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MEETING TO ORDER AT 6:00 PM[1. CALL TO ORDER]
AND STATE THAT THE NOTICE OF THE SPECIAL COUNCIL MEETING WAS DULY POSTED.THERE WILL NOW BE A ROLL CALL OF CITY COUNCIL.
AS I CALL YOUR NAME, PLEASE STATE THAT.
IF YOU'RE HERE, MAYOR, MAYOR PRO TEM MORALIS PRESENT COUNCIL MEMBER EDWARDS, COUNCIL MEMBER CLOUSER PRESENT COUNCIL MEMBER, STERLING RESIDENT COUNCIL MEMBER BONEY, PRESENT COUNCIL MEMBER, EMORY PREJUDICE.
OKAY, NOW WE'LL DO A ROLL CALL FOR CITY STAFF MEMBERS AND WHO ARE PRESENTING CITY MANAGER JONES, PRESENT ASSISTANT CITY MANAGER, BILL ATKINSON, ASSISTANT CITY MANAGER, GLEN MARTEL.
SO THE ATTORNEY CITY, SECRETARY MARIA JACKSON, DIRECTOR OF COMMUNICATION, STACY WALKER.
WE DO HAVE AN OUTSIDE REPRESENTATIVE.
ANYONE ELSE? UM, WHOSE NAME THAT WAS NOT CALLED? THAT IS ON THE CALL.
CAN YOU PLEASE ANNOUNCE YOURSELF AND STATE YOUR NAME? MARIO PARTITA.
ANYONE ELSE? RIGHT, ALSO THAT ANY PERSON THAT'S INTERESTED IN SPEAKING ON ANY, UH, ITEMS ON THE AGENDA MUST HAVE NOTICED NOTIFY THE CITY BY EMAIL OR PHONE OR SUBMISSION OF A PUBLIC COMMENT FORM, UH, BY TO THE CITY SECRETARY BEFORE 4:00 PM.
I DO NOT SEE ANYONE ITEM NUMBER TWO, UH, DISCUSS POSSIBLE ACTION
[2(a) Discuss the proposed administration of a small business loan program on behalf of the City. (Proposed presenter: Assistant City Manager Bill Atkinson)]
TO A, DISCUSS THE PROPOSED ADMINISTRATION OF SMALL BUSINESS LOAN PROGRAM ON BEHALF OF THE CITY.UH, WE DO HAVE A PRESENTATION BY OUR ASSISTANT CITY MANAGER, BILL ATKINSON.
UH, MAYOR AND COUNCIL, AS YOU KNOW, WE'VE BEEN DISCUSSING, UH, THE PROVISION OF A SMALL BUSINESS LOAN PROGRAM FUNDED BY THE CITY OF MISSOURI CITY.
IT WAS OUTLINED IN THE BUDGET PROPOSAL APPROVED, UH, FOR THE GENERAL FUND TO ALLOCATE $1.5 MILLION THAT WOULD LEVERAGE APPROXIMATELY $15 MILLION FOR CAPITAL REAL ESTATE INVESTMENT.
THE FUNDING WILL COVER TWO PROGRAMS AIMED AT ASSISTANT SMALL BUSINESSES THROUGHOUT THE CITY AND FOCUS OF, UH, A PERCENTAGE OF IT, UM, AS THE FINES TO BE DETERMINED ON THE TEXAS PARKWAY CORRIDOR AND CARTWRIGHT ROAD, AND THEN, UH, COMMERCIAL CORRIDORS THROUGHOUT THE CITY AND THAT THE CAR QUALIFIED SMALL BUSINESSES, THE STAFF IS RECOMMENDING FOR A FEE OF $1,600 A MONTH.
AND WE CONTRACT WITH BCL ATTACHES TO PROVIDE MONTHLY TURN TO LOAN SERVICES, TO INCLUDE ADMINISTRATE PROGRAM OPERATIONS, MARKETING LOAN, PAYMENT PROCESSING, PORTFOLIO MANAGEMENT, LOAN SERVICING, AND A BCL TAXES WOULD MAINTAIN RECORDS WITH MONTHLY REPORTS, QUARTERLY AND ANNUAL REPORTS IN REGARDS TO THE LOAN FUND RECAPTURE OF THE PROGRAM.
UH, AS YOU RECALL, ON DECEMBER 21ST, UH, CONSULTANT ROOSEVELT IS WITH US TONIGHT, UH, BCL, TEXAS OF TEXAS PRESENTED THE FRAMEWORK OF HOW THE SMALL BUSINESS LOAN PROGRAM WOULD WORK, HOW IT'S FUNDED AND HOW IT LEVERAGES ADDITIONAL DOLLARS COMING IN FROM OTHERS IN ORDER TO PROVIDE A LOAN POOL FOR QUALIFIED SMALL BUSINESSES.
STEP TWO IS WHERE WE'RE AT TODAY AND WE ADVISED YOU THAT WE WOULD COME BACK WITH THE LONG CRITERIA AND UNDERWRITE THE BCL TEXAS WOULD USE OR EXECUTION OF THE PROGRAM AT THAT TIME.
UH, STAFF WILL BE, WE'LL BE SEEKING, UH, FIRST PRESENT TO YOU AND THEN SEEKING YOUR FEEDBACK AND APPROVAL OF THESE PARAMETERS AND ANSWERING ANY QUESTIONS YOU MAY HAVE WITH RESPECT TO THE PROGRAM, UH, GUIDELINES AS WELL AS THE, UH, UNDERWRITING.
UH, JUST AS A REMINDER AT THE DECEMBER 21ST MEETING, UH, THE SMALL BUSINESS FUND, UH, WOULD BE ALLOCATED PERCENTAGE OF THE FINANCE, UH, $500,000 IN WORKING CAPITAL T OH FOUR, WORKING CAPITAL TO QUALIFYING BUSINESSES ON TEXAS PARKWAY, CARTWRIGHT CORRIDORS, AND THE REMAINDER THAT WILL QUALIFY SMALL BUSINESSES THROUGHOUT THE CITY.
UH, SECONDLY, UH, THE CITY IS OUT ON VACATION AND THE MILLION DOLLARS WOULD BE UTILIZED TO LEVERAGE BORROWERS BANK SBA FIVE OH FOUR LOAN FUNDS TOTALING, APPROXIMATELY $10 MILLION FOR CAPITAL INVESTMENT.
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BE FOR THE COMMERCIAL REAL ESTATE, UH, PORTION OF IT.UH, IN TOTAL, THE CRA FUNDS WILL BE A TANDEM LOUNGE, GANTI U S SMALL BUSINESS ADMINISTRATION BIBLE PROGRAM, AND A BANK LOANS.
SO IN FOLLOWING YOU HAD BEEN PRESENTED WITH A JOURNAL, WELL LOOK HOW THE, THE FUNDING THAT IS AVAILABLE THAT WE'D BE MADE AVAILABLE WOULD BE ABLE TO LEVERAGE $15 MILLION IN AVAILABLE LOAN FUNDS FOR THE PROGRAM.
AND THEN THAT BRINGS US HERE TO TONIGHT AND WHICH, UH, AGAIN, UH, TONIGHT ROSA WILL BE PRESENTING TO YOU THE WRONG CRITERIA AND UNDERWRITING PLAYING AMATEURS AS THE BCL, TEXAS THAT THEY'D BE USING FOR THE EXECUTION OF THE PROGRAM.
AND THEN WE'LL SEEK APPROVAL FROM YOU, UH, OF THE PROGRAM UNDERWRITING AS WELL AS, UH, ANSWER, BE HAPPY TO ANSWER ANY QUESTIONS YOU HAVE ABOUT IT, OR THE FRAMEWORK THAT WAS PRESENTED TO LAST ME.
SO AT THIS TIME, UH, I WILL TURN IT OVER TO ROSA TO PROVIDE HER, UH, OVERVIEW, UH, ANY QUESTIONS.
IT'S MY PLEASURE TO BE WITH YOU AGAIN TONIGHT.
I BELIEVE IF WE CAN GO TO THE NEXT SLIDE, UM, THERE'S A LOT OF WORK THAT STILL NEEDS TO BE DONE.
UM, WHEN YOU DO UNDERWRITING, NEXT SLIDE PLEASE.
SO WHEN YOU DO UNDERWRITING, YOU'RE REALLY DETERMINING IF YOUR BORROWER IS ELIGIBLE.
IF THEY'RE STRONG ENOUGH TO MAINTAIN, UH, THEIR DOORS OPEN AND TO GROW, AND IF THEY CAN REPAY THAT LOAN, BECAUSE AS YOU'RE AWARE, THESE ARE LOANS, THEY'RE NOT GOING TO BE GRANTS, AND WE'RE GOING TO WANT TO EVALUATE THE FINANCIAL STRENGTH OF EACH APPLICANT AND NOT EVERYBODY WILL GET SELECTED, BUT WE'RE DETERMINING THEIR ELIGIBILITY FOR THE PROGRAM.
AND WE'RE ALSO DETERMINING THEIR ABILITY TO PAY THAT LOAN BACK.
SO WHEN WE PRESENTED LAST MONTH, WE TALKED ABOUT I'M SORRY.
I CAN'T SEE ANY OF THE SLIDES.
JUST GIVE ME ONE SECOND TO TRY TO RESET.
I CAN SEE THEM FINE, BUT LET ME TRY TO POP IT UP AGAIN.
SO MARY, LAST MONTH, MARIN COUNCIL, UH, YOU SAW THIS STEPS THAT WE NEEDED TO GO THROUGH TO ACTUALLY GET THE PROGRAMS STRUCTURED AND OPERATIONAL THE FIRST STEP THERE WOULD BE, HOPEFULLY THAT YOU'RE ENGAGE US TO BE THE ADMINISTRATOR OF THE PROGRAM TO QUALIFY FAMILIES.
UH, I'M SORRY TO QUALIFY YOUR BUSINESSES, UH, FOR ELIGIBILITY.
AND THE SECOND STEP, WHICH W WE'LL FOCUS ON TODAY IS THE LENDING CRITERIA.
HOW DO WE ACTUALLY EVALUATE ALONE WHO IS ELIGIBLE AND WHAT WOULD NOT BE ELIGIBLE IN A PROGRAM WITH MISSOURI CITY? SO IF WE COULD GO TO THE, SO THE FOCUS TODAY WILL BE ON STEP TWO, NEXT SLIDE.
WE, AS BILL SAID, THERE'S TWO FUNDS.
AND THE UNDERWRITING FOR THAT, I WAS ASKED TO KIND OF SHARE WITH YOU MORE HIGH LEVEL FEATURES IS THAT WE WANT TO CREATE SOME FLEXIBILITY IN THE UNDERWRITING.
UM, SO FOR THE GROWTH FUND FOR OUR BUSINESSES THAT ARE ALREADY IN THE COMMUNITY, WE'D LIKE TO LEND UP TO A HUNDRED THOUSAND DOLLARS, THAT 100,000 WE'LL LEVERAGE 10 TIMES, AND THAT WOULD BE A MILLION DOLLARS.
AND TYPICALLY A STANDARD SCORE THAT A BANK WANTS IS ABOUT 620 AND HIGHER FOR PERSONAL CREDIT SCORE, BECAUSE WE WANT SOME FLEXIBILITY.
WE WERE WANTING TO WORK WITH LOCAL ENTREPRENEURS.
WE'RE NOT GOING TO TREAT IT AS A TRADITIONAL BANK LOAN.
MY RECOMMENDATION IS WE LOOK AT A CREDIT SCORE OF FIVE 90 AND HIGHER.
WE'RE ALSO LOOKING THAT THE BUSINESS SHOULD HAVE
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12 MONTHS EXPERIENCE OF OPERATING HISTORY.WE REALLY ARE WANTING TO FOCUS ON THOSE GROWING BUSINESSES, UH, AND LESS EMPHASIS ON STARTUPS.
THE CITY GROWTH FUND WOULD BE THE DOLLARS CAN BE USED FOR WORKING CAPITAL.
WE THINK THAT THAT'S GOING TO BE THE MAJORITY OF, OF REQUESTS COMING IN, BUT THEY CAN ALSO BE USED IN A COMBINATION OF WORKING CAPITAL BUILDING IMPROVEMENTS, A EQUIPMENT INVENTORY, AND PERHAPS EVEN MARKETING THE BUSINESS WILL HAVE TO DEMONSTRATE THEIR ABILITY TO REPAY THE LOAN.
AND TYPICALLY WHAT WE DO WITH THAT WITH AN APPLICATION IS WE'RE LOOKING AT THEIR FINANCIAL STATEMENTS.
WE'RE LOOKING AT TAX RETURNS, WE'RE LOOKING AT THEIR FINANCIAL PROJECTIONS, AND WE'RE LOOKING AT THE AMOUNT OF DEBT THAT THEY WOULD TAKE ON.
AND WE NEED TO HAVE SOME POSITIVE ASSURANCE THAT THE BUSINESS CAN REPAY ITS LOANS.
NOW, I CAN TELL YOU, WE'VE BEEN DOING THIS FOR 30 YEARS WITH PROJECTS, SMALL AND VERY, VERY LARGE.
AND SO THIS IS SOMETHING THAT IS DONE INTERNALLY, VERY CONFIDENTIALLY, BUT YOU CAN'T DO IT WITHOUT LOOKING AT THE FINANCIAL INFORMATION OF THE BUSINESS, THE FINANCIAL INFORMATION OF THE BORROWER AND HAVING THOSE, UM, VERY IMPORTANT CONVERSATIONS AS TO WHETHER THE PROJECT CAN MOVE FORWARD.
BUT WE LOOK AT COLLATERAL, WE WOULD BE LOOKING AT COLLATERAL OF ABOUT 85% LOAN TO VALUE.
IT COULD INCLUDE PERSONAL ASSETS.
FOR EXAMPLE, IF I WANT TO BORROW, UH, FOR WORKING CAPITAL, IF MY BUSINESS WANTS TO BORROW FOR WORKING CAPITAL, BUT THEY ONLY HAVE A, LET'S SAY IT'S A HUNDRED THOUSAND DOLLARS REQUESTS, BUT THEY ONLY HAVE 50,000 OF COLLATERAL.
WELL, THEY'RE A LITTLE BIT, YOU KNOW, WE WANT 85,000 OF COLLATERAL, BUT IF THEY WANTED TO PLEDGE A LOT THAT THEY HAD, UM, IN, WITHIN THE CITY OR A BOAT OR ANYTHING ELSE, THAT'S HAS A VALUE IN IT'S A PERSONNEL ACID THAT IS TYPICALLY ALLOWED.
AND WE WOULD TAKE THAT IN CONSIDERATION WHEN WE'RE LOOKING AT THE COLLATERAL REQUIREMENTS, BUT THESE ARE SECURED LOANS.
THEY'RE NOT GOING TO BE ONE-TO-ONE SECURED, BUT WE WILL BE, UH, REQUIRING COLLATERAL.
AND WE WILL BE DOCUMENTING THAT COLLATERAL.
AND WE'LL BE FILING LIENS ON THAT COLLATERAL 20%, UH, INDIVIDUALS THAT HAVE 20% OWNERSHIP IN A BUSINESS.
IT'S VERY STANDARD THAT YOU GET A PERSONAL GUARANTEE FROM THE INDIVIDUALS.
SO NOT ONLY WOULD YOU HAVE A BUSINESS GUARANTEE, YOU WOULD ALSO HAVE A PERSONAL GUARANTEE FOR EVERYBODY.
AND WITH THAT, WE ARE LOOKING AT THOSE PERSONAL FINANCIAL STATEMENTS.
LIKE I MENTIONED, WE'RE WANTING TO SEE IF THEY HAVE THEIR EQUITY.
WE WANT TO SEE WHAT THEIR COLLATERAL CONSISTS OF.
AND THEN WE'RE ALSO, YOU KNOW, WANTING TO ENSURE THAT IF THE BUSINESS IS NOT ABLE TO MAKE THE PAYMENTS, THAT THOSE INDIVIDUALS, YOUR BORROWERS, THE OWNERS ARE STILL REQUIRED TO, UH, THEY'RE OBLIGATED TO MAKE THAT LOAN GOOD.
THE THIRD, THE LAST FEATURE IS A RULE OF TWO.
UH, THAT'S A RULE THAT WE UTILIZE.
IT'S A RULE THAT WE ADOPTED FROM THE SMALL BUSINESS ADMINISTRATION.
YOU KNOW, NO LOAN SHOULD BE MADE UNILATERALLY.
WE'RE RECOMMENDING THAT IF BCL OF TEXAS IS GOING TO BE UNDERWRITING THESE LOANS FOR ELIGIBILITY, FOR COLLATERAL, FOR REPAYMENT ABILITY, THEN WE CAN CERTAINLY MAKE THE RECOMMENDATION TO GO FORWARD AND FOR APPROVAL.
BUT WE WOULD WANT ONE OTHER, UH, PARTY TO CONCUR WITH THE FINAL DECISION.
UH, WE'RE SUGGESTING THAT PERHAPS THE CITY COUNCIL DESIGNATE WHO THAT INDIVIDUAL WILL BE, AND THAT WE'RE ALSO ASKING A QUICK TURNAROUND, WHAT THAT INDIVIDUAL WILL GET.
THE MEMO SAID, HERE'S THE CUSTOMER.
HERE'S WHAT THEY WANT TO BORROW.
HERE'S THEIR PERSONAL FINANCIAL STATEMENTS.
HERE'S THEIR ABILITY TO REPAY.
HERE'S A LITTLE BIT OF HISTORY ABOUT THE BUSINESS AND BECAUSE EVERYTHING PASSES WE'RE RECOMMENDED APPROVAL.
SO THAT'S CREDIT MEMO WOULD BE SUBMITTED TO WEAR RED, THE CITY COUNCIL DESIGNATES AS THEIR REPRESENTATIVE, BUT WE WOULD WANT THAT REPRESENTATIVE TO ALLOW A THREE-DAY TURNAROUND SO THAT WE CAN GO AHEAD AND ISSUE A COMMITMENT LETTER.
NOW, A LOT, SOME THESE LOANS ARE GOING TO HAVE A BANK IN THE DEAL AND THE BANKS CANNOT GO TO COMMITTEE AND SAY, OH, WELL, THEY HAVEN'T DECIDED, OR WE DON'T KNOW YET.
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IMPORTANT THAT THE BANK SAY WE'VE GOT A COMMITMENT LETTER.IT'S THE LOAN HAS BEEN APPROVED.
AND I HAVE VERIFICATION THAT AT WHEN THE TIME IS RIGHT, THIS LOAN WILL BE FUNDED FOR X AMOUNT.
AND SO, UM, THE ROOM OF TWO WORKS, IT MEANS THAT WE'RE NOT MAKING A UNIT, A LATERAL DECISION.
UH, THESE LOANS WOULD REQUIRE TWO PARTIES TO, UH, APPROVE AND, UH, GO FORWARD WITH A COMMITMENT LETTER.
UM, ONE OF THOSE PARTIES WOULD BE OUR REPRESENTATIVE.
AND THEN THE SECOND PARTY WOULD BE A CITY COUNCIL DESIGNEE.
AND IN GREEN, YOU SEE WHERE THE GROWTH FUND IS CAPITALIZED WITH $500,000.
AND WHEN YOU LEVERAGE THAT 10 TIMES, YOU, THE COMMUNITY GET BENEFIT OF A $5 MILLION LEVERAGE INVESTMENT IN, IN YOUR, IN YOUR TARGET MARKETS.
ANY QUESTIONS IS THAT ALL YOUR PRESENCE THAT WE'D LIKE TO REVIEW NOW, THE COMMERCIAL REAL ESTATE, THE, THE UNDERWRITING FOR THE COMMERCIAL REAL ESTATE.
IF I MAY, THIS IS JUST MY SUGGESTION THAT IF YOU DIDN'T GO THROUGH THE WHOLE SLIDE AND THEN WE'LL HAVE Q AND A, THEN THAT'S JUST MY SUGGESTION.
SO REAL ESTATE, THESE LOANS ARE A LITTLE BIT, UM, MORE COMPLEX.
UM, YOU HAVE EARMARK THAT A BORROWER CAN, UH, APPLY FOR UP TO $250,000 FROM THE COMMERCIAL REAL ESTATE POOL.
REMEMBER THAT POOL IS A MILLION DOLLARS.
AND SO THAT WILL LEVERAGE 10 TIMES FOR THE COMMERCIAL REAL ESTATE.
KEEP IN MIND THAT THIS IS A US SMALL BUSINESS ADMINISTRATION LOAN PROGRAM.
IT HAS VERY SOLID, UH, STANDARD OPERATING PROCEDURES THAT WE HAVE WORKED WITH FOR 30 YEARS.
THE, THE ONLY WAY THE CUSTOMER CAN TAP THIS BOND IS IF A CDC LIKE OURSELVES SPONSORS THE PROJECT.
SO THE CREDIT SCORE REQUIREMENT IS HIGHER.
UH, IT, IT TENDS TO BE MORE ALIGNED WITH WHAT THE SMALL BUSINESS ADMINISTRATION REQUIRES.
UH, THE YEARS OF OPERATING EXPERIENCE IS LONGER IN THIS CASE, WE'RE RECOMMENDING 24 MONTHS OR GREATER.
UM, THE MONEY CAN BE USED FOR ANYTHING RELATED TO THE ACQUISITION OF A PROPERTY OR THE CONSTRUCTION OF REAL ESTATE.
IT CAN NOT BE FOR WORKING CAPITAL OR INVENTORY OR ANYTHING LIKE THAT.
AND SO I, WHAT I PUT IN, IN THE LIGHTER SHADE, IT CAN BE USED FOR APPRAISALS, A DOWN PAYMENT OF LEGAL TITLE, FEES, ENGINEERING, SIDE PREPARATION, ANYTHING RELATED TO A NEW CONSTRUCTION OR THE PURCHASE OF AN EXISTING BUILDING.
AND IT CAN BE A PURCHASE AND REHAB UNDER COMMUNITY, A COMMERCIAL REAL ESTATE.
THE BUILDING HAS TO BE OCCUPIED BY THE BUSINESS.
SO THIS IS NOT FOR SPECULATION.
IT IS NOT FOR, I WANT TO BUY THIS BUILDING AND I'M GOING TO FLIP IT.
SO BECAUSE IT IS A FEDERAL GOVERNMENT PROGRAM, UH, WE HAVE TO APPLY THE FEDERAL RULES AND ENSURE THAT IT IS GOING TO BE COMPLIANT WITH THE FEDERAL RULES AND SLPS.
AGAIN, IN THE SAME CASES IN THE GROWTH FUND FOR REAL ESTATE FINANCING, UM, THE BUSINESS MUST DEMONSTRATE THEIR ABILITY TO REPAY THE SMALL BUSINESS ADMINISTRATION.
THE BANK WILL ALWAYS BE 50% IN THE DEAL, AND WE'RE TALKING ABOUT LOCAL BANKS.
AND THEN THE CITY OF MISSOURI LOAN WOULD ALSO, UH, WE WOULD NEED TO DEMONSTRATE THAT THE BUSINESS CAN PAY ALL OF THE DEBT AND THAT'S ON US.
WE ARE ACTUALLY DOING THAT ALLOCATION, THE ANALYSIS THAT THE FINANCIAL FEASIBILITY OF PROJECTS, UH, COLLATERAL IS REQUIRED.
AND BECAUSE IT'S REAL ESTATE, THE TYPICAL COLLATERAL IS THE LAND AND BUILDING.
SO BECAUSE THERE'S A BANK IN THE TRANSACTION, THE BANK IS IN A FIRST LIEN, THE SMALL BUSINESS ADMINISTRATION, ISN'T A SECOND LIEN.
AND THE MISSOURI CITY FUND WOULD BE IN A THIRD LIEN POSITION.
THESE LOANS ARE VERY ATTRACTIVE.
AND IN ANOTHER SLIDE, YOU'LL GET TO SEE THE INTEREST RATE AND THEIR, UH, LOW DOWN LONG-TERM LOW INTEREST BECAUSE WE'RE TRYING TO REWARD THOSE BUSINESSES THAT ARE GROWING TO BUILD SPACE, GROW INTO THE SPACE
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THAT THEY NEED.AND TYPICALLY WHEN YOU'RE GROWING INTO NEW SPACE, YOU'RE ADDING JOBS IN THIS PROGRAM, PERSONAL GUARANTEES ARE MANDATORY.
IF YOU OWN 20% OF A BUSINESS, UH, EACH INDIVIDUAL THAT OWNS 20% OR GREATER HAS TO PROVIDE A PERSONAL GUARANTEE.
AND AGAIN, I WOULD SAY FOR THE MISSOURI CITY PORTION, I WOULD RECOMMEND THAT WE ALSO HAVE A RULE OF TWO, THE SAME FEATURES AS IN THE GROWTH THUMB.
NOW, MISSOURI, THE CITY COULD APPLY AND COULD APPROVE THE LOAN.
AND WE BOTH APPROVED THE LOAN AND WE'RE READY TO HAVE IT GO FORWARD FOR THE BANK.
AND, BUT MY RECOMMENDATION AND I, I CAN BE, I'M GOING TO BE VERY CLEAR IN, IN MY STATEMENT, IF THE SBA DOES NOT APPROVE, THEN THE MISSOURI CITY LOAN SHOULD NOT GO FORWARD.
IT CAN NOT, IT SHOULD NOT BE ABLE TO GO FORWARD BECAUSE THE WHOLE IDEA OF THIS COMMERCIAL REAL ESTATE IS YOU WANT THE BANK MONEY IN THE TRANSACTION.
YOU WANT THE SBA MONEY IN THE TRANSACTION AND THE MISERY CITY CAPITOL FILLS THE GAP.
BUT IF ONE OF THOSE THREE, IF THE BANK OR SBA DON'T FIT, MISSOURI CITY SHOULD NOT BE FUNDING THEIR PART
AND SO BACK TO THE INTEREST RATE, WE'LL LOOK AT THAT IN A SECOND.
BUT IN THIS CASE, I JUST WANT TO REEMPHASIZE THAT THE CRE COMMERCIAL REAL ESTATE LOAN FUND WITH YOUR CAPITAL IS A MILLION DOLLARS.
AND THAT GETS LEVERAGED 10 TIME TO $10 MILLION.
WE HAVE BEEN DOING THESE LOANS FOR 30 YEARS WHEN, OH, HOW THE PROGRAMS WORK.
WE HAVE TO KEEP UP WITH THE FEDERAL RULES.
THEY CHANGE VERY FREQUENTLY THESE DAYS, BUT IT'S AN OUTSTANDING PROGRAM FOR YOUR BUSINESSES THAT, THAT HAVE BEEN LEASING.
AND THEY'RE IN A POSITION NOW TO, TO BUY THEIR SPACE.
SO WE TALKED ABOUT WHAT'S ELIGIBLE AND THE AMOUNT THAT WE WOULD BE WILLING TO LEND IN EITHER THE WORKING CAPITAL PROGRAM, THE GROWTH FUND, OR THE REAL ESTATE FUND, THIS SLIDE TALKS ABOUT WHAT'S NOT ELIGIBLE.
AND THESE THERE'S SOME OF THESE RECOMMENDATIONS AND SOME ARE SBA FA FEATURES.
UM, ONE OF THE FEATURES IS THAT WE DO NOT WANT ANY OF THE FUNDS TO BE USED TO PAY THE PRINCIPAL SALARIES.
THEY SHOULD BE USED PRIMARILY FOR BUSINESS AND BUSINESS RELATED COSTS.
THE BUILDING PURCHASED OR CONSTRUCTED CAN NOT BE USED FOR GOVERNMENT USE OR FOR POLITICAL ACTIVITIES.
THAT'S A VERY FIRM POLICY WITH THE FEDERAL, UH, THE SBA, UH, ON THE POLITICAL LOBBYING.
UM, THE FUND CANNOT BE, UH, FOR NONPROFIT ENTITIES, UH, FOR THE COMMERCIAL REAL ESTATE.
UM, I DON'T BELIEVE THAT YOU WANT THE GROWTH FUND FOR NONPROFIT ENTITIES.
AND SO WE HAVE FLEXIBILITY IN SOME OF THESE, BUT ON MY LIST, I'M THINKING THAT WE WANT TO GIVE PREFERENCE TO ESTABLISH BUSINESSES.
UM, THAT'S THE THEME OF, OF WHAT WE'RE TRYING TO DO.
SO NONPROFITS WOULD NOT BE ELIGIBLE.
RELIGIOUS ENTITIES ARE NOT ELIGIBLE.
LIQUOR STORES ARE NOT, YOU HAVE TO LOOK STABILITY THEIR YEAR.
IF YOU WANT TO MAKE THEM ELIGIBLE.
YOU KNOW, THERE'S SOME, SOME INDUSTRIES THAT ARE CONSIDERED SIN AND, YOU KNOW, THE PEOPLE COULD SAY, WELL, THE CITY COUNCIL FUNDED THAT LIQUOR STORE, PERHAPS WE DON'T WANT TO GO THERE.
SO THAT'S WHY I'VE ADDED IT AS NOT ELIGIBLE ON THE NEXT BULLET.
THE SBA IS A VERY, VERY FIRM THAT FOR ANY OF THEIR LENDING, UH, ANY ILLEGAL PRODUCTS ARE NOT ELIGIBLE.
SO WE HAD THAT CONVERSATION THIS WEEK DURING SOME TRAINING, HEMP CBD, UH, WHETHER IT, THESE ARE USED FOR FOOD ITEMS OR CREAMS, IT DOESN'T MATTER.
ADULT BOOKSTORES, ADULT RETAIL, OPERATIONS ARE NOT ELIGIBLE, UH, FRANCHISE BUSINESSES THAT ARE NOT LISTED ON THE SBA APPROVED FRANCHISE DIRECTORY ARE NOT ELIGIBLE.
I HAVE TO STRESS THAT, UH, BECAUSE SBA IS VERY CLEAR.
IF IT'S NOT ON THEIR DIRECTORY, THEY ARE NOT GOING TO APPROVE IT.
AND SO THAT'S WHY I PUT THIS AS, UH, INELIGIBLE,
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UH, BORROWERS WHO HAVE DEFAULTED ON GOVERNMENT LOANS ARE INELIGIBLE.AND WE HAVE, WHEN WE'RE DOING A CRE APPLICATION, WE HAVE TO RUN CHECKS ON THAT, UH, ON THAT ISSUE, WHETHER INDEED THE INDIVIDUALS ARE LISTED AS HAVING PROBLEMS, UH, WITH THE FEDERAL GOVERNMENT AND DEFAULTED AND ANY LOANS THAT WILL BUBBLE UP THE GOVERNMENT KEEPS TRACK OF THAT.
UH, IF A BUSINESS HAS BEEN DECLARED, UH, HAS DECLARED BANKRUPTCY IN THE LAST SEVEN YEARS, THEY ARE NOT ELIGIBLE IF WE'RE PAST THE SEVEN YEARS, UH, THERE CAN BE SOME CONSIDERATION.
AND IF A BUSINESS CANNOT DEMONSTRATE THAT THEY CAN REPAY THEIR LOAN, WE WILL DETERMINE THAT THEY'RE NOT ELIGIBLE.
SBA WOULD BE DETERMINING THE SAME THING AS WHAT A TRADITIONAL BANK.
UM, ANY ITEM THAT I'VE NOT MENTIONED HERE, THAT THE CITY COUNCIL WANTS TO ADD, OR ANYONE THAT WE WANT TO TALK FURTHER, UH, YOU HAVE FLEXIBILITY IN ADDING TO THIS SLIDE.
THIS TALKS ABOUT THE INTEREST RATE.
SO FOR THE MISSOURI CITY GROWTH FUND, OUR RECOMMENDATION IS THAT YOU CONSIDER WALL STREET JOURNAL PRIME MINUS THREE.
TODAY WALL STREET JOURNAL PRIME IS 3.25%.
AND SO THE RECOMMENDATION WOULD BE USE THAT AS YOUR FACTOR MINUS THREE.
AND THEN THAT BECOMES THE INTEREST RATE THAT WE MAKE AVAILABLE TO THE CUSTOMER.
KEEP IN MIND THAT THE GROWTH FUND LOANS WILL BE SHORTER TERM.
UH, WE'RE RECOMMENDING THAT THEY NOT BE THE BEST.
WE, WE DON'T GO BEYOND FIVE YEARS FOR THE COMMERCIAL REAL ESTATE.
THE RECOMMENDATION HERE IS THAT YOU CONSIDER LOCKING IN YOUR INTEREST RATE AT THE SAME RATE AS THE FEDERAL GOVERNMENT ON A FIVE OH FOUR COMMERCIAL REAL ESTATE ON THEIR PORTION OF THE LOAN.
AND SO IN JANUARY THIS MONTH, UH, THE INTEREST RATE FOR A FIXED RATE FOR A 20 YEAR LOAN IS 1.2%.
SO YOU CAN SEE RIGHT HERE, YOU KNOW, WHO IN, UH, IN TEXAS IS MAKING REAL 20 YEAR INTEREST RATE LOANS AT 1.2%.
AND SO IT'S REALLY TO THE ADVANTAGE OF YOUR BUSINESS TO TAP THIS FUND.
IF THEY'RE WANTING TO ACQUIRE THEIR REAL ESTATE OR BUILD REAL ESTATE, BECAUSE THE INTEREST RATE LOCKS IN IT'S A FIXED RATE FOR 20 YEARS.
IN SOME CIRCUMSTANCES, WE CAN EVEN GO 25 YEARS NEXT LINE.
SO ONE OF THE THINGS WE DO WANT TO TALK ABOUT IS HOW A DEAL GETS STRUCTURED.
YOU KNOW, ONE OF THE THINGS THAT'S VERY IMPORTANT IS PERHAPS OFTENTIME, OUR BUSINESSES DO NOT HAVE WHAT THE BANK REQUIRES.
SO I DID THIS EXAMPLE IN THIS CASE, WE'RE SAYING WE HAVE A LOCAL DRY CLEANERS.
THEY'VE BEEN IN BUSINESS FOR FOUR YEARS AND THEY WANT TO GO INTO A SECOND LOCATION.
THIS LOCATION IS LEASED SPACE.
IT'S BEEN VACANT FOR TWO YEARS, BUT IT'S VERY VISIBLE.
AND THAT'S WHY THEY'RE INTERESTED IN IT.
THE BUSINESS NEEDS A HUNDRED THOUSAND DOLLARS AND THEY'VE GONE TO THE BANK.
UH, THE BUSINESS OWNER HAS $8,000 AND THE BANK HAS TOLD THEM, WELL, WE CAN TALK ABOUT IT SOME MORE, BUT WE NEED $25,000 EQUITY FROM YOU.
SO IF THE BANK NEEDS 25,000 AND THE BUSINESS OWNER ONLY HAS 8,000, WE HAVE A GAP.
AND THAT'S WHAT YOUR PROGRAM HELPS TO DO.
THE BANK ALSO SAID, WELL, MR. UH, DRY CLEANERS, YOU, WE AT THE BANK REQUIRED CREDIT SCORE OF 620, BUT BCLS POOLED THE CREDIT SCORE OF THE CUSTOMER.
AND THE CUSTOMER HAS A SCORE OF 598.
SO IN THIS CASE, IF YOU LOOK AT WHAT THE BUSINESS NEEDS AND THE CASH THAT THEY HAVE AND THEIR CREDIT SCORE AND WHAT THE BANK IS REQUIRING, THEY CAN'T GET THAT BANK.
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COMMUNITY LENDER LIKE OURSELVES IS WE ROLL UP OUR SLEEVES AND WE ACTUALLY WORK WITH A CUSTOMER AND BCL OF TEXAS WE'RE STATEWIDE.SO WE HAVE, WE'RE DIFFERENT THOUGH FROM OUR OTHER, UH, CDCS, WE HAVE STAFF THAT ARE CERTIFIED TO HELP BUSINESSES TO IMPROVE THEIR CREDIT SCORES.
AND THAT'S NOT A SERVICE THAT WE HAVE PROVIDED FOR 30 YEARS.
THAT'S A SERVICE THAT WE DECIDED OVER IN THE LAST FIVE YEARS THAT THERE WAS A NEED FOR THIS.
AND IT'S NOT THAT COMPLICATED.
SO WORKING WITH US AT NO COST TO THE BUSINESS, OUR FINANCIAL CAPABILITY STAFF WOULD WORK WITH THAT CUSTOMER TO COACH THEM AND HELP THEM LOOK AT THEIR CREDIT SCORE AND HELP SOLVE THEIR SOLUTION AND COACH THEM AND HOW, WHAT THEY NEED TO DO TO INCREASE THEIR CREDIT SCORE, TO MEET THE BANK'S REQUIREMENTS.
THE OTHER THING WE WOULD DO WITH THE PROJECT IS WE WOULD ACTUALLY STRUCTURE THE TRANSACTION.
AND SO WHAT DO YOU SEE IN THE BOXES, HOW WE'RE ACTUALLY STRUCTURING THE TRANSACTION? AND WE SAY, OKAY, WE'RE GOING TO NEED YOUR $8,000.
THERE'S NO WAY WE CAN GO INTO A BANK AND SAY, WE WANT TO DO THIS LOAN, BUT WE, WE DON'T WANT TO PUT ANY MONEY IN THE DEAL.
AND SO WE WOULD SAY TO THE BORROWER, WE NEED YOU TO CONTRIBUTE YOUR 8,000.
YOU HAVE IT, YOU PLAN TO USE IT, LET'S PUT IT ON THE TABLE, BUT WE ALSO WOULD RECOMMEND TO THEM, LET'S TAP THE MISSOURI CITY GROWTH FUND BECAUSE THEIR MONEY CAN BE USED FOR WORKING CAPITAL EQUIPMENT MARKETING.
AND SO LET'S, LET'S GET 25,000 FROM THE MISSOURI CITY LOAN FUND.
AND HOPEFULLY WE CAN PRESENT OUR CASE PRESENT, UM, THE FINANCIAL STRENGTH OF YOUR BUSINESS AND THAT THIS IS A GOOD PLAN.
UH, MISSOURI CITY LOAN FUND WOULD APPROVE YOU.
I WANT TO STRESS TO YOU THAT IT'S VERY IMPORTANT TO DO IT IN THAT ORDER, BECAUSE THE BANK'S GONNA SAY, I WANT TO SAY THAT EVERYBODY'S GOT THEIR MONEY IN FIRST, AND THEN I'LL CONSIDER IT FOR THE RIDE.
SO WHERE THE BANK NEEDED 20% DOWN.
NOW WE HAVE ALMOST ACTUALLY 30% IN THE TRANSACTION.
AND SO THE KEY IS A TYPICAL BUSINESS.
WOULDN'T KNOW HOW TO STRUCTURE HIS, HIS TRANSACTION FOR SUCCESS, BUT WE KNOW THIS IS ONE EXAMPLE OF HOW WE WOULD STRUCTURE IT.
AND SO YOU GO TO THE BANK AND YOU SAY, WE'RE NOT READY TO GO TO THE BANK.
AND WE CAN CONFIRM THAT EQUITY, WE'RE NOT READY TO GO TO THE BANK.
AND WE DON'T HAVE A COMMITMENT LETTER FOR THE 25,000 FROM MISSOURI CITY, BUT WE ARE READY FOR THE BANK.
WHEN WE SAY MR. BANKER, WE HAVE 30% OF THE TRANSACTION READY TO GO.
AND OUR CUSTOMER HAS, UM, A CREDIT SCORE OF SIX 25.
LET'S SAY, UH, CAN WE KEEP TALKING ABOUT GETTING THE REST OF THE FINANCING? SO I WOULD JUST WANT TO STRESS TO YOU IN THE ORANGE IT'S THROUGH OUR HEALTH, THROUGH OUR STAFFING, THAT WE HELP THE BORROWERS IMPROVE THEIR CREDIT SCORE TO MEET THE BANK REQUIREMENTS.
WE'RE PREPARED THE BUSINESS PLAN AND THEIR FINANCIAL PROJECTIONS.
AND WE STRUCTURED THE FINANCING SO THAT THE BANK CAN SEE, UH, THAT THE EQUITY INJECTION REQUIREMENT IS BEING BET, MATT.
AND THEN THERE'S SOME OTHER FORMULAS AND CRITERIA THAT WE DO.
THE, THE MAIN ONE BEING CAN, THE LOANS GET PAID BACK.
AND SO ALL OF THAT IS PUT TOGETHER AND PRESENTED AT THE APPROPRIATE TIME.
SOMETIMES OUR BANK, OUR BORROWERS SKIPPED THE STEPS THEY GO FROM FROM, I HAVE AN IDEA AND THEY GO STRAIGHT TO THE BANK AND THEY GET TURNED DOWN.
WE ARE THE EXPERIENCED BUSINESS DEVELOPMENT LENDER THAT KNOWS HOW TO PUT THE PROJECT TOGETHER, HOW TO RIGHT-SIZE IT.
AND IF IT'S NOT GOING TO WORK, WE TELL THE CUSTOMER THIS WON'T WORK.
PLEASE SAVE YOUR MONEY BECAUSE THAT WE SEE SOME PROBLEMS AND WE COUNSEL THE BUSINESS ON WHAT THOSE PROBLEMS ARE AND WHAT THEY NEED TO DO TO MITIGATE THEM.
SO THIS WAS A VERY SIMPLE EXAMPLE OF THE WORK WE DO TO FILL THE EQUITY GAP AND HOW IMPORTANT YOUR MONEY IS TO HELPING DEALS HAPPEN.
WELL, THE PROMISE TO OUR LOCAL BUSINESS IS THAT WE'RE HERE
[00:35:01]
TO HELP YOU.YOU CONTRIBUTE TO OUR COMMUNITY.
AND SO IN RETURN, THE MISSOURI CITY LOAN FUND GENERATES VALUE ADDED TO THE COMMUNITY.
WE DEMONSTRATE THAT WE SUPPORT LOCAL BUSINESSES.
WE'RE ABLE TO FILL THAT EQUITY GAP, THAT THAT EXAMPLE SHOWS.
TRUST ME, WE SEE THIS ALL THE TIME DEALS AREN'T GET BANKABLE UNTIL WE CAN STRUCTURE THE DEAL CORRECTLY AND, AND GET THAT ADDITIONAL FUNDING THAT THE PROJECT NEEDS.
UM, THE, THE SUPPORT THAT WE PROVIDE IS NO COST TO THE BUSINESS.
SO WHAT BILL SAID IS OUR FEE ON A MONTHLY BASIS COVERS IT DOESN'T MATTER.
WE'RE TOUCHING ONE BUSINESS OR 10 BUSINESSES.
THE QUALITY WILL REMAIN THE SAME, BUT AT NO TIME WILL THE BUSINESS GET CHARGED FOR THE TIME AND ENERGY AND, AND CONSULTATION THAT GOES IN, UH, WITH OUR EXPERTISE AND CAPACITY.
I MENTIONED THAT WE RIGHT-SIZED LOAN.
SOMETIMES THE BUSINESSES HAVEN'T DECIDED WHAT THE SIZE OF THE LOAN IS.
OTHER TIMES THEY THINK THAT THE LOAN IS MUCH BIGGER AND BY OUR EXPERTISE, WE'RE ABLE TO, UH, BRING IT TO THE RIGHT SIZE.
THAT MAKES IT BANKABLE, UH, MISSOURI CITY BENEFITS, BECAUSE YOU GET TO STIMULATE, UH, SOME COMMERCIAL CORRIDORS THAT PERHAPS NEED INFUSION OF CAPITAL.
AND WE GET BUSINESSES TO BUY, UH, UM, REDEVELOPMENT AIR AREAS THAT NEED TO BE REDEVELOPMENT.
WE GET BUSINESSES TO BUY VACANT BUILDINGS OR VACANT SPACES AND REAL IT'S REALLY IMPORTANT.
AND, AND MAYBE I HAVEN'T STRESSED IT ENOUGH.
THE BANKS ARE NOT LEFT OUT OF THIS BCL OF TEXAS IS NOT A BANK.
AND SO WE, WE KNOW THE IMPORTANCE OF YOUR LOCAL BUSINESSES TO HAVE THOSE BANK RELATIONSHIPS.
AND AS YOU SAW IN BOTH EXAMPLES, THE GROWTH FUND FOR THE BANK SAID, THIS IS OUR CRITERIA, AND WE'LL LEND YOU A PORTION OF IT, BUT WE WON'T LEND YOU ALL OF IT.
SO THAT EXAMPLE HAD A LOCAL BANK IN THE DEAL, UH, FOR COMMERCIAL REAL ESTATE, A, A BANK HAS TO BE 50% OF THE TRANSACTION.
SO THE LOCAL BANK RELATIONSHIP IS CRITICAL.
UM, WE CAN'T, UM, UNDEREMPHASIZE HOW IMPORTANT IT IS TO INCLUDE OUR LOCAL BANKS OR, OR OF THE LOCAL BANKS.
WE HAVE RELATIONSHIPS WITH BANKS ACROSS TEXAS AND, AND ACROSS AMERICA, UH, THAT COULD PERHAPS MAKE THE PROJECT HAPPEN.
SO IN SUMMARY, THE 1.5 MILLION THAT YOU'RE ALLOCATING FOR BOTH PROGRAMS LEVERAGES 10 TIMES IT LEVERAGES $15 MILLION.
I'M AVAILABLE FOR ANY QUESTIONS.
THANK YOU, MS. VALDEZ, UH, FOR THAT PRESENTATION.
UM, I, I DO HAVE A COUPLE OF QUESTIONS ABOUT PRIOR TO GETTING TO THE QUESTIONS I WOULD LIKE TO HAVE BILL WHO PRESENTED EARLIER OUR CITY MANAGER, UH, PLEASE EXPLAIN TO MYSELF AS I WAS NOT ON COUNCIL, WHEN THIS PROGRAM WAS INITIALLY PUT TOGETHER OR PUT IT FORTH THROUGH THE, YOU KNOW, GETTING BCL AND OTHERS, CAN YOU GIVE US A SYNOPSIS OF HOW DID WE GET HERE TO THIS DATE? SO THIS WAY, SOME OF OUR RESIDENTS WHO ARE TAXPAYERS CAN UNDERSTAND HOW DO WE PUT THIS PROGRAM TOGETHER? AND WHAT WAS THE INTENT? WHAT WAS THE PURPOSE? HOW DO WE MOVE FORWARD WITH THIS? WAS THIS VOTED ON? OR WAS THIS NOT VOTED TO MOVE FORWARD? YES, SIR.
SO, UH, THIS IS AN ITEM THAT WAS BROUGHT FORWARD IN THE BUDGET PRESENTATION OR THE PRESENTATION OF THE 20, 21 BUDGET AS A PROGRAM.
AND WE DO HAVE ALLOCATED 1.5, 9 MILLION FOR THE PROGRAM AND PROGRAM EXPENSES.
AND THIS IS SOMETHING THAT THEY SHOULDN'T MANTRA BOUGHT FORWARD IN THE, IN THE INITIAL, UH, BUDGET PRESENTATION WAS APPROVED BY COUNCIL, AND NOW WE'RE AT THAT POINT, WHATEVER, UH, WE BEGAN EXECUTION AND PUTTING IT INTO PLACE.
AND, UH, MS. VALDEZ HAS, UH, BEEN WORKING WITH OTHER COMMUNITIES THROUGHOUT TEXAS, UH, ON SIMILAR PROGRAMS. AND SO, UM, AGAIN, UH, INITIALLY MAJOR GUY I GUESS, COULD SPEAK TO THIS.
HE'S, UH, FAMILIAR WITH HER AND WE BEGAN DISCUSSIONS WITH HER AND, UH,
[00:40:01]
BROUGHT FORWARD THE INFORMATION BEGINNING IN NOVEMBER AND DECEMBER.AND, UH, THIS IS THE SECOND AGAIN, THE SECOND PRESENTATION AND, UH, THE FRONT GIVING THE FINE WORK OF HOW THE WHOLE SYSTEM WORKS AND THEN SECOND MALL, THE LENDING PARTIES AND THE, AND THE MANNER IN WHICH THE LENDING TAKES PLACE.
AND SO THAT ONE, AM I GOING TO FORWARD IN A VERY SYSTEMATIC MANNER AND LETTING YOU KNOW WHAT I DO, WHAT BCL TEXAS DOES AND HELPING CITIES, UH, PUT THESE TOGETHER AND WHAT CDCS ARE AND HOW THEY ASSIST ANY CITY MANAGER HAS SOMETHING TO ADD TO THAT AS WELL.
YEAH, BILL, I JUST ECHO WHAT YOU SAID AT THIS IS, UM, YOU KNOW, REALLY, UH, ONE STEP IN A SERIES OF STEPS, UH, TRADITIONALLY WHEN THESE SORTS OF PROGRAMS ARE SET UP, UH, THERE'S A PROCESS.
UH, OBVIOUSLY THE FIRST PROCESS IS FRAMEWORK.
SECOND PROCESS IS, YOU KNOW, HAVING, UH, A CITY COUNCIL APPROVE THE UNDERWRITING CRITERIA POINT, WHO ARE THE APPROPRIATE POINT PEOPLE, UH, AND APPROPRIATE OVERSIGHT FOR THE COUNCIL.
UH, THE THIRD PROCESS IS ONCE THAT'S ESTABLISHED, THERE'S DEVELOPING, UH, THE TAKE TO MARKET STRATEGY AND HAVING COUNCIL APPROVED TO TAKE THE MARKET STRATEGY.
AND WHAT I MEAN BY TAKE THE MARKET STRATEGY IS ONE OF THE THINGS BCL WOULD BE DOING IS, UH, THEY WOULD BE GOING OUT AND MARKETING TO OUR BUSINESSES AND MAKING THAT THEY ARE, UH, HANDLING EVERYTHING FROM A TO Z FROM AN UNDERWRITING STANDPOINT AND A MARKETING STANDPOINT.
AND IN PROVIDING, UM, REPORTS TO THE COUNCIL, AS REGULARLY AS THE COUNCIL WOULD, WOULD LIKE TO MONITOR A PROGRAM.
UH, AND THEN, UH, ONCE THAT IS APPROVED BY COUNCIL, THEN A FOURTH STEP WOULD BE, UH, THE LAUNCHER PROGRAM.
UH, SO THOSE ARE GENERALLY THE STEPS THAT TYPICALLY CITIES AND IN DOING THIS.
UH, AND SO, UH, TODAY IS THE THIRD MEETING, UH, YOU KNOW, PROCESS OF DISCUSSIONS THAT WE'VE HAD.
AND, UH, AS YOU KNOW, IT WAS UP TO THE CITY COUNCIL TO DECIDE, YOU KNOW, WHETHER OR NOT WE'RE MOVING FORWARD OR ARE NOT, OR IF SO, HOW, SO THAT'S PART OF, UH, OF WHAT'S HAPPENING FOR THOSE WHO, UH, WHO MAY BE JUST ATTENDING FOR THE FIRST TIME.
UH, SENIOR MANAGER, I DO HAVE COUPLE MORE QUESTIONS BEFORE WE OPEN IT UP.
UM, THIS IS JUST SO THAT I'M CLEAR ON, ON THIS.
UM, SO THIS WAS PUT TOGETHER THROUGH THE, UM, ASSISTANT CITY MANAGER THAT YOU SAID DURING THE BUDGET.
WAS THIS AMENDED OR WAS THIS ORIGINALLY ON THE BUDGET WAS IN THE ORIGINAL BUDGET THAT, UH, I SUBMITTED TO THE CITY COUNCIL, UH, BACK IN, UH, AUGUST.
AND SO THE, THE, UH, THEN CITY COUNCIL VOTED ON IT.
THE CITY COUNCIL VOTED TO APPROVE THE CITY'S BUDGET.
AND THIS WAS A COMPONENT OF THE CITY'S BUDGET THAT WAS APPROVED.
WAS IT A SEVEN TO ZERO VOTE OR WAS IT A, THERE WAS A DIFFERENCE IN VOTE? I DON'T, I DIDN'T SEE THAT.
THAT'S WHAT I'M ASKING JUST OUT.
KNOW WHAT I'M SAYING? THE BUDGET WAS APPROVED LEGALLY BY THE CITY COUNCIL, OR WE WOULDN'T BE OPERATING RIGHT NOW TODAY AS A CITY IN A WAY WE ARE.
SO, YES, IT WAS, IT WAS APPROVED BY THE COUNCIL.
I DON'T KNOW THE CAT, BUT, UH, THAT'S SOMETHING MAYBE THE CITY SECRETARY COULD GET FOR YOU.
UH, IT IS TECHNICALLY, I LIKE TO KNOW.
AND WHAT ARE THE OTHER CITIES THAT, DO WE HAVE ANY IDEA OTHER LOCAL CITIES LIKE OUR SIZE DURING THIS? SURE.
THERE'S SOME THROUGHOUT THE COUNTRY.
ROSA, YOU CAN TALK ABOUT SOME YOU, YOU WORK WITH HERE IN TEXAS.
UH, BUT I DO KNOW, UH, FOR EXAMPLE, UH, YOU KNOW, YOU GET SOME CITIES, UH, INCLUDING, UM, I THINK, UM, PFLUGERVILLE WAS ONE, UH, THAT'S MAYBE A LITTLE BIT BIGGER THAN, UH, KNOW IT WAS A LITTLE SMALLER THAN, UH, IN BILLS ABOUT THE POPULATION OF 60,000, UH, THAT, UH, THAT IS CURRENTLY DOING IT.
UH, AND THEN, YOU KNOW, ROUND ROCK IS ANOTHER, UM, THERE'S ALSO, UH, SOME OTHER COMMUNITIES WHO ARE REALLY STARTING TO LOOK INWARD IN TERMS OF REDEVELOPMENT.
UH, TYPICALLY THIS IS A TOOL THAT IS USED, UH, TO HELP THE UNDERWRITE, UM, YOU KNOW, COSTS WHEN CITIES ARE FROM AN ECONOMIC DEVELOPMENT STEP, PREGNANCIES ARE STARTING TO LOOK MORE INWARD.
THEY DON'T, IN OTHER WORDS, THEY'RE RUNNING OUT OF SPACE TO GREEN SPACE GROW, UM, AND PARTICULARLY WHAT MAKES IT POWERFUL IS THE ABILITY TO, UH, GET
[00:45:01]
TENTATIVE IMPROVEMENTS DONE ON, ON RETAIL OUTLETS OR WHAT HAVE YOU.SO, UM, ROSA, YOU MIGHT WANT TO TALK ABOUT SO MANY OTHER SURE.
UH, I WANT TO JUST SAY MAYOR THAT EVERY CITY PROGRAM HAS A DIFFERENT TWIST.
YOU KNOW, IT GOES WITH WHAT THE GOALS OF THE CITY AND THEY RECANATI DEVELOPMENT.
UM, STRATEGIES ARE, UH, WE'RE WORKING WITH AUSTIN RIGHT NOW, AUSTIN, UH, HAS, UH, CALLED US THIS WEEK.
WE, WE WERE INTERVIEWED AND THEY WANT TO US TO WORK WITH THEM ON A PROGRAM FOR LEGACY BUSINESSES.
THESE ARE BUSINESSES THAT HAVE BEEN IN THE COMMUNITY 20 YEARS.
AND SO THAT DOESN'T LOOK LIKE WHAT WE'RE DISCUSSING WITH YOU.
SO WE'VE WORKED WITH OTHER CITIES WHERE THEY WANT TO DO MAIN STREET BUSINESSES ONLY.
UM, I LIKE YOUR PRODUCT BECAUSE, YOU KNOW, I CAN'T STRESS ENOUGH THAT THE FIVE OH FOUR COULDN'T BE AT A BETTER TIME, UH, WITH INTEREST RATES WITH THE 25 YEAR FEATURE.
UM, THE FACT THAT YOU'RE ALLOWING BUSINESSES TO ACQUIRE, UH, THEIR SPACE INSTEAD OF PAYING A LANDLORD AND THEY DON'T KNOW WHAT THE NEW RENTS ARE GOING TO BE.
UM, YOUR, YOUR PROGRAM HAS SOME VERY ATTRACTIVE FEATURES AND IT'S NOT JUST FOR, FOR DOWNTOWN REDEVELOPMENT, IT IMPACTS, UH, ALL OF YOUR CITY.
YOU'VE GOT THE TWO PARTS, THE SMALL GROWTH FUND THAT IS FOR THE SMALLER TRANSACTIONS.
AND THEN THE LARGER PART, AS WELL AS MY QUESTION WAS SIMPLE WITHOUT A TWIST WATER, THE OTHER CITIES, LOCAL CITIES WITHIN OUR RANGE OF POPULATION THAT HAVE A PROGRAM SIMILAR TO WHAT WE'RE PUTTING OUT THERE TODAY.
I HEARD TWO FROM THE CITY MANAGER.
SO, YOU KNOW, SIMILAR TO WHAT WE'RE DOING, MAYBE NOT EXACTLY, BUT CLOSE ENOUGH, WHAT ARE THE OTHER CITIES? DALLAS HAS A PROGRAM, BUT THEY'RE USING CDBG DOLLARS.
UH, BUT THEY DO HAVE A PROGRAM SIMILAR TO YOURS.
AND THEN, AND WE'VE, WE HAVE HAD CONTRACTS WITH PFLUGERVILLE TO HELP THEM WITH THEIR PROGRAM, BUT THAT'S SMALLER STAGE.
SO INSTEAD OF TEXAS, YOU HAVE TO EXPERIENCE THAT OR SOMETHING.
MAYA WANT TO DO, ROSA IS MAKE SURE WE PROVIDE, I KNOW JUST A RATTLE OFF NAMES, AND THEN WE MIGHT WANT TO JUST GIVE HIM A LIST, BECAUSE I KNOW I, THERE WAS A LIST THAT I SAW THAT HAD AT LEAST 10 CITIES ON THERE.
SO, YOU KNOW, I KNOW MY NUMBER IS RATTLE OFF THE LIST OF NAMES, BUT MIGHT WANT TO JUST PROVIDE THAT TO THEM AS A FOLLOW-UP, I'D BE GLAD TO DO THAT, BUT I DO WANT TO STRESS THAT THE CITIES ARE GOING TO BE LARGE AND THEN THEY'RE GOING TO BE SMALL.
AND THEN YOU HAVE SOME IN-BETWEEN LIKE KALENE PFLUGERVILLE, MISSOURI CITY, TYLER, UH, THAT HAVE SIMILAR PROGRAMS. OKAY.
I GUESS I GOT ONE MORE QUESTION THEN WE'LL OPEN IT UP TO THE REST OF THE COUNCIL.
THIS IS JUST SO THAT I UNDERSTAND HOW THIS PROGRAM AND WHAT ARE THE RIGHT QUESTIONS TO ASK IS, SO WE WENT OUT THERE AND, AND, UM, AND HIRED BCL OF TEXAS.
IS THAT MY UNDERSTANDING TO MANAGE THIS PROGRAM OR TO HELP US TO MANAGE? I'M NOT SAYING IT RIGHT? NO, WE HAVEN'T HIRED THEM YET.
SO WHAT'S THEIR ROLE BEEN UP TO UP TO TODAY IN PRESENTING THIS ITEM? THEIR ROLE HAS BEEN JUST TO HELP US PACKAGE IT BASED OFF THEIR EXPERIENCE THROUGHOUT THE STATE.
THEY HAVE, UH, THUS FAR, UH, BEEN VOLUNTEERING THEIR TIME TO HELP US OUT JUST GIVEN THE FACT THAT THEY'RE NOT FOR PROFIT AND THEY'RE CHARTERED TO WORK WITHIN THE STATE TO HELP CITIES GROW SMALL BUSINESSES WITHIN THE STATE, UH, IN ORDER TO, UH, MOVE AHEAD WITH THE IMPLEMENTATION OF THE PROJECT, THEN, UH, WE WOULD, UH, HAVE TO BRING THEM ON.
UH, AND AS SHE INDICATED IN HER PRESENTATION, THAT WOULD BE FOR THE MONTHLY FEE AND THEIR ROLE WILL BE TO MANAGE THE ENTIRE PROGRAM FROM A TO Z, WHICH INCLUDES MARKETING PROGRAM EXECUTION, OR UNDERWRITING, UH, PACKAGING, AND, UH, ALSO, UH, PROVIDING, UH, THE FOLLOW-UP DETAIL KIND OF REPORT MATRIX FORMULA TO REPORT OUT RESULTS.
SO ALL OF THOSE PIECES WOULD BE INCLUDED AT THIS POINT? NO, SHE HAS NOT BEEN HIRED.
[00:50:01]
SHE'S JUST HELPING US TO ROLL THIS OUT.I WOULD SAY, WOULD THAT BE ACCURATE AS, AS A PART OF THEIR MISSION? YES.
SO, SO ONCE WE, IS THAT MONTHLY FEE, WHEN YOU'RE TALKING ABOUT A MONTHLY FEE TO THE MANAGER, IS THAT SOMETHING LIKE IN A, IN A PERCENTAGE OF THE, OF THE LOAN OR IS IT JUST A FIXED THEM? NO, NO, GO AHEAD.
BECAUSE I DIDN'T SEE IT IN THE PRESENTATION.
THAT'S WHY I'M JUST MAKING SURE WHAT THAT, WHAT THAT IS.
AND WE TYPICALLY STRUCTURED ON THE SIZE OF THE, YOUR LOAN POOL.
SO A SMALLER LOAN POOL WOULD NOT PAY THAT MUCH BECAUSE THEY'RE GOING TO HAVE FEWER APPLICATIONS, FEWER, UM, APPROVED LOANS.
UH, THE LARGER LOAN POOLS, UH, REQUIRES MORE TRANSACTIONS, MORE COMPLEXITY.
UM, YOU KNOW, THINK ABOUT IT $18,000 A YEAR.
DOESN'T EVEN PAY FOR A STAFF MEMBER.
BUT BECAUSE WE HAVE THE SOFTWARE, WE HAVE THE SKILL SETS, WE HAVE THE EXPERIENCE, WE HAVE THE ACCOUNTING, WE GET AUDITED.
UM, YOU'RE ABLE TO TAP OUR CAPACITY AT A VERY, VERY AFFORDABLE PRICE.
SO IS THAT THE $18,000 FIGURE? IS THAT THE MONTHLY, BECAUSE YOU JUST SAID IT 1500 A MONTH.
AND THAT'S, THAT'S INCLUDED IN, IT CAN GO NEMO, UH, THE BACKGROUND SECTION OF THE MEMO AND I WAS ABLE TO PROVIDE IT.
WELL, NO, NO, I UNDERSTAND THAT.
I MEAN, I MEAN, I'M JUST CLEARING UP THESE QUESTIONS JUST SO THAT AS WE GETTING READY AND I'M SURE THERE ARE OTHERS THAT HAVE QUESTIONS ALSO, BUT I JUST WANT TO CLEAR UP BEFORE WE GET INTO THE NEXT SPACE TO UNDERSTAND EXACTLY WHAT I'M GOING TO BE VOTING FOR.
UM, SO THESE ARE JUST THE DISCUSSIONS, JUST TO MAKE SURE THAT WE'RE CLEAR ON, ON EXACTLY THAT WHAT WE'RE ASKING.
SO IS YOUR, IS THE COMP IS THE BCLS ROLE IS ALSO TO GO SOLICIT, UH, PERSPECTIVE, UM, BUSINESSES, UH, OR NOT.
SO LET'S SAY MARY, YOU KNOW, YOU BELONG TO THE CHAMBER OF COMMERCE.
YOU, YOU SHARE THAT THE CITY HAS THIS PROGRAM, YOU HAVE THREE BUSINESSES THAT COME UP TO YOU.
YOU JUST GIVE THEM OUR NAME, OUR ONE 800, AND WE'LL TAKE THAT CALL AND WE'LL START WORKING WITH THAT CUSTOMER.
UH, OR IF YOU WANT US TO COME TO THE COMMUNITY RIGHT NOW, IT'S A LITTLE BIT DIFFICULT, BUT WE COULD CERTAINLY HAVE SOME, SOME VIDEO CONFERENCING.
UH, WE COULD DO SOME PRESENTATIONS TO A BUSINESS, UH, ASSOCIATION, UH, OR TO THE ROTARY OR TO ANY ORGANIZATION WHEN YOU WANT US TO PRESENT.
UH, THAT'S ALL INCLUDED IN OUR SERVICES.
THAT'S ALL INCLUDED IN THAT MONTHLY COST ALL THE TIME THAT WE SPENT COUNSELING THE BUSINESS, ROLLING UP OUR SLEEVES, COACHING THEM, STRUCTURING THEIR TRANSACTION.
AND LET'S SAY, WE'RE WORKING WITH SIX OF THEM.
THAT'S ALL INCLUDED IN OUR COST.
IN ADDITION TO THE REPORTS, IN ADDITION TO FUNDING THOSE LOANS, CLOSING LOANS, LOANS, YOU KNOW, UM, COLLECTING THE PAYMENT, YOUR BEHALF, THAT IS PART OF OUR FEE STRUCTURE 1500 A MONTH.
I MEAN, I DON'T HAVE ANY OTHER QUESTIONS UNTIL LATER ON, BUT, BUT I'LL OPEN IT UP FOR DISCUSSION.
HEY, THIS IS COUNCIL MEMBER BONEY.
I JUST WANTED TO MAKE SURE I WAS CLEAR, UM, BECAUSE THIS IS A LOT OF WORK THAT HAS BEEN DONE.
AND, UH, IF DONE VOLUNTARILY OUT, I MEAN, I DEFINITELY APPRECIATE BCL, TEXAS AND ROSA FOR DOING SO, BUT I JUST WANT TO MAKE SURE THAT BCL WITH TEXAS HAS NOT BEEN CONTRACTED AND OR PAID TO DO ANY WORK FOR MISSOURI CITY IN ANY SHAPE, FORM OR FASHION PRIOR TO THIS MEETING TODAY.
I HAVE A COUPLE OF QUESTIONS IF I COULD, UM, WHAT HAPPENS TO A DEVELOPMENT, UH, AND THIS IS FOR EITHER ROSA OR THE CITY MANAGER OR BOTH, UH, WHAT HAPPENS TO A DEVELOPMENT IF THE DEVELOPMENT GOES BELLY UP AND DOES NOT FULLY MATERIALIZE? THE REASON WHY I'M ASKING THAT IS BECAUSE I READ IT ON AN ARTICLE IN AUSTIN, AMERICAN STATESMAN DATED OCTOBER THE SECOND 2020 THAT, UM, UM, PRESTON HOLLOW CAPITAL OF DALLAS TO, UH, THE CITY OF HUTTOE CLAIMING THAT THE CITY NEEDS TO RETURN A $15 MILLION LOAN.
IT RECEIVED FROM THE COMPANY TO BUY LAND AND PAY FOR OTHER COSTS, LINKED TO A BASEBALL PROJECT FROM THE COMPANY PERFECT GAME.
AND WHAT THEY STATED IN THAT LAWSUIT WAS THAT THE CITY OF HUNTSVILLE DEFAULTED ON THE LOAN AFTER BUYING
[00:55:01]
THE LAND WITH THE MONEY AND THEN DECIDED THAT THE FINANCE COMPANY DIDN'T HAVE THE RIGHT TO FORECLOSE ON THE LAND BECAUSE THE LOAN AGREEMENT WAS INVALID.AND THE ARTICLE WENT ON TO STATE THAT PRESTON HOLLOW ALSO SUED COTTONWOOD DEVELOPMENT CORPORATION, THE CDC, WHICH IS THE GOVERNMENT ENTITY AT THE CITY OF HUTTOE FOR, TO HANDLE THE MONEY AND THE BONDS FOR THE PERFECT GAME PROJECT, UH, WHICH IS EERILY SIMILAR TO THE CDC THAT WAS PROPOSED.
AND IT WAS PART OF THE BUDGET THAT WAS APPROVED LATE LAST YEAR AND THIS PARTICULAR PROJECT, UH, AT THE END OF THE DAY, THE CITY WILL BE IN THIRD LIEN POSITION ON A BUSINESS DEVELOPMENT DEAL.
SO IF THE CITY GIVES $250,000 IN THE EXAMPLE THAT WAS GIVEN AND ISN'T THOROUGHLY IN POSITION, WHAT, WHAT RECOURSE DOES THE CITY HAVE IF GOD FORBID ALONE AT THE CITY ISSUES DEFAULTS AND DOES NOT GET PAID BACK FOR WHATEVER REASON.
AND WHAT'S THE LIKELIHOOD WE'D BE ABLE TO GET BACK, SAY FOR INSTANCE, THAT 250,000 OR WHATEVER WE LEND.
SO I'M JUST HAVING A LITTLE STRUGGLE, STRUGGLE ON, UH, MITIGATING OUR RISKS HERE, UH, AS IT RELATES TO LENDING MONEY AND US BEING IN THIRD LIEN POSITION, OR, UH, PUTTING MONEY OUT THERE WITH A LOAN PROGRAM THAT WE'VE, WE'VE NEVER DONE BEFORE.
THAT'S A VERY GOOD QUESTION, COUNCILMAN.
UM, THAT, THAT OBVIOUSLY THAT LOAN WAS DONE AFTER I LEFT THE CITY OF HUDDLE.
I WAS NOT WORKING THERE AT THAT TIME, BUT I CAN TELL YOU FROM A REVIEWING THE DOCUMENTS THAT IS LIKE APPLES AND ORANGES COMPARED TO THIS WHAT'S BEING PROPOSED TODAY, THAT WAS A, UM, A BOND FACILITY, UM, THROUGH A, THAT WAS BEING SOLICITED THROUGH AN UNDERWRITER.
UM, AND IT'S SIMPLE ON THE WRITER, UH, AND THAT STRUCTURE WAS, UH, NIGHT AND DAY.
WHAT, WHAT ROSA AND HER TEAM AND THE FOLKS AT THE SBA DO IS THEY HELP TO UNDERWRITE SMALL BUSINESSES THROUGHOUT THE COUNTRY, BUT ROSE'S GROUP SPECIFICALLY, UH, MISSION IS TO HELP THE FOLKS IN TEXAS AND THEY DON'T DO IT, UH, THROUGH THEIR MUNICIPAL, UH, SECURITIES MARKET.
UH, THAT'S A MUNICIPAL SECURITY EXCHANGE MARKET DEAL.
THIS IS NOT WHAT I UNDERSTAND.
UH, BUT AGAIN, UM, YOU KNOW, I WASN'T, I READ THE SAME THING, UH, YOU READ, BUT, UH, THAT, THAT TRANSACTION, UH, WAS DONE AFTER I LEFT AND UNDER A DIFFERENT STANDARD.
WELL, I AGREE, I APPRECIATE THIS SEDIMENT CITY MANAGER JONES.
I APPRECIATE YOU IN THAT RESPONSE, BUT I GUESS TO ME, IT'S VERY SIMILAR IN A SENSE THAT A CDC WAS FORMED, UH, IN THAT THE CITY WAS MANAGING.
CAUSE I KNOW IT WAS PROPOSED THROUGH THE BUDGET THAT WE, THAT WAS APPROVED.
I WILL, OF COURSE, I OF COURSE VOTED AGAINST THAT BUDGET BASED OFF OF THAT, UH, THOSE, UH, ITEMS, UH, THE SMALL BUSINESS LOAN PROGRAM AND THE, AND THE CDC THAT WAS PROPOSED IN THE BUDGET BECAUSE I NEEDED MORE INFORMATION, BUT I GUESS MY THING IS IT'S SIMILAR TO ME IN THAT, UH, WE'RE, WE'RE TALKING ABOUT, UH, AND, AND MAYBE YOU CAN HELP ME UNDERSTAND WHY WE, WHY A CDC WAS BEING PROPOSED OR WHY CDC IS NEEDED, BECAUSE IT SEEMS AS IF THE SAME, UH, THE SAME PROGRAM, UH, OR THE SAME, UM, SITUATION IS BEING, UH, PRESENTED TO US HERE IN MISSOURI CITY.
SO AS A, UM, UH, CDC WOULD MANAGE THE PROGRAM OR AT LEAST LEND THE MONEY AND BE RESPONSIBLE FOR OVERSEEING THE LENDING OF THE MONEY, UH, ALONG WITH BCL OF TEXAS MANAGING THE PROGRAM ITSELF.
UH, I JUST WANT TO MAKE SURE I'M CLEAR BECAUSE IT LOOKS VERY, VERY SIMILAR TO ME, ALTHOUGH, ALTHOUGH I DON'T KNOW THE PARTICULARS OF THE OVERALL HOTEL DEAL, BUT I KNOW ENOUGH TO KNOW THAT, UH, THERE'S A LAWSUIT, UH, THAT IS GOING AGAINST THE CITY AS WELL AS TO THE CDC FROM THE FINANCING COMPANY.
SO IT SOUNDS SIMILAR TO WHAT'S BEING PROPOSED TO ME.
SO COUNSELOR PONY, IF YOU LIKE ME TO RESPOND, AND WE HAPPENED TO, UH, YOU KNOW, YOU JUST, AS WELL AS I KNOW ENOUGH OF WHAT WE READ AND THE STATESMAN, BUT I ALSO TOO, UH, HAVE HAD AN OPPORTUNITY TO REVIEW THE, THE SOP, THE SPECIAL OFFERING THE POS TO PUBLIC OFFERING STATEMENTS AS IT RELATES TO THAT TRANSACTION.
AND THAT WAS A TRANSACTION THAT WAS, UH, WITH PRESTON HOLLOW, BEEN SOLD ON A MUNICIPAL, UH, UH, SECURITIES MARKET.
SO I DON'T, I DON'T KNOW ALL THE PARTICULARS ABOUT THAT
[01:00:01]
TRANSACTION CAUSE I WASN'T HANDS ON INVOLVED IN STRUCTURING THAT, BUT IT IS A COMPLETELY DIFFERENT THAN AN SBA LOAN.UM, ROSA, YOUR ORGANIZATION DON'T ISSUE MS. SECURITY EXCHANGE BONDS.
SO SHE WORKS WITH THE SBA AND SBA FINANCING.
PART OF THAT TRANSACTION WAS A SECURITIES TRANSACTION THROUGH A MUNICIPAL BOND ISSUANCE, WHICH IS, CAN YOU HELP ME WELL, CAN YOU HELP? CAN YOU WALK ME THROUGH THEN? SO I CAN JUST, I'LL BE DONE AFTER I ASKED THIS QUESTION, I PROMISE, CAN YOU WALK ME THROUGH THEN, UM, THE PROCESS AND THE ROLE THAT THE CITY WOULD PLAY IN LENDING MONEY IN A THIRD LIEN CAPACITY, UH, AS IT RELATES TO SAY, FOR INSTANCE, A DEVELOPMENT COMES TO US AND IT'S WHATEVER REASON, AND WE HAVE TO, UH, INJECT, UH, $250,000 INTO THAT DEVELOPMENT.
CAN YOU WALK ME THROUGH WHAT ROLE THE CITY WOULD PLAY IN? HOW WOULD THEY LEND THAT MONEY AND WHAT ROLE WOULD WE PLAY IN ENSURING THAT THAT DELL DEVELOPMENT GOES FROM START TO FINISH? UH, WHAT HAPPENS TO THAT 250,000? SO I JUST WANNA, I JUST WANT US TO BETTER UNDERSTAND.
I WANT TO BETTER UNDERSTAND WHAT ROLE WE PLAY AND WHAT PROCESSES ARE IN PLACE TO ENSURE THAT, YOU KNOW, WE, WE GET THAT PROJECT FROM START TO FINISH.
SO IF YOU CAN, UH, CAN YOU FLIP BACK TO A SLIDE THAT ROSA PRESENT, SHE GAVE AN EXAMPLE OF THAT.
UH, IT'S ON THE SLIDE WHERE IT TALKS ABOUT FILLING THE GAP.
UH, SO, UH, DOUG, IF YOU COULD FLIP BACK TO THAT PRESENTATION AND, UM, AND GO BACK TO THE EXAMPLE SHE GAVE, THERE YOU GO.
SO IN THAT INSTANCE, IF YOU LOOK AT THE BOX THERE TO YOUR RIGHT, UH, WHAT WAS NEEDED IN ORDER TO, IN THIS EXAMPLE, SHE GAVE, BECAUSE THE GOAL IS TO HELP SMALL BUSINESSES.
UH, THIS WAS A CLEANERS, UH, SOMEONE WHO WANTED TO DO A CLEANERS AND THEY WERE MOVING INTO A SPACE, UH, THAT, UH, NEEDED SOME UPLIFT AND ORDER FOR THEM TO BE SUCCESSFUL WITH MARKETING THE BUSINESSES, UH, MARKING THEIR BUSINESS AND GETTING A BUSINESS GOING THEY NEEDED IN ORDER TO EFFECTUATE THE PROJECT, THEY NEEDED $108,000 ALONE.
AND THIS INSTANCE, THEY HAD ABOUT $8,000 THEMSELVES.
AND TYPICALLY ANY TIME A BUSINESS GO AND DO A LOAN, IT'S USUALLY 80 20.
THE BUSINESS NORMALLY PUTS IN 20% OF THEIR OWN CASH.
AS EQUITY HERE IN THIS TRANSACTION, IT SHOWS THAT WHAT WE WOULD, WHAT THE MISSOURI CITY LOAN FUND IN THIS EXAMPLE WOULD DO IS THE LORD OR HEARD AWAY IN THIS ONE, THEY WOULD BE PUTTING IN 7% AND MISSOURI CITY IN HER EXAMPLE WOULD BE PUTTING IN 25% AND GETTING THEM TO A POINT WITH THE BANK WHERE THEY CAN DO TO HIGHER AND AN $8,000 LOAN.
NOW, THE INTERESTING THING WITH THIS EXAMPLE AS WELL, IT'S THE COST OF CAPITAL.
SO SHE MENTIONED TO YOU, UH, IN THE OTHER SLIDE THAT THE COST OF CAPITAL FOR MISSOURI CITY LONG WOULD BE SET BY THE SBA RIGHT NOW, THE SVA RATES ARE 1.7, I BELIEVE RIGHT IN THIS MARKET.
UH, SO IN THIS INSTANCE, YOU KNOW, WHERE DO YOU GO TO GET A 1% LOAN? UM, IF YOU DON'T DO IT BECAUSE YOU DO IT IN PARTNERSHIP WITH THE SBA, BECAUSE THE FEDERAL GOVERNMENT IS SECURITIZING THAT LOAN THEMSELVES.
SO AGAIN, WITH HERE IS JUST LET ME FINISH.
LET ME JUST FINISH MY THOUGHT, PLEASE.
HOLD ON, LET ME JUST SAY THIS.
I COMPLETELY UNDERSTAND THE PRESENTATION AS ROLLING ROSA GAVE IT.
I DON'T WANT US TO LABOR THE CONVERSATION.
I UNDERSTAND, BUT THERE WERE TWO, THERE WERE TWO, UH, COMPONENTS OF THE PRESENTATION.
ONE WAS THE GROWTH FUND THAT YOU JUST AFTER MENTIONED, BUT THE COMMERCIAL REAL ESTATE COMPONENT WAS PRIMARILY WHAT I WAS SPEAKING ABOUT.
AND I SHOULD HAVE CLARIFIED THAT.
UH, I'LL SPEAK MORE ON THE COMMERCIAL REAL ESTATE SIDE, BECAUSE THIS EXAMPLE, THIS EXAMPLE IS THE COMMERCIAL REAL ESTATE.
WELL, YOU SAID YOU STARTED, YOU REFERENCED THE, THE SLIDE THAT TALKED ABOUT THE GROWTH FUND.
YOU TALKED ABOUT A CLIENT, YOU TALKED ABOUT A DRY CLEANERS.
I'M JUST MORE SO SPEAKING ABOUT, LET'S TALK ABOUT THE 250,000 GOING TOWARDS THE COMMERCIAL REAL ESTATE.
[01:05:01]
YEAH.SO WHEN, UH, WHEN I, CAN I, CAN I ASK YOU YOUR QUESTION OR DO YOU NOT WANT ME TO ANSWER, LET ME ANSWER YOUR QUESTION AND YOU ASK THE QUESTION AND YOUR QUESTION WAS RELATED TO THE REAL ESTATE COMPONENT OF THE PROPOSAL IN THAT REAL ESTATE COMPONENT.
THIS EXAMPLE IS AN EXAMPLE WHERE IT IS BEING DONE TO PERFORM A REAL ESTATE IMPROVEMENTS NEEDED FOR THE BUSINESS TO MOVE AHEAD.
SO THIS IS IN THE REAL ESTATE COMPONENT OF THE DEAL AND ON A REAL ESTATE COMPONENT OF THE DEAL.
THIS BOX, AS YOU HAVE LAID OUT HERE GIVES YOU AN EXAMPLE OF THAT, OKAY, THIS IS NOT A WORKING CAPITAL LOAN THAT YOU SEE ON THE SCREEN RIGHT NOW, THIS IS A REAL ESTATE LOAN THAT WOULD HELP BUSINESSES, THAT THAT WOULD LIKE TO EXPAND THEIR BUSINESS, OR WOULD LIKE TO MOVE INTO SOME OF THE SPACES, BUT YOU KNOW, ARE CLOSE TO GET INTO DEAL WHERE IT'S BANKABLE.
IT'S A GOOD PROJECT FOR THE COMMUNITY, BUT NEED A LITTLE HELP TO MAKE IT WORK.
THIS WILL HELP BUSINESSES IN TWO WAYS.
ONE, IT WILL LOWER THE DOUBT PAYMENT TO MAKE IT HAPPEN, BUT SECONDLY, IT GETS THEM CASH AT A ONE HALF PERCENT BASIS SO THAT THEY CAN ACTUALLY GET IN AND DO THEIR BUSINESS.
SO IT LOWERS THE COST OF THE CAPITAL AS WELL AS THE ENTRYWAY PER DEAL.
AND THAT IS A REAL ESTATE TRANSACTION THAT AS SHE GAVE YOU AS AN EXAMPLE, RIGHT, RIGHT.
AND I'LL JUST SHUT UP AFTER THIS.
UH, YOU KNOW, IN THE EXAMPLE, IT STATES UNDER BUSINESS NEED, IT SAYS THE MONEY WILL BE USED FOR LEASE HOLD IMPROVEMENTS, SIGNAGE, EQUIPMENT MARKETING, AND WORKING CAPITAL.
SO IT'S NOT JUST ABOUT REAL ESTATE.
THAT'S WHY I WANTED TO MAKE SURE I CLARIFY TO YOU THAT I WAS MORE SO SPEAKING ABOUT THE TWO COMPONENTS THAT YOU, UH, WERE PRESENTING OR THAT ROSA PRESENTED ONE WAS OF COURSE, ABOUT GROWTH, UH, FUND.
AND THE OTHER ONE WAS ABOUT COMMERCIAL REAL ESTATE.
I, AND I HOPE I DIDN'T CONFUSE YOU WHEN I WAS ASKING THE QUESTION, BUT I JUST WANTED TO BETTER UNDERSTAND IF WE PUT OURSELVES OUT THERE FOR $250,000 AND TO MITIGATE RISKS WITH US BEING IN THIRD LIEN POSITION, HOW DO WE ENSURE THAT WE, IF, IF IN FACT THIS DEAL FALLS THROUGH OR DEFAULTS, GOD FORBID THAT WE ARE PROTECTED AND WE DON'T JUST COMPLETELY LOSE THAT 250,000.
THAT'S MY, THAT'S MY PRIMARY QUESTION, BECAUSE, YOU KNOW, WE DON'T HAVE $250,000 OR ANY MONEY FOR THAT MATTER TO JUST, UH, AS A SMALLER CITY TO, UH, LOSE, UH, BY LENDING OUT MONEY, UH, FOR BUSINESSES AND TAKE MET TYPE OF RISK.
SO THAT'S WHY I WAS ASKING THE NEXT QUESTION.
AND I, YOU KNOW, I HOPE I DIDN'T CONFUSE YOU IN ANY WAY.
THIS, THIS ONE HERE IS FOR THE REAL ESTATE, THE WORKING CAPITAL ONE, I THINK WAS ON THE OTHER SLIDE.
IF YOU LIBRARY, DIDN'T WALK THROUGH THAT.
BUT, UH, IN THESE TRANSACTIONS THOUGH, THE, THE ROLE WOULD BE TO PROVIDE THE QUIDDITY TO BUSINESSES AT A TIME WHERE THEY NEED LIQUIDITY AND HELP AND GIVE, UH, A HAND UP, NOT A HAND OUT TO BUSINESSES.
NOW, OBVIOUSLY, UH, WITH THIS, UH, YOU KNOW, WE WOULD BE, AND WE DID DURING THE BUDGETING PROCESS, ASK FOR A MILLION AND A HALF DOLLARS TO LEVERAGE 15 MILLION WITHIN OUR CITY.
OBVIOUSLY CITIES THAT ARE LARGER THAN MISSOURI CITY, UH, MAKE LARGER LOAN FUNDS.
SOME OF THEM ARE HUNDRED MILLION DOLLARS, FOR EXAMPLE.
SO WE THINK WE'VE, RIGHT-SIZED THIS RIGHT TO THE CITY, AND THAT'S WHY WE MADE THE PROPOSAL, BUT I UNDERSTAND THE COUNCIL IS NOT COMFORTABLE WITH MOVING AHEAD.
THAT'S A, THAT'S A POLICY DECISION.
UH, BUT, UH, CERTAINLY, UH, THAT'S, THAT'S THE RATIONALE BEHIND THE PROPOSAL.
I'D LIKE TO SHARE TWO COMMENTS, UM, COUNCIL MEMBER BONEY, UH, I'M NOT FAMILIAR WITH THE HUTTOE TRANSACTION, BUT I CAN TELL YOU THAT THE CDC WAS STARTED JUST FOR THAT SINGULAR PURPOSE THAT CDC DOESN'T HAVE EXPERIENCE.
WE BRING TO THE TABLE 30 YEARS EXPERIENCE OF DOING THESE TRANSACTIONS.
THE SECOND THING IS SBA WILL NOT APPROVE, UH, AS REQUIRED TO APPROVE THESE REAL ESTATE LOANS.
IF THEY DON'T APPROVE THE REAL ESTATE LOANS.
WHAT I MENTIONED VERY CLEARLY IS THAT MISSOURI CITY SHOULD NOT APPROVE THE LOAN EITHER.
EVEN IF YOU ISSUED A COMMITMENT LETTER, YOU CAN RE PUT IN THAT COMMITTED LETTER, SUBJECT TO SBA COMMERCIAL REAL ESTATE APPROVAL.
SO YOU RETRACT THAT COMMITMENT.
SO YOUR MONEY'S NOT OUT THERE.
SO ONE, YOU HAVE A CDC WITH 30 YEARS OF EXPERIENCE THAT IS CERTIFIED BY THE US TREASURY THAT IS CERTIFIED BY THE SMALL BUSINESS ADMINISTRATION.
[01:10:01]
CREATED PROBABLY DIDN'T HAVE THAT TYPE OF EXPERIENCE.SECONDLY, YOUR FUNDS ARE NOT AT RISK.
IF THE SBA DOES NOT APPROVE IT, EVEN THOUGH I RECOMMENDED APPROVAL AND WE HAD A ROOM OF TWO AND WE ISSUED A COMMITMENT LETTER, IF THE SBA DOES NOT APPROVE THAT TRANSACTION WILL NOT HAPPEN.
AND THEN THIRDLY, AND THIS IS NOT KNOWN TO A LOT OF PEOPLE, BUT THE SBA EXPECTS US TO MONITOR.
AND THAT LOAN FOR 20 YEARS, I HAD A LOAN THAT PAID OFF LAST MONTH.
AND, UH, ACTUALLY IN NOVEMBER, WE MONITORED AND WE HAVE A RELATIONSHIP WITH THAT CUSTOMER FOR 20 YEARS, WE MAINTAIN SOLID RELATIONSHIPS.
WE KNOW WHEN THEY'RE GOING TO GOOD TIMES AND THROUGH TOUGH TIMES AND BELIEVE YOU ME, THERE'S A FEW RIGHT NOW, SOME, TWO HOTELS THAT I HAVE ON MY BOOKS THAT ARE GOING THROUGH SOME TOUGH TIMES, WE'RE IN THERE TO HELP THEM AND WORK WITH THE BANK AND MAKE THE DEAL HAPPEN.
NOBODY WANTS TO LOSE THAT MONEY, NOT YOU, NOT THE BANK AND NOT THE FEDERAL GOVERNMENT.
AND THEN THIRD, WE HAVE ATTORNEY AT FOURTH, WE HAVE ATTORNEYS ON THAT.
WE BRING IN TO HELP PROTECT YOUR LIEN POSITION.
AND THAT'S ALL ON OUR, OUR COSTS.
SBA ALSO PAYS US TO MITIGATE SOME OF THAT BECAUSE WE'RE REPRESENTATIVES OF THE FEDERAL GOVERNMENT.
SO AT NO TIME, ARE WE GONNA FORGET THAT YOUR FUNDS ARE IN THE TRANSACTION, WE'RE IN THERE FOR THE ENTIRE PERIOD OF THAT NOTE AND WE'RE PROTECTING EVERYBODY'S INTEREST.
AND I HOPE THAT ANSWERS YOUR QUESTION, UH, MAYOR, THIS IS COUNCIL MEMBER MORALIS.
SO ROSA, IN THE DECEMBER MEETING, YOU PROVIDED US SOME ADDITIONAL INFORMATION WHICH INCLUDED AN EXAMPLE OF HOW A BUSINESS WOULD TAKE OUT A LOAN AND UNDER NORMAL CIRCUMSTANCES, THAT LOAN WOULD BE ABOUT $2,300.
BUT WITH THE PROGRAM THAT YOU'RE PROPOSING OR WE'RE PROPOSING, THE LOAN ACTUALLY GOES UP TO 37 35.
SO WE TALK A LOT ABOUT 10 TIMES LEVERAGE.
AND WE'VE TALKED ABOUT, UH, SUCH A GREAT RATE AT 1.2, 1.7, WHATEVER IT WAS.
BUT IN REALITY, THE DIFFERENCE BETWEEN THOSE $2 IS 38% INTEREST.
SO IN THE TIMES THAT WE HAVE NOW, LIKE YOU MENTIONED THE HOTEL AND SOME OF THE OTHER THINGS THAT WE'VE SEEN HERE LOCALLY, UH, I'VE GOT A RESTAURANT RIGHT NOW.
HOW CAN A BUSINESS TAKE ON MORE DEBT? HOW CAN A BUSINESS TAKE ON 38% MORE, UM, AND SURVIVE? I THINK WHAT WE'RE LOOKING AT IS WE'RE LOOKING AT A BUSINESSES WHO WANT MORE FOOT TRAFFIC, NOT MORE DEBT.
SO CAN YOU KIND OF WALK ME THROUGH HOW, HOW THIS CAN WORK IN THIS ENVIRONMENT TODAY? WELL, WE WOULD NOT BE LOOKING AT MARGINAL, UH, TROUBLED LOANS.
UH, I CAN TELL YOU IF THEY CAN KEEP THEIR DOORS OPEN.
NOW WE WOULDN'T RECOMMEND THAT THEY TAKE ON ADDITIONAL DEBT.
UH, THAT'S A WHOLE DIFFERENT CONTRACT THAT WE HAD, UH, WITH TRAVIS COUNTY, WHERE WE WERE DOING, UM, COUNSELING FOR BUSINESS CONTINUITY.
SO THERE'S A WHOLE DIFFERENT CLATTERED GORY OF BUSINESSES THAT NEED HELP, BUT PERHAPS IT SHOULDN'T BE MONEY, PERHAPS IT'S HOW TO DO THEIR FINANCIALS BETTER, HOW TO SCALE BACK ON THEIR WORKFORCE.
I MEAN, THERE'S A WHOLE DIFFERENT CONSULTATION.
I HAVE STAFF THAT ARE BUSINESS CONSULTANTS THAT WILL DO THAT.
SO I'M GOING TO GO BACK TO THE, THE ISSUE.
IF A BUSINESS IS GROWING AND THEY HAVE AN OPPORTUNITY TO BUY A PROPERTY AND THEY CAN AFFORD, REMEMBER I'VE SAID THIS SEVERAL TIMES, WE HAVE VERIFIED THAT THEY CAN, UH, THEY CAN MAKE THE DEBT PAYMENTS.
IF THEY CAN AFFORD IT, THEN WE CAN RECOMMEND GO FORWARD IF THEY CANNOT AFFORD IT.
AND WE SAY THAT VERY CLEARLY AT THE BOTTOM OF THIS SLIDE THAT WE'RE LOOKING AT, IF THOSE ISSUES REMAIN OUTSTANDING, IT MAY NOT BE IN THE BEST INTEREST TO PRESENT THE DEAL, RIGHT? SO I CAN TELL YOU, WE HAVE OUR OWN CAPITAL AS WELL.
WE HAVE ABOUT $30 MILLION OF OUR CAPITAL THAT WE LEND.
AND I CAN TELL YOU THAT IF I GET 300 REQUESTS A YEAR, I'M NOT APPROVING 300 REQUESTS, I CAN GUARANTEE YOU, WE'RE NOT, WE'RE ONLY APPROVING THOSE LOANS THAT CAN VERIFY THAT THEY'VE GOT THE CASH TO GO FORWARD AND THAT THEY CAN VERIFY THAT THEY CAN MAKE
[01:15:01]
THOSE, THAT ADDITIONAL DEBT THAT THEY'RE TAKING ON.SO, AND SO, IN MY OPINION, YOU KNOW, AS WE LOOK AT, WHEN WE STARTED THIS BUDGET CONVERSATION TO THE MEETING WE HAD ON SEPTEMBER 21ST, WHERE WE HAD A LOT OF BUSINESSES COME FORWARD, IF YOU RECALL, WE HAD TWO ITEMS TO ATC AND A LOT OF PEOPLE CAME FORWARD TO TALK ABOUT TO AGC AND WHAT THEY WERE ASKING FOR WAS RELIEF.
RIGHT? AND SO, IN MY OPINION, ALTHOUGH THIS IS A GREAT IDEA, 10 TIMES LEVERAGE LOW INTEREST.
I THINK WE'RE SOLVING FOR THE WRONG THING.
I THINK LOCAL BUSINESSES WANT MORE FOOT TRAFFIC.
I THINK MORE BUSINESSES NEED HELP TO KEEP THE DOORS OPEN.
THIS IS A GREAT IDEA FOR SOMEBODY WHO WANTS TO START SOMETHING NEW, BUT TODAY OUR ENVIRONMENT IS WHERE OUR COMPANIES ARE STRUGGLING AND THEY W THEY NEED US TO SOLVE SOMETHING DIFFERENT.
SO THAT'S, THAT'S JUST, UH, MY COMMENT FOR NOW, AND I MIGHT HAVE MORE QUESTIONS LATER, AND I AGREE WITH YOU, AND THAT'S WHY THERE'S A PPP TOO.
MY STAFFER ARE VISY TAKING THOSE APPLICATIONS.
AND WE'RE VERY LUCKY THAT THAT PROGRAM HAS BEEN ROLLED OUT.
THAT'S WHY THERE'S ANOTHER IDOL PROGRAM FROM THE FEDERAL GOVERNMENT TODAY.
I LEARNED ABOUT ANOTHER PROGRAM FOR THE THEATER AND THE ARTS INDUSTRIES, AND THEN UNDER THE NEW ADMINISTRATION, THEY'LL BE MORE FUN.
I GOT A, I GOT AN EMAIL AND I WAS IN A CONFERENCE CALL WHERE THEY, UH, PROGRAMMED FOR THESE TROUBLING DIFFICULT BUSINESSES TO GET BELOW MARKET FINANCING FROM A POOL OF MONEY THAT IS MANAGED BY OTHER PARTIES.
SO WE HAVE, YOU KNOW, WHEN WE COUNSEL WHERE THE BUSINESS, WE HAVE ALTERNATIVES AND WE CAN RECOMMEND OTHER SOLUTIONS FOR THEM.
SO I, I HEAR CLEARLY WHAT YOU'RE SAYING.
UM, BUT THERE ARE SOME, WE JUST APPROVED A FLORIST, UM, WITH A FIVE OH FOUR.
UH, AND SO TH WE APPROVED THE CHILDCARE.
UH, THERE ARE SOME BUSINESSES THAT ARE GROWING AND DO NEED THE CAPITAL AND DO NEED THAT FINANCING.
SO HA YOU KNOW, LUCKY FOR US, WE'RE ABLE TO OFFER, UH, SOLUTIONS GIVEN THE CIRCUMSTANCES.
NO, JUST TO ASK ABOUT THE PPP, BECAUSE SINCE MS. VALDEZ BOUGHT UP THAT I WAS ON A CALL, UH, THIS MONDAY WITH THE FORT BEND COUNTY EDC, AND THEY WERE TALKING ABOUT THE PPP AND HOW THAT AMOUNT WAS GOING TO BE RELEASED OUT.
SO I THINK TO MAYOR PRO TEM RUELAS, TO WHAT, YOUR, THE WAY, HOW YOU SOME IN THIS UP AND TO MS. VALDEZ, UM, VALIDATING, I THINK THAT'S THE APPROACH, UH, THAT'S OUT THERE.
UM, THAT PROBABLY THAT WHAT I GUESS THE INTENT OF THIS IS, THAT'S WHY I'VE ASKED.
I ASKED A LOT OF QUESTIONS UP FRONT ABOUT THE PURPOSE OF THIS, BUT, YOU KNOW, THE EXAMPLE THAT'S GIVEN WITH FILLING THE, YOU KNOW, EQUITY GAP, THAT SEEMS MORE LIKE, UM, I GO BACK TO WHAT YOU'RE SAYING IS SOMEONE WHO'S STARTING A BUSINESS OR WANTING TO START AND CAN'T GET ALONE.
IS THAT TRUE? IS THAT, AM I SAYING THAT HIM AS WELL AS, YES.
AND IN THIS EXAMPLE, THERE THEY'VE ALREADY BEEN IN BUSINESS FOR YEARS, THEY'RE READY FOR THEIR SECOND LOCATION AND THEY CAN'T GET THE LOAN.
THEY'RE NOT BANKABLE BECAUSE THEY CAN'T NOT MEET THE BANK CRITERIA WITH YOUR MONEY.
THAT LOAN BECOMES VERY BANKABLE.
THAT BUSINESS BECOMES BANKABLE WITH YOUR MONEY AND WITH OUR HELP, THE CITY MANAGER ALSO TOO, I JUST WANT TO ADD TO A ROSE WAS SAYING, AS YOU GET TO, UH, DYNAMICS, THIS TAKING SHAPE ONE, YOU'VE GOT BUSINESSES WHO NEED HELP.
AND THAT'S WHAT W ARE ALREADY YOU PROGRAM.
AND THAT'S WHAT OUR SMALL BUSINESS PROGRAM USING CARES DOLLARS DOES IS THEY HELP BUSINESSES WHO WERE IN CRITICAL STATE, GET TO HAVE SOME STABILITY.
THE INTENTION OF THIS TOOL THAT'S BEEN PRESENTED TO YOU TODAY IS TO HELP THOSE BUSINESSES WHO WANT TO GROW, WHO WANTS TO EXPAND AND MOVE INTO A COMMUNITY.
SO THERE IS A LOT OF BUSINESSES, NOT ONLY HERE IN MISSOURI CITY, BUT THROUGHOUT THE COUNTRY WHO HAS A STRONG FOOTPRINT IN THEIR BUSINESS WHO SEES THIS MARKET AS THE RIGHT MARKET TO TRY TO EXPAND THEIR BUSINESS, YOU KNOW, BUY LOW, SELL HIGH.
THAT'S WHAT YOU'RE TALKING ECONOMICS.
SO THIS IS AN ENVIRONMENT FOR THOSE WHO ARE FINANCIALLY STRONG, WHO WANT TO EXPAND THEIR BUSINESS IN OUR COMMUNITY, WHO WISH, UH, TO POSSIBLY EVEN MOVE HERE AND BRING NEW BUSINESS HERE, PARTICULARLY TO INDUSTRIES RIGHT NOW, UH, THAT ARE IN THE MEDICINES, THE BIOTECH INDUSTRIES AND THOSE SORTS OF INDUSTRIES.
UH, THEY HAVE, UH, STORED UP A LOT
[01:20:01]
OF CASH.THEY SEE THIS AS AN OPPORTUNITY FOR MARKET SPACE TO MOVE.
UH, AND SO YOU'VE GOT DYNAMICS.
WE'VE GOT ONE PROGRAM THAT WE ARE ALREADY DOING.
THAT'S BEEN WILDLY SUCCESSFUL, UH, AND GIVING GRANTS.
THIS PROGRAM WAS A TENANT TO HELP, UH, THOSE BUSINESSES TO GROW WHO ARE HERE AND TO ALSO BE USED AS A TOOL TO RECRUIT NEW BUSINESSES AND SOME OF OUR VACANT SPACES AND SOME OF THE VACANT SHOPPING CENTERS WE HAVE THROUGHOUT TOWN.
THAT'S WHAT THEY'RE USED FOR, UH, SO DIFFERENT TOOLS.
UH, AND, UH, BUT CERTAINLY, UH, IT'S, IT'S A POLICY DECISION FOR THE COUNCIL.
DO YOU WANT TO HAVE THIS TOOL OR NOT? YEAH.
AND CITY MANAGER JONES OUT, SO GOOD SUMMARY.
BUT WHAT I WAS GETTING TO IS IF WE'RE LISTENING TO OUR CONSTITUENTS, IF WE LISTEN TO WHAT HAPPENED ON SEPTEMBER 21ST, THE ITEMS TO AMC, WE'VE GOT LOCAL BUSINESSES WHO JUST WANT TO SURVIVE.
THEY WANT TO SEE US, YOU KNOW, SOLVE THAT ISSUE.
UM, AND, AND TO YOUR POINT WHERE THERE'S OTHER BUSINESSES ON THE SIDELINES WHERE THEY'RE STOCKED UP CASH AND THEY'RE READY TO MOVE IN, THEN, THEN MAYBE THEY SHOULDN'T FILE THIS WHEN IT, THEY GOT THE MONEY.
BUT I, I'M JUST KINDA THINKING ABOUT, YOU KNOW, THAT STRUGGLING BEAUTY SALON, THAT'S STRUGGLING RESTAURANT TODAY AND LISTENING TO THEM ON THE 21ST ONE, WE NEED MORE HELP GUYS.
AND SO, UM, I GET THIS, I THINK THIS IS GREAT, BUT I THINK WE HAVE ANOTHER CHALLENGE THAT WE HAVE TO SOLVE FIRST.
I'LL LET OTHER COUNCIL MEMBERS TO ASK QUESTIONS.
THANK YOU FOR THAT INFORMATION, ROSA.
THIS IS COUNCILWOMAN STERLING.
UH, I HAVE A QUESTION ACTUALLY TO THE FIRST QUESTION IS I KNOW ROSEN IN THE BEGINNING OF YOUR PRESENTATION, YOU MENTIONED THAT THE COUNCIL WILL APPOINT SOMEONE.
SO MY QUESTION IS TO MAYBE CITY MANAGERS, THIS, SOMEONE THAT WE WILL COOPERATE INTO OUR EXISTING STAFF, OR IS IT SOMEONE WE'D HAVE TO HIRE, OR WOULD THAT BE A PERSON APPOINTED BY THE COUNCIL OR WOULD IT BE A COUNCIL MEMBER? TYPICALLY WHAT CITIES DO IS HAVE THE ECONOMIC DEVELOPMENT DIRECTOR OF CITY MANAGER SERVE IN THAT CAPACITY WITH, UH, APPROPRIATE, UM, OVERSIGHT TO THE COUNCIL, UH, THAT THAT'S WHAT NORMALLY HAPPENS.
AND THAT GENERALLY HAPPENS TO THE CITY'S FINANCE COMMITTEE IS TYPICALLY WHAT, WHAT HAPPENS.
AND THIS IS JUST A COMMENT AND FILLING IN THE EQUITY GAP, UH, SMALL BUSINESS OWNERS, MYSELF.
IT'S A GREAT OPPORTUNITY FOR THOSE INDIVIDUALS WHO ARE PROBABLY STRUGGLING WHEN YOU LOOK AT A 1.2%, RIGHT, AS OPPOSED TO SEVEN NOW, SIX, EIGHT, AND 12, 15%.
THAT'S JUST ME IN LOOKING AT, UH, THE PRESENTATION.
I THINK IT WOULD BE GREAT FOR OUR COMMUNITY, UH, DURING THE PANDEMIC NOW, BECAUSE A LOT OF BUSINESSES ARE STRUGGLING AND LOOKING AT THE CARES.
CAUSE I LOOKED AT THE PAPERWORK AND THE DYNAMICS, EVEN JUST COMPLETING THE PAPERWORK, UH, WHAT ARE YOU GOING TO LOOK AT A 1.2, 5%? I WOULD JUMP ON IT IMMEDIATELY, BUT THAT'S JUST MY COMMENT.
AND I JUST WANT TO MAKE THAT ONE CLEAR.
SO CITY MANAGER, COUNCIL MEMBERS, STERLING, THERE'S A NEW PROGRAM BECAUSE OF CARES THAT, UH, IF A BUSINESS HAS A MORTGAGE THAT THEY WANT TO REFINANCE FOR THEIR BUSINESS REFINANCE IS ALLOWED WITH NOTHING DOWN.
SO, I MEAN, WE'RE SEEING SOME INCREDIBLE NEW FEATURES UNDER THE REAL ESTATE PIECE.
BUT THAT'S DIFFERENT THAN THIS, CORRECT? NOPE.
YOU KNOW, THE MISSOURI CITY COMMERCIAL REAL ESTATE IS THE SAME PRODUCT THAT WILL REQUIRE THAT SBA REAL ESTATE COMPONENT.
UM, THIS IS, UM, UM, SHAUNDRA EDWARDS.
I JUST WANT TO THANK YOU FOR YOUR DEDICATION TO THE CITY.
WE CAN HEAR YOUR TESTIMONY EDWARDS YOU THERE.
UM, I WAS JUST MAKING A STATEMENT AND, UM, MY NAME IS VALDEZ NOW THAT I APPRECIATE THE PRESENTATION AND HER DEDICATION TO THE CITY THUS FAR.
UM, I THINK THIS IS A GREAT OPPORTUNITY FOR OUR BUSINESS.
I KNOW SOME BUSINESSES ARE STRUGGLING.
THOSE THAT WILL QUALIFY, I THINK
[01:25:01]
QUITE A BIT.YOU'RE BREAKING UP, UH, BARELY HEAR WHAT YOU HAD TO SAY.
UM, I'LL JUST REPEAT WHAT I SAID.
I JUST WANTED TO THANK MS. VALDEZ FOR HER DEDICATION TO THE CITY, AS WELL AS BRINGING THIS, UM, PRESENTATION TO US AND GIVING ME MORE INSIGHT ON THE PROGRAM.
I THINK IT'S A GREAT PROGRAM THAT OUR CITY WOULD BENEFIT FROM.
ALTHOUGH WE DO HAVE BUSINESSES THAT ARE STRUGGLING, UM, THIS, IF YOU QUALIFY FOR THIS PROGRAM, IT WOULD BE A GREAT ASSET FOR OUR COMMUNITY TO CONTINUE TO THRIVE.
UM, I'M EXCITED TO SEE WHAT THIS PROGRAM WILL BRING TO THE CITY.
UM, MS. THANK YOU SO MUCH FOR, UH, YOUR PRESENTATION.
UM, I HAVE A COUPLE OF QUESTIONS.
I'M, I'M NEW TO CITY COUNCIL, UM, AND I'VE, I'VE READ UP AS MUCH AS, AS I CAN UNDERSTAND, BUT, UM, I HAVE A FEW QUESTIONS.
WHAT HAPPENS IF LET'S SAY, UM, A BUSINESS GETS IN ONE OF THESE LOANS AND THEY DECIDE TO SELL THEIR BUSINESS, WHAT HAPPENS THEN? WHAT TYPICALLY, UM, IN EITHER PROGRAM WE CAN LET THE NEW OWNER ASSUME THE DEBT IT IS ALLOWED, UM, OR THEY CAN PRE-PAY THE DEBT.
UM, THAT SHOULDN'T BE A PROBLEM.
WE DO SEE THAT, UM, UH, ROSA, JUST TO ADD TO THAT, THAT WOULD BE LIKE IN TO SOMEONE WHO OWNS A HOME WHO TOOK A MORTGAGE ON A HOME WHO SELLS THEIR HOME, THEY WOULD BE REQUIRED TO PAY THAT MORTGAGE OFF AS A PART OF THE SELL TO A NEW OWNER.
SO IT WOULD BE THE SAME KIND OF SITUATION.
THERE BE, THERE ARE NO PREPAYMENT PENALTIES.
AND SO WHEN THEY SELL THE BUSINESS, WE COULD ACTUALLY HELP THEM PRICE IT SO THAT THERE'S FULL RECOVERY TO THEIR, THEIR DEBTORS TO THEIR LENDERS.
UM, AND SO THE EXPECTATION IS WE GET, YOU GET PAID BACK, THE BANK GETS PAID BACK, OR WE CAN AGREE THAT THE NEW BUYER, UH, CAN ASSUME THE DEBT, THE REMAINING BALANCE THAT IS OWED.
WE WOULD ENTER INTO NEW LOAN DOCUMENTS, BUT WE WOULD START WITH THAT REMAINING BALANCE.
AND THEN, UM, SO THIS, THIS PARTICULAR LOAN, IS IT JUST FOR US A CERTAIN PART OF MISSOURI CITY OR IS IT FOR ALL BUSINESSES IN MISSOURI CITY? MY UNDERSTANDING IS WE WANT TO LOOK AT ALL BUSINESSES IN MISSOURI CITY.
YOU MIGHT HAVE A QUARTER YOU WANT TO, YOU KNOW, TARGET AND MAKE A PREFERENTIAL MARKETING EFFORTS FOR, BUT IT'S OPEN TO ALL OF THE CITY.
UM, YOU KNOW, THERE'S NO REASONS WHY IT NEEDS TO BE LIMITED TO ONLY CERTAIN PARTS OF YOUR TOWN.
CAN YOU WEIGH IN ON THAT? BECAUSE I KNOW SOME PROGRAMS ARE, UM, I JUST WANT TO JUST CLARIFY IF THIS IS JUST FOR ONE PART OF THE CITY, ONE CORRIDOR, UH, WHAT WE'RE PROPOSING HERE AND THAT STRUCTURE IS, UH, TO HAVE THE LOAN, UH, BE, UH, FOR THE ENTIRE CITY.
WHAT'S THE FOCUS FOR THE CARTWRIGHT AND, UH, CO CARTWRIGHT AND TEXAS CORRIDOR ONE.
SO, UH, THERE'LL BE SOME SPECIAL EMPHASIS PLACED IN THAT, IN THAT QUARTER.
AND THAT'S WHAT ROSA WAS SUGGESTING.
WHAT DOES SPECIAL EMPHASIS LIKE, IS THERE A SPECIAL INCENTIVES FOR BUSINESSES ALONG THAT CORRIDOR NOW WITH THIS PROPOSAL DOES ASSESS ASIDE A PORTION OF THE DOLLARS TO MAKE SURE IT'S TARGETED TOWARDS THAT PARTICULAR CORRIDOR.
UH, AND THAT'S JUST THE RECOGNIZE THAT THAT, THAT CORRIDOR IS A CORRIDOR TO SEE THAT, UM, HAS BEEN STRUGGLING FOR SOME TIME.
AND THE CITY'S CITY WANTS TO PUT SOME EFFORT TOWARDS, UM, ENHANCING AND IMPROVING THE REAL ESTATE VALUES ALONG THE CORRIDOR.
AND MY LAST QUESTION IS, UM, OBVIOUSLY THIS IS TAXPAYER MONEY.
DOES D TAXPAYERS KNOW THAT, UM, I GUESS THERE THAT THIS IS THEIR MONEY, THAT'S GOING
[01:30:01]
TO GO INTO THE LOAN.YES, THEY, THEY, THEY, THEY, THEY WOULD NOT ONLY IN OUR PRESENTATION HERE TODAY, BUT THE PREVIOUS PRESENTATIONS, BUT AS, AS ROSA WOULD GO OUT AND MARKET THE PROGRAM, UM, JUST AS ANY OTHER PROGRAM LIKE THIS, UH, GENERALLY EVERYONE WOULD BE, WOULD KNOW THAT THIS IS IN THE SERIOUS CITY LONG FINE.
AND WITH NO, THE CRITERIA THAT ROSA JUST PRESENTED TO YOU COUNCIL DECIDED TO, TO, UH, MOVE AHEAD.
I'M JUST, YOU KNOW, I LIKED THE PROGRAM, BUT MY CONCERN IS THAT LET'S SAY 20 BUSINESSES, YOU KNOW, DEFAULT THEN THAT PUTS US IN, YOU KNOW, THE, WHAT WAS PRESENTED IS LIKE THE GREAT SIDE OF IT.
BUT WHAT HAPPENS AT 20 BIZ, WE KIND OF BROKE UP A LITTLE, YOU KNOW, WE'RE, WE'RE IN, ON THE HALL, IN THE HALL FOR THIS THAT'S MY, SO TYPICALLY WHAT CITIES, MY CONCERN IS MORE ABOUT THE PRESENTATION.
UH, HERE I SAID, DEFAULT, MY CONCERN IS THE DEFAULT AND THE TAX PAYER MONEY.
MY BIG CONCERN IS, YOU KNOW, SEVERAL BUSINESSES DEFAULT IN, AND THEN THE, YOU KNOW, MISSOURI CITY IS ON THE HOOK FOR ALL THIS MONEY.
AND, UM, AND THAT'S ALL MY QUESTIONS BON TO THAT IF I MAY.
SO MISSOURI CITY WOULD NOT BE ON A HOOK OF PAYING BACK ANYBODY ELSE'S ALONE, UH, TYPICALLY IN THESE STRUCTURES, UH, CITIES LOOK AT IT AND SAY, WE'RE MAKING THAT INVESTMENT.
AND TO, UH, SHORTEN UP THE BUSINESSES WITHIN OUR CITY HERE WERE ASKING FOR THAT MILLION AND A HALF TO CREATE $15 MILLION WORTH OF CAPITAL TO FLOW INTO YOUR BUSINESSES.
SO I KNOW THAT THIS IS A REVOLVING LOAN PROGRAM, UH, BUT, UH, GENERALLY, UH, THE WAY THAT THESE THINGS ARE STRUCTURED, MOST CITIES SEE THIS AS A CONTRIBUTION TO DRIVE NEW BUSINESS GROWTH.
AND HERE ARE A MILLION AND A HALF DOLLARS, UH, FOR A CITY, OUR SIZE, UM, UM, WHICH WOULD CREATE THE $15 MILLION WORTH OF CAPITAL, BUT CERTAINLY UNDERSTAND AND RESPECT YOUR CONCERN, BUSINESS COUNCIL, WOMAN STERLING.
UM, THIS WILL BE A WIN-WIN FOR MISSOURI CITY.
UH, ACTUALLY YOU CAN, I THINK IN THE EARLY PRESENTATION, SHE TALKED ABOUT COLLATERAL, UH, AND ANYTIME YOU HAVE A COLLATERAL OR LIEN, YOU CAN'T, YOU CAN'T SELL YOUR PROPERTY.
YOU CAN DEFAULT BECAUSE YOU STILL, YOU WOULD STILL GET YOUR MONEY BACK.
AND AS YOU SAY, YOU CAN GO BACK IN AND REPACKAGE THE DEAL.
I MEAN, UH, THAT'S THE COST OF DOING BUSINESS ANYWHERE.
SO I THINK A RETURN ON OUR INVESTMENT IS WE CAN SEE THE MONEY COMING BACK TO THE CITY.
WHEN YOU START LOOKING AT THE SALES TAX IS ALL THAT IT COMES BACK TO.
IT'S NOT REALLY A LOSS TO THE CITY.
THIS IS THE WAY I SEE IT IN BUSINESS.
UH, IT WILL BE A WIN-WIN FOR MISSOURI CITY.
IF YOU LOOK AT THE DYNAMICS, THERE'S GOING TO BE A COLLATERAL.
AND THAT'S WHAT YOU MENTIONED, MS. VALDEZ, RIGHT? THERE'S A LIEN AGAINST YOU GET LIENS IS WHEN YOU HAVE A LIEN AGAINST YOUR PROPERTY, YOU CAN'T SELL IT ANYWAY.
YOU CAN'T DO ANYTHING UNTIL, YOU KNOW, YOU COME BACK TO THE, UH, TO THE, TO THE BARGAINS COMPANY OR WHATEVER COMPANY, THE BUSINESS COUNTY.
I SEE THIS AS A WIN-WIN FOR MISSOURI CITY AND FOR OUR BUSINESSES, IF WE WANT TO, IF WE WANT TO KIND OF UPSCALE, UH, TEXAS PARK WAY AND CARTWRIGHT AND MISSOURI CITY, AND ESPECIALLY IN THOSE PLACES THAT THE PEERS WOULD BE DESERT AREAS.
THIS, THIS IS COUNCIL MEMBER BONEY, AND, UM, I'M COMING FROM A PERSPECTIVE.
I SERVED AS THE VICE PRESIDENT OF SMALL BUSINESS BANKING FOR THE SIX LARGEST BANK IN THE UNITED STATES OF AMERICA.
I WAS AN UNDERWRITER AND I UNDERSTAND LOANS PARTICULARLY RELATIVE TO SMALL BUSINESSES.
AND SO, FIRST OF ALL, YOU KNOW, IT'S BEEN STATED SEVERAL TIMES AND I'VE HEARD A LOT OF THE CONVERSATION AND I'VE HEARD THE PRESENTATION.
I'VE HEARD COMMERCIAL REAL ESTATE, MULTIPLE TIMES BEING PRESENTED IN AND THROWN OUT THERE.
BUT MORE IMPORTANTLY, LET ME JUST SHARE WITH YOU THAT WHENEVER YOU LEND ANY MONEY, WHATEVER IT IS, YOU ARE AT RISK OF LOSING THAT MONEY BECAUSE YOU'RE GIVING A
[01:35:01]
HUNDRED PERCENT OF THAT MONEY TO AN END, TO AN ENTITY OR AN INDIVIDUAL WITH THE HOPES OF GETTING THAT MONEY PAID BACK TO YOU PLUS INTEREST.SO WE CAN'T, WE CAN'T PUT IT OUT THERE THAT WE'RE NOT GOING TO BE AT RISK FOR LENDING MONEY OUT TO AN ENTITY OR A SMALL BUSINESS.
UH, SO ANY MONEY THAT WE LEND OUT, WHETHER IT'S A, A QUARTER OR IT'S A QUARTER OF A MILLION DOLLARS, THAT MONEY, IF WE ARE AS A CITY LENDING THAT MONEY AND PARTICULARLY BEING IN A THIRD LIEN POSITION, WE'RE AT RISK OF NOT GETTING THAT MONEY PAID BACK TO US.
NOBODY ON THIS CALL CAN TELL ME THAT WE AS A CITY, IF WE LEND MONEY, WE ARE GUARANTEED TO GET THAT MONEY BACK.
ANY LOAN CAN, CAN BE DEFAULTED UPON.
SO LET'S, LET'S NOT PUT IT OUT THERE OR CONFUSE THE CITIZENS AS TO, UH, A NARRATIVE THAT, THAT MONEY IS GUARANTEED TO BE PAID BACK TO US.
THESE, THESE DOLLARS PER THE QUESTION POSED BY THE AT-LARGE COUNCIL WOMAN, LYNN KLAUSER ABOUT THE RISK INVOLVED IS A REAL CON UH, AS A REAL CONCERN, BECAUSE I'VE ASKED THIS ON THE LAST SEVERAL COUNCIL MEETINGS THAT WE HAVE, HOW DO WE MITIGATE OUR RISKS? HOW DO WE MITIGATE OUR RISK AS IT RELATES TO OUR MONEY BEING LENT OUT.
FIRST OF ALL, WE, AS A CITY, WE'RE NOT IN THE REAL ESTATE BUSINESS.
IF YOU DEFAULT ON A, IF A LOAN IS DEFAULTED UPON, UH, AND, AND IT'S INVOLVING REAL ESTATE, THEN WE HAVE TO NOW, BECAUSE WE'RE IN A THIRD LIEN POSITION, WE HAVE TO WAIT TO FIND OUT IF AND WHEN, IF, AND WHEN WE WOULD BE ABLE TO GET THE MONEY THAT WE LENT OUT BACK.
SO THERE'S NO GUARANTEE THAT WE, IF WE LENT A QUARTER OR A QUARTER OF A MILLION DOLLARS, THAT WE WILL BE ABLE TO GET A COIN OF THAT BACK OR ALL OF IT.
SO THAT'S MY CONCERN, BUT WE, WE NEED TO BE VERY, VERY CLEAR THAT, UH, ANY MONEY THAT WE LEND OUT, IF WE HAVE A LOAN PROGRAM, ANY MONEY THAT WE LEND OUT IS SUBJECT TO BEING DEFAULTED UPON AND US NOT BEING PAID BACK THAT MONEY.
AND THESE ARE TAXPAYER DOLLARS THAT WE'RE PROPOSING TO LAND TO THESE PARTICULAR SMALL BUSINESSES.
AND I'LL CLOSE WITH THIS ON THE SMALL BUSINESS END, TEXAS PARKWAY AND CARTWRIGHT.
I'VE BEEN LIVING ON TEXAS PARKWAY OFF OF TEXTS PARKWAY SINCE 2000.
AND I'M HERE TO TELL YOU THAT THE MAJORITY OF THE SMALL BUSINESSES THAT ARE ON THAT CORRIDOR, TEXAS PARKWAY AND CARTWRIGHT ACTUALLY ARE HOUSED INSIDE OF A STRIP CENTER OR A BUILDING THAT DOES NOT BELONG TO THEM.
AND SO ANY LOANS THAT WE GIVE TO SMALL BUSINESSES ON TEXAS PARKWAY AND CARTWRIGHT, IF THEY'RE GIVEN TO THE ACTUAL PROPERTY OWNERS OF THE STRIP CENTERS, OR THE BUILDINGS THAT HOUSED THESE PARTICULAR BUSINESSES, THEN THOSE INDIVIDUALS, UH, WITH WOULD NEED TO BE REQUIRED IN MY ESTIMATION TO MODERNIZE THEIR PROPERTIES, UH, WHETHER THEY BE WHERE THE FORMER STRIPS, UH, FOR FORMER MOVIE THEATER IS, OR WHERE THE FORM OF PROGRESS.
BUT WE HAVE PRIVATE ENTERPRISE THAT HAVE INVESTED INTO THESE PARTICULAR ENTITIES THAT ARE LOOKING TO INJECT CAPITAL THEMSELVES IN ORDER TO MODERNIZE THEIR PROPERTIES WITH THE EXCEPTION OF THE PRO THE STRIP CENTER, WHERE THE MOVIE THEATER IS.
SO NONE OF THESE BUSINESSES, THEY MAY BE ABLE TO DO SOME THINGS POSSIBLY INSIDE OF THEIR BUSINESSES WHERE THEY LEASE, BUT THEY'RE NOT GOING TO BE ABLE TO, UH, DO ANY MAJOR DEVELOPMENT OR REDEVELOPMENT OF THE PROPERTIES THAT THEY ACTUALLY LEASE OUT OF.
SO WE KEEP TALKING ABOUT THE SMALL BUSINESSES ON TEXAS PARKWAY AND HOW THIS IS GOING TO BENEFIT THEM, BUT THE ONLY THING THEY COULD BENEFIT THEM WITH IS POSSIBLE LEASEHOLD IMPROVEMENTS WORKING CAPITAL AND THINGS WITHIN THE PARTICULAR ENTITY AND SPACE THAT THEY LEASE.
SO IF WE'RE REALLY WANTING TO SEE REDEVELOPMENT ON TEXAS BROCKWAY, WHILE I BELIEVE THAT THIS COULD BE A POTENTIALLY PRODUCTIVE THING, WE CAN'T AFFORD TO PUT THE TAXPAYERS OF MISSOURI CITY AT RISK BY PUTTING MONEY OUT THERE IN THE FORM OF LOANS, WITH THE POTENTIAL OF THEM BEING DEFAULTED UPON AND NOT HAVING A RECOURSE TO GET THAT MONEY BACK.
I JUST WANT TO ADD ONE FIRST AND FINAL THING.
I'M A SMALL BUSINESS OWNER, AND I'M ALSO A REALTOR INVESTOR.
UM, THE CITY WOULD NOT BE LOSING DOLLARS.
WE WOULD BE GAINING AS I THINK WAS IN THE FIRST SLIDE.
AND ALSO YOU WITH THE BUSINESS, YOU WOULD GET THAT MONEY BACK IN SALES TAXES.
[01:40:01]
AM I RIGHT? CITY MANAGER, IS THE CITY MANAGER STILL THERE? IS THAT CORRECT? YES, THAT WOULD BE TO GO, IS THE GOAL WOULD BE NOT ONLY TO, UH, HELP TO FOSTER NEW BUSINESSES AND EXPAND A REAL, THE RETAIL FOOTPRINT, BUT TO DRIVE MORE SALES TAX.AND ALSO TO, UH, WHEN YOU'RE, UH, MAKING IMPROVEMENTS TO THE ACTUAL STRUCTURE, YOU'RE ACTUALLY IMPROVING THE REAL ESTATE, UH, TAXES ALONG THAT CORRIDOR AS WELL.
SO IT WOULD BE BOTH ON A REAL ESTATE TAX SIDE, AS WELL AS SALES TAX.
WELL, WELL, WELL, LET ME, HOLD ON.
LET ME, I MEAN, THIS, THIS IS A, I MEAN, I HEAR WHAT YOU'RE SAYING, COUNCILWOMAN, I HEAR YOU AS FAR AS POTENTIAL INCREASE IN VALUE OF A, UH, POTENTIAL, A PIECE OF PROPERTY THAT IS ON THE CORRIDOR, BUT THOSE BUSINESSES ARE NOT GOING TO GIVE YOU MORE SALES TAX REVENUE BECAUSE THEY IMPROVED THEIR PROPERTY INSIDE OF THAT FACILITY.
YOU GET ADDITIONAL SALES TAX REVENUE BECAUSE OF AN INCREASE IN SALES TAX REVENUE, BECAUSE MORE PEOPLE, MORE PEOPLE SOLICIT OR, UH, PATRONIZED THOSE PARTICULAR BUSINESSES, YOU DON'T GET IT BECAUSE WE GAVE YOU A LOAN TO IMPROVE YOUR PROPERTY.
SO I JUST WANT TO MAKE SURE THAT WE'RE, YOU KNOW, WE'RE TALKING ABOUT TWO SEPARATE THINGS HERE.
WE'RE TALKING ABOUT, WE'RE TALKING ABOUT, WE'RE TALKING ABOUT THE POTENTIAL OF BRINGING NEW DEVELOPMENT ON THE BOARD DOOR, AND WE'RE TALKING ABOUT THE EXISTING BUSINESSES.
SO IS THIS ABOUT THE EXISTING? ARE WE TALKING ABOUT THE EXISTING BUSINESSES? ARE WE TALKING ABOUT THE POTENTIAL OF NEW BUSINESSES COMING ON THE CORRIDOR? THERE'S TWO SEPARATE, THIS IS APPLES AND ORANGES IN COMPARISON.
I JUST WANT TO MAKE SURE WE IDENTIFY THE DISTINCTION CUSTOMER VERSUS CITY MANAGER.
THIS PROPOSAL ACTUALLY WOULD ADDRESS BOTH.
FOR EXAMPLE, YOU HAVE RIGHT NOW ALONG THE TEXAS PARKWAY AND CARTWRIGHT CORRIDOR, YOU HAVE TWO VACANT BUILDINGS AND THERE ARE SUBSTANTIAL BUILDINGS.
THERE ARE FORMER GROCERY STORE FACILITIES, A FUND LIKE THIS COULD BE USED FOR SOMEBODY TO ACQUIRE THAT REAL ESTATE MAKE IMPROVEMENTS TO THEIR REAL ESTATE, MOVE NEW BUSINESSES INTO THAT REAL ESTATE BECAUSE OF THE IMPROVEMENTS, UH, AND WOULD IN TURN, GENERATE NEW SALES TAXES WITHIN THAT CORRIDOR.
LIKEWISE, ON THE OTHER SIDE OF THAT, YOU CAN HAVE AN EXISTING BUSINESS THAT'S THERE WHO HAVE AN OPPORTUNITY TO GO OUT AND WIN, LOSE BUSINESS.
YOU KNOW, THERE IS SOME BUSINESSES IN THIS MARKET THAT IS DOING FINE.
ALL OF THEM HAVEN'T SHUTTERED UP THEIR WINDOWS, BUT THERE'S AN OPPORTUNITY.
SOME MIGHT HAVE TO DO NEW BUSINESS THIS LONG CAN HELP THEM, UH, BE ABLE TO BUY THE RECEIVABLES THEY NEED IN ORDER TO EXPAND THEIR BUSINESSES.
AND ALSO TO MAKE NEW 10 PRIVILEGE.
FOR EXAMPLE, RESTAURANTS WHO MIGHT WANT TO EXPAND THE BIGGEST COST THAT A RESTAURANT HAVE IS THEIR OVEN SYSTEMS THAT THIS WILL ALLOW FOR THOSE KINDS OF EXPENDITURES TO BE MADE SO THAT THEY CAN BE ABLE TO BE SUCCESSFUL IN IT BECAUSE IT LOWERS THEIR COST OF CAPITAL IS A DIFFERENCE BETWEEN A LOAN AND 1.7% AND ALONE.
AND 7% IS JUST A HUGE DIFFERENCE WHEN IT COMES DOWN TO MAKING PAYMENTS AND THAT KIND OF THING.
SO IT'S REALLY BOTH AND DEPENDS ON WHAT THE NEEDS ARE OF THE OPPORTUNITY.
ONE FINAL COMMENT, UH, COUNCIL MEMBER BONEY.
THIS PRESENTATION IS ABOUT STEP TWO, ELIGIBILITY AND UNDERWRITING.
WE DIDN'T DISCUSS THAT FOR THE LIFE OF THE LOAN.
THE FEE THAT YOU'RE PAYING US IS ALL ENCOMPASSING.
WE ARE TRAINED IN LIQUIDATION.
WE HAVE ATTORNEYS ON, ON CALL THAT WILL SUE THE CUSTOMER IF NEED BE.
ALL OF THAT IS PART OF WHAT WE BRING TO THE TABLE SERVICING IS, AND THAT MAINTAINING THOSE RELATIONSHIPS AND MONITORING YOUR COLLATERAL IS CRITICAL.
THE PURPOSE FOR TODAY WAS NOT TO COVER THAT WE WERE TO COVER STEP TWO, WHICH IS THE UNDERWRITING ELIGIBILITY, AND, YOU KNOW, WHAT'S NOT ELIGIBLE.
SO I JUST WANT TO STRESS TO EVERYBODY THAT WHAT WE BRING TO THE TABLE IS 30 YEARS OF SERVICING AND LIQUIDATING AND CALCULATING OUR RECOVERY.
IF THERE IS GOING TO BE A DEFAULT, THAT IS PART OF THE SKILL SETS WE BRING FORWARD.
[01:45:01]
AND AS I MENTIONED IN ONE OF THE SLIDES, EVERY TIME WE GO TO LEGAL, WE ALWAYS WIN MS. VALDEZ, THIS IS ROBIN.DO YOU HAVE ANY, UM, ANY, UH, I MEAN CHART OR ANY SUCCESS STORIES THAT SHOWS, UM, SUCH AS, YOU KNOW, WE'RE TALKING ABOUT 1.5 MILLION THAT CAN POTENTIALLY TURN INTO A $15 MILLION WORTH OF, UH, YOU KNOW, UM, DO WE HAVE, DO YOU HAVE, I MEAN, I UNDERSTAND YOU HAVE DALLAS AND ANOTHER CITY.
CAN YOU TELL ME SOMETHING SO I CAN TELL YOU THE THINGS THAT THIS IS SOMETHING THAT IT WILL TURN AROUND, UH, YOU KNOW, WE CAN TAKE THAT 1.5 MILLION AND TURN AROUND AND IN TIME WE'LL BE ABLE TO HAVE $15 MILLION WORTH OF ASSETS AND ALL THAT BACK INTO THE CITY OF TWO BUSINESSES.
AND SO THE MONEY THAT THE OWNER IS PUTTING IN IS NEW MONEY.
HE HADN'T PUT IT IN BEFORE THE MONEY THAT THE BANK IS CONTRIBUTING IN THE FORM OF A LOAN IS HIS LEVERAGE AND THAT MONEY HADN'T BEEN PROVIDED EITHER.
AND SO WE'RE SAYING YOUR MONEY STIMULATES THAT CAPITAL.
AND SO THE 1,000,005 WILL BE STIMULATING 15 MILLION OF NEW MONEY TO COME INTO THE COMMUNITY.
MY QUESTION WAS, DO YOU HAVE ANY SUCCESS STORIES OF ANY, ANY CITIES THAT YOU CAN SHARE WITH US THAT HAVE, YOU KNOW, GOT THIS LEVERAGE AND, YOU KNOW, AS, AS ON A SUCCESSFUL, SO WE CAN, SO I CAN SAY THAT THERE IS ANOTHER CITY OUT THERE, UM, THAT HAVE TAKEN THE LEVERAGE AND STIMULATED AT THIS TYPE OF INCOME OR WHATEVER IT IS.
IS THERE ANY, ANY EXAMPLE THAT ANYWHERE THAT YOU KNOW OF? I CAN, I, I, WASN'T PREPARED TO GIVE YOU AN EXAMPLE.
I CAN TRY AND FIND AN EXAMPLE AND FOLLOW UP, BUT I ALSO WANT TO SHARE WITH YOU THAT FIVE OH FOUR ISN'T RESTRICTED JUST TO CERTAIN CITIES.
IF I HAVE A PORT CAN HAPPEN ANYWHERE, IT CAN BE IN A SMALL TOWN, IT CAN BE WHIPPED ON HEN HOUSES.
WE'VE DONE ASSISTED $10 MILLION ASSISTED LIVING FACILITIES.
WE'VE DONE REHABILITATION CENTERS, BUT THESE CAN BE IN ANY TOWN.
WHAT THE BOOK, ROSA, ROSA, ROSA, CAN YOU GIVE THEM AN EXAMPLE OF A DEAL THAT WAS DONE USING, UTILIZING THESE RESOURCES THAT WOULD HAVE BEEN, THAT YOU CONSIDER TO BE SUCCESSFUL? SURE.
UM, I GAVE YOU AN EXAMPLE THE LAST TIME, UM, MAYOR, WHERE WE SHOWED A CHILDCARE CENTER, UM, MARTHA FLORES HAD, UH, WE HELPED HER WITH A CHILDCARE CENTER IN ONE TOWN.
SHE AND HER FAMILY DECIDED TO GO TO A TOWN CLOSE TO AUSTIN, 20 MINUTES AWAY FROM AUSTIN.
UH, SHE BOUGHT AN EXISTING CHILDCARE CENTER WHEN WE STRUCTURED THE DEAL.
SHE PUT INTO THE PROJECT A HUNDRED THOUSAND, YOU KNOW? AND SO WE WERE ABLE WITH FIVE OH FOUR TO GET HER THAT REMAINING 800, 800,000, UH, WHEN SHE SAVED ON HER ONE, HER 100,000, SHE WAS ABLE TO UTILIZE THAT FOR WORKING CAPITAL.
SO YES, MOST OF OUR VITAL PORT PROJECTS TEND TO BE LARGE.
YOU KNOW, WE, HAVEN'T GIVEN YOU A BIG EXAMPLE OTHER THAN THE LAST PRESENTATION.
WHEN WE, I DID SHOW YOU HER $800,000 PROJECT.
IF THERE'S A GAP WE STEPPED UP AND WE MADE HER A SMALL LOAN TO FILL THAT GAP.
AND THE ONLY REASON WE DID IT IS BECAUSE WE ALREADY KNEW HER.
WE KNEW HER FROM HER FIRST, UH, FACILITY THAT SHE HAD DONE WITH OUR HELP.
AND SO, UH, THAT'S ALSO A POSSIBILITY IF IT NEEDS THAT EXTRA STRUCTURING AND SOME CAPITAL FROM OTHER SOURCES, I'M WORKING RIGHT NOW WITH A WOMAN DOCTOR WHO IS GOING TO BUILD A MEDICAL CLINIC IN A HEALTH DESERT.
AND SO WE WERE ABLE TO BRING HER A MILLION, FIVE FROM A CDC LIKE US OUT OF PHOENIX, ARIZONA.
AND SO THAT'S THE BENEFIT AGAIN WITH MY NETWORK AND MY STAFF'S EXPERTISE AND THESE OTHER CAPITAL SOURCES THAT ARE OUT THERE, WE'RE ABLE TO STRUCTURE THE PROJECT.
SO IT CAN GO FORWARD THAT DOCTOR'S DEAL COULD NOT GO FORWARD.
SHE HAD A MILLION DOLLARS WORTH OF LAND, HER LAND, BUT THE BANK WANTS WORKING CAPITAL.
THE BANK WANTS TO SEE A MARKET STUDY.
THE BANK WANTS TO SEE THE IS DONE.
THE BANK WANTS TO SEE THE ARCHITECTURAL DRAWINGS, YOU
[01:50:01]
KNOW, HER CONTRIBUTION OF BLAND DIDN'T PAY FOR ANY OF THAT.WAS THE, IT WAS THOSE TWO EXAMPLES THAT YOU USED OF THE, WAS THAT FROM THE TWO STATES, I MEAN, TWO CITIES THAT IS SIMILAR TO, IN OUR POSITION OR SOMETHING ELSE THAT YOU'RE TALKING ABOUT? NO, ONE OF THE CITIES WAS SMALL, ELEGANT, TEXAS.
I THINK THEY'RE LIKE LESS THAN 10,000 POPULATION AND THE OTHER CITY IS IN AUSTIN.
AND THAT'S SIMILAR TO THE SITUATION THAT WE'RE IN, RIGHT.
UH, WITH THEM, UM, CONTRIBUTING THE MONEY TAXPAYERS' MONEY.
IS THAT WHAT IT IS? NO, THAT'S AN EXAMPLE OF THE FIVE OH FOUR AND HOW THAT LEVERAGED CAPITAL, BECAUSE I BELIEVE YOUR QUESTION WAS, YOU KNOW, AN EXAMPLE OF LEVERAGING THAT 10 TIMES.
ONE IS, UH, WHEN YOU'RE GOING THROUGH THE PRESENTATION ON GROWTH, UH, YOU INDICATED THAT, UH, ONE OF THE WAYS THAT, UH, YOU, UM, WOULD, UH, CONSIDER, UH, A, UM, A LOAN WAS FROM, UH, POSITIVE ASSURANCE THAT YOU RECEIVED.
CAN YOU KIND OF ELABORATE WHAT, UH, AND HOW YOU MEASURE A POSITIVE ASSURANCE? SURE.
UM, IF THE CUSTOMER IS REQUIRED TO PUT HIS $8,000, WE'RE VERIFYING BY LOOKING AT THEIR BANK STATEMENTS OR THEIR STOCKS AND BONDS.
SO WE'RE VERIFYING AND WE GET CONFIRMATION FROM THEM BECAUSE WE'RE LOOKING AT WHAT THEY'RE SUBMITTING IN THEIR APPLICATION.
WE'RE LOOKING AT ALL THE DOCUMENTS.
AND SO THAT'S ONE THING WE VERIFIED.
THE OTHER THING WE VERIFY IS THEIR TAX RETURNS AND THEIR SALES AND PROFITS.
IF THE BUSINESS DOESN'T HAVE A PROFITABLE TREND, ONCE WE THROW IN THE NEW DEBT, THEN IT'S GOING TO STRUGGLE IN MAKING THAT NEW DEBT PAYMENT.
ALL OF THAT GOES INTO CONSIDERATION WHEN YOU'RE UNDERWRITING THE TRANSACTION, YOU CAN'T DO IT WITHOUT LOOKING AT FINANCIAL STATEMENTS, WITHOUT LOOKING AT VERIFYING THAT THE MONEY THEY'RE GOING TO PUT IN IS AVAILABLE, THE BIGGER THE PROJECT, THE MORE THE CUSTOMER HAS TO PUT DOWN.
AND SO WE, WE VERIFY ALL OF THAT.
AND THEN WE DO THAT DEBT COVERAGE CAN BE CO YOU KNOW, PAID THEIR DEBT ON THE, THEIR LOANS ON THE DEBT DEBT THAT THEY'RE GOING TO TAKE ON.
YEAH, I ASSUME THAT WOULD BE THE SAME, UH, WHEN WE TALK ABOUT, UH, UH, YOU DETERMINE WHETHER THE, UH, UH, BUSINESS WOULD BE ABLE TO, UH, UH, UH, DEMONSTRATE THAT THEY COULD MAKE THEIR LOAN REPAYMENTS.
YOU'RE LOOKING AT THE FINANCIALS TO SEE WHAT THEIR, UH, UH, STATUS MAY BE AS FAR AS BEING ABLE TO TAKE ON DEBT AND WHAT THEIR CURRENT, YOU KNOW, THAT THE EXPENSES ARE.
SO THEY THEY'D BE IN A POSITION TO BE ABLE TO DO THE, UH, THE REPAYMENT OF THE LOANS.
AND IF THEY CAN'T DO IT, WE HAVE TO HAVE A HEART TO HEART TALK AND SAY, WE DON'T RECOMMEND YOU DO IT AT THIS TIME.
WE RECOMMEND YOU MIGHT LOOK AT A DIFFERENT BUILDING THAT WON'T COST AS MUCH.
UM, SO IT'S, YOU KNOW, IT'S A SOFT, NO, BUT YES WE SAY NO OFTEN.
THE OTHER IS, AND CORRECT ME IF YOU WOULD, UH, THAT, UH, THESE PROGRAMS REQUIRE THAT THE, THE, UH, IF YOU PROVIDE A LONG, UH, THEY HAVE TO BE, UH, BUSINESS OCCUPIED OWNER OCCUPIED ON THE REAL ESTATE PIECE.
IT'S A FEDERAL GOVERNMENT REQUIREMENT.
IT CANNOT BE FOR FLIPPING AND IT CAN NOT BE FOR INVESTORS.
IT CAN'T BE A, AN APARTMENT, UM, BECAUSE YOU'RE NOT OCCUPYING THAT EVERY ONE OF THE UNITS, UH, IT CANNOT BE, UH, I THINK STORAGE FACILITIES ARE A GRAY AREA.
UH, IF YOU HAVE STAFF ON THE PREMISES, UH, AND YOU'RE OCCUPYING PART OF THAT SPACE THAT MIGHT BE CONSIDERED ELIGIBLE, BUT YES, YOU HAVE TO OCCUPY THE SPACE.
YOU COULD LEASE A PORTION OF IT.
I BELIEVE IT'S 40% SO LONG AS WITHIN A PERIOD OF TIME, YOU'RE GOING TO MOVE INTO ALL OF IT.
UH, MAYBE YOU CAN HELP ME WITH, UH, WITH A SITUATION THAT WE HAVE, UM, LIKE ON TEXAS PARKWAY WHERE YOU HAVE A NUMBER OF BUSINESSES, SMALL BUSINESSES THAT, UH, UH, LEASE FROM THEIR, UM, UH, THE OWNER OF THAT STRIP CENTER, WHEREVER THAT MAY BE, UH, UH, W W AND THEY'RE STRUGGLING.
SO, FIRST OF ALL, AS I UNDERSTAND
[01:55:01]
IT, IF THEY WANT TO GO OUT AND, UM, UH, MAKE IMPROVEMENTS, UH, THEY WOULD HAVE, THEY WOULDN'T BE ABLE TO USE THE, UH, UH, THE GROWTH, UH, LOAN THEY'D HAVE TO DO IT UNDERNEATH THE COMMERCIAL.NO, THEY COULD USE THE GROWTH FUND.
IT'S FLEXIBLE ENOUGH TO WHERE, YOU KNOW, AND THE ELIGIBILITY THAT I HAD ON THAT SLIDE, WE SAID IT COULD BE USED FOR LEASEHOLD IMPROVEMENTS.
IT COULD BE USED FOR WORKING CAPITAL.
IT COULD EVEN BE USED FOR PAYING THEIR STAFF WHERE, OR EVEN MARKETING INVENTORY AS WELL.
THAT WOULD BE THE POSSIBILITY THAT WOULD BE THE GROWTH.
AND, UH, I GUESS THE OTHER JUST OBSERVATION IS THAT YOU WERE PUTTING IN, UH, BEING ASKED TO PUT IN $500,000 FOR THE, UM, FOR THE GROWTH AND WHAT WAS THE, UH, UH, THE MAXIMUM THAT WE COULD HAVE ON THOSE WAS THAT A HUNDRED THOUSAND, SO THAT, AND, YOU KNOW, TAKING THE, THE EXTREME, THAT REALLY MEANS THAT WE COULD ONLY, IF WE, UH, GAVE OUT A HUNDRED THOUSAND DOLLAR LOANS, WE'D ONLY BE ABLE TO ASSIST FIVE BUSINESSES, UH, OUT OF THAT PARTICULAR PROGRAM.
WE'VE GOT A MILLION DOLLARS THERE WITH A MAX OF 250,000.
SO THE EXTREME, WE WOULD ONLY BE ABLE TO PROVIDE ASSISTANCE TO, UH, TO, FOR BUSINESSES THAT ARE TRYING TO, UM, UH, UTILIZE, UH, THIS SONG FEATURE.
I'VE GOT ONE QUESTION FOR, FOR BILL, IF HE'S STILL THERE.
UM, I NOTICED THAT, UH, THE AMOUNT THAT WAS BEING REQUESTED WAS, UH, I THOUGHT IT SAID 1.5, 9 MILLION AS OPPOSED TO ONE AND A HALF MILLION.
WELL, WE'RE, WE'RE TALKING ABOUT A MILLION, FIVE GOING INTO THIS, THIS PROGRAM.
WHAT'S THE OTHER $90,000 FOR, THAT WAS A BUDGET.
CAN YOU HEAR ME FIRST OF ALL? YES, I CAN.
UH, BEST THAT WAS IN THAT LINE ITEM.
AND PART OF THAT WAS FOR THE, UH, OBVIOUSLY SOMEBODY, A FEE FOR SOMEBODY TO SERVICE THE PROGRAM IN THIS CASE, IT'D BE 18,000.
UM, AND I DON'T KNOW, UH, IF THE LINE ITEM BROKE DOWN FURTHER FOR ANY OTHER TYPES OF, UH, ECONOMIC DEVELOPMENT PROGRAMS, UH, IN THAT ADDITIONAL 90,000 BEYOND THAT AMOUNT.
SO THAT'S, UH, I'M SORRY, CUSTOMER MAMMARY.
NO, NO, THAT WE JUST BUDGETED THAT AMOUNT, BUT ACTUALLY, UH, WE WOULD EXPERIENCE SOME SAVINGS.
UH, IF WE WENT WITH W WHAT ROSA, IT WOULDN'T COST THAT MUCH TO THE MINISTER.
MY QUESTION WAS, IS, WAS IT FOR ANOTHER, UH, UH, STAFF MEMBER TO, UH, HANDLE OUR SIDE OF THE, UH, THE, UH, UH, THE PROGRAM? NO, SIR.
BUT YOU'RE ALSO DOING A BUDGET, CREATE A COORDINATORS TO COORDINATORS POSITION WITH ANY ECONOMIC DEVELOPMENT, UH, DEPARTMENT.
UH, AND OBVIOUSLY WE'RE OUT RECRUITING NOW AND DOING A NATIONAL SEARCH FOR ECONOMIC DEVELOPMENT DIRECTOR, BUT THE GOAL WOULD BE, WE WOULD HAVE A DIRECTOR AND HE WOULD HAVE TWO COORDINATORS JUST WORKING FOR HIM.
SO THAT CAPACITY INTERNALLY WOULD BE THERE.
I THINK AT ONE, I THOUGHT ONE TIME THAT WE ALREADY HAD IN THE BUDGET, UH, FAR ONE, UH, COORDINATOR IN THAT DEPARTMENT.
SO WE WOULD BE ADDING ANOTHER COORDINATOR FOR ECONOMIC DEVELOPMENT PURPOSES.
THAT WAS IN THE BUDGET AS WELL, AND CURRENTLY RIGHT NOW, BUT THE WAY THE BUDGET IS SET TODAY, THERE'S A, ANOTHER MIND FOR DIRECTOR OF THE DEPARTMENT AND FOR TWO COORDINATOR POSITIONS WITHIN THAT DEPARTMENT.
AND SO THE HOPE IS THAT, YOU KNOW, WHEN WE RECRUIT AND GET US A DIRECTOR, UH, THAT HE WOULD BE WORKING TO FEEL THOSE TWO JOBS.
IS THERE ANY OTHER DISCUSSIONS? WELL, I DON'T HAVE ANY QUESTIONS, BUT I, I GUESS I'LL MAKE A STATEMENT.
I'M JUST CONCERNED THAT, UH, WITH THE, UH, UH, WITH THE AMOUNT OF MONEY THAT WE'RE PUTTING
[02:00:01]
INTO THESE TWO PROGRAMS, UH, AND THE POTENTIAL OF, UH, NOT, UH, UH, BEING ABLE TO, UH, HIT A WIDE, UH, UH, NUMBER OF, UH, OF BUSINESSES, UH, YOU KNOW, ARE WE GOING TO BE GETTING INTO A POINT WHERE WE'RE PICKING WINNERS AND LOSERS? UH, AND SO, AND YOU KNOW, WHAT IS THE, WHAT'S THE PRIORITY? IS IT FIRST COME FIRST SERVE THAT, UH, THAT GETS TO, UH, GET AT THE TOP OF THE LINE? OR WHAT IS THAT, THAT, UH, THAT PROCESS THAT SAYS, UH, YOU KNOW, WE'VE GOT 10 PEOPLE OUT THERE WHO, UH, QUALIFIED FOR LUNGS.HOW DO WE DETERMINE IF WE DON'T HAVE ALL OF THE FUNDS TO HANDLE THOSE? HOW DO WE DETERMINE WHO WE PICK? WELL, YOU, YOU CAN MAKE SOME DETERM, SOME PRIORITIZATION.
I MEAN, THIS IS YOUR FUNDING, UH, YOUR PROGRAM, OR WE CAN GO WITH FIRST, COME FIRST SERVE.
I MEAN, UM, SOME MAY COME IN FIRST, BUT THEY DON'T FINISH THEIR PAPERWORK, OR THEY DON'T SUBMIT WHAT WE NEED.
AND SO THEY FALL TO THIRD OR FIFTH OR EIGHTH PLACE.
IT JUST WHOEVER'S READY AND WHO WE VERIFY AND WHO PASSES THE REPAYMENT AND COLLATERAL TEST, AND WHO GETS THAT APPROVAL IN THE CASE OF COMMERCIAL REAL ESTATE FROM SBA.
AND THAT'S THE ONE THAT WOULD BE READY TO GO AND, AND MOVE UP AND THE PIPELINE.
UH, BUT IF YOU WANT TO CREATE YOU, THE COUNCIL, UM, UM, STRUCTURE, YOU CAN CERTAINLY DO THAT.
YEAH, NO, MY, UH, UH, UH, REQUIREMENT WOULD BE THAT THAT'S NOT A REQUIREMENT, BUT, UH, I JUST DON'T WANT TO, I DON'T THINK WE SHOULD BE IN A POSITION WHERE WE'RE SELECTING WINNERS OR LOSERS, UH, FAR, UH, BUSINESSES THAT WANT TO UTILIZE THESE PROGRAMS. THAT'S JUST A STATEMENT.
ANY OTHER DISCUSSIONS FROM ANYBODY ELSE? I'LL JUST, I'LL JUST, JUST AS COUNCIL MEMBER, I'M A REALIST.
SO I HAVE JUST SOME COMMENTS AS WELL.
UM, I REALLY BELIEVE THAT TEXTS PARKWAY NEEDS HELP.
WE ALL BELIEVE THAT WE'RE HERE FOR THAT, RIGHT? I LIKE THE STORY, THE SHINY 10 X LEVERAGE THE LOW INTEREST, BUT LET'S NOT FORGET IT.
IT COULD COST SOMEBODY UP TO 38% MORE ON A, ON A MONTHLY NOTE.
UM, WE WERE TALKING EARLIER ABOUT KNOWING OUR CUSTOMERS AND MY QUESTION IS, DO WE REALLY KNOW THEM ON SEPTEMBER 21? AND WHAT WE HEARD FROM THE CUSTOMERS WHO JOINED THAT CALL WAS WE NEED HELP.
AND LIKE COUNCIL MEMBER EMORY POINTED OUT, HE POINTED OUT THE LIMITATIONS OF HOW MANY WE WOULD ACTUALLY REACH WITH THIS INCENTIVE.
AND SO OVERALL, I JUST THINK THIS IS A GOOD IDEA, BUT AT THE WRONG TIME, UH, OUR, UH, OUR BUSINESSES NEED NEED HELP.
AND SO LASTLY, YOU ASKED SOME QUESTIONS AT THE BEGINNING, AND I APPRECIATE YOU HOLDING THIS MEETING SO WE CAN GO INTO MORE DEPTH.
YOU KNOW, BCL IS A GREAT COMPANY.
THEY'RE DOING A LOT FOR US RIGHT NOW WITH NO COSTS, BUT HOW DID WE GET THE BCL? WE DID WE GO TO A BUYBOARD? DO WE GET IT, DID IT GO TO A COMMITTEE FOR DISCUSSION? WAS THERE AN RFP? NO.
SO I JUST, THERE'S JUST SOME THINGS OUT THERE THAT, YOU KNOW, AGAIN, THE RIGHT THING TO DO, BUT MAYBE NOT THE RIGHT TIME.
AND SO THOSE ARE MY, THAT'S MY STATEMENT.
THANK YOU, COUNCIL MEMBER MORALIS.
UH, ANYBODY ELSE? UM, I DO HAVE A QUESTION FOR YOU, JOYCE, IF SHE'S STILL ON OUR CITY ATTORNEY.
WHAT WAS THAT? I DO HAVE A QUESTION FOR YOU, UM, ON THIS.
UM, SO SINCE, YOU KNOW, I'M NOT HEARING ANY OF THE DISCUSSIONS, WE HAD A HEALTHY DISCUSSION ON THIS, UM, WHAT TYPE OF ACTION THAT WE NEED TO DO WITH THIS? UM, CAUSE I DON'T, YOU KNOW, I'M JUST TRYING TO UNDERSTAND FROM A LEGAL POINT OF VIEW, I'M NOT CERTAIN AS TO WHAT IS BEING REQUESTED BY THE CITY MANAGER.
I, I WOULD SUSPECT, I THINK THAT THERE MIGHT BE A CONTRACT, UH, THAT COULD BE CONSIDERED AT THIS POINT.
I WOULD THINK THAT THERE COULD BE JUST A MOTION TO PROCEED IF THAT'S WHAT'S DESIRED WITH LOOKING INTO THE PROGRAM FURTHER, IT JUST DEPENDS ON WHAT THE COUNCIL WOULD LIKE TO SEE MOVING FORWARD FROM THERE.
MY QUESTION WAS, I MEAN, I, WE PUTTING OUT A, IS AN EMOTION THAT WE NEED TO, UM, WHETHER WE'RE MOVING FORWARD
[02:05:01]
WITH THIS OR NOT.UM, YOU KNOW, IS THAT YOUR SUGGESTION? I WOULD THINK, AND I DON'T WANT TO SPEAK FOR MR. JONES, BUT I WOULD THINK THAT STAFF WOULD WANT DIRECTION AS TO WHERE COUNCIL WANTS TO GO WITH THE PROGRAM.
SO IF THERE IS A DESIRE TO SEE ADDITIONAL INFORMATION OR TO MOVE THE PROGRAM FORWARD OR NOT TO, I WOULD THINK THAT, UH, BUT I DON'T WANT TO SEE FOR MR. JONES.
SO, UM, MR. JOHNSON GONNA HOP IN, BUT YEAH, SORRY.
I WAS ON MUTE, UH, UH, MAYOR, UH, I JUST WANT TO GET SOME DIRECTION, UH, DO THE COUNCIL WITH THE COUNCIL, LIKE US TO MOVE AHEAD OR NOT.
I WANT TO ALSO TO THANK ROSA, UH, AND YOU KNOW, HER NON FOR PROFIT HAS A PACKABLE REPUTATION IN THIS STATE.
UH, AND I REACHED OUT TO THEM BECAUSE OF THAT IMPECCABLE REPUTATION AND WORKING WITH COMMUNITIES OF ALL SIZES AND THEY DONATE A LOT OF THEIR TIME BECAUSE OF THEIR NON-FOR-PROFIT MISSION TO COMMUNITIES THROUGHOUT THE STATE.
AND THEY'VE SPENT A TREMENDOUS AMOUNT OF TIME, UH, WORKING WITH US, UH, JUST TO KIND OF HELP, UH, PROGRESS, UH, THIS AND FEED OUT THE QUESTIONS.
UH, SO, UM, THANK YOU, ROSA, YOU KNOW, AND BCL TERRY BOY, I REALLY APPRECIATE YOU GUYS RESPONDING TO THE CALL TO COME AND HELP US.
AND I KNOW YOU DO THAT IN OTHER CITIES, BUT I JUST WANT TO SAY THANK YOU BECAUSE WE HAVEN'T PAID YOU ANYTHING FOR THIS.
AND, UH, W WE APPRECIATE YOU FROM THAT STANDPOINT, BUT JUST ASKING FOR COUNSEL TO GIVE ME SOME DIRECTION, WHAT WOULD YOU LIKE TO DO? DO YOU WANT TO MOVE AHEAD OR DO YOU WANT TO JUST KILL THE PROGRAM? I MEAN, WHAT DO YOU WANT TO DO? GO AHEAD, MRS. COUNCILWOMAN STERLING.
UH, I'D LIKE TO THANK ROSA TOO.
I KNOW WE'VE BEEN DOING THIS PRESENTATION FOR THE LAST FOUR OR FIVE MONTHS, AND I THINK THIS IS ABOUT OUR SECOND OR THIRD TIME.
I WANT TO THANK YOU SO VERY MUCH FOR THE INFORMATION AND MAYOR AS A MOTION IN ORDER OR NOT YET.
I WAS JUST, I WAS JUST GONNA SAY MY FINAL PITCH TO BEFORE WE ASKED, UM, I DO WANT TO TAKE THIS OPPORTUNITY TO THANK YOU.
WAS THAT, UM, YOU KNOW, UM, I WASN'T HERE FOR, YOU KNOW, AN A, BUT I DO HEAR THAT, UH, YOU'VE BEEN IN PLACE FOR SEVERAL MONTHS HELPING US.
UM, AND ALSO I WANT TO TAKE THIS OPPORTUNITY TO THANK OUR ASSISTANT CITY MANAGER, BILL ATKINSON, FOR HIS WORK, UM, ON THIS PROJECT AND WORKING WITH ROSA AND WORKING WITH OTHERS TO, UM, GET TO THIS LEVEL.
UM, YOU KNOW, WE HAD THIS ON DECEMBER 21ST, UM, AGENDA, UM, AND I WANTED TO PUSH THIS FORWARD.
SO THIS WAY THAT, UM, YOU KNOW, THE DISCUSSIONS THAT WE HAD GET TODAY, UH, I WASN'T CLEAR ON SOME OF THIS THINGS AND I KNOW WE HAD A JAM PACKED AGENDA.
SO THAT'S PART OF THE REASON WHY WE PUT THIS UP FOR A SPECIAL, A SPECIAL MEETING, UH, WANTED TO JUST DISCUSS AND TALK ABOUT IT.
I MEAN, I THINK SO THIS WAY EVERYBODY'S CLEAR EVERYBODY GETS THEIR QUESTIONS ANSWERED.
UM, EVERYBODY, IT FEELS LIKE, YOU KNOW, EVERYTHING IS ON THE TABLE FOR, YOU KNOW, FOR Y'ALL TO INDIVIDUALLY DECIDE ON WHAT YOU'RE WANTING TO DO, UM, WHILE WE CALL FOR A MOTION.
UM, BUT I WANT TO THANK ALL OF MY COLLEAGUES FOR YOUR INPUT, FOR YOUR SUGGESTIONS, UM, AND FOR, UM, UH, COMING UP TO THIS, UH, UPDATE DISCUSSION SO THAT WE'RE ALL UNDERSTANDING WHAT'S GOING ON.
SO I GUESS WITH THAT BEING SAID, UM, IF THERE ARE NO OTHER DISCUSSIONS I WILL CALL FOR A MOTION, COUNCILWOMAN STERLING, MAKE A MOTION THAT WE MOVE FORWARD IN A CONTINUATION OF IMPLEMENTING THE PROGRAM FROM MISSOURI EDWARD SECRETARY MOTION.
SO WE HAVE A MOTION, UM, FOR A COUNCIL MEMBER STERLING TO MOVE FORWARD AND WE HAVE SECONDED BY COUNCIL MEMBER EDWARDS.
UH, IS THERE, UM, ANY OTHER DISCUSSION? YES, MY COMMENTS ARE, ARE WHAT I MENTIONED EARLIER.
SO NO FURTHER DISCUSSION THIS COUNCIL MEMBER BONY.
I JUST WANT TO MENTION THAT, YOU KNOW, UH, THERE, THERE'S NO GREATER ADVOCATE FOR SMALL BUSINESSES THAN MYSELF.
UH, I WAS THE, UH, PRESIDENT AND CEO OF THE GREATER HOUSTON BLACK CHAMBER OF COMMERCE AND STARTED THE TEXAS BUSINESS ALLIANCE.
I COMPLETELY UNDERSTAND THE NEEDS OF SMALL BUSINESSES, AND I BELIEVE THAT WE'VE BEEN HELPING THEM AND ASSISTING THEM AS BEST WE CAN DO THE, UH, THE, UH, CARES GRANTS, UH, GIVING THEM A MUCH NEEDED RESOURCES AND, UH, AND FINANCES THAT THEY NEED THAT THEY DON'T HAVE TO PAY BACK THE CITY.
I DON'T BELIEVE THAT WE NEED TO BE IN THE BUSINESS OF BURDEN BURDENING ANY SMALL BUSINESSES WITH ADDITIONAL
[02:10:01]
DEBT.UH, AND THEN THERE'S A LOT OF UNSURITY AS IT RELATES TO, UH, OUR, OUR RISK FACTOR AS A CITY.
AND I BELIEVE THAT WE DON'T NEED TO PUT THIS TAXPAYER DOLLARS AT RISK WITHOUT HAVING A CLEAR UNDERSTANDING OF WHAT THAT MEANS, UH, AND HOW WE CAN AVOID A POTENTIAL DEFAULTS, UH, IN A LOAN PROGRAM THAT WE'VE, WE DON'T HAVE A PRECEDENT IN KNOWING HOW, HOW THAT IS GOING TO IMPACT US POTENTIALLY HEMORRHAGING OUR CITY.
SO, UM, THAT'S ALL I HAVE TO SAY ON THAT SITUATION BEFORE WE VOTE ANY OTHER DISCOUNTS FROM AN EMORY, UH, I WOULD, UH, SAY THAT, UH, YOU KNOW, WHAT, I'M HOPING THAT, UH, WHATEVER DOLLARS, UH, THAT WE HAVE LEFT OVER IN THE CARES FUND, UH, YOU KNOW, AS GRANTS THAT, UH, WE TAKE EVERY OPPORTUNITY WE CAN TO MAKE SURE THAT, UH, WE UTILIZE THOSE DOLLARS THAT WERE GIVEN TO US TO, UH, TO PROVIDE THE ASSISTANCE TO OUR SMALL BUSINESSES.
UM, BECAUSE YOU KNOW, THAT'S ONE WAY THAT, UH, THEY CAN, UH, HAVE SOME RELIEF AND NOT BE BURDENED WITH ANY TYPE OF A, OF A REPAYMENT BECAUSE THEY ARE A GRANT.
THANK YOU, SAM AND MARY, I DO WANT TO SAY ONE LAST THING.
UM, IT'S HARDER TO GET A GRANT.
I MEAN, A HARD TO GET A LOAN TO DO THIS, TO GET A GRANT.
UH, I, LIKE I SAID, I, I UNDERWROTE MONS FOR, FOR MANY, MANY YEARS AND IT'S WAY HARDER TO GET ALONE THAN IT IS TO GET A GRANT, PARTICULARLY, UH, WITH THE PARAMETERS THAT WE HAVE IN MISSOURI CITY.
BUT ANYWAY, I JUST WANTED TO SAY THAT, LASTLY, THIS IS COUNCILWOMAN CLOUDS.
THANK YOU SO MUCH FOR YOUR PRESENTATION AND FOR YOUR TIME.
SO I JUST WANTED TO MAKE SURE I THANKED YOU ALL RIGHT.
THIS, UH, THIS IS COUNSEL OR MR. HURLEY.
I JUST WANT TO THANK BILL ATKINSON AND THE TEAM AS WELL, BUT I ALSO WANT TO JUST THE CITY MISSOURI CITY TO UNDERSTAND THAT THIS IS COMING FROM OUR RESERVE FUNDS AND THE FUNDS.
SO KEEP THAT IN MIND AS WE MAKE DECISIONS AS IT IMPACT OUR CITY.
UM, SINCE EVERYBODY'S MAKING A COMMENT, UM, I, YOU KNOW, I DID HEAR FROM EVERYONE, UM, THIS IS TAX TAXPAYERS MONIES.
UM, WE ARE ALL RESPONSIBLE TO MANAGE THAT, UM, AT THE SAME TIME WHILE I UNDERSTAND THAT RESERVE ACCOUNT, YOU KNOW, IT IS COMING FROM THE RESERVE ACCOUNT, UM, THAT IS KEPT THERE FOR, UH, YOU KNOW, WHEN WE NEED IT.
UM, WHEN THE TIME COMES, I GO BACK TO WHAT MAYOR PRO TEM WAS TALKING ABOUT, YOU KNOW, THIS MAY BE, UM, COMING AT THE WRONG TIME, BUT, YOU KNOW, AS WE'VE TALKED ABOUT SALES TAX, IT'S ALMOST LIKE, YOU KNOW, YOU GIVE TAX ABATEMENTS TO A BIGGER FACILITIES.
AND THEN, AND THEN WE TURN AROUND AND SAY THAT WE'RE GETTING SALES TAX FROM IT ALSO, THAT KIND OF FLUCTUATES.
I MEAN, YOU KNOW, PAY OFF EACH OTHER.
UH, BUT I THINK THERE'S A LITTLE BIT MORE THAN THAT.
I THINK IT'S JUST SOMETHING THAT MADE ME SICK.
I MYSELF IS A SMALL BUSINESS OWNER AND I FULLY UNDERSTAND, AND I HEAR EVERYONE'S CONCERNS WHAT EVERYBODY'S TALKING ABOUT.
AGAIN, GOOD HEALTHY DISCUSSIONS.
I THINK WE NEED TO GIVE STAFF SOME DIRECTIONS, UM, ESPECIALLY TO CITY MANAGER AND ASSISTANT CITY MANAGER, UH, WHETHER TO MOVE FORWARD OR NOT.
SO WE DO HAVE A MOTION BY COUNCIL MEMBER STERLING TO MOVE THIS FORWARD.
UH, WE DO HAVE, WE HAVE A SECOND BY COUNCIL MEMBER EDWARDS.
UM, IF THERE ARE NO OTHER DISCUSSIONS THAT I WANT TO CALL FOR VOTES.
SO ANY OTHER DISCUSSIONS, OKAY.
MAYOR PRO TEM OR ELLIS? NO COSTUMER EDWARDS.
COUNCIL MEMBER, KLAUSER, COUNCIL MEMBER, STERLING COUNCIL MEMBER BONEY, NO COUNCIL MEMBER EMORY.
SO THE MOTION IS AT FIVE TO TWO.
UM, CITY MANAGER AND CITY ATTORNEY.
I DON'T SEE ANY OTHER ITEMS. SO I GUESS WE CAN, UH, THERE'S NO EXECUTIVE SESSION, UM, CLOSED EXECUTIVE SESSION.
SO I GUESS I'M GOING TO RECONVENE THIS MEETING ADJOURN.
I MEAN, I JOINED THIS MEETING.