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Home My WebLink AboutAgenda - 11-21-2013 - Information Item 6-GINFORMATION ITEM - Attachment 6 - G MEMORANDUM To: Michael Talbert Interim Orange County Manager From: Steve Brantley Director, Orange County Economic Development Date: November 8, 2013 Subj: Assembly of Governments Meeting on Nov. 21, 2013 Draft Agenda's #6 Information Item (Morinaga America Foods, Inc.) MORINAGA AMERICA FOODS, INC. Our community celebrated significant economic development success on Sept. 3rd, 2013 when Orange County, the City of Mebane and the State of North Carolina jointly announced that Morinaga America Foods, Inc. has selected a 21 -acre light industrial site in our Buckhorn Economic Development District. The Company will initially build a 98,000 sq. ft. candy production facility to make the fruit chewable candy called "Hi- Chew ", employ 90 — 120 workers, and invest up to $48 million. The project will pay its employees an average annual salary of $38,000 and contribute an annual payroll of $3.4 million to the community. Recruitment of this 114 -year old major Japanese confectionary company over the recent 18 months involved more than 12 company visits, and a joint recruitment effort by Orange County, the City of Mebane and the State during a very competitive statewide and national site search by Morinaga. Investment: $34 - $48 million Employment: 90 - 120 jobs Avg. Annual Salary: $37,969 Annual Payroll: $3.4 million (includes Health Insurance & Benefits) Facility Size: 98,000 sq. ft. Type of Operation: Production of "Hi- Chew" candy Site Size: 21 Acres (Buckhorn Economic Development District) Morinaga America Foods, Inc. will begin site work in March, 2014 and construct the initial 98,000 sq. ft. facility by year -end. Machinery installation will occupy the first half of 2015, leading up to a completed operation by June or July, 2015. The 21 -acre site is located in the Buckhorn Economic Development District and is large enough to accommodate one or more additional plant expansions in the future. There are signs the Company could eventually grow with additional phases of similar size. With this planned capital investment, Morinaga will become Orange County's 3rd largest corporate tax payer (behind the two utilities Duke Energy and Piedmont EMC), and is our largest manufacturing related taxpayer. 2 Senior leadership from Morinaga have made recent visits to the area, to include Masao Hoshino (President of Morinaga America, Inc.) on October 8th and 15th, and most recently, President Toru Arai (President of parent firm Morinaga & Co., Ltd., from Tokyo) who returned on Nov. 8th. Infrastructure and related development issues are now ongoing to support the project, to include: • Public Hearings have now been completed to approve local financial incentives by the City of Mebane (Oct. 7th) and Orange County (Oct. 15th). These inducement agreements are "performance- based" and require the Company to show proof of creating jobs and investment, before any local incentive payments will be made. • City of Mebane voted following a Nov. 4th Public Hearing to annex and rezone the property. • Orange County's application process with the North Carolina Department of Commerce for a Community Development Block Grant (CDBG) is now underway to receive reimbursement for 75% of infrastructure development costs associated with extending water and sewer lines to the Morinaga site, and designing and engineering the 3,500' access road to be built by NCDOT. • Sewer to the site will connect to the new backbone main sewer line that is currently under construction between Mattress Factory Road and Ben Wilson Road. This utility work will connect the Morinaga project to Orange County's $4 million expenditure from the quarter cent sales tax to fund infrastructure throughout the economic development districts. The successful recruitment of this new business is a result of the Orange County Board of Commissioners' and our residents' efforts over the past 2 — 3 years to help diversify the local economy by: • Passage of the % cent sales tax referendum in Nov. 2011, which now provides funding to pursue economic development, to include developing the necessary utility infrastructure throughout the County's 3 economic development districts. • The BOCC's rezoning of over 700 acres of land in the 3 economic development districts to create compatible zoning and land use applications that appeal to business prospects. • The BOCC support of an inducement agreement policy, and interest to meet with potential investment prospects. • Increased efforts by the local municipalities and their elected officials and staff to pursue economic development by becoming more competitive in their approach to a more efficient permitting and review process, marketing efforts and product development. Sew 9 i r Aerial View of Morinaga America Foods, Inc. Site: C Site and Proposed Infrastructure for Morinaga Facility (Conceptual Layout)