local government code. Each agreement can be considered a program. So this agreement could be considered a program and our charter does provide the authority uh for the city to operate. for transparency. Uh the Texas comproller maintains an online database of these agreements for public access. So once we have this 380 and 381 in place, anyone can pull it up and look at very transparent, very accountable. In short, the 380 agreement is a flexible tool for Texas cities to partner with developers, eliminating risk and encouraging new commercial ventures that benefit the local economy. That's the 380. Now, let's talk about the 381, which is this side of the table with the county. A Texas chapter 381 is agreement is a tool under the Texas local government code allowing counties to offer financial incentives like

grants, loans, or property tax abatements to businesses to promote local economic development, create jobs, stimulate commercial activity within their borders. These agreements are a way for counties to direct ne to directly negotiate with developers and businesses often often working alongside a chapter 380 for cities and chapter 312 tax abatement agreement which are all reported to the tax controller. I believe in the past the county has participated in chapter 312 tax abatement. The key aspect of the chapter uh 381 agreement, the purpose to promote economic development, expand the tax base, create jobs, encourage business location and commercial activity. Uh incentives offered. Counties can provide loans, grants, property tax abatements or other financial assistance to businesses. Who uses it? Primarily counties and municipalities under chapter 80 allow them to negotiate directly with developers and businesses. How it works? A county enters into a formal agreement with a business outlining outlining the incentive provided in the business's commitment for example job creation investment etc. Example uh we have providing funds for infrastructure sales tax rebate which this one is or property tax relief in exchange for a business building or expanding the county and reporting. Counties uh must report these agreements to the Texas comprollers's office. just like the city. And in short, this should sound very familiar. A 381 agreement is the flexible tool for Texas counties to partner with developers, eliminating risk and encouraging new commercial ventures that benefit the local or regional economy. Just like a 380, the only difference is for the

note for both the 380 and the 381, no bonds are sold. No city or county funds funds are fronted to the developer. There's no money passed to anybody up front. No city or county funds are loaned to the developer. No liability is assumed by either the city or the county. No city or county funds are given to the developer that are not generated by the commercial business which the developer constructed the building for and brought in. The developer's not using their money. We're not using our money. We're using the sales tax money that the business created and we're giving it back to both agreements. The 380 and the 3D1 are performance performance based. What does that mean? Means there's nothing up front. To receive funds, the developer must perform and meet established benchmark. If the developer does not meet meet the benchmarks, the developer does not get the incentive. In this case, the rebated sales risk mitigation of the cities and counties incentive is contingent on the project success, eliminating the risk to the city and county to the development phase. And what is this performance base best for? It's best for attracting new business, retail or commercial projects with specific performance requirements and where the city or county wants to use its own revenue as that's what performance pay means. So in order for a 380 or a 381 to be legit or legal, it's it's we call it the but for test. This anchor store would not come here but for these agreements. If these agreements were not in place, if if tonight or tomorrow night and the next commissioner's meeting you say we don't

want to do this, this project does not happen. That is the butt for test. Uh we've w we've walked through this with Hilltop. We've walked through this with the consultant. we walk through that's with the developer and they have ensured us and showed us that without uh them getting some money back the tax uh rebate it doesn't pencil out it doesn't make sense for them they're not able to get uh the funding and and to secure the funding um so the but for test in Texas the buttfor test is a criterion used by some municipalities as a part of the evaluation process for both chapter 380 and 381 agreement development agreement. It is not a statewide legal requirement imposed by the local government code itself but rather a policy tour to ensure that incentive is necessary for the project to occur. You look down towards what will the application must provide credible evidence that but for the city's incentives or the county's incentive which in this case is the rebated sales tax the project would not one occur in that specific location two happen at all or three address competitive position around a potential relocation or expansion of a viable alternative alternative site outside the municipality. All in all, if you look at the the underlying uh sentence, the purpose of this standard, the butt for test is to ensure that public funds are used for a valid purpose and not not granted to a project that would have happened anyway without this. So, it's to make sure that we're being accountable and responsible with our with our and we're not just handing it out. So, it's important to note neither the city nor the county will use funds from their general fund or funds normally set aside for another purpose as incentive this project or to reimburse the

developer. Both the city and the county are proposing to use money generated by the new anchor store which is a portion of their sales tax to reimburse the developer. And the money reimbursed to the developer is money made by the anchor store. It's not money taken anywhere else. County's budget, the city's budget. Money we would not otherwise have were it not for the anchor. The developing a developer vetting process. There's been some uh questions and concern about this. The developer and investors have been vetted by the anchor store and the lending financial institution during the site selection process. And I think just as important, there is no risk for the city or the county due to the agreements being performed. So development summary, if you look here uh on the on the left hand side, it goes year one all the way down to 15. These are their projected sales. Year one of 13 million all the way down to year 15 of 20 million. Again, these are projected. They might be a little more, they might be a little less, but uh this business has been in business and they're doing as well as they are because they know their business. I would I would think that it's pretty safe to assume that these numbers are relatively uh close and legit. So, if you look at and we'll take the cities first, the city's estimated sales tax in that first year would be $146,250. The city in this agreement would agree to rebate 95% of that. So the city participation means that $138,938 is rebated back to the development. If you look at the county, uh county's tax would be 65,000.

Uh they would agree to rebate 95% of that sales tax back to the developer. So the county's participation would be 61,750. So in this particular development summary, you see the cities goes on for 15 years at 95%. So that is a 95% sales tax rebate for 15 years to the developer where the counties is a 95 cent or 95% sales tax rebate for 10 years and we will have those cap. Um it will be 15 going to the counties I'm sorry the cities uh be 15 years or 2000 2,784,375 dollars whichever comes first or the counties will be 10 years or that number $724,375 whichever comes first. So, if that magic number is breached in nine years, then you go back to receiving 100% of your sale. One, well, and we'll talk about this here in a minute, but one thing that I'll point out that you don't see on here is this developer, nor is the anchor store asking for anything on the law. So the 380 agreement term, the city would rebate 95% of the sales tax generated by the anchor store to the developer for a term of 15 years until this amount of sorry wrong button. until that amount of 2.7 has been reached, whichever comes first. And then the developer constructs the retail center to include one anchor tenant, which is a national sporting good retailer with at least 50,000 square feet, specialty apparel, and outdoor recreation items consisting of over 100 locations across the US. They will obtain their

certificate of occupancy within 14 months of receipt of permits and create 60 full-time jobs within 36 months. That's the 380 for the city. The county uh if accepted would be the 381. And the county will rebate 95% of the sales tax generated by the anchor store to the developer for a term of 10 years or until that total 724,000 and change has been reached whichever comes first. The developer has the same benchmark, same requirements that they did in the 380 on the right hand side. They'll construct the real retail center. They'll obtain the certificate of occupancy within 14 months. uh receeded the permit and then create 60 full-time jobs within 30. So the reason this isn't in a is not in a slide, but they're they're let's say they have a number of of it's 3.5 without the county's participation. You see the city's at 100%. And we don't make it in 15. It takes 20. So, what excites me uh when I when I talk to the judge, I'm talking to the commissioner, what excites me and to even have you sitting here in the same meeting to talk about this is we are doing this together. So, you're in it for 10 years, we're in it for 15. If we all get there a little early, we're back making these numbers here on the left hand 219,000 in 14 years and the county's making 97,000. and we turn around and we take that money and we give it to employees, we put it into projects, we get some equipment, we create program. So doing this together, we're able to make this happen, but then also we're both getting

100% of our sales tax and we're already getting our adorn. So we're getting but we're reaching that number faster. So pictures always help things. At least I think they do. That was the goal. So on the left you have the developer. The developer brings the store in. The store sells things. They generate sales tax. They turn it into the city and then the city reimburse that money that the store earned and we give it back to the developer. And here in a minute I'm going to ask Jason to come up and talk about why we're giving it to the developer and not to the anchor store. But at no point did the city have to dip into the utility fund or the general fund or reserves to pay for this development. So the anchor store that we're wanting to bring in is helping to pay for development. So the 381, it's very much the same thing. You have a developer, they build a store, they sell things, they give the the sales tax to the county, the county reimburse 95%. You haven't had to dip into your general fund, your utility fund, sell bulldozers, anything. You're using the money that's not yours. You're using the money that developer brought in with the anchor. So estimated property tax, the advalorum, if you look at these two columns where the red circles are, this anchor store is not asking for any rebate or abatement on their adorum tax. So if you look at the cities, take the 380 um or look at this one here, the 1966 686 is what the city is expected to make in approximate in ad balorum over 15 years. And the county will make 194,000 over 15 years. And then when you add

that up with the this this column here, the advalorum with with what we do get the 5% of the uh the sales tax in 15 years, the city should be at 335,95 that we didn't have. And then the county should just be over 707,000 that you didn't all because we brought this anchor store in. So with the 380 and 381, this is what happened. The project happened. The anchor store attracts additional quality commercial growth, which means increased sales tax revenue for the city and the county. increased property tax revenue for the county, the city, Mount Pleasant ISD, TRMC, Northeast Texas Community College, more jobs, more water customers, more sewer customers, etc. You get you get the point. This city collects up to 140,000 in sales tax over 15 years, and the county collects over $500,000 in sales tax in 15 years. The reason yours is higher is because you stop at 10 years. So for property tax, we've already talked about that the city collects approximately 196,000 over 15 years. The county collects approximately 194,000 in 15 years. So Jason, if you don't mind, I think this would be a good time to go back to why is the rebate going to the developer instead of the you gave me fair warning to keep my foot from going to sleep again. So, I hobbled up here last time. I was prepared. So, um a great presentation. Thank you, uh for that. I really don't have anything else to add other than the fact that the way this will be constructed, um we're uh in the process of negotiating a lease with the anchor,

obviously, subject to the incentives. That'll be a 15-year primary term with another 15-year option. we're obligated to deliver the site and the store and all the infrastructure and improvements. Uh in return, they will guarantee that um and also um commit to paying a minimum amount of rent. Uh unfortunately, that rent and I think they probably acknowledge it is not sufficient to uh meet the lending requirements. And so uh the participation uh that's been uh provided and proposed here basically makes us whole on what the lender is going to require uh to meet their u minimum uh debt coverage ratio. And so uh that's the purpose of the term. Um it really uh and that's why we're not asking for anything more uh than what we're asking for. Essentially we're just meeting the lending requirements that make the project work and make the project whole. Will the developer have an agreement with the tenant? Uh the tenant will be obligated to pay rent and your participation will help make the financing work from the development participation side that enables the project to happen. We do have other commitments that are contingent on this store. That's correct. That is absolutely correct. That is absolutely correct. Thank you, Judge.

Believe it or not, I still have So without the three, we talked about what happens with the 380 381 agreement, but without it, that without the 380 and 381, what happens? This project does not happen. It's the whole butt for test we talked about earlier, the litman test. If these agreements do not happen, this anchor store does not. teacher commercial development in the area does not happen or if it does the quality or of potential development is significantly decreased. The proposed plan as if you remember we'll go back to that first picture seven other pad sites uh near this location. Now, we can continue to do what we've been doing and we get 100% of nothing or we can participate in this agreement and gain new revenues in sales tax, new revenues, property tax. We can create jobs and attract future development created a filter. When I when I am working on a decision, I find it helpful for me to go through a filter. Here's how it goes. First question I always ask, is it legal? Is a 380 legal? Is a 381 legal? The response is yes. Both are authorized by the Texas Local Government Code Chapter 380 and Chapter 381. Second question, if it's a yes, is it ethical? Question. response I have is yes. Yes, this project serves the legitimate purpose of economic development and job creation. Is it a common practice? Is the industry standard among other municipalities and counties? The answer is yes. According to the Texas Controllers website, there are

approximately 4,380 or 381 agreements currently in place in Texas. We will not be the first people in Texas to do this. We may be the first in this area that have a joint city and county working together because a lot of cities and counties don't work together. That's why I'm so excited about this meeting. So, is it common practice? Yes. Does it add value to the city, county, region? That's a resounding yes. This project creates jobs, generates sales tax, generates property tax. It's expected to be a magnet for future commercial development in this area. And I I I cannot stress enough that not only will be a magnet for future development, but that development will be good development. Not all development is good development. This helps ensure that it is um it's another reason for Mount Pleasant, Pitis County to be a destination location. Um, Titus County, the city of Mount Pleasant, Mount Pleasant ISD, Northeast Texas Community College, the hospital will all receive a portion of property tax from this project. Does it generate revenue for the city and county? Yes, we've talked about that several times. Sales tax, property debt. It also creates peripheral. Those 60 people have to live somewhere. They have to buy gas somewhere. they have to shop somewhere. Does it create jobs? Yes. Uh that's one of the benchmarks that we will have in both the 380 and in the 381 agreement. 60 full-time jobs in 36 months. Does it increase the potential and quality for future development? Yes. We've talked about it before. We're going to talk about it again. seven other pet sites that are planned for that commercial development and they want to be for the ones that speaking with the developer

and and Jason uh they want to be next to this anchor if I own the store I don't care what I sold I would want to be next to a successful business that's going to increase my footprint and potential sale does it meet an identified objective in the city of Mount Pleasant 2022 comprehensive plan to develop and implement targeted strategies for a future development of the interstate I30 corridor. Yes, for those of you who are interested, it's on page 34 of the adopted Mount Pleasant 2020 comprehensive. Last question is, does this project happen without the chapter 380 and 381 agreement? No. the development incentives specifically the state tax re sales tax rebate helps offset the low lease rate provided by the developer to the anchor store to bring them to Mount Pleasant Titus County area so I will go into a little bit and if I get this incorrect please correct me I don't know how many other locations that this anchor store was looking at but I know we were one of many maybe hund I'm not sure at least several several dozen In order to attract that store, we had to make this area look really good. We will have a building and we will give you an extremely low rent lease rate. We want them here to the developer. So, this sales tax rebate will help make the developer whole. That's why the sales tax rebate is going to the developer to offset the deal that they're giving the anchor. Again, does this project happen without 381. No, it does not. So, if you look here, uh, and anybody that just look at the map, the little red dots, this is where this anchor store is

currently. There's a big hole right here in the middle. Right there. What's in the middle? We are. That's where they want to be. If the 380 doesn't go, the 381 doesn't go, that's where they're going to or that's where they're going to go and they're not going to come back here. So, for what it's worth, I would like any questions. Correct. Correct. Correct. And if they they 13 million was their projected. If they sell 15 million in the first year, good for them. Good for us. We're out quicker. 100% intact. Correct. You have a PET administrator, right? You will not have to have an administrator. we have our finance director and again we have um Jim Sabonis and John Martin with Hilltop again with the city and the county. If either one of you are still online and you would like to uh to speak directly to that I know you've worked with several cities and counties on 380s and 381 please feel free.

Rob, this is Jim with Hilltop. Can you hear me clearly?

Yes, sir. Um, first of all, um, I apologize uh to both the council and the commissioners that I couldn't be there tonight. I had another pres-scheduled meeting that took place earlier. Uh, thank you, Rob, for arranging me to participate um by Zoom. I I have um many clients that have uh 380 agreements and in general um I think every one of those clients have um their finance director um work with the controller and the business uh entity to um review, certify and and to to process the uh reimbursement payments. Your your finance director right now receives monthly payments from the controller from the sales stash collections and she goes through that process um to um review those collections uh if there's any adjustments that meet made um she'll take place with. So to me while it is some additional work I I think that based on my experience you have a qualified um excellent client director and that's something that I see my other clients work with too you know again very simple u process uh the the the academy will be required to uh

anchor sign a release with um with the city to allow the controller to receive u reports. So when the city receives its monthly report, it'll actually detail um total collections and it'll indicate the specific business that signed release what their proportionate sales tax would be. So um I'm highly confident that that that um that that can be done. And and one thing I will mention, Rob, and I did I forgot to mention this. I'm glad this question came up that in the uh 380 agreement I would add if there was any um administrative or legal cost and complying with agreement that it would be netted out of the 95% um reimbursement to the developer.

Yes. Thank you.

Any other questions or comments? And we're not voting on this tonight. Obviously, this is just a workshop. This is just discussion. I do have uh I think it was about 4:30 almost 5:00 this afternoon. Um Frank Garza had sent me the latest 380. I do not do not have the latest 381, but that will be it will be very very similar to the 380. So before you leave today, I will get you a copy of that to read. But uh we are very from the city standpoint and even though I'm I'm not a representative of the county um in working through it, I think it's a very good agreement for both organizations. Um I think it's a very fair, appropriate, and transparent. Um and having worked in other cities and worked with 380s, um I think it's a very good with the develop. This is our term. The city's term is for 15 years. There is no renewal. You can you can yes but generally when you have your and if I'm if I'm reading your question correctly if let's say they want to do a 15 year with a 5year renewal that would be in the initial agreement we do not have that so 15 years then we're 10 years in the

the butt for test if Walmart Home Depot the store that's already here said hey we we want we want to open they're already open. That that would not make it legal because it does not pass. As much as we would like to be able to support those businesses in some of those ways, legal legal reasons.

Yes. Had this been started, this would not be done. If you have a program set up for business retention, which we do not, that's a different program, or there's a big expansion for their business when they're adding 100. No. And if we do, how many businesses will I have lined up tomorrow morning saying I'm going to leave or say they're going? That's why I use that filter for my decision. Is it legal? Is it ethical?

So, if if anyone would like to say anything, we ask that you go to the microphone. The city will the city will. Yes. And we will share that information with the county. So the county is not going to be burdened with keeping up with people. Correct. And once we get that policy done, we will share that with the county. And and again, the 380 381 mirror programs mirror each other and it will be not so specific that we have to change it every time a new business comes in, but it will state what our objectives are. For example, on this one, is it in an area that we want developed? I30. Absolutely. It's in the comprehensive plan. Will it create jobs? Yes. Um is it something that we do not have? Yes. Well, those are those are points right there. Uh if someone wants to bring in something that we already have, they might get points but not as many. Might not reach the objective. It might be in an area that we don't really want or don't need develop because it's developing on its own. So, it will be a policy but be be more of a a set of guidelines that helps direct us to keep it ethical because it would be it's easy to take any project or any program and and use or use it or abuse it or misuse it. So, we want to make sure that that's not the case. And we want structure and uh consistency. So, it doesn't matter whose name is at the bottom of the contract if it's a good project. They can they can be, but we they want to do that. Yes. Yeah. But if they can prove that there's a legit need and it's something that would

add value and benefit the city and the county, then we can. No. Right. Correct. Correct. Again, it it will have a point. So you you you can you can do a fiveyear, you could do 10 year, you can do 15, you could do 20, but what dictated or specifically the number was the financial need to make the developer hold to make the project work. So it was not to get the lender rich or to get the the box store rich or or to to do any of those things is how do we make this happen? And I I without divulging too much, we had our I say our final phone call, we had our last phone call this afternoon and there was still some negotiating uh and the number that we landed at was a little lower than what was initially stated. Um but the number that we landed making it work for the lender for Jason Clunch. Okay. That's correct. That's correct.

Great question. Um I'm very familiar with the development group um that's uh we actually pursue to to mature this project and for one reason um they've got the financial capability of delivering the store. They also have experience in delivering the boxes. They're working on another project as we speak um much further north out outside of the state but um fairly nearby. And so um the anchor already has a relationship with this developer. There's already templates that have been negotiated in terms and so that expedited the process and that was one thing that was required. But the anchor does a substantial amount of vetting and they won't choose to work with somebody if they don't have experience and financial capabilities of delivering the store. And so that's how this process evolved. So, the meeting was was mostly to to update everybody here that's going to be participating in the vote uh whenever it does come along. It's not tonight. Uh but I do want to open it up to our constituents in the county and in the city. And I asked instead of making speculative announcements or whatever it is on Facebook, just feel free to ask your questions now to clear up any questions or doubts that you have. And I I even want to open that up online, Candace. And if you don't ask a question, then I ask you to be a responsible adult adult and and not make assumptions, right? I hope that that's clear enough. Luckily, I'm not political, so I don't worry about it. So, is there anybody that has any questions? Any anybody want 30 come up to the mic. So, everybody on also, uh, mayor, would would everyone

please be very cognizant of the need to refer to the entity as the anchor? Thank

Cody Smith area. My only question is is in the construction and development. Uh will local contractors and local talent be my name is Steve Haramman. I live in Bedford, Texas. I'm part of the development team partner in the deal. So I'm very familiar with everything that that Mr. Punch just described. Um yes they will be uh open to uh the way this thing is set up uh it's kind of in two segments and uh one is we have to get the site developed put the utilities in and at that point it is usually the uh the large anchor stores prerogative to choose their contractor. So once uh we turn the site over uh we're on a short uh fuse. So that's the reason we're trying to get this done in spring and deliver the site so that they can start construction on their uh 50,000 foot plus building. Um but they choose their contractor. We're able to choose the dirt contractor and the folks who put in the horizontal improvements. They'll interview all contractors that have an interest. Um the u but I'm speaking more for the land horizontal for what we do. Uh but yes, uh the uh the anchor store does have have a process and you have to be on an approved list or go through the

the process of being approved before you're possibly chosen. Yeah.

And I I do know that a lot of uh anchor stores, especially the bigger just the bigger stores in general, they're probably going to have a crew that comes in that are just going one store, one store, and they've got it all down. So they can put it up a lot quicker. So I'm what I would say is there's probably going to be more there's going to be more. Exactly. And in the smaller businesses, right, when these smaller businesses start moving in, that's probably when you're going to start seeing more. But these big stores, they probably got all teams lined up going from one location to the other. You have a question. Just state your name. I'm Dana Wallace and I'm your county treasurer and I just had a couple questions mainly to your um attorney. Did you review their 380 agreement?

I have been a some degree in it but Frank Garza my law partner who is uh on virtually has been involved in it over the last because he specializes in that or he's done a lot of that. Okay. Yes ma'am. So have reviewed the county? No, ma'am. Okay. So, we haven't had anybody review the county. Identical to the city. Okay. Yeah. I don't I I don't have jurisdiction to review the counties. Only the county attorney can review that one. Um so, I have only prepared and reviewed the 380 for the city.

Okay. Well, I think our county attorney asked the commissioners to take for someone outside council, some outside council to review that. Have y'all I don't I guess that will happen next or whatever. So, anyway, I was just because I didn't know if our contract had been looked at and has have y'all reviewed the um agreement the anchor tenants agreement. I just want to make sure that that anchor tenants their responsibility to get us the number or get whoever the number so that we can write them that check because we all want this to happen but we on that agreement itself there kind of the details in the agreement. So, have is anybody going to out on the outside going to view that to let us know that that um that you're going to that that anchor tenant is going to supply us what's needed to be able to write this developer the check that he needs. Okay. once a year then. So at the end of the first year because I haven't been in any of this who did it or you did okay. We haven't seen that yet. So, can you answer that? You understand what I'm saying?

That's right. Yes, ma'am. In fact, there there's a section in the in the in the actual 380 agreement that outlines the basis for calculating the grant and it requires the anchor tenant to provide to the developer information that they submit to the Texas comproller and we have we've identified specific information that they're required to report to us in order for us to provide that rebate.

And you're no ma'am. Okay. I'm Frank with the DTRG law firm. They have been working with the county the county pays hilltop.

We should not have and and most of ours will be done. It's it's a onetime payment. It's not paid every yours will be the same. Just as a matter of record uh to answer the question, so the anchor tenant will be required to report sales and then we'll be required to report those sales to the city and ultimately the county and so there'll be full transparency. Um I think as Mr. Vine represented earlier, the only way that those reimbursements occur, the participation occurs as those sales have to be generated and the taxes have to be generated. And so the reimbursement of that will only occur after those sales tax have been created. So they have they have to be created. Um and then there'll likely be an audit process and if there's any questions then we'll have to go through that process prior to distribution. That's correct. We understand. Yes. Yeah. Understand. Understood. Thank you. All right. Anybody else? Anyone in the room? Anyone online? Okay. If you're participating in the meeting and you're online, now's the time. Too much money. Too much money. No,

I would defer to I'll let Jim or John or Frank who've dealt with I've only dealt with a handful of these. I've not seen a lot of cons. This is performance-based. So, I'm not giving them any money up front and then have a clawback. So, if they don't perform, I have have to go fight and and try to get my money back. That's not the case. So, the better they perform, just the quicker they get their money, the quicker we get our money, quicker we're made whole. If they don't perform, if they let's say they the the anchor store comes in two years, they they close. They all the stores in the nation closed and this is one of them. Then the agreement just goes away and then correct. Sure. There's more traffic, right? We want it to be good road. Absolutely. So there to speak directly to traffic. Uh we have worked closely with text. The developer has to make sure that we don't there doesn't have to be new uh light a new light in the area, new signage. There doesn't have to be improvement on the particular road that's already there. Now once those other pad sites are developed, there will be a big driveway and there will be a traffic light installed for safety. So there will be some things that that will be uh that we will see change, but not I you said we've only heard good things. I I can't think of anything that's negative, right? And and Jim or John or Frank you you have worked with different cities on

multiple 380s 381s. Have do you uh can you identify a con? Could you repeat that question? This is Jim with Hilltown.

He had said we we had heard nothing but good things about this agreement. Is there anything that's negative? Is there a con? Well, I let me say um this is a probably the most common tool used in the um when competing for retail grocery stores, Walmarts um retail anchors of any kind. These three agreements are very common and and to me the financial structure proposed by uh the city staff has no financial risk to the city. The city's not putting any money into it. um the you know there's always a risk when you work with retail businesses that eight years after this the um the the business closes but at that time there'd be a termination of the agreement and and you move forward. So I believe from as your financial advisor to the city, I'm highly confident there's no financial risk um and you and it and you do this for the strategic reason of acquiring a an anchor to facilitate the rest of the development. But at the same time to me these are more um the risk would be that you know the at sometime the store may close and in our world it's evolving. I've been at at this for a couple decades and and retail business itself is changing. I think it'll change in the future. I hope that it will be there 15 to 20 or 30 years. But we all recognize that the world evolves and if it does close um the city won't have any risk at that time. It'll just terminate the agreement. So I hope that that's to me the the issue to be aware of. Doesn't guarantee that it stays

open, but there's no no commitment to the city. If they're not generating sales tax, they don't receive sales tax.

And I would have to agree with that. This is Frank. I would have to agree with that. Um the uh I worked on a project where they did it for an outlet mall and the outlet mall now is vacant and uh the city no longer has to reimburse the developer who built the outlet mall because they filed for bankruptcy. So the city's able to get out of the agreement because it is performance-based. If the developer doesn't perform, there's no requirement to reimburse. The negative is there's an isore in that town with that outlet mall that's closed and they're now trying to redevelop it. But um you know as it was just stated uh retail has changed. So but as far as the city's risk the 380 agreements are low risk for the city and 381s are low risk for the county because it is all on the developer to perform in order for them to be reimbursed.

Did you have a followup? Yeah. So to a short answer, yes. So and this was asked uh earlier by by someone else. It's a very good question. So this anchor site comes in and they bring Where does adarm go? Goes to the city. Goes to the county. Where does it go when it comes to us? Goes into general fund. What do we use for police and fire? What does the hospital use theirs for? EMS. I' I'd shared that. I Can you pull my uh Sorry. Could you pull my uh PowerPoint back up, please? I think that one thing about quality of life here and I'm hoping that's something that it does bring you know besides everybody and you know the people I think I think another positive thing, but I feel like it's going to help with quality of life and it's probably going to beautify that part of town, you know, even more. So, so you look at these numbers here for adorum, these are estimates approximately 13,000 a year for the city. That's your total in 15 years. And then adarm appro income just just for

adarm for the county that's at 15 years. Now, that's not going to for five new offers. But but sure, but one business is not going to generate five. So, but there will be some some increase, but they're also a water cut. They're a sewer cut. Uh they're going to employ 60 people that again have to buy their gas somewhere. They have to live somewhere. So, they with with their job brings other. They're also a crash. So, there's Maybe not one business, but the next business that comes in, it all helps.

I was asking him about this earlier is that these other smaller businesses that come in, they will probably they will have a 380, I'm sure. But it's not going to look anything like that. Yeah.

Right. But their their sales tag, I'm sure, is not and that kind of. So those auxiliary businesses that are coming in, that's going to be another point, especially if we get them in here right behind. I mean, I've heard restaurants are coming in and everything else. That sales tax, if it's not 100%, I'm sure it'll be close to it. We've just got to make this concession to get our anchor score in, right? And 5% of whatever it is is a lot more than 100% of nothing. So that's kind of what I've been.

Yeah. I go by well in right they don't produce the shareholders. Well, I mean, but you got to have some forward thinking though, right? I mean, I understand 15 years sounds a lot. So, you have a 31 year old kid. So, I mean, yeah, we're we're having to bite some of that in the beginning, but after the 15 years and after the 10 years, our revenue is going to start pulling in and we're getting 100% of the property back.

So, what are the projected cost? Projected cost of are you talking about EMS? I honestly don't know who would be able to project it.

Sorry. Well, Are you ready? Oh yeah. 380 and 381 programs to generate sales tax. That's how we're generating.

That's one way to generate I've not said that we I'm not going to argue with you. I haven't said that we haven't. You asked if we have. I have

Jason, do you have a comment? But we are generating more revenue. I I think we do a lot of fiscal impact analysis and analysis on behalf of municipalities and and other uh economic development organizations. I think the best way of doing this and and I'll do this before tomorrow night is you take the easiest way and there's there there's no perfect science because y'all don't have the operating history by department per what it cost to operate a store. But I think very easily you would take total resident population and total workforce and divide that by the amount of your city budget because that's essentially what it costs to operate um the city on an annual basis or we could aggregate the county. And then ultimately you would aggregate that back into the cost per either worker or square footage. And I will say that I could attest that the amount of revenue that this produces would certainly more than cover the cost of service that would be required to essentially carry one store. And and just to follow up, I know I've said it a lot, but for instance, property taxes were raised back to where they were in 2020, which made us out of around 30 people here or 30 cities. We're the second lowest. Tyler's the only one below us on on taxes on property taxes. So, I didn't get to vote on it, but if I would have, I would have voted for it. All right. The budget was less this year than it was last year. Correct.

Well, it was the numbers that you showed. It was the numbers that you showed on it. No. Yes. I have not been bankrupt. Yeah, I guess that's true.

Yeah. Yeah, that's true. Yeah, but I Yeah. Oh, no. Yeah, I just wanted to clarify where we are. There any more questions on Did we raise any more questions? Sure. Would like to get them. Come on up. Come on up. So they can so they can hear you on the time the uh inspection was hired out to someone else. City going to keep the inspection right get paid for the inspection of buildings and all the stuff that goes with one of good question. One of the things that you generally do in velopment services to provide incentive to work with developers is to offer either a reduced or a wave permitting or inspection fee. And that's what we plan to do with this particular.

Oh no, we we will do it. We will do that in house. Yes. No, we will do we will we will do that in thank you for good evening. I'm Sher Sproul and uh I'm going to try to keep it concise which is one of the greatest challenges that I faced. Thank you for indulging me for just a few minutes. I'm pretty much a native Mount Pleasant person. Four generations deep on both my husband and my side. Most of you know this. Our our living has basic basically been made with retail. Okay? Some sort of sales services retail. For you younger people and some of my contemporaries, things have changed and they're changing rapidly. Mount Pleasant used to be referred to, used to, and it can come back. I haven't heard this term, and you realtors and things will be able to verify this. We used to be known as the hub of Northeast Texas. You know what a hub is? It's the middle of the wheel. All the spokes come into the hub which means a lot of people come in from Mount Pleasant from 30 35 mile radius to do business. Those people can go to Tixure Cana Paris Long View etc. or they can come into Mount Pleasant. As a matter of fact, I've been married to Scott Rule for many many years and his mother and dad started a motorcycle business here in 1965. The only motorcycle shop in northeast Texas and I'm talking texture Canana Tyler was long Mount Pleasant had the

second one in northeast Texas and it has survived 60 years they draw in a lot of business one of the largest challenges that's that spru I know from being married to Scott and being very involved in that one of the largest challenges they have faced is online sales. If we don't grow the 271 I30 corridor with some with some large tenant brickandmortar stores, we're going to continue to lose all of that business to online sales, which we collect no adorum taxes and we collect no sales taxes even a 10 and 15 year projection. I get the risk. Your problem if you don't like these agreements is not with these local officials. They do have to make the ultimate decision to bring this into Mount Pleasant Titus County. It's a hard decision, but the legislators in Austin have put these laws on the books. We are competing with other towns and counties for these opportunities. There is risk involved and yes Corey to your point there are some other expenses that are going to come as far as services fire but if we don't take this opportunity Mount Pleasant really if you look at our census numbers for the last several years and I keep up with it because I'm a realtor we have grown very slowly very slowly in population what 16 18,000

now as 16 20 years ago it was like 13 or 14 20 years ago. You people need to start having babies. We are not repopulating. But my one of my largest concerns is losing our retail business to online. So I am cons I am concerned about the risk. One of the things that I faced when I was on the council with these opportunities. This is a big deal for a small county and a small city. This is new to us, new to you. It's a little risky. It's scary. We have to put a lot of confidence in the leaders that they have shared the information needed for these representatives of ours to be able to make this decision. I actually am glad it's you this time voting on it and not me. But I wanted to come and give you my support. I think it's a step forward for Mount Pleasant. I think it's going to draw a lot of attention to the I3271 corridor. We've been wanting to see it developed for years. That's why in 2020, we put the master plan in while I was on the council quick. That was one of the things I wanted to see. We got to have a plan for growth. We've always wanted to see it. This is going to be a huge step forward. It may not make it. There's no guarantees that any business or retail will succeed and not fold. And yes, to Mr. Garza's point, it it left a vacant facility. They will work to repurpose that and there will be something else come and use that facility. It's not the end of the world. I do like the fact that it's not frontloaded for money. It is performance-based. I hope that the details, you lawyers, you judges, I appreciate you. I hope you've done your due diligence to deliver these people the information they need that

they can feel secure about that your due diligence has been done to dot the eyes and cross the tees and protect these two entities as much as possible and the citizens I believe you have that falls on you we're out here elected people I was trying to make decision to grow and help the city be viable and move forward I think this is a great step forward So, as far as I'm concerned, I don't want to continue to lose business to online sales, which we collect no benefit, not one other benefit. We lose, that's a 100% loss to our area, and it has greatly affected small businesses here. So, we need these big box stores for that reason, and that's my main concern. And thank you for your time.

Thanks, Terry. And the information will be available on the 380 and the 381 when it gets voted on. I think you said the Texas comproller will keep I mean this is part of our transparency, right? Whatever we're conducting, whatever we're doing with these businesses, it it will be fully transparent. Are there any other questions? Yes, ma'am.