HomeMy WebLinkAboutAgenda - 04-01-1996 - VII-A 1
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
MEETING DATE: April 1, 1996
Action Agenda
Item # \&r-fir
SUBJECT: Lease of Georgia-Pacific facility, Hillsborough
DEPARTMENT: PUBLIC HEARING: Yes X No
Economic Development Comm. BUDGET AMENDMENT NEEDED: Yes_ No X
Purchasing Department
ATTACHMENT(S): INFORMATION CONTACT:
Ted Abernathy(ext. 2325)
Pam Jones (ext. 2652)
TELEPHONE NUMBERS:
Hillsborough - 732-8181
Durham - 699-7331
Mebane - (910) 227-2031
Chapel Hill - 967-9251/968-4501
Purpose: For the Board of Commissioners to receive public comment concerning a proposed
lease of the Georgia-Pacific facility on Valley Forge Road in Hillsborough.
Background: This facility is a 100,000 square foot, concrete industrial building, sitting on 12.9
acres of land at 401 Valley Forge Rd. in Hillsborough(near the intersection of I-85 and new NC
86). It was constructed in 1972 using bonds issued by an Industrial Development Corporation.
Once these bonds are retired next year, ownership of the building will revert to Orange County.
This should occur on Oct. 1, 1997.
A firm has already contacted Orange County about leasing this facility once it is controlled by the
County. The prospective tenant is Builders Supply&Lumber Co. of Elkwood, VA. This firm is
a subsidiary of Pulte Homes, one of the nation's largest residential builders, and would primarily
make windows, doors, and mouldings at this facility. The lease terms described below have been
proposed; a description of the firm's planned impact on the local economy is also included:
Lease Terms:
* Lease would begin on approx. Oct. 1, 1997, subject to Georgia-Pacific Corp. providing formal
notice of their intent not to renew their current lease agreement. Georgia-Pacific has the right to
renew their existing lease for additional 5-year periods. (They do not have an option to
purchase). However, they intend to vacate the building by January 1997, and it is unlikely
that they will choose to renew the lease.
* 10-year initial lease term, with 2 subsequent 5-year renewal options.
2
* Annual lease payments of approximately $115,000. This could be structured to provide for a
separate payment equal to the amount of property taxes due to Orange County annually. These
payments will be subject to an annual escalation rate.
* Lease rate increase to be negotiated for any subsequent terms.
* Lease rate is net of all insurance, maintenance, utilities,janitorial, etc.. (These will all be
the responsibility of the tenant).
* Lease payment offsets are allowed for documented, permanent improvements to the facility&
grounds; up to $150,000 total over the first 5 years, with not more than $50,000 offset in any one
year. (examples: new roof, paving of gravel parking areas)
* Lessee gains first right of refusal regarding the sale of the facility& property.
Economic/Community Impact:
> Approximately 60-70 employees will be hired by the tenant during the first year of occupancy.
Approximately 90-100 employees at the facility within 2-3 years of occupancy.
> Wages ranging from roughly $7.50/hour to $12.00/hour. This firm currently has locations in
Raleigh and Charlotte, with wages in this range.
> Total corporate investment of$7-10 million within the first 4 years.
Recommendation: Receive comments from the public; take action on the proposed lease as the
Board of Commissioners so desires.