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HomeMy WebLinkAbout2011-250 ED - AKG North America, Incorporated - Performance Agreement for Incentive for AKG Expansion~'' 7 -~ ~ ~ 1 ~~tsU STATE OF NORTH CAROLINA ORANGE COUNTY PERFORMANCE AGREEMENT BETWEEN ORANGE COUNTY, NC AND AKG NORTH AMERICA, INCORPORATED This Agreement made and entered into this the 7`" day of June, 201 ] by and between Orange County, a body politic existing under the laws of the State of North Carolina (appearing hereinafter as "County") and AKG North America, Incorporated, located in Mebane, North Carolina, a producer of heat transfer products (appearing hereinafter as "Company'). AKG North America, Inc. operates its business in part directly (central management functions) and in part through three subsidiaries, i.e. AKG North American Operations, Inc. (manufacturing), AKG of America, Inc. (OEM sales), and AKG Thermal Systems, Inc. (off-the-shelf sales). All are duly authorized to conduct business in North Carolina. It is understood that the levels of performance required by this Agreement are to be met by this group as a whole at its facility in Orange County (Mebane). Accordingly, the term "Company' as used in this Agreement refers to the entire group at such facility. WITNESSETH THAT WHEREAS, the County has offered to the Company an inducement package as hereinafter set forth; and WHEREAS, the State of North Carolina and the Town of Mebane, North Carolina have offered separate inducement packages to the Company; and WHEREAS, but for the offer of an inducement package the Company would not be expanding its facility within Orange County; and WHEREAS, the Company has agreed to meet and continue meeting the minimum investment and employment requirements as hereinafter set forth; NOW, THEREFORE, the parties hereto in consideration of these mutual covenants and agreements passing from each to the other do hereby agree as follows: 1. INDUSTRIAL INVESTMENT AND EMPLOYMENT AGREEMENT A. INVESTMENT: The Company shall directly invest a minimum three million dollars ($3,000,000.00), in accordance with the investment plan attached as Exhibit B, in addition to 2011 assessments in real and taxable business personal property as described in Exhibit C. The Company shall maintain the minimum taxable investment for a period of at least five years through and including 2016. If total increase of taxable investment shall fall below the minimum investment levels, due to failure to meet the investment goals set forth in Exhibit B or removal of equipment, as assessed by the Orange County Tax Assessor, the amount of the following annual installment will be reduced by a pro- rata percentage of the shortfall. The baseline for measuring whether the investment goals have been met (i.e. the 2011 tax assessments) shall be adjusted (1) upward, if there is an increase in the assessment of the Company's real property and (2) downward, to reflect the natural decline in the value of the Page 1 of 8 . ~~ Company's personal property (existing in 2011 and acquired thereafter in the course of the new investment) as measured by the depreciation of such property in accordance with generally accepted accounting principles. B. EMPLOYMENT: At the time of the commencement of this Agreement Company and County agree Company has 311 full time employees at its Mebane facility. At the expiration of this Agreement, the Company, and its subsidiaries, shall employ, at its Mebane facility in Orange County, at least the equivalent of 40l full time employees in accordance with "Exhibit A". Ninety (90) new full time equivalent employees shall be hired at the Mebane facility pursuant to the terms of this Agreement Employees counted toward this total shall include both new and existing employees of the Company, provided such employees are employed in Orange County on a full time basis. Employees of the Company will be eligible to participate in Company sponsored health insurance and retirement programs. For purposes of this section "401 full time equivalent employees" shall be defined as 401 actively employed individuals and shall not include vacant positions for which the Company is actively or otherwise recruiting. It is understood that vacancies occur and that when such occur the Company will immediately, or as soon as is reasonably possible thereafter, fill said vacancies. The mean wage of the 90 new full time equivalent employees shall be, as of the last day of this Agreement, at the annual rate of forty-four thousand one hundred seventy-five dollars ($44,175.00). C. GRANT PARTICIPATION: Where applicable, the Company agrees to partner, through the commitment to create new jobs, with Orange County and other applicable agencies to apply for grants that will improve and/or add water, sewer, road or other necessary infrastructure in order to facilitate the successful completion of this project. The Company agrees to meet with program representatives, and to participate in the grant request process as necessary to secure the required funding. D. GUARANTEED MINIMUM LEVEL OF PERFORMANCE: The Company guarantees that its minimum level of performance pursuant to this Agreement shall be as set out in this Section 1. Company agrees that failure to meet the minimum level of new employment as reflected in Section 1 B shall entitle the County to reductions in inducement installments paid to the Company in an amount of two hundred fifty dollars ($250.00) per employee not hired as reflected in Exhibit A. Company further agrees that failure to meet the minimum level of direct investment as reflected in Section 1 A shall entitle County to pro rata reductions in inducement installments paid to the Company. E. STATUTORY COMPLIANCE: The Company understands that the County's participation is contingent upon compliance with North Carolina General Statute 158-7.1 and other relevant North Carolina General Statutes. 2. INDUCEMENT PACKAGE A. COUNTY INDUCEMENT GRANT: The County, upon execution of this Agreement, shall provide to the Company an inducement to offset facility development, expansion, and acquisition costs in an amount not to exceed One Hundred Thousand dollars ($100,000.00)This inducement shall be payable in equal installments over a five year period. The first installment shall occur during January of the 2012 calendar year upon receipt of proof, as described in Section 4 of this Agreement, that the minimum employment and investment numbers referenced in Section 1 of this Agreement have been met and that all local property taxes on the real and business personal property owned by the Company and located Page 2 of 8 l~° within Orange County have been paid. Subsequent annual installments will occur during the month of January for the term of this Agreement with the final installment occurring in January 2016, provided proof of payment of all property taxes and verification of employment and investment levels has been submitted to the County. B. TOTAL COUNTY COMMITMENT The total County commitment for the Inducement Grant outlined in the paragraph above shall not exceed One Hundred Thousand Dollars ($100,000.00). 3. EXPANSION OPPORTUNITY Participation in this Agreement shall not exclude the Company from consideration for additional inducements from the County either during or upon completion of this Agreement. Future projects shall be considered on a case-by-case basis and induced at the discretion of the County based on new taxable investment and job creation in excess of the minimum levels outlined in "Section 1" above. Any such agreement shall require a separate "Performance Agreement" which shall conform to all relevant North Carolina Statutes and/or Orange County Ordinances, Policies or Resolutions, shall be in writing, and shall be mutually agreed upon by the Parties. 4. PROOF AND CERTIFICATION The officials of Parties to this Agreement shall furnish the necessary reports and certificates to verify that each Party's respective goals are met. Once the Company maintains its investment and employment goals for the term of this Agreement it will no longer need to furnish these reports. Acceptable forms of proof for taxable investment shall be the records of the County Tax Administrator. Acceptable forms of proof of payment of taxes shall be in the form of cancelled checks, and receipts of payment from the County Tax Administrator. Acceptable forms of proof for employment numbers shall be in the form of a notarized statement from a North Carolina licensed Certified Public Accountant and shall be verified by the North Carolina Employment Security Commission. 5. REMEDY A. INDUCEMENT PACKAGE: If the County does not meet and maintain the terms set forth in the inducement package, the Company has the option to the rights set forth in paragraph l0A of this Agreement upon thirty (30) days written notice to the County. B. DELAY OF INDUCEMENT PACKAGE INITIATION If the Company does not meet employment and investment goals that are to be met pursuant to this Agreement by December 31, 2011, the onset of this Agreement may be delayed one (1) year, at the option of the Company. Written notification of a request to delay onset must be received by the County no later than December 31, 2011. In that event this Agreement shall initiate no later than December 31, 2012 and shall expire no later than January 31, 2017. C. INVESTMENT AND EMPLOYMENT PACKAGE If the Company does not meet and maintain either the investment or employment goals within the annual timetable set forth in this Agreement, and does not opt to delay the onset of this Agreement as described above, then the county will reduce the annual installment payment as set forth in paragraph 1 D of this Agreement until such time as the Company once again meets both the investment and employment goals. Reduction shall be computed based on the percentage of the goal not met. In order to qualify for the full reimbursement, including Page 3 of 8 recovery of any prior reductions, both investment and employment must meet or exceed the minimum standards outlined above. 6. SEVERABILITY If any term or provision of this Agreement is held to be illegal, invalid, or unenforceable, the legality, validity, or enforceability of the remaining terms, or provisions of this Agreement shall not be affected thereby; and in lieu of such illegal, invalid or unenforceable term or provision, there shall be added by mutually agreed upon written amendment to this Agreement, a legal, valid, or enforceable term or provision, as similar as possible to the term or provision declared illegal, invalid, or unenforceable. 7. COMPLIANCE WITH THE LOCAL GOVERNMENT BUDGET AND FISCAL CONTROL ACTS OF NORTH CAROLINA GENERAL STATUTES All appropriations and expenditures pursuant to this Agreement shall be subject to the provisions of the Local Government Budget and Fiscal Control Act of the North Carolina General Statutes for cities and counties and shall be listed in the annual report submitted to the Local Government Commission by the County. 8. GOVERNING LAWS & FORUM This Agreement shall be governed and construed by the Laws of the State of North Carolina. Any action brought to enforce or contest any section of this Agreement shall be brought in the North Carolina General Court of Justice sitting in Orange County, North Carolina. The Parties hereto stipulate to the jurisdiction of said court. 9. INDEMNIFICATION The Company hereby agrees to indemnify, protect and save the County and its officers, directors, and employees harmless from all liability, obligations, losses, claims, damages, actions, suits, proceedings, costs and expenses, including reasonable attorneys' fees, arising out of, connected with, or resulting directly or indirectly from the Company's Facility in Mebane or the transactions contemplated by or relating to this Agreement, including without limitation, the possession, condition, construction or use thereof, insofar as such matters relate to events subject to the control of the Company and not the County. The County hereby agrees to indemnify, protect and save the Company and its officers, directors, and employees harmless from all liability, obligations, losses, claims, damages, actions, suits, proceedings, costs and expenses, including reasonable attorneys' fees, arising out of, connected with, or resulting directly or indirectly from the performance of this Agreement attributable to the negligence or misconduct of the County, its officers or employees. The indemnification arising under this Article shall survive the Agreement's termination. 10. TERMINATION A. COMPANY: Upon Company's meeting its Employment and Investment obligations as set out in Section l above and upon Company's certification to such and certification of the payment of al] real and personal property taxes, as set out in Section 4 above, then upon the occurrence of any of the following events, the Company shall have the option of terminating this Agreement: Failure of the County, to provide the initial inducement installment as provided in Section 2 to this Agreement; Page 4 of 8 ,~ or, under the same circumstances, failure of the County to make future inducement installments, as provided for in Section 2 to this Agreement. Should the Company exercise its option to terminate this Agreement, pursuant to this Section for failure by the County, the Company shall be entitled to retain all funds paid to or for the benefit of the Company pursuant to this Agreement. Should the Company terminate this Agreement of its unilateral choice, regardless of any of the above incidences of default, the Company shall repay to the County all funds paid to or for the benefit of the Company pursuant to this Agreement. Thereafter, the County shall have no further obligation to make annual inducement installments. Any such termination of this Agreement by the Company shall be in writing and shall meet notice requirements as set out herein. B. COUNTY: The County shall have the option of terminating this Agreement upon any Abandonment of Operations by the Company, without penalty to the County, which option shall be executed by giving written notice to the Company. Abandonment of Operations shall be defined as a period in excess of four (4) weeks during which the Company's level of Full Time Equivalent Employees or Direct Investment goes below twenty percent (20%) of the guaranteed minimum levels of performance commitments for either Full Time Equivalent Employees or Direct Investment as reflected in Section 1 above. Notwithstanding the foregoing, if the aforesaid decline in the number of full time equivalent employees or the Company's failure to make the required direct investments is attributable to an overall national economic decline (as such may be recognized by the United States Bureau of Labor Statistics), this shall not be deemed an abandonment of operations entitling the County to terminate this Agreement, and the Company shall not be deemed in default. In such event, the Company's and the County's obligations shall be suspended for one year and resume thereafter. If after one year the aforesaid decline continues the County may declare an Abandonment of Operations and proceed as set forth herein. C. NATURAL: In any event, the above terms notwithstanding, this Agreement shall terminate upon the 31 S` day of January of the year in which the final financial inducement installment is made. 11. LIMITATION OF COUNTY'S OBLIGATION NO PROVISION OF THIS AGREEMENT SHALL BE CONSTRUED OR INTERPRETED AS CREATING A PLEDGE OF THE FAITH AND CREDIT OF THE COUNTY WITHIN THE MEANING OF ANY CONSTITUTIONAL DEBT LIMITATION. NO PROVISION OF THIS AGREEMENT SHALL BE CONSTRUED OR INTERPRETED AS DELEGATING GOVERNMENTAL POWERS NOR AS A DONATION OR A LENDING OF THE CREDIT OF THE COUNTY WITHIN THE MEANING OF THE STATE CONSTITUTION. THIS AGREEMENT SHALL NOT DIRECTLY OR INDIRECTLY OR CONTINGENTLY OBLIGATE THE COUNTY TO MAKE ANY PAYMENTS BEYOND THOSE APPROPRIATED IN THE COUNTY'S SOLE DISCRETION FOR ANY FISCAL YEAR IN WHICH THIS AGREEMENT SHALL BE IN EFFECT. NO PROVISION OF THIS AGREEMENT SHALL BE CONSTRUED TO PLEDGE OR TO CREATE A LIEN ON ANY CLASS OR SOURCE OF THE COUNTY'S MONEYS, NOR SHALL ANY PROVISION OF THE AGREEMENT RESTRICT TO ANY EXTENT PROHIBITED BY LAW, ANY ACTION OR RIGHT OF ACTION ON THE PART OF ANY FUTURE COUNTY GOVERNING BODY. TO THE EXTENT OF ANY CONFLICT BETWEEN THIS ARTICLE AND ANY OTHER PROVISION OF THIS AGREEMENT, THIS ARTICLE SHALL TAKE PRIORITY. 12. LIABILITY OF PUBLIC OFFICERS Page 5 of 8 No officer, agent or employee of the County or the Company shall be subject to any personal liability or accountability by reason of the execution of this Agreement or any other documents related to the transactions contemplated hereby. Such officers, agents, or employees shall be deemed to execute such documents in their official capacities only, and not in their individual capacities. This Section shall not relieve any such officer, agent or employee from the performance of any official duty provided by law. 13. MISCELLANEOUS A. ENTIRE AGREEMENT: Amendments. This Agreement, including Exhibit A attached, which is incorporated herein and made a part hereof, constitutes the entire contract between the parties, and this Agreement shall not be changed except in writing signed by the Parties. B. BINDING EFFECT: Subject to the specific provisions of this Agreement, this Agreement shall be binding upon and inure to the benefit of and be enforceable by the Parties and their respective successors and assigns. C. TIME: Time is of the essence in this Agreement and each and all of its provisions. D. CONSTRUCTION: Nothing in this Agreement shall be construed to the effect that the County has any right to influence the Company's business decisions or to receive business information from the Company (except as expressly provided in section 4 hereof). 14. NOTICES Any notices pursuant to and/or required by this Agreement shall be in writing and shall be delivered via United States Mail, certified, return receipt requested: if to Orange County; County Manager 200 S. Cameron Street Hillsborough, NC 27278 If to AKG North America, Inc.; Ralf Hutter, Vice President 7315 Oakwood St. Extension Mebane, NC 27302 Any addressee may designate additional or different addresses for communications by notice given under this Section to the other Party. Page 6 of S AGREEMENT REVIEWED AND ACCEPTED BY: /~%i J ~;, JICI/Zc~i ' Date Vice President AKG North America ~~~~~ Bernadette Pelissier Date Chair Orange County Commissioners ~%~/2d~ ~ Attest: Date Title: vYC~~,-f,,.:,7/ ~~ ~~ ~C~7h ~~~.nL G. 7/20~lt Attest: Donna Baker Date Clerk to the Board Orange County Commissioners This instrument has been pre-audited in the manner required by the Local Government Budget and Fiscal Control Act. ~~ ~1, I~- Finance Director Approved as to form and legal sufficiency. Offi oft e County Attorney Page 7 of 8 "Exhibit A" December 31 Baseline Em to ees New Em to ees Total Em to ees 2011 311 33 344 2012 21 365 2013 13 378 2014 13 391 2015 10 401 Total at Natural Termination of A reement 90 401 Page 8 of 8 PRIVATE INVESTMENT 29 Direct Investment To Be Made By AKG NA Calendar Year 2011 2012 2013 30 Direct Investment To Be Calendar Year 2611 2o1z 2013 31 Total Direct Investment Calendar Ysar 2011 2012 2013 A. B. C. ea roperiy Real Property Construction andlor Tangible Personal Acquisition Improvernenis Property so $zaoD,ooo $o 50 $300.600 50 $0 $0 $0 53,000,000 t B the Related tNembers A. B. C. ea roperty Real Property CopsWction and/or Tangible Personal Acquisilion improvements Property $0 $0 $200,000 $6 so $16o,oD6 $0 $0 $0 $300,000 tAKG NA Anr1 the Rwlatnri lutamhn.c nnrnF,tnoel\ A. B. C, ea rope y ReatProperty Construction arxtlor Tangible Personal Acquisition Improvements Propen Sa,~oo,DDO $a6o,oo6 $300,000 $100,000 TOTAL Saaoo,ooo $300,000 53,OOQ000 TOTAL Szoo,ooo $100,D00 $300,000 TOTAL $2,800,000 ;400,000 $3,000,000 $300,000 53,300,000 32 Provide a brief description of the real estate options being considered for the N.C. location being considered forthe Project (acquire an existing facility, build, lease, build-to-suit....). Building expansion and civic improvements on the current AKG campus in Mebane, NG. This will be a design and build project: 33 Does the Project involve additional private investment not to be made by AKG NA or the Related Metnbers (e.g. costs related to the construction of a buflding that wiU be leased by AKG NA or the Retated Members)? O Yes O No Please provide a brief explanation (including costs, timing, and who will make the investment) N(A v2 (D7 21. D8) Project Details Page 3 of 3 COUNTY OF ORANGE .~+ ` ~ `°` , ~ o Roberson s Sx Admirlsstrator ~~ a ~ P.O. Box 8181 Hillsborough, NC 2727(3 ' ~ Phone: (919) 245-2725 Fax: (919) 644-3332 -ry ~..." J~ E-mail: jrober~co.orange.nc.us ADDRESS SERVICE REQUESTED PRQPERTY TAX BILL #BWNJSCP *****AUTO**5-DIGIT 27302.. 13394 1 AV 0.335 In~r~lnr~u~~r~~uurl~~~~rnu~lr~ur~~lur~n+~~lur~t~rrl 013394 AKG OF AMERICA INC PO BOX 370 13394 MEBANf NC 27302 - 0370 ~"°~ 51 ~./~~'f ~art~,,. PROPERTY IDENTIFICATION AND VALUE INFORMATION .... ,~ 250142 364796 I 9824-69-7443 #i REC AKG OF AMERICA P88/6~ A40.31 couNTY I GO 3R 9ASIC FEE B SEE BACK OF BILL FOR EXPLANATION OF 3R FEE FICATION 66229 COUNTY SEE BACK OF BILL eAto CvDI AAIATt~1R1 r 1$37 IMPORTANT -PLEASE READ FRONT AND BACK OF NOTICE CAREFULLY Chapel Hill Stormwater Management Fee email: stormwater~townofchapelhill.org website: www.townofchapelhill.org/stormwater $ TELEPHONE 919-969-RAIN (7246) Orange County Waste Reduction Recycle & Reuse Fee {3R Feel email: revenue~co.orange.nc.us website: www.co.orange.nc.us/recycling ~ TELEPHONE 919.245-2725 CREDIT CARD PAYMENTS: Call 1.888.272 9829. The jurisdiction code # 4311 will be required or you may access the Internet at: www co orange n~ustreyenue and click on the "Pay Taxes" icon. There is a convenience fee charged in addition to the amount of tax you pay. The fee is charged by the vendor providing this service. You must use the BILL NUMBER to ensure proper credit. Please locate the BILL NUMBER printed below in blue. PAYMENTS THRU ONLINE BANKING: When making payments thru your personal online banking, you must use the BILL NUMBER to ensure proper credit. Please locate the BILL NUMBER printed below in blue. 3.22..15 ~ 201063281 7899458 ( ~ 7899458 67777.35 37.00 M %~i ~, DETACH AND RETAIN THIS PORTION FOR INCOME TAX PURPpSES your personas onnne oanxmg, you must use the oiu. rv~moer+ to ensure proper credit. Please locate the BILL NUMBER printed below in blue. UE INFORMATION ___~____ 201063282 4860931 I I 4860931' GQ , 858 41706.79 ~~ /~~J `~ ~ k i~ X - V ~r~ l ; t+' ~~.. . .._ _ . LATE LIST PENALTY ~~~ ~ ~ ~ `