Economic Development Corp. - Regular Meeting

We will call to order the city of New Braunfels Economic Development Committee Corporation meeting on 07/17/2025. Miss Fox, will you please call the roll?

Tara Thompson?

That to workshop meeting minutes gonna and approval of the June well, let's do that one first just one at a time. Approval of June 24 workshop meeting minutes.

Move for approval.

Second.

I have a motion from director Herta and a second from director Carden, was it?

Yes.

All those in favor?

Aye. Any

opposed? On to b, approval of the 06/24/2025 regular meeting minutes.

So move. Second.

Motion by director Thompson. Second by director Herdo. All in favor?

Aye. Aye.

And passes both pass unanimously. On four, citizens communication. This is time for citizens to address the board on issues and items of concerns not on this agenda. There will be no board action at this time. Seeing none, we will move on to the treasurer's report. Mr. Warner.

Thank you, president Haim, and members of the Board. Pleased to report that for the month of May, we did see some growth in sales taxes. As you can see from the graph there, overall 2.6% when we remove all of the various adjustments to that payment, current to current growth, which is a better reflection of economic activity, we actually saw growth a little bit more than 6%. So certainly one of the better months that we've seen in the face of probably more volatility than we've seen here in New Braunfels in quite some time. And certainly expecting more of that volatility to continue throughout the summer season as well, but we'll report on that when we've got some better information.

Drilling down into May a little bit, kind of trying do you have some industry specific information for you that we saw growth in retail, food services and professional services, which is really what drove that overall growth, saw overall double digit declines in wholesale markets for the month

of May. But again, happy to be on

the right side, this equation for the month of May. Again, this graph shows your updated revenue projections through fiscal year twenty nineteen, not a lot of change since we last met. Similarly, again, a lot of changes to your current commitments. However, though, as your agenda is this evening and the City Council thereafter to ratify some pretty large investments, our teams will incorporate those projected cash flows into this graph. And so by the time we meet next month, you should expect to see some material changes to this.

And again, just a combination of your revenues, expenditures and changes in fund balance through fiscal year twenty seven. Happy to answer any questions.

No questions? Thank you, Mr. Warner.

Thank you.

On six, discussion and possible action a, public hearing discussion and possible action approving a third amendment to the contract between the New Braunfels Economic Development Corporation and HC Supply Facilities Limited to modify the percentages of sales tax rebate and extend the existing contract term pursuant to section five zero one point one zero one of the Texas local government code.

Again,

of

state

And excited the And partnership that included a 50% sales tax rebate back to the company if certain performance conditions were hit, all of which were hit from 2006 until 2021. After Home Depot reacquired HE Supply in 2020 and some subsequent business process changes by the company in October 2021, they were unfortunately no longer able to source their inter state Texas based sales to the New Braunfels location. That was a major hit for both the city of New Braunfels, the Economic Development Corporation, and Comal County. However, though, HD Supply has indicated that after kind of their review of the current administrative code that governs sales tax sourcing rules, some additional business plan changes that they are putting in place as we speak, as well as a major investment in overhaul to their order tracking software system, they're going to be able to begin sourcing the majority of those interstate sales back to New Braunfels and Comal County. As part of these modifications, HD Supply has requested the same employment terms as well as a ten year extension of the agreement with the city, the Economic Development Corporation, and the county.

The city, while we've been having these discussions and thinking about potentially reviving these agreements, we've also considered whether or not there's an opportunity to modify the sales tax contribution percentages, quite frankly, a way that can benefit the city's general fund more so than it used to under the previous methodology and approach. And so for your benefit there, this speaks to how that sales tax sharing was administered previously where it was 50% of the EDC's portion and 50% of the general fund portion. As a reminder, the general fund portion is one and one eighth of a penny while the EDC is three eighth of a penny. And so again to provide maximum benefit to the city's general fund and therefore the citizens that are the services that we provide this community, we had proposed a structure of modifying the economic development corporations portion up to 100% as well as that which allows I should say the general fund portion to ratchet down to 33.3%. Benefit to the general fund.

I absolutely want to thank the Economic Development Corporation for your leadership on this. Again, as we've talked about, we plan to utilize that additional revenue specifically for one time cost in our general fund and one time investments. And as we talked about as well, next month when we consider the administrative services agreement between the city and the Economic Development Corporation, putting some language in there that requires us to reevaluate the structure on an annual basis and toggle it as needed. But again, excited for these sales taxes to flow back to New Braunfels and Comal County in 2021 and most years before that, HD Supply represented the largest sales tax remitter for New Braunfels and Comal County and it wasn't really close. And so again, looking forward to that switch being flipped on.

As far as timeline is concerned, based on how the Economic Development Corporation considers this action this evening, looking to have that ratified by the city at their second meeting in July, as well as the city's amendment to the contract. Discussions with HE Supply as well and expect that approval soon as well. And we're expecting those sales taxes to begin flowing back to this area as soon as September or October. Happy to answer any follow-up questions if you have any. And again, I pass along my appreciation for your collaboration and partnership on this.

All I'll say is from the citizens of New Braunfels and this board, thank you for finding these extra sales tax dollars. It's a huge win for the entire community. Thank you. So your entire staff needs to be commended for that. Thank you. We will open up for public action or I'm sorry, public discussion. If there's anybody from the public that would like to discuss this item. Seeing none. Do we have a motion from the board?

So just for clarification, the motion would be to modify the percentage?

The motion is to there, you went over there, sorry.

Yes, Director Carden, motion I'm sorry. The proposal that's incorporated into the amendment is to extend the agreement for a period of ten years and reflect the proposed methodology as presented.

That's what's included. I'm going

need a shorter version of that.

Sure, yeah. The amendment incorporates both the extension as well as the updated sales tax sharing methodology.

Okay. So I make a motion to extend as well as update the sales tax terms. Does that would that cover it? Okay.

Let's let Nathan come up here and opine on this.

Let's make sure we're legal. I should probably not sit in the back. No. You're fine. Thank you. Alternatively, what you guys can do is just approve the third amendment. Make a motion to approve the third amendment.

I approve okay. I make a motion to approve the third amendment. I'll second.

Thank you. I've got a motion from director Carden and a second from Thompson. All those in favor? Aye. Any opposed? Motion passes unanimously. Item b, public hearing discussion and possible action approving an economic development incentive up to 950,000 to Lefco USA Inc pursuant to section five zero one point one zero one of the Texas local government code. Miss Boggs?

Thank you, president Hines. We're here tonight to seek approval of incentive agreement with Lefco USA. I have the company CEO here and their consultant from Hickey and Associates to give you a project overview and the

company. We're We're a a Canadian enterprise that was incorporated in 1974, fifty one years old, but started operations in 1957. We make large, complex, blow molded And we've we've

the manufacturing facility. It would be around 40,000 square feet to start off with expanding to 70,000 square feet with a capital investment ranging to 15,000,000 to $25,000,000 over the next five years. A 150 new full time employees over the next five years with an average wage of $68,000 Really appreciate your support. It is between New Braunfels and Mexico locations. So happy to answer questions. And Eric, do you want to talk a little bit about kind of your customers?

So we supply large companies, large OEMs that make powersports vehicles, agriculture vehicles and also transport vehicles. We're also in the recreational sector and we also make hospital bed rails for the medical industry. So most of our company customers that we would be servicing from here are in either Texas or Mexico.

Thank you.

Thank you. I would like to add that the economic impact on this project is roughly $2,000,000 to the community injected into our economy. We're adding over a 150 jobs. These are great wages for our local community. This company is very environmentally friendly. They have zero waste, very low emissions. And as a reminder, we had the Coleman plant in New Braunfels for many, many years, and they shut down. And this is a similar process. It's a little more high-tech than that, and they are building some bigger products than that. But they are very environmentally friendly, and we just think they're a great company and a great project.

So the proposed incentive is $950,000. The first it would be over three payments, and that first payment would be $450,000 once they get their certificate of occupancy and have at least $4,000,000 invested. Then the next two payments would come after they hit other milestones. The first milestone would be at least 20 employees and have $6,000,000 of taxable investment. And again, the wage has to be at 62,000, the average wage.

A lot of the jobs will be way over that, but the average wage is right around 62 for our agreement. And then the third payment would be when they have 50 employees, full time employees, with average wage 62,000 and have at least $10,000,000 of taxable investment on the ground. Thereafter, we would have compliance annually, and they would be required to have a minimum of a 100 full time employees and a minimum of 10,000,000 taxable value, and at the same time, requiring that they have at least $62,000 average wage for their employees. And this will be a ten year contract that they'll have to keep that agreement. We're happy to take any questions that you have.

Any questions? Mm-mm. Okay. We will open this up for public hearing. Anybody would like to speak on this item? Seeing none, we will close public hearing.

Move for approval. Second.

I have a motion from director Herta and a second from director Miren. All those in favor? Aye. Any opposed? Motion passes unanimously. Thank you guys. Item c, public hearing discussion of possible action approving an additional project expenditure of up to 3,800,000.0 to Alamo Colleges District Northeast Lakeview College for primary job training facility in Career Center pursuant to section pursuant to sections five zero one point one zero one and five zero one point one zero five of the Texas Local Government Code. Mister Becker?

Thank you very much. As a reminder, this project is well, a prior phase of this project has been approved by this board. You committed to a $1,200,000 investment to partner on the first phase of the project. This item today converts the project into a single phase item with a set with an additional 3,800,000.0. As a reminder, this is they've acquired a building at significant expense.

We've gone through the significant additions and courses they've added over the next two years with projected increases over with this new facility. You've seen the enrollment projections that will the growth they've seen over the last couple of years and the continued growth they expect with this investment. And it almost feels challenging to create some sort of an economic impact analysis on education. Right? I mean, it's the kind of thing that carries into the next generation.

So how do you put a number on it? But I do think it's important to look at some metrics, some data on that. So you'll see a couple of the economic impacts we see so program graduates will own and earn about 82,000 annually. Think about what that would have been prior to going through this. There's $19,000,000 in direct and induced employment for a total earnings impact of $67,000,000 So as you think about how supporting a project like this creates ripple effects throughout the economy, these are some of the numbers we have.

And then we really look at it as just a big total economic output of about $281,000,000 And these are complicated formulas, but once again, how do you quantify something that affects multiple generations? So, doctor Garcia is here. She has brief remarks. And, certainly, if you have any questions for either staff or doctor Garcia, we can take those this time. But I'll turn it over.

Thank you, and President Hines and members of the board. Mr. Mayor, we're back, and we're very excited. We've had some changes that we made. I know that originally last time I came, we spoke about a two phased approach.

But after meeting with the architects and with the construction firms, it saves the college $1,200,000 in construction costs. And so that's why one of the rationales we moved from a two phased approach to a single approach in the remodel. The other issue is that we are accredited by Southern Association of Community Colleges. That is who accredits Northeast Lakeview College. And they said, you know, if you have a single opening, then we can transfer your approval rate that you had from CTTC over to this building, so you won't have to apply for a third permit, which could delay.

And our goal is to continue to open those doors on August 2026. I think the other bigger issue is from an operational standpoint why we chose to move to a single approach is think about trying to explain this to students. We have classes at CTTC, we have classes at the Sundance, and we'll have classes at the main campus. And we thought that's gonna be very complex and convoluted for students. And so we felt that having just a clean break and moving the facility over all at once would allow us to have a bigger splash, have a bigger presence, and then have all our students in one location.

And then finally, it's just the construction cost alone. That was a big mitigating factor, not only the 1,200,000.0, but the time that it was going to take and the possible delays, having part of the building opening with possibly maybe having to shut it down because of electrical or water or pot you know, something like that. We just felt it's just gonna be too many disruptions for the classroom, and the goal that we want is to make sure that our students have a location. Since then, I just wanted to bring you a couple of renderings so you guys can see what the we wanted to bring you just a couple of just to have an idea of what the upside down. We're going to be changing a little bit of the facade, so it has a much stronger presence with the building.

So I thought you guys would like to kinda see some of a little bit of the changes. And then we will have a patient that we're signing in time so that it's easy to find from the other direction that's coming in. By the end of this month, our goal is to have from the architects sort of final approval of what the interior will look like, and so I'll be able to bring that back so you guys can have a seat and maybe get a sneak peek of that as well. And then hopefully, we'll be able to have some conversations with our three construction firms at the end of the month so we can get our bids. So again, we're moving along nicely.

We did get last time I came, I spoke about the land acquisition that was next door that was in the final stages. It's actually been titled, so it's officially ours. So not only do we own the building, but we own the 4.2 acres that are right next to it. So moving along nicely, and I thought you might like to see a couple of the changes that we added. So, I know that you have the presentation that we gave to the city last time, so I'm just opening it up for questions.

Thank you. Any questions?

I mean, I can go through the I can go through the whole thing if you want me to or whatever works for you.

Any questions? No. No. Mm-mm. Okay. Miss Braggart?

All right.

Yes. And if I can add just one thing that I think is a really important point on this, and I think it speaks to why this economic development corporation exists. But and you've seen the growth numbers they've seen in Como and Guadalupe County. With this facility, we're not in their taxing jurisdiction. This is an investment that this board in this city can make to get the amenity in our city without being a taxing entity. So I think it's a good deal for residents from that perspective.

Thank you, mister Brecker. And I will, at this time, open it up for public hearing. Anybody like speak on this item? Please state your name and then if you're a resident or a nonresident of the city. My name

is Richard Kelsheimer. I live in New Braunfels and am a resident. The only question that I had regarding the investment that was being made into the college was how much and I I have to ask you how much of an investment, how many of those students are gonna remain in the Camel or New Braunfels area because their the projections they made was based on that income that they were gonna be generating, which would be income that would go to investments here in the city. So I guess my question is, is part of the studies have they looked at the overall needs that are in the New Braunfels area in terms of the curriculum that they are providing and how many jobs are gonna be available. I just think that should be a consideration and something as a board that you might wanna consider.

Because if all those people are going to Austin or San Antonio or somewhere else and not staying in the New Braunfels community, then your original vision and what you wanna accomplish might not be totally accomplished. And please don't get me wrong. I'm not against, okay, the the university being here. I just think it needs there needs to be some thought, maybe questions about that so that you understand how much of that economic impact is actually gonna remain in the New Braunfels area. So that's the only comment that I have.

Thank you, mister Gelsheimer. I'm sure doctor Garcia has comments on that. I'll I'll also say that this board, city staff, and the chamber has for many years to try to eliminate that outflow of work to Austin and San Antonio by creating jobs like we approved today. And everybody around here has worked very hard to make sure that continues to happen, but I'll let doctor Garcia continue. Continue.

Those are really good questions. Is there any way you can see where what's going to be the facility? They're right here. So, Actually, we've had worked with a lot of employers from the New Braunfels area on what the demands are. As you know, that in the nursing and allied health, as a matter of fact, we just came from the State Board of Nursing and have been officially approved to have a nursing program at main campus.

Health care is a huge need in this area, and what we've learned is, you know, industry wants to hire nurses that live in the area, but they need to have the opportunity to get the education. Right now, if you would like to become a nurse, either need to travel all the way up to Austin or you have to go back to San Antonio College, which is another additional 18 miles in both ways. And so this will allow us the opportunity to be able to offer the CNA. Sharon just met with several employers who all have CNA who would like to get those certifications and move into the LVN and then move into the ADN, but you have to have a starting point. So, we are having conversations with employers.

We know that the demand for nursing and health care is huge. Our science labs are full as soon as those open up, so there's a demand for those science courses, as well as engineering labs and the electrical labs. Several of the business and industry, especially in the data source industry, need additional 600 to 800 electricians, and there's not enough electricians out here. So again, trying to provide the support services for students to either pursue a traditional course pathway where they can transfer to university, that's still an option. But, we also know that there's a huge need for the IT labs, which is the cybersecurity, the engineering labs, the electrical labs, and the allied hearth.

And that's why we picked those programs specifically. We could have offered a myriad of things, but we wanted to make sure that what we offered was what the community was asking for. So, again, we met with several business and industry. They're part of our advisory councils that will be in the allied health, in the electrical, and the engineering. So to make sure not only that our curriculum is aligning with what industry is wanting, but to make sure that they can help us with getting that experiential learning that students need so they can land those jobs here in New Braunfels.

We wanna keep we wanna keep the students here, and one way to do that is by offering higher ed here and not sending them to out of state or to universities down the hall, and then all of a sudden they stay in San Antonio or they go up to Austin or they end up in Dallas because they can't get the the education that they need here. So I hope that answers your questions.

You left College Station out there, but I'll let this slide.

I know. As a matter of fact, in defense of College Station, we actually have a partnership with College Station at our main campus. And so, Station has sent two full time engineering faculty that stay on our campus 100%. So, our students begin their two year engineering program at Northeast Lakeview College, and then they transition to College Station as juniors, and they're automatically accepted. So, we have a partnership, but keeping them here, and we're also a lot cheaper than the university. Yes ma'am.

Thank you Doctor. Garcia.

I just wanted to make one

I was just gonna see if there's any other public

comment. Okay, sorry.

And then we will close public comment seeing no more. Doctor. Carton?

I just wanted to say on kind of building on what Doctor. Garcia was saying, working in the healthcare industry myself and others of us working in education and knowing the needs of this project as well as multiple other projects for years, as long as many of us have been here, We've addressed needs in engineering and manufacturing, in health care, in IT, in electrical, in these concerns with many different projects not just this one. So the need has been out there for a while.

Thank you. Mr. Packer, I think we've seen this, but how does the $3,800,000 break out? Is it tiered? How are we paying that out?

Okay, so this is how it breaks out. So the total cost for the project right now is $7,000,000 The $2,000,000 was for the land acquisition and $1,000,000 for all of the equipment in the engineering and electrical labs. So the total cost for this project was $10,000,000 NLC had $4,000,000 in reserves, which is what we use to pay for the land and put into the account so we can go with the construction firm. Our equipment's gonna cost us a million dollars. So right now, we already have anticipated spending $5,000,000 and the total funding gap was $5,000,000 Originally when we had planned on splitting that cost, that's when we asked for the 1.2, so thank you for that.

But the balance of that is the 3.8. And so the 3,800,000.0 plus the 1,200,000.0 equals the $5,000,000 as you can see. And we've invested in the other building that we purchased about 13,500,000.0 on that.

Yeah, so I'd argue this slide should say the total cost is $23,500,000 and the funding gap is $5,000,000 on that.

Director Herta?

Where'd that come from? I'm sorry. Was like God.

Voice over there.

From a bird.

This will be a reimbursement based. So it'll be a not to exceed amount total of $5,000,000 Once they submit receipts for the work that is done, the money will be reimbursed.

Yeah, that was the original intent of the question is are we reimbursing the construction costs and all of that. So okay, not to exceed the 3.8, good deal.

Thank you. Any more questions? Any motions?

I move to approve the expenditure not to exceed, how are we doing that? Not to exceed the 3,800,000.0 to Alamo College 's district, Northeast Lakeview.

Second. I have a

motion from director Merrin and a second from director Herdo. All in favor? Aye. Any opposed? Motion passes unanimously. Item d, public hearing discussion and possible action approving a project expenditure of up to $240,000 to fund the Dry Camel flood plain remapping project pursuant to section five zero five point one five two of the Texas government code.

Thank you, president Hines and directors. Our final item this evening is the third public presentation for the Dry Dry Comal Creek floodplain mapping project. We have previously presented this item to this board in both May and June, so we're having the public hearing and final recommendation this evening. The Dry Clamal Creek, was last updated over twenty years ago in 2003 within the corporate city limits, and it was mapped upstream in 2005 outside of the city limits. We are looking to move forward with this remapping project in order to better understand the area when we don't have efficient and effective data.

We can hinder development within the areas adjacent to the Dry Comal Creek. And it also, of course, hinders floodplain management as well. I think we've all seen recently that this area is a source of floodwaters when we have high water events. As far as next steps are concerned, we will have a presentation to the city council on Monday at their special meeting. We will ask for approval from the city council in August Should you recommend approval this evening?

Once funding has been secured, we expect to begin this project within three months. It would be about a nine month project, and then it will have to go through a FEMA review. So it's not a quick project, but we do think that this is important to understand flood risks and then also to help with development of properties adjacent to the Dry Comal Creek. Happy to answer any questions.

Any questions from the board? Okay. I will open it up to public comment. Anybody would like to speak on this item? Mister Gelsheimer.

The only question that I had regarding this is that the the companies or that will be developing along the creek there, and this study, I know it needs to be done. Will that be recuperated from the developers that are gonna be coming in and trying to develop properties along there? Will they be charged a fee for the chart for what's being the $240,000 that's being expended, by the Economic Development Corporation? Will that actually be somehow reimbursed to us based on the developer that's trying to develop a piece of that property? I just think that's good business and and should be part of the cost rather than us picking up the cost for a developer to come in here.

That's my only comment.

Thank you, sir. I'm happy to to answer that question. That is not part of the plan currently to ask for monies to come back to the city to recoup the cost of the study. It is important to move forward with the study. Of course, there are significant cost hurdles to development when you're trying to develop a small piece of property and you have to examine the entire watershed. But this project is important for, as I mentioned, flood mitigation and future economic development as well.

Seeing no other public comments we will close public comment. Anything else from the board or motion?

Can I just make a motion to approve? Sure. Yes. That's what I'm doing. Yes. I make a motion to approve. Second.

I have a motion from director Carden, a second from director Herta. All those in favor?

Aye. Aye.

Any opposed? Item passes unanimously. And are we doing executive session? No executive session. And with

that,

we are adjourned.