CHAIR: Marie J. Carmichael MEMBERS: Reuben A. Shelton Larry D. Neff John E. Mehner Kelley M. Martin Patrick J. Lamping Bradley G. Gregory Matthew L. Dameron EXECUTIVE DIRECTOR: Robert V. Miserez

EX-OFFICIO MEMBERS: Peter D. Kinder Lieutenant Governor Mike Downing Director, Economic Development Richard Fordyce Director, Agriculture

Missouri Development Finance Board

Sara Pauley Director, Natural Resources

MEETING MINUTES MISSOURI DEVELOPMENT FINANCE BOARD Governor Office Building 200 Madison Street, Room 1010 Jefferson City, Missouri JULY 21, 2015 The Missouri Development Finance Board met in regular session on Tuesday, July 21, 2015, beginning at 10:30 a.m. Notice of the meeting was duly posted as required by RSMo Section 610.020 at the MDFB principal office. The following members and officers of the Board were present or absent at the meeting as follows: Marie J. Carmichael Reuben A. Shelton Larry D. Neff John E. Mehner Kelley M. Martin Patrick J. Lamping Bradley G. Gregory Matthew L. Dameron Peter D. Kinder Mike Downing Richard Fordyce Sara Pauley Robert V. Miserez

Chair Vice Chairman and Member Secretary and Member Treasurer and Member Member Member Member Member Lieutenant Governor and Member Director, Dept. of Economic Development and Member Director, Dept. of Agriculture and Member Director, Dept. of Natural Resources and Member Executive Director and Assistant Secretary

Present Present Absent Present Present Present Present* Present Present Present Present Present* Present

*Participated via telephone conference call. Chair Carmichael called the meeting to order and declared a quorum was present. In addition to the above, those in attendance included: Board Staff:

Kathleen Barney, Erica Griffin, Kimberly Martin, Ryan Vermette and Valerie Haller

Board Counsel:

David Queen

Others Present:

Bob Blitz and Kevin Fleming, Blitz, Bardgett & Deutsch LC; Dave Peacock, DAP & Associates; Debbie Rush and Barbara Geisman, Thompson Coburn LLC; Brian May, Office of the Governor; Myra Wolfe, Representative Jeanne Kirkton’s Office; Karin Hagaman, Cortex*; Lesley Hoffarth, Forest Park Forever*; Rob Orr, St. Louis Development Corporation*; Glenn Fitzgerald

200 Madison Street, Suite 1000 P.O. Box 567 Jefferson City, Missouri 65102 Telephone: (573) 751-8479 Fax: (573) 526-4418 Visit our Web site at www.mdfb.org

and Doug Anderson, Missouri House of Representatives; Sallie Hemenway, Missouri Department of Economic Development; Jeremy Cady, Missouri Alliance for Freedom; Alex Stuckey, St. Louis Post-Dispatch; and Marshall Griffin, St. Louis Public Radio

The meeting was rearranged as follows.

I.

Secretary’s Report

Secretary Neff

Assistant Secretary Miserez presented for approval the minutes from the June 16, 2015 meeting. The minutes were included in the Board materials distributed in advance of the meeting. There being no questions, corrections or additions, Vice Chairman Shelton made a motion to approve the minutes as presented. Treasurer Mehner seconded the motion. The following roll call vote was recorded: Aye:

Shelton, Mehner, Martin, Lamping, Gregory, Dameron, Downing, Fordyce, Pauley and Carmichael

Nay:

None

Absent:

Neff and Kinder

Chair Carmichael declared the motion passed.

II.

Treasurer’s Report

Treasurer Mehner

Treasurer Mehner presented for approval the Treasurer’s Report as of and for the eleven months ended May 31, 2015. The Treasurer’s Report was included in the Board materials distributed in advance of the meeting. There being no questions, corrections or additions, Treasurer Mehner made a motion to approve the Treasurer’s Report as submitted. Vice Chairman Shelton seconded the motion. The following roll call vote was recorded: Aye:

Shelton, Mehner, Martin, Lamping, Gregory, Dameron, Downing, Fordyce, Pauley and Carmichael

Nay:

None

Absent:

Neff and Kinder

Chair Carmichael declared the motion passed.

Lt. Governor Kinder arrived at the meeting.

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III.

Department of Economic Development Report

Director Downing

Director Downing distributed a handout that contained detailed information on economic indicators, best job markets for workers with a bachelor’s degree, and the Missouri Arts Council. Director Downing invited everyone to the Governor’s Conference on Economic Development which will be held September 2-4, 2015 at the St. Louis Union Station in St. Louis, Missouri. Events include a technology tour, a reception at Busch Stadium and the Governor’s Cup football game. Director Downing discussed the economic indicators and reported the unemployment rate had remained steady at 5.8% with employment increasing by 1,500 jobs. Director Downing noted that foreign exports had increased 3% since last year and taxable sales increased 1.6% for the first quarter of 2015. Director Downing reported on a recent news article by HeadlightData regarding the best job markets for workers with a bachelor’s degree. Kansas City, Missouri, was determined to be the third best metro for bachelors-educated working age adults. Director Downing noted that SB149, which is tax exemptions for data storage center facilities, will take effect August 28, 2015, and the Department has a tax incentive program for sales tax exemptions. Director Downing reported the Missouri Technology Corporation was appropriated $16 million for FY 2016 and commented that over the last three to four years they have had approximately $22 million in investments which leveraged approximately $180 million in private funds. Director Downing noted the Coordinating Board for Higher Education began deliberations on their Strategic Plan and commented that talent, attraction, development and retention is the key to economic development. Director Downing reported they continue to work with the developers of the National Geospatial-Intelligence Agency regarding the $1 billion expansion of their current facility with 3,100 jobs in St. Louis. Lt. Governor Kinder asked in regards to the three possible sites in Missouri if the State had a preferred site. Director Downing responded the Department will assist whichever site in Missouri the NGA selects and they anticipate the NGA will make their selection early next year. Director Downing discussed the Missouri Arts Council and noted one of their key services is providing approximately $4.5 million yearly in art-related grants. Director Downing reported that in FY 2015 the Missouri Arts Council made 337 grants totaling $4.3 million. Director Downing reported the Missouri Division of Tourism, along with the states of Kentucky and Tennessee, is participating in a Fam Tour of the Mississippi River country in October 2015. 3

Member Martin asked if there were any airline orders placed during the Paris Air Show. Director Downing responded Boeing is in pursuit of a contract for a new product called the long-range strike bomber and a decision is to be made reportedly sometime in August. The contract is reportedly between $50 and $70 billion in orders over 15 years.

IV.

Department of Agriculture Report

Director Fordyce

Director Fordyce commented the weather has been challenging across the State for agriculture. Director Fordyce noted that national agriculture statistics are reporting that corn plantings in Missouri were around 92% of intended, and soybeans that were not planted are estimated as low as 28%, but as high as 40% which could have a very negative impact on farm income. Director Fordyce reported that because of the weather, the Department participated in a call with the University of Missouri Extension, Farm Service Agency, NRCS, and federal partners to discuss important dates producers need to be aware of. Director Fordyce discussed the reporting date for producers to report to crop insurance and noted that it was determined that 15 northwest Missouri counties had to report to crop insurance by July 15th. The Governor, Missouri congressional delegation, Missouri Corn Growers Association and Missouri Soybean Association sent letters to ask for an extension for Missouri producers; however, the extension was denied and therefore the Governor asked the Missouri Attorney General to sue the USDA to grant the producers an extension. Director Fordyce commented the State cannot have producers not covered with crop insurance based on a reporting date that was impossible to meet. Director Fordyce invited everyone to the Missouri State Fair which will be held August 13-23, 2015, in Sedalia. Director Fordyce commented the main reason for the fair is to showcase Missouri agriculture each year and there were more than 8,000 exhibitor entries in 2014. Director Fordyce reported on the high path avian influenza and noted the Department has been engaged with the Missouri Department of Natural Resources and Missouri Department of Conservation to discuss a response should there be another outbreak. There also have been a number of regional and national meetings with the USDA and USDA Wildlife Services to mitigate some of the causes and what could be done better. Director Fordyce reported that Congress has been discussing the Trade Promotion Authority with the President which allows the President to negotiate and expedite trade agreements and is critical for agriculture trade. Member Martin asked for an update on the trade mission to Cuba. Director Fordyce commented he believes it is significant that the U.S. has embassies now, but there are issues from a financial perspective such that we cannot have a direct transaction between a U.S. financial institution and the government of Cuba. Director Fordyce commented if trade restrictions are lifted it will be a huge win for Missouri to be able to export agricultural commodities to Cuba.

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V.

Department of Natural Resources

Director Pauley

Director Pauley reported the annual drinking water intended use plan will go on public notice next week and approximately 20 communities will benefit from approximately $43 million in loans and $9.3 million in direct grants. The plan will be brought before the Safe Water Drinking Commission for approval at its August 19th meeting.

VI.

Lieutenant Governor’s Report

Lt. Governor Kinder

Lt. Governor Kinder reported on the Aerospace States Association, of which he is a member of, and discussed the possibility of Missouri becoming a state chapter as the Association is trying to raise its presence. Lt. Governor Kinder noted the Association will have its first annual foreign direct investment conference in Los Angeles in October to pursue the possibility of foreign direct investment in our country. Lt. Governor Kinder noted that a representative from the Missouri Partnership will be attending the October conference.

VIII. New Business A.

St. Louis Regional Convention and Sports Complex Authority — Tax Credit for Contribution Application

Robert V. Miserez

Mr. Miserez presented the St. Louis Regional Convention and Sports Complex Authority (RSA) Tax Credit for Contribution Application requesting approval of $15 million in calendar year 2015 tax credits to leverage $30 million in contributions to the Board to support the development of a professional football stadium complex in St. Louis. Mr. Miserez commented the project contemplates an additional two applications in each of the next two years for an additional $17.5 million in tax credits. Mr. Miserez noted that the requested 2015 tax credits are above the Board’s annual $10 million cap and would require written approval from the requisite three cabinet officers. Mr. Miserez introduced Bob Blitz, lawyer for the RSA. Mr. Blitz thanked the Board for considering the request and application and introduced Dave Peacock to give an update on the progress made on the project. Mr. Peacock began a PowerPoint presentation and noted the proposed project location is an exceptionally distressed and underutilized area in St. Louis. Mr. Peacock discussed the site photos and commented the area is basically 89% vacant, has abandoned property, unacceptable site conditions and deteriorated/ dangerous buildings. Mr. Peacock continued and discussed the new riverfront stadium complex which would keep NFL football in the St. Louis region, provide a state-of-the-art venue for new sports and entertainment events, and revitalize a distressed and deteriorated section of downtown St. Louis. Mr. Peacock commented there has been a coordinated effort in working with Great Rivers Greenway to look at the entire riverfront and noted the site will be a catalyst for future development. The 5

project is an 88-acre site with 38 acres of public open space, 1.5 miles of new Great Rivers Greenway trails, 17 acres of new event plazas, and more than 4,800 parking spaces. Mr. Peacock reported on the proposed signature top-tier NFL stadium that would consist of 62,625 seats and expandable to 72,000 if needed, 114 suites, 7,050 club seats, 25 loge boxes and is sized to the St. Louis market. Mr. Peacock commented the stadium would be modular in that it would be a multi-purpose venue adaptable for Major League Soccer with seating scalable to 34,000 for MLS events, but also scalable to 18,000 for smaller soccer/other events. Mr. Peacock reported the request is for $15 million in contribution tax credits approved in 2015 and consideration of an additional $35 million in tax credits in 2016 and 2017, for a three-year total of $50 million in tax credits for $100 million in contributions. Mr. Peacock noted the credits and contributions are contingent upon a substantial NFL team and league financial commitment of $450 million. Mr. Peacock discussed how Missouri would benefit from the project including preserving millions of dollars in State income and sales taxes, create opportunity for football-related revenues to grow, preserve local jobs, preserve the State’s and St. Louis region’s ‘big league’ image, revitalize and anchor a large section of the North Riverfront area, free up the Edward Jones Dome to attract more conventions, create new construction and permanent jobs, and create new jobs associated with new events to generate new revenue for the State. Mr. Peacock thanked the Board for their consideration of the application and was available for questions. Lt. Governor Kinder asked if anyone operates on an assumption that the St. Louis Rams are leaving. Mr. Peacock responded there is a process currently underway with the NFL and is not a foregone conclusion because there is another project in Los Angeles being considered. Mr. Peacock reiterated they will not build anything without a commitment from the NFL and a team, and noted the Rams owner would need to obtain 24 votes from the 30 team owners to move and has to prove that everything possible has been done by virtue of NFL bylaws in his home market in order to get the 24 votes. Member Martin questioned if the NFL G4 Program was a loan to a NFL team that passes through as a grant. Mr. Peacock responded the G4 Program is a program the NFL created as a loan with funds coming from the visitor gate receipts; when a visitor attends a NFL game, one-third goes into the visitor gates receipts pool and two-thirds goes to the Club. Mr. Peacock commented that as stadiums are built across the country, the visitor gate receipts pool increases and the loan is paid back through the visitor gate receipts from the collective stadiums built. Mr. Peacock noted that of the $200 million coming from the G4 Program, $150 million is a loan and $50 million is a grant. Member Martin asked if the impact of advertising was included in the economic impact study. Director Downing responded there is a lot of indirect economic impact that is difficult to measure and they have tried to come up with conservative measures of the team income which is the team owner, players and 6

coaches’ income tax, ticket sales tax, and concessions sales tax. Director Downing commented they feel confident that if the State didn’t have a team, it would lose more money than the State would be paying out in costs for the project and the project is a revenue generating enterprise. Vice Chairman Shelton asked how the decision was made to construct the stadium as an open air stadium versus a domed stadium. Mr. Peacock responded that frugality was a major factor in the decision. Treasurer Mehner asked about the status of the negotiations with the remaining 11% of property owners within the project site. Mr. Peacock responded that discussions have gone well and they are collaborating on a workable solution with the owners. Lt. Governor Kinder asked for clarification on the current bond debt payoff for the Edward Jones Dome. Mr. Blitz responded the current bonds would be paid off in 2021 and they extend into 2024 for maintenance payments. Lt. Governor Kinder questioned if legislative assent and buy-in is required to re-up the State to a new commitment that currently does not exist. Brian May responded that the RSA is the issuer of the revenue bonds and the RSA can make a determination as to whether it is going to issue the new bonds. Mr. Blitz commented they will not be extending the current bonds and that there would be new bonds issued for the project. Chair Carmichael commented the project is an opportunity for the Board to participate in something that has the capacity to have an economic impact for the State in that it is leveraging $450 million in private investment, a billion dollar construction project, and a catalyst for economic impact around the complex. Chair Carmichael thanked the project representatives for their presentation and information.

Director Pauley disconnected from the meeting.

VII.

Old Business A.

City of Independence — Crackerneck Creek Refunding Bonds — Final Authorizing Resolution

Kathleen Barney

Ms. Barney reported the City of Independence is requesting the Board issue refunding Series 2015C Bonds for five separate series of bonds previously issued for approximately $59.5 million, and of those bonds three issues were taxable for approximately $39 million. Ms. Barney noted the Crackerneck Creek project is anchored by a Bass Pro and includes Hobby Lobby and Mardel stores, Cheddars Casual Café and a hotel. Ms. Barney reported the site has not been developed at the rate originally expected and has caused the City to use approximately $13.4 million from its 7

General Fund and $2.5 million from other sources to support the payment of debt service on the Project Bonds. Ms. Barney noted the 2015C Bonds will be issued as tax-exempt bonds which will lower City subsidy. Ms. Barney reported the project is a conduit issue with the Board having no repayment obligation. Staff recommended adoption of the Final Authorizing Resolution for Refunding Tax-Exempt Series 2015C bonds not to exceed $75 million for the Crackerneck Creek Project. Vice Chairman Shelton made a motion to adopt the following Final Authorizing Resolution: RESOLUTION AUTHORIZING THE ISSUANCE OF A SERIES OF INFRASTRUCTURE FACILITIES REFUNDING REVENUE BONDS FOR THE BENEFIT OF THE CITY OF INDEPENDENCE, MISSOURI, IN AN AGGREGATE PRINCIPAL AMOUNT NOT EXCEEDING $75,000,000, TO PROVIDE FUNDS TO BE LOANED TO THE CITY RELATED TO REFUNDING CERTAIN BONDS PREVIOUSLY ISSUED BY THE BOARD ON BEHALF OF THE CITY; AND AUTHORIZING AND APPROVING CERTAIN DOCUMENTS AND ACTIONS IN CONNECTION WITH THE ISSUANCE OF SAID BONDS. Member Martin seconded the motion. The following roll call vote was recorded: Aye:

Shelton, Mehner, Martin, Lamping, Gregory, Dameron, Kinder, Downing, Fordyce and Carmichael

Nay:

None

Absent:

Neff and Pauley

Chair Carmichael declared the motion passed. B.

St. Louis Convention Center Hotel Garage Parking Garage Expenditure Approval

Kathleen Barney

Ms. Barney reported the St. Louis Convention Center Hotel Garage (Garage) opened in August 2002 and was not equipped with energy efficient lighting. The parking garage operator considers the current lighting output to be poor. Ms. Barney commented that in the interest of public safety and cost savings, staff requested that the Board approve up to $160,000 to install energy efficient lighting in the Garage. Ms. Barney noted a rebate from Ameren is available and will lower the cost of the new lighting system. Staff recommended approval of up to $160,000 to install energy efficient lighting with improved light output in the Garage and for the garage operator to drill down on two of the three received proposals to ascertain the best price and best type of fixtures and lights for the Garage. 8

Member Lamping made a motion to approve up to $160,000 to install the best price and best type energy efficient lighting in the St. Louis Convention Center Hotel Garage. Vice Chairman Shelton seconded the motion. The following roll call vote was recorded: Aye:

Shelton, Mehner, Martin, Lamping, Gregory, Dameron, Kinder, Downing, Fordyce and Carmichael

Nay:

None

Absent:

Neff and Pauley

Chair Carmichael declared the motion passed. Director Fordyce left the meeting for another commitment. C.

MDFB Purchasing/Spending Policy

Robert V. Miserez

Mr. Miserez presented the request to increase the limits for the Board’s Purchasing/Spending Policy. Mr. Miserez reported the Board adopted a purchasing/spending policy for non-program and non-project specific expenditures in January 2006 following the 2005 Board Retreat. Mr. Miserez discussed the current policy and limits and staff recommended approval to rescind the current Purchasing/Spending Policy and adopt the proposed increased limits to the spending policy. Vice Chairman Shelton made a motion to rescind the current Purchasing/Spending Policy and adopt the proposed increased limits to the spending policy. Member Martin seconded the motion. The following roll call vote was recorded: Aye:

Shelton, Mehner, Martin, Lamping, Gregory, Dameron, Kinder, Downing and Carmichael

Nay:

None

Absent:

Neff, Fordyce and Pauley

Chair Carmichael declared the motion passed. D.

Tax Credit for Contribution Program — April 30, 2015 Funding Cycle Application Recommendations

Robert V. Miserez

Mr. Miserez presented the recommendations for the four Metro Region applications received for the Tax Credit for Contribution Program April 30, 2015 funding cycle. Mr. Miserez discussed the matrix, evaluations and staff recommendations and commented that all four of the projects have very positive impacts and are very good projects. 9

Mr. Miserez reported the April 30th funding cycle had $4,541,007 available in credits and the cumulative total of the requested tax credits from the Metro Region was $10,800,000, which exceeds the Board’s annual capacity. Staff recommended approval of $2 million for the T-REX Project, $650,000 for the Grand Center Project, and $1.8 million for the Forest Park Forever Project. Director Downing made a motion to approve $2 million in tax credits for the T-REX Project, $650,000 in tax credits for the Grand Center, and to defer the funding for the Forest Park Forever Project and reserve that remaining capacity for the September 30th funding cycle. Director Downing noted that Forest Park Forever has received a fair amount of funding from the Board already, and commented that after speaking with the Missouri Economic Development Council Board, many of their members were not aware of the Program. Director Downing commented that with better promotion of the Program there would be more diverse applications from throughout the State. Member Martin seconded the motion. Discussion ensued regarding the methodology of scoring and the economic impact of benefit to cost ratio. Mr. Miserez commented the economic impact ratio is half of one of the five categories that are reviewed and that projects are being weighed in a comprehensive, yet consistent manner. Vice Chairman Shelton commented he was uncomfortable with the fact that after staff had made their analysis and recommendation to not fund one of the projects and reduce it to zero. Director Downing commented that of the three projects that were recommended, he felt the Forest Park Forever Project was not as strong and they have received a fair amount of funding from the Board, but just as important is that with better promotion of the Program to our partners throughout the State, a sizeable amount of applications could be received from more diverse areas of the State. With a motion and second on the floor, the following roll call vote was recorded: Aye:

Martin, Lamping, Dameron, Kinder, Downing and Carmichael

Nay:

Shelton, Mehner and Gregory

Absent:

Neff, Fordyce and Pauley

Chair Carmichael declared the motion passed.

VIII. New Business (cont’d) B.

MDFB FY 2016 Budget

Erica Griffin

Ms. Griffin presented the MDFB FY 2016 budget, along with projections for fiscal years 2017 and 2018. Ms. Griffin noted the proposed budget is based upon historical trends and future assumptions, and the budget should be viewed as a 10

working document that should serve as a baseline for the Board’s expenditures throughout the year. Ms. Griffin discussed the major assumptions and methodology of the proposed budget that was included in Board materials distributed in advance of the meeting. Ms. Griffin was available for questions and staff recommended adoption of the FY 2016 Operating Budget as presented. Treasurer Mehner made a motion to adopt the MDFB FY 2016 Operating Budget as presented. Vice Chairman Shelton seconded the motion. The following roll call vote was recorded: Aye:

Shelton, Mehner, Martin, Lamping, Gregory, Dameron, Kinder, Downing and Carmichael

Nay:

None

Absent:

Neff, Fordyce and Pauley

Chair Carmichael declared the motion passed.

IX.

Executive Director’s Report

Robert V. Miserez

Mr. Miserez reported the Board will be executing documents for the Defeasance of 2007 Bonds for the City of Arnold and their sewer project. Mr. Miserez also reported that the St. Joseph Ag Expo requested that their application for $4.8 million in tax credits be reactivated. Mr. Miserez reported that the City of Kansas City had formally withdrawn their application for the TMC Grocery Store, and noted that an application from the City of Kansas City is expected which will be requesting $2 million in tax credits for a Major League Baseball youth academy project. Mr. Miserez commented the youth academy project was appropriated $2 million in State funds and that the project would most likely receive up to the maximum amount in NAP and YOP funding. Sallie Hemenway reported the Department of Economic Development supported a Men’s Academy in which 15 young men were selected from North County St. Louis to participate in internship programs for seven weeks. Ms. Hemenway discussed the academy and noted they were rotated between three private businesses and were housed at Harris-Stowe University in St. Louis for three weeks, and then rotated between three State agencies and housed at Lincoln University in Jefferson City for four weeks. Ms. Hemenway noted the intent of the initiative was to expose them to opportunities in the business community and public service that they otherwise would not have had the opportunity to. Ms. Hemenway reported the Department is very interested in continuing the initiative and any support the Board may offer would greatly be appreciated.

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X.

Adjournment There being no further business before the Board, Treasurer Mehner made a motion to adjourn the meeting. Member Martin seconded the motion. By unanimous consent, Chair Carmichael declared the motion passed and the meeting adjourned.

[Assistant Secretary Miserez’s Signature]

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