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HomeMy WebLinkAboutAgenda - 10-18-2016 - 5-b - Public Hearing Regarding an Economic Development Incentive for Wegmans Food Markets, Inc., and Interlocal Agreement Between Orange County & Chapel Hill 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: October 18, 2016 Action Agenda Item No. 5-b SUBJECT: Public Hearing Regarding an Economic Development Recruitment Incentive for Wegmans Food Markets, Inc., and a Supplemental Interlocal Agreement Between Orange County & the Town of Chapel Hill DEPARTMENT: Economic Development, Manager's Office, Attorney's Office ATTACHMENT(S): INFORMATION CONTACT: 1. Performance Agreement between Steve Brantley, Economic Development Orange County & Wegmans Food (919) 245-2326 Markets, Inc. Travis Myren, Deputy County Manager 2. Public Hearing Notice (919) 245-2308 3. Interlocal Agreement between Orange County & the Town Of Chapel Hill 4. PowerPoint Summary 5. Wegmans Food Market, Inc. Overview 6. Chronology/Projected Timeline 7. News Release PURPOSE: To: 1) Receive and hold a public hearing on the issuance of a "performance-based" economic development incentive by the County to a private company; 2) Consider approval of the incentive agreement, with claw-back provisions, for the recruitment of Wegmans Food Markets, Inc. to Orange County, NC; and 3) Consider a supplemental Interlocal Agreement between Orange County and the Town of Chapel Hill, whereby the County administers the performance-based incentive agreement with the Company, and the County and Town equally share 50/50 in the cost-sharing of the annual incentive payment during the 5-year term of the incentive agreement (The Town of Chapel Hill is scheduled to hold a public hearing on the proposal on Monday, October 17, 2016.). BACKGROUND: Local and state government in North Carolina has the goal to promote economic development by encouraging the location of new businesses and the expansion of existing businesses. This activity serves to diversify the local tax base, increase employment opportunities and introduce desired job skills and related benefits to a community, and for the benefit of its residents. The Local Government Act, North Carolina General Statute (NCGS) 2 158-7.1 outlines the requirements of public hearings, and NCGS 158-7.1(a) specifically addresses the requirement that economic development appropriations "must be determined by the governing body of the city or county to increase the population, taxable property, agriculture industries, employment, industrial output, or business prospects of the city or county". This public hearing has been scheduled in compliance. Project Description: In response to the ongoing relocation by the Performance Automall car dealership operation (owned by Hendrick Automotive Group) out of Chapel Hill and Orange County and to the SouthPoint Mall area in adjacent Durham County, and the resulting transfer of over 300 full-time jobs out of the community, the Town and County have partnered to spur redevelopment of the 14-acre site that serves as an important gateway entry into Chapel Hill. During 2016, the leadership of Orange County and Chapel Hill collaborated closely in this regard to encourage the recruitment of a single high-quality tenant grocery store, with restaurants, prepared foods, a farmers market and related retail businesses by the grocery chain Wegmans Food Markets, Inc. This joint recruitment effort of Wegmans endeavors to attract to the community a significant number of new jobs, with health insurance & related employment benefits, and notable tax revenues that warrant the proposed incentive offer to the company. Considering Wegmans' competitive site selection efforts as it moves down the eastern seaboard and into North Carolina and establishes its first retail locations in the state, Orange County and Town of Chapel Hill have partnered in a joint recruitment and incentivization effort to attract this specific retail business to the U.S. 15-501 location. The proposed joint financial incentive, calculated at a value up to $4.0 million over a proposed 5-year start-up period by the company, will be equally shared 50/50 by the County & Town. The economic development inducement incentive will be performance-based with respect to the County's annual verification of the Company's targeted increases in (1) employment, wages & benefits, (2) net new taxable real & personal property additions, and (3) retail sales tax collections from projected revenue growth, as Wegmans establishes a Chapel Hill retail presence. Incentives would only be paid following confirmation of the Company's required annual threshold growth in these measures, and, on a pro-rata reimbursement in case the company's targeted growth in any year lags current growth projections. Orange County will serve as the primary administrator of the performance-based Inducement Agreement between Wegmans and the local governments, and the County is holding the required public hearing. In addition, there is a separate Interlocal Agreement that governs the cost share incentive payment transactions between the County and Town over the term of the total incentive period. This incentive offering is based off the following benefits a Wegmans retail facility will bring to the community. Community Benefits Offered by the Proposal: • Recruitment to Chapel Hill and Orange County of a significant new retail destination business, Wegmans Food Markets, Inc. has the expected potential to create 185 full-time and approximately 413 part-time (350 full-time equivalent) jobs in the first 6 years of operation. Fringe benefits include health insurance for all full-time employees working at least 30 hours per week. 3 ➢ Employees: 185 Full Time and approximately 413 Part Time (-350 Full Time Equivalent) 70% @ $12 - $20 per hour ➢ Salaried Employees: 30 - 35 Full Time @ $60,000 - $80,000 (some positions at $80,000 - $250,000) • Addition of up to $t5 million (County and Town combined) in new retail sales tax collections per year, based on the Company's projected sales revenues (by the end of year#5). • A real property valuation of $18,144,000 from the Company's planned $30 million capital expenditure improvements to be made at the site. • Environmental clean-up associated with the site's redevelopment. • Re-development of the 14-acre commercial site currently occupied by the Performance Automall car dealership along U.S. 501. (Performance Automall has announced it will fully close its Chapel Hill location and relocate its business and all employees to Durham County by the late summer of 2017). • A major retail shopping destination and tourism booster along an important gateway entry into Chapel Hill, which will have a broad regional market draw of customers, and be located close to a potential light rail stop. • Appeal of Wegmans' shared community values and synergies with Orange County's local food systems movement and emphasis to support local food sourcing. • A new partnership between Orange County and Town of Chapel Hill to be competitive and successfully attract a renowned Wegmans retail venture which is also considering alternate retail store locations throughout the Research Triangle area. • Wegmans is ranked #1 nationally each year in its business field. A company representative (Dan Aken, Director of Real Estate & Site Development for Wegmans) will be present at the meeting and will be available for comment and questions. Outline of Performance-Based Incentives: The performance measures listed below will be evaluated for the twelve month period following the Company's Commencement Date (date when the company opens for business). For illustration purposes, it is assumed the Certificate of Occupancy is obtained by January 1, 2019. With this potential timeline, the 1st year identified below would be calendar year 2019 and would run through calendar year 2024. (1) Overall property valuation of at least $18,144,000 in real property and at least $8,000,000 in personal property. (2) Wegmans store retail sales are projected to reach $83,000,000 by the end of the first five years. \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\: I I ri II IP 011 •;\\\\\\\\\\\\\\\\\\\\\\\\ 1 S`Year 21 Year 3`d Year 41 Year 5 'Year $62,000,000 $67,000,000 $72,000,000 $78,000,000 $83,000,000 4 (3) Wegmans will maintain employment consistent with the job chart below during the term of the incentive agreement. The award is calculated at 25% of the total incentive based on job creation. If job targets are not achieved, the incentive payment will be reduced proportionally. Employment Projections 12 Year 2' Year 3Id Year 41 Year 51 Year Full Time Jobs 185 185 185 185 185 Part Time Jobs 250 287 325 350 413 TOTAL(Full Time 285 300 315 325 350 Equivalent) *Anything less than projections will create a pro-rata reimbursement. Orange County Revenue Projections 1St Year 211 Year Year 41 Year 51 Year TOTAL Net New Property $103,782 $95,002 $86,222 $77,442 $68,662 $431,112 Tax Revenue Sales Tax $813,426 $879,025 $944,624 $1,023,343 $1,088,941 $4,749,359 Revenue TOTAL EN UE REVENUE$917,208.32$974,027.32$1,030,846.32$1,100,785.32$1,157,603.32$5,180,470.60 Incentive $(400,000) $(400,000) $(400,000) $(400,000) $(400,000) $(2,000,000) Payment FINANCIAL IMPACT: The attached "Performance Agreement" contract between Orange County and Wegmans Food Market, Inc. outlines a total financial impact of up to Four Million Dollars ($4,000,000) payable in five (5) annual installments of approximately Eight Hundred Thousand Dollars ($800,000) over a six (6) year period. The financial impact will be co-shared equally by the County and Town of Chapel Hill, with the County and Town each providing Four Hundred Thousand Dollars ($400,000) annually during the Inducement Agreement's term. This Inducement Agreement will be performance-based, measured annually, and based the Company's investments resulting in a Personal Property valuation of at least Eight Million 5 Dollars ($8,000,000), Company retail sales reaching at least Eighty-Three Million Dollars ($83,000,000); and Company employment reaching at least three hundred fifty (350) full-time equivalent jobs at the Chapel Hill facility. The attached supplemental Interlocal Agreement between the County and Town covers the County's overall administration of the Inducement Agreement with the Company, and the reimbursement by the Town to the County for the Inducement Grant to be paid to the Company. SOCIAL JUSTICE IMPACT: The following Orange County Social Justice Goal is applicable to this agenda item: • GOAL: ENSURE ECONOMIC SELF-SUFFICIENCY The creation and preservation of infrastructure, policies, programs and funding necessary for residents to provide shelter, food, clothing and medical care for themselves and their dependents. RECOMMENDATION(S): The Manager recommends that the Board: (1) Receive the proposal to consider the issuance of incentives to a private company for the recruitment of Wegmans Food Market, Inc. to Orange County; (2) Conduct the Public Hearing and receive public comments; (3) Close the Public Hearing; (4) Approve the "performance-based" economic development incentive agreement between Orange County and the Company, Wegmans Food Market, Inc., with claw-back provisions, subject to final review by the County Attorney, and authorize the Chair to sign the agreement on behalf of the County; (5) Receive the supplemental proposal to consider an Interlocal Agreement between Orange County and the Town of Chapel Hill, whereby the County administers the performance- based incentive agreement with the Company, and the County and Town equally share 50/50 in the cost-sharing of the annual incentive payment during the 5-year term of the incentive agreement; and (6) Approve the Interlocal Agreement, subject to final review by the County Attorney, and authorize the Chair to sign on behalf of the County. Attachment 1 6 STATE OF NORTH CAROLINA ORANGE COUNTY PERFORMANCE AGREEMENT BETWEEN ORANGE COUNTY, NORTH CAROLINA, AND WEGMANS FOOD MARKETS, INCORPORATED This Agreement made and entered into this the day of , 201 ("Effective Date")by and between Orange County, a political subdivision of the State of North Carolina ("County") and WEGMANS FOOD MARKETS,INCORPORATED ("Wegmans"), a New York corporation,with a facility to be located in Chapel Hill, Orange County,North Carolina("Company"), for the purpose of incentivizing Company's investment and location in Orange County. Company is a New York registered corporation with its principal place of business in Rochester,New York. Company's Facility(as defined below) shall provide retail services in Chapel Hill, Orange County,North Carolina. Company represents it is 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 Company as a whole and in their entirety at its Facility in Orange County. 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,but for the offer of an inducement package the Company would not be locating 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. DEFINITIONS. As used in this Agreement the terms below will have the following meanings: A. "Affiliate." A company that the Company controls, controls the Company, or is under common control with the Company. B. "Certified Public Accountant." An accountant who is a licensed certified public accountant,whose license is in good standing, and who is not associated or affiliated with Company or County. C. "Commencement Date." The date on which the Company opens for business to the public at the Subject Property, after having obtained applicable governmental approvals, certificates of zoning compliance, and certificates of occupancy. Unless delayed by causes beyond the control of the Company,the Commencement Date is anticipated to be no later than April 30, 2019. Page 1 of 14 7 D. "Company." WEGMANS, Inc. and includes its affiliates, successors, and assigns. E. "Full Time Equivalent." Includes all filled Full Time (thirty hours or more per week) and filled part time positions of the Company at the Facility. One (1) Full Time position is equal to one (1) Full Time Equivalent position. Two point five(2.5)part time positions are equal to one (1) Full Time Equivalent position. Full Time Equivalent employees refers to actively employed individuals and shall not include vacant positions for which the Company is actively or otherwise recruiting. F. "Grant."An economic incentive grant from an outside agency to the County to assist County and Company in infrastructure development or expansion. G. "Inducement Grant." An economic development grant provided to Company for the purpose of securing the Company's location of its Facility in Orange County,North Carolina. H. "Orange County Facility" or"Facility." The Company constructed and/or owned primary and secondary structures,utilities, and operations and service areas situated on the Subject Property in Chapel Hill, Orange County,North Carolina in and on which Company conducts its business and/or operations. I. "Personal Property." All non real property the Company or an Affiliate owns or leases located at the Facility, including all(a)machinery and equipment, (b) furniture, furnishings, and fixtures, (c)property that is capitalized for federal or state income Tax purposes, (d) all additions to any of the foregoing, and all replacements of any of the foregoing in excess of$100,000. Such Personal Property is that property listed with the Orange County Tax Assessor. J. "Subject Property" or"Property." The real property on which Company constructs and/or operates the Orange County Facility identified by Property Identification Numbers 9799782859, 9799782464 and more specifically described in Exhibit A,the Legal Description thereof. K. "Tax" or"Taxes." Ad valorem property Tax levied on the Company's real and Personal Property located in the County pursuant to Article 25, Chapter 105 of the North Carolina General Statutes or any successor statute relating to ad valorem property Tax the County levies on property. L. "Term" or"Full Term." The duration of this Agreement meaning the Effective Date through and including the 31st day of December of the year in which the final financial inducement installment is made. M. "Total Valuation." The assessed value of all real and personal property acquired by Company in and for its Orange County Facility. 2. INVESTMENT,EMPLOYMENT,AND SALES A. INVESTMENT Page 2 of 14 8 1. For purposes of the Company's minimum level of performance for investment the Company anticipates it shall directly invest an amount sufficient to result in a real property valuation of the Property of at least Eighteen Million One Hundred Forty-four Thousand Dollars ($18,144,000.00) and a Personal Property valuation of at least Eight Million Dollars ($8,000,000.00)both of which combined equal the Total Valuation. If the Company does not make investments sufficient to achieve these valuations on or before the Commencement Date (and as may be extended herein),the amount of the Inducement Grant will be adjusted as provided in this Article 2. 2. If the investment of the Company does not result in at least the property valuation shown in Article 2A,the amount of the annual installment will be reduced by a pro-rata percentage of the shortfall. The baseline for measuring whether the valuation goals have been met(i.e. the Tax assessments for the year in which the Commencement Date occurs) shall be adjusted(1)upward, if there is an increase in the assessment of the Company's Property and(2) downward,to reflect the natural decline in the value of the Company's Personal Property(existing in the year in which the Commencement Date occurs 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 1. For purposes of the Company's minimum level of performance for employment, it is expected that on or before the date that is one year after the Commencement Date (the conclusion of the first year of operations), at least 285 persons will be employed in Full Time Equivalent positions at the Facility. The minimum number of filled Full Time Equivalent positions for each successive year shall be as provided in Exhibit B. The number of Full Time Equivalent positions shall be evidenced by the annual certification of a Certified Public Accountant retained by Company for the purpose of providing such certification to County. 2. Company shall maintain the minimum levels of Full Time Equivalent employees as shown in Exhibit B. Employees counted toward these totals shall include only those employees of the Company employed and located at Company's Facility in Chapel Hill, Orange County,North Carolina provided such employees are employed in Orange County on a Full Time Equivalent basis. The minimum wage for seventy percent (70%) of all employees at the Facility shall be at least Twelve Dollars ($12.00)per hour. Full time employees of the Company will be provided with health care coverage in accordance with Wegmans' standard benefit plan for full time employees. C. SALES REVENUE: For purposes of the Company's minimum level of performance for sales revenue it is expected that Company shall achieve at least Sixty-Two Million Dollars ($62,000,000.00)by the end of the first year of operations (the date that is one year after the Commencement Date); at least Sixty-Seven Million Dollars ($67,000,000.00) in sales revenue by the end of year two (the date that is two years after the Commencement Date); at least Seventy-Two Million Dollars ($72,000,000.00) in sales revenue by the end of year three (the date that is three years after the Commencement Date); at least Seventy-Eight Million Dollars ($78,000,000.00)by the end of year four(the date that is four years after the Commencement Date); and at least Eighty-Three Million Dollars ($83,000,000.00)by the end of year 5 (the date that is five years after the Commencement Date). Sales revenue amounts shall be evidenced by Page 3 of 14 9 an annual certification of a Certified Public Accountant. This certification shall be provided to County prior to the payment of any inducement grant installment. D. DEVELOPMENT GRANT PARTICIPATION: Where applicable,the Company agrees to reasonably cooperate with Orange County and other applicable agencies to apply for development Grants that will improve and/or add water, sewer,road or other necessary infrastructure in order to facilitate the successful completion of this project. If such development Grants become available the Company agrees to meet with program representatives, and to participate in the Grant request process as necessary to secure the required funding. E. MINIMUM LEVEL OF PERFORMANCE: The Company agrees that its minimum level of performance pursuant to this Agreement shall be as set out in this Article 2. Company agrees that should it not meet the required minimum levels of performance County may reduce the Inducement Grant by a pro rata amount for failures to meet the sales, employment, and valuation performance requirements. F. STATUTORY COMPLIANCE: The Company understands that the County's participation is contingent upon authority found in North Carolina General Statute 158-7.1 and other relevant North Carolina General Statutes and that should such statutory authority be withdrawn by the North Carolina General Assembly, County may terminate this Agreement without penalty to County and without further compliance with this Agreement. 3. INDUCEMENT PACKAGE A. COUNTY INDUCEMENT GRANT: Subject to the limitations set out herein,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 estimated and not to exceed Four Million Dollars ($4,000,000.00)payable in five installments of approximately Eight Hundred Thousand Dollars ($800,000.00) over a six year period. The first installment shall occur within a reasonable time after the end of the first twelve (12)month period following the Commencement Date and upon receipt of proof, as described in Article 5 of this Agreement,that the minimum employment, sales, and valuation requirements referenced in Article 2 of this Agreement have been met and that all outstanding local property Taxes on the real and business Personal Property owned by the Company and located within Orange County, for which a bill for such Taxes has been issued to the Company,have been paid. Subsequent annual financial inducement installments will occur within a reasonable time after the end of the applicable twelve (12)month period and upon the County's receipt of the proof required by Article 5 of this Agreement. No installment shall be required to be paid until such time as County receives proof of the payment of all outstanding property Taxes and verification of sales, employment, and valuation levels has been submitted to the County. The final Inducement Grant amount shall be determined based on the level at which Company achieves the valuations, sales, and employment requirements established in this Agreement. B. TOTAL COUNTY COMMITMENT: The amount of the Inducement Grant is based on Company investments resulting in a real property valuation of the Property of at least Eighteen Million One Hundred Forty-four Thousand Dollars ($18,144,000.00); Company investments resulting in a Personal Property valuation of at least Eight Million Dollars ($8,000,000.00); Company sales in the amounts described in Section 2(C) of this Agreement; and Company Page 4 of 14 10 employing at least the number set forth in Exhibit B of Full Time Equivalent employees at the Facility. C. MAXIMUM COUNTY COMMITMENT: The Inducement Grant SHALL NOT EXCEED FOUR MILLION DOLLARS ($ 4,000,000.00). This maximum inducement amount is based on the Company meeting all requirements herein. One quarter (25%) of the Inducement Grant is based on Company achieving the real and Personal Property valuation requirement, one half(50%) on the Company achieving the sales revenue requirement, and one quarter(25%) on the Company achieving the minimum employment requirement and paying a minimum wage of at least twelve dollars ($12.00)per hour to at least seventy percent (70%) of all employees at the Facility. Should Company annually fail to meet any of such requirements,the Inducement Grant shall be reduced in a pro rata amount for the real and Personal Property valuations,the sales revenues, and minimum employment and/or wage requirement. (Example of calculation and reduction: At the end of the first year following the Commencement Date, should Company have achieved at least$62,000,000.00 in sales revenue, Company is entitled to 50%of the annual inducement installment. If Company has for the same time period achieved a Personal Property valuation of only$4,000,000.00, and a real property valuation of only$9,000,000.00, Company is entitled to 12.5%of the annual inducement installment. If Company has for the same time period only employed 200 Full Time Equivalent employees Company is entitled to 17.5%of the annual inducement installment. This calculation and reduction results in an inducement installment at the conclusion of year one of operations in an amount of approximately$640,000.00.) 4. 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 Article 2 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. 5. PROOF AND CERTIFICATION The officials of the parties to this Agreement shall furnish the necessary reports and certificates to verify that each party's respective goals are met. Proof and certification that Company has met the valuation, sales, and employment requirements set out in Article 2 must be provided to County prior to the annual Inducement Grant installment. Acceptable forms of proof for valuation shall be the records of the Orange 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 Orange County Tax Administrator. Acceptable forms of proof for employment numbers shall be in the form of either a notarized certification from a Certified Public Accountant retained by the Company to provide such certification to the County. Acceptable forms of proof for sales revenue shall be in the form of a notarized Page 5 of 14 11 certification from a Certified Public Accountant retained by the Company to provide such certification to the County. 6. 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 Article 1 1A of this Agreement upon thirty(30) days written notice to the County. B. DELAY OF INDUCEMENT PACKAGE INITIATION: If the Company determines it will not meet the year one employment, sales, and valuation goals that are to be met pursuant to this Agreement by the date that is one year after the Commencement Date,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 nine (9)months after the Commencement Date. In the event the employment, sales, and valuation goals are not met due to causes beyond the control of the Company,the period in which such employment, sales, and valuation goals are to be met shall be tolled by the period of such delay caused by such causes beyond the control of the Company(for purposes of this Article 6B, causes beyond the control of the Company are limited to: delay in completion of public works construction such as access road,utilities,water, and sewer lines where such public works projects are the responsibility of a state, local, or federal agency; failure to obtain governmental approvals; Act of God; strikes; lockouts; inability to procure materials (including energy); power; casualty; inclement weather; riots; insurrection; war). C. VALUATION, SALES,AND EMPLOYMENT PACKAGE: If the Company does not meet and maintain any of the valuation, sales, or employment goals within the annual timetable set forth in this Agreement(except as set forth above), 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 Article 3C of this Agreement until such time as the Company once again meets valuation, sales, 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 recovery of any prior reductions, except reductions based on employment,both valuation and sales revenue must meet or exceed the minimum standards outlined above prior to the natural termination of this Agreement. 7. 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. 8. COMPLIANCE WITH THE LOCAL GOVERNMENT BUDGET AND FISCAL CONTROL ACT 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 Page 6 of 14 12 for cities and counties and shall be listed in the annual report submitted to the Local Government Commission by the County. 9. GOVERNING LAWS,DISPUTE RESOLUTION, & FORUM This Agreement shall be governed and construed according to the laws of the State of North Carolina. Any action brought to enforce or contest any term or provision 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. It is agreed by the parties that no other court shall have jurisdiction or venue with respect to such suits or actions. Binding arbitration may not be initiated by either party,however,the parties may agree to nonbinding mediation of any dispute prior to the bringing of a suit or action. 10. INDEMNIFICATION The Company and the County each hereby agree to indemnify, protect and save the other party 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 this Agreement. The indemnification arising under this Article shall survive the Agreement's termination. 11. TERMINATION A. COMPANY: Upon Company's meeting its sales, valuation, and employment obligations as set out in Article 2 above and upon Company's certification to such and certification of the payment of all real and personal property Taxes, as set out in Article 5 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 Article 3 of this Agreement; or, under the same circumstances, failure of the County to make future inducement installments, as provided for in Article 3 of this Agreement. Should the Company exercise its option to terminate this Agreement,pursuant to this Article for such 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. Conversely, should the Company terminate this Agreement for any reason other than the default by the County to provide for any inducement installment to the Company, 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 inducement installments annually or otherwise. 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 eight (8) weeks during which the Company's level of Full Time Equivalent Employees or retail sales revenue drops below thirty percent(30%) of the minimum levels of performance commitments for either Full Time Equivalent employees or retail sales revenue as reflected in Article 2 above. Page 7 of 14 13 C. NATURAL: In any event, the above terms notwithstanding, this Agreement shall terminate upon the 31st day of December of the year in which the final financial inducement installment is made. 12. LIMITATION OF COUNTY'S OBLIGATION NO PROVISION OF THIS AGREEMENT SHALL BE CONSTRUED OR INTERPRETED AS CREATING A PLEDGE OF THE FAITH AND CREDIT OR TAXING POWER 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 SET FORTH IN THIS AGREEMENT 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. 13. LIABILITY OF PUBLIC OFFICERS 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 Article shall not relieve any such officer, agent or employee from the performance of any official duty provided by law. 14. MISCELLANEOUS A. ENTIRE AGREEMENT: This Agreement, including all exhibits attached, constitutes the entire contract between the parties, and this Agreement shall not be amended except in writing signed by the Parties. B. BINDING EFFECT and SEVERABILITY: Subject to the specific provisions herein, this Agreement shall be binding upon and inure to the benefit of and be enforceable by the Parties and their respective successors and assigns. If any term of this Agreement is to any extent illegal, otherwise invalid, or incapable of being enforced, such term shall be excluded to the extent of such invalidity or unenforceability; all other terms hereof shall remain in full force and effect; and, to the extent permitted and possible, the invalid or unenforceable term shall be deemed replaced by a term that is valid and enforceable and that comes closest to expressing the intention of such invalid or unenforceable term. Page 8 of 14 14 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 Article 2 and Article 5 hereof). E. SIGNATURES: This Agreement together with any amendments or modifications may be executed electronically. All electronic signatures affixed hereto evidence the intent of the Parties to comply with Article 11A and Article 40 of North Carolina General Statute Chapter 66. F. CONFIDENTIALITY: 1. County may, during the term of this Agreement,have access to, and acquire knowledge regarding confidential and proprietary information,materials, data, financial, tax, and/or other information,records, or documents which may be confidential, privileged, or otherwise protected in nature and not subject to production under North Carolina Public Records laws. To the extent authorized by Chapter 132 of the North Carolina General Statutes any such knowledge acquired, and any such record or document accessed,by the County shall not be used,published, disclosed, or divulged by the County to any person, firm, agency, or other entity. Company acknowledges County is a governmental entity subject to the requirements of North Carolina Public Records laws and must produce public records upon request. 2. Should Company determine any proprietary information, materials, data, financial,tax, and/or other information,records, or documents provided to County is confidential or proprietary Company SHALL prominently mark such proprietary information, materials, data,financial,tax, and/or other information, records, or documents CONFIDENTIAL and/or PROPRIETARY and notify County of such claim in a separate written document. 3. Should County withhold from public records production any information,records, or documents based on Company's claim that such information,records, or documents are confidential and/or proprietary, Company agrees to intervene in any litigation filed against the County to compel production of such information,records, or documents and to defend and indemnify County from any and all claims, costs, damages, or fees related thereto. 15. COMPLIANCE WITH LAW A. NON-DISCRIMINATION: Company shall at all times remain in compliance with all applicable local, state, and federal laws,rules, and regulations including but not limited to all state and federal anti-discrimination laws,policies,rules, and regulations and the Orange County Non-Discrimination Policy. Company shall not discriminate against any person based on age (as that term is defined in the Orange County Civil Rights Ordinance),race, ethnicity, color, national origin,religion, creed, sex, gender, gender identity, gender expression,marital status, familial status, source of income, disability,political affiliation,veteran status, disabled veteran status. Any violation of this requirement is a breach of this Agreement and County may immediately terminate this Agreement without further obligation on the part of the County. This Article is not intended to limit and does not limit breach of the Agreement to discrimination. Page 9 of 14 15 B. E-VERIFY AND IRAN DIVESTMENT: By executing this Agreement, Company affirms that to the best of its knowledge,the Company, and any North Carolina Affiliates of Company, is and shall remain in compliance with Article 2 of Chapter 64 of the North Carolina General Statutes. By executing this Agreement Company certifies that Company, and any North Carolina Affiliates of Company,has not been identified, and has not utilized the services of any agent or subcontractor, on the list created by the North Carolina State Treasurer pursuant to G.S. 147-86.58. 16. 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; If to WEGMANS, Inc.; County Manager 200 S. Cameron Street Hillsborough,NC 27278 Any addressee may designate additional or different addresses for communications by notice given under this Article to the other Party. Page 10 of 14 16 AGREEMENT REVIEWED AND ACCEPTED BY: For Wegmans, Inc. Attest: President For Orange County,North Carolina Attest: Donna Baker Chair Clerk to the Board Orange County Commissioners Orange County Commissioners This instrument has been pre-audited in the manner required by the Local Government Budget and Fiscal Control Act. Chief Financial Officer Approved as to form and legal sufficiency. Office of the County Attorney Page 11of14 17 Exhibit A Legal Description of the Property Being all of those parcels described as Tract 1 and Tract 2 shown on that plat entitled "Recombination and Right-of-Way Dedication Plat—Performance Automall Hendrick Automotive Group" dated April 22, 2006, surveyed by Philip Post& Associates and recorded in Plat Book 100 at Page 37, Orange County Registry. Page 12 of 14 18 Page 13 of 14 19 Exhibit B Employment Job Projections End of 1st End of 2nd End of 3rd End of 4th End of 5th Year of Year of Year of Year of Year of Operation Operation Operation Operation Operation Full Time 185 185 185 185 185 Part Time 250 287 325 350 413 (Approximate) TOTAL FTE 285 300 315 325 350 20 Attachment 2 PUBLICATION INSTRUCTION: Please publish the following notice in the Special Notice Section of the Classified Advertisements on Wednesday, October 6, 2016. The County Seal should be placed above the announcement. ig,IA Fii,_ . -, k; '01 at I i^°fig JJT' 4 elb eax � G °\`r PUBLIC HEARING Tuesday, October 18, 2016 SOUTHERN HUMAN SERVICES CENTER 2501 Homestead Road Chapel Hill, NC 27516 NOTICE OF PUBLIC HEARING REGARDING PROPOSED ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT FOR PROJECT "EAGLE" Notice is hereby given that in accordance with North Carolina General Statute 158-7.1 the Board of Commissioners of Orange County (the "Board") will hold a public hearing on October 18, 2016 at 7:00 p.m., at Southern Human Services Center, 2501 Homestead Road, Chapel Hill, NC concerning Orange County entering into an Economic Development Incentive Agreement with "Eagle" Corporation to assist the company in locating to Orange County. The Board will consider the appropriation of county general funds for the purpose of entering into an Economic Development Incentive Agreement with "Eagle" Corporation, a retail and food sales company, in an amount not to exceed Four Million Dollars, payable in five annual installments of up to Eight Hundred Thousand Dollars each, over a six year period. These funds will be used to assist the company with expenses associated with location of the company to Orange County, site development, and facility construction. Location of the "Eagle" facility to Orange County will create public benefits for the County including the creation of approximately 350 new Full Time Equivalent jobs and a capital investment in Orange County of approximately $18 million. Anyone interested in the Economic Development Incentive Agreement or the nature of Project "Eagle" may appear and be heard at the public hearing. Anyone who wishes to make comments in writing prior to the public hearing may do so by mailing or delivering such comments to the Board of Commissioners of Orange County, do Clerk to the Board of Commissioners, 200 S. Cameron Street, Hillsborough, North Carolina 27278. Attachment 3 21 INTERLOCAL AGREEMENT BETWEEN ORANGE COUNTY AND THE TOWN OF CHAPEL HILL REGARDING THE REIMBURSEMENT OF AN INDUCEMENT GRANT TO WEGMANS FOOD MARKETS, INCORPORATED THIS AGREEMENT, made and entered into this day of , 2016 between Town Chapel Hill, North Carolina a municipal corporation situated in Orange County, North Carolina (the "Town"), and Orange County, a political subdivision of the State of North Carolina (the "County"), for the reimbursement to the County by the Town of one half of the County's expenditures for an economic development inducement grant to induce Wegmans Food Markets, Incorporated ("Wegmans") to locate a new facility in Chapel Hill, Orange County, North Carolina. County and Town may be referred to jointly as the "Parties". WITNESSETH WHEREAS, the County and Town are public bodies, politic and/or corporate, under the laws of the State of North Carolina and are vested with the power and authority by Article 20 of North Carolina General Statute Chapter 160A to enter into this Interlocal Agreement (hereinafter referred to as the "Agreement"); and WHEREAS, representatives of the County and Town have expressed interest in joint economic development incentives to jointly fund the economic development inducement grant to Wegmans with the County paying one hundred percent (100%) of the agreed upon incentive to Wegmans and Town reimbursing to County fifty percent (50%) of County's inducement grant; and WHEREAS, this project will create jobs, provide company benefits to employees, create property and sales tax revenue, assist in capturing market share from other areas, and improve a gateway location; and WHEREAS, the estimated maximum inducement grant is and shall not exceed four million dollars ($4,000,000.00); and WHEREAS, the County and Town now desire to formally establish the terms of the Town's reimbursements to the County. NOW, THEREFORE, in consideration of the foregoing and based on mutual promises and obligations set forth herein, the receipt and sufficiency of which is hereby acknowledged, the County and Town agree as follows: 1. TERM AND TERMINATION a. This Agreement shall commence upon execution and shall continue until all reimbursement installments are paid in full with such payment in full occurring no later than January 31, 2026. b. This Agreement may be renewed or amended upon written agreement of the Parties. 22 2. RESPONSIBILITIES OF TOWN a. The Town is responsible for and shall reimburse the County fifty percent (50%) of the total inducement grant paid to Wegmans by County. The total amount of such reimbursement paid by Town shall not exceed two million dollars ($2,000,000.00). b. Town shall pay its inducement grant reimbursement in annual installments within thirty (30) days of receipt of the County's invoice. 3. RESPONSIBILITIES OF COUNTY a. The County is responsible for direct payment of the inducement grant to Wegmans. The total amount of the inducement grant shall not exceed four million dollars ($4,000,000.00) and shall be paid in annual installments and subject to the terms and conditions of the Inducement Grant Agreement between County and Wegmans, dated b. Upon County's payment of its annual inducement grant installment to Wegmans the County shall invoice Town for the fifty percent (50%) reimbursement amount. This annual invoice will be in the form of a single invoice for the full fifty percent (50%) installment amount. 4. REMEDIES a. Should County for any reason permanently discontinue paying Wegmans the agreed upon inducement grant prior to the natural expiration of the Inducement Grant Agreement Town may, without penalty, discontinue reimbursing County for such inducement grant; provided, however, that all reimbursements due County up to and including the date of County's discontinuance of payments to Wegmans shall be fully reimbursed by Town to County. b. Should Town for any reason discontinue reimbursing County the agreed upon inducement grant reimbursement prior to the natural expiration of the Inducement Grant Agreement between County and Wegmans, Town, through execution of this Agreement, authorizes County to collect and withhold from Town any real and personal property tax revenues due to Town, and paid by Wegmans, in an amount equal to the full reimbursement amount owed to County by Town pursuant to this Agreement. By execution of this Agreement Town grants to County all such real and personal property tax revenues for deposit in County's general fund and disclaims and releases any and all right to, claim, or interest in such tax revenues. 5. ENTIRE AGREEMENT This Agreement constitutes the entire Agreement of the Parties hereto regarding reimbursement by Town to County for the inducement grant paid to Wegmans by County. 23 In witness whereof, the Parties, by and through their authorized agents, have hereunder set their hands and seals as of the day and year first above written. Mayor, Town of Chapel Hill Chair, Orange County Board of Commissioners This instrument has been pre-audited in the manner required by the Local Government Budget and Fiscal Control Act: Chapel Hill Finance Officer This instrument has been pre-audited in the manner required by the Local Government Budget and Fiscal Control Act: Orange County CFO Attachment 4 ORANGE COUNTY ECONOMIC DEVELOPMENT NORTH CAROLINA Presentation to Orange County Board of Commissioners PUBLIC HEARING FOR A PROPOSED ECONOMIC DEVELOPMENT RECRUITMENT INCENTIVE FOR WEGMANS FOOD MARKETS, INC. INTERLOCAL AGREEMENT BETWEEN ORANGE COUNTY AND THE TOWN OF CHAPEL HILL OCTOBER 18, 2016 25 Description of "Project Eagle" ORANGE COUNTY �4,. ECONOMIC DEVELOPMENT NORTH CAROLINA A redevelopment of the current 14-acre Performance Automall site (following the auto dealership's ongoing relocation to Durham by owner Hendrick Automall Group) and the establishment of a single tenant grocery store, with restaurants, prepared foods, farmers market and related retail businesses by Wegmans Food Markets. Project Eagle 26 y 1 Jmw~�1 _ •��+ k r A,- T 41h 0 4V dA 1p r { � •t 5 lyi L � y L i � � ++� �� •�F� �d� in 16= LO IW 3r Ir • fi r' r *= r /f� }r lb 7F RW ti ti� r ` j . 0elL. tom. lb # r _ y. to Fea ti f• i !• 1!F' I �; ' F i 3 fC�� — 1 �• h 311 c�rtrl�rF�d ��f Site AtfYJJ 7B 27 i Ov4 N E D ORANGE COUNTY ECONOMIC DEVELOPMENT NORTH CAROLINA A. �r a yC F•p�0 ,�k, � �rYOU GEC 0\31, i HOME 4 ED Headquartered in Rochester, New York - -- _- PkES i $7.6 billion in Revenue (2015) Over 46,000 Employees - :ry h ho Company Values: We care about the well-being and success of every person. High standards are a way of life. We pursue excellence in everything we do. We make a difference in every community we serve. We respect and listen to our people. We empower our people to make decisions that improve their work and benefit our customers and our company. i 4 • ORANGE COUNTY + ECONOMIC DEVELOPMENT NORTH CAROLINA helping you make great meals easy Asian Bar Nature's Marketplace Bakery Patisserie Beer Pharmacy Catering Pizza Complements Pub Floral Sub Shop Kosher Deli Sushi Market Cafe Wine, Liquor, Beer i 4 • ORANGE COUNTY Communitv Benefits I ` ECONOMIC DEVELOPMENT NORTH CAROLINA Substantial employment, averaging 350 full-time equivalent jobs. Minimum starting wage of $12 per hour for at least 70% of employees. Health insurance benefits provided to all full-time employees working at least 30 hours per week. Significant gains in new property & retail sales taxes collected. Broad regional market draw from other areas & tourism boost. Direct synergies with Orange County's local food economy. Improvements to a critical U.S. 15-501 gateway location into Chapel Hill. i jr aT al �� E]__®. 30 Outline of Performance Based Incentives ' ORANGE COUNTY 4, ECONOMIC DEVELOPMENT (on a $4 million dollar incentive) NORTH CAROLINA Incentive Structure $4.0 million proposed total incentive, split 50/50 between Orange County ($2 million) and the Town of Chapel Hill ($2 million). Orange County will serve as the primary administrator of the performance- based incentive agreement between Wegmans and the local governments, and hold the required public hearing. Orange County and the Town of Chapel Hill will have a supplemental Inter- local Agreement governing the co-share incentive payment over the term of the incentive period. 31 Outline of Performance Based Incentives ' ORANGE COUNTY 4, ECONOMIC DEVELOPMENT (on a $4 million dollar incentive) NORTH CAROLINA This incentive offering is based off the foliowing: 1 ) Gateway location along U.S. 15-501 into our community. 2) Large number of jobs that would be created (185 full-time & approximately 413 part-time; or 350 full-time equivalent jobs). 3) Significant amount of net new taxable investment being made to redevelop and improve the site ($30+ million). 4) Significant amount of sales tax that will be generated (potentially $1 .5 million +/- annually between the County and Town of Chapel Hill). 5) This store location will be close to a potential light rail stop. 6) Environmental clean-up associated with the site's redevelopment. 7) Replacement of outgoing Performance Motors with another company that supports community values. 32 Outline of Performance Based Incentives ' ORANGE COUNTY 4, ECONOMIC DEVELOPMENT (on a $4 million dollar incentive) NORTH CAROLINA Overall property valuation of at least $18,144,000 in real property and at least $8,000,000 in personal property. If the property tax valuation target is not achieved, the incentive payment will be reduced proportionally. 33 Outline of Performance Based Incentives + x ORANGE COUNTY 4, ECONOMIC DEVELOPMENT (on a $4 million dollar incentive) NORTH CAROLINA Wegmans store retail sales are projected to reach $83,000,000 by the end of the first five years. If the retail sales target is not achieved, the incentive payment will be reduced proportionally. PrM Letail Sales Projections AL 1 St Year 2nd Year 3rd Year 4t" Year 5t" Year $62,000,000 $67,000,000 $72,000,000 $78,000,000 $83,000,000 34 Outline of Performance Based Incentives ' ORANGE COUNTY 4, ECONOMIC DEVELOPMENT (on a $4 million dollar incentive) NORTH CAROLINA Wegmans will maintain employment consistent with the job chart below during the term of the incentive agreement. The award is calculated at 25% of the total incentive based on job creation. If the employment target is not achieved, the incentive payment will be reduced proportionally. FRI Employment Projections 1 St Year 2nd Year 3rd Year 4t" Year 5t" Year Full Time Jobs 185 185 185 185 185 Part Time Jobs 250 287 325 350 413 (Approximate) TOTAL (Full Time 285 300 315 325 350 Equivalent) 35 Now- Outline of Performance Based Incentives x ORANGE COUNTY 4, ECONOMIC DEVELOPMENT (on a $4 million dollar incentive) NORTH CAROLINA Orange County Revenue Projections 1 St Year 2nd Year 3rd Year 4t" Year 5t" Year TOTAL Net New Property Tax Revenue $103,782 $95,002 $86,222 $77,442 $68,662 $431 ,112 Sales Tax Revenue $813,426 $879,025 $944,624 $1 ,023,343 $1 ,088,941 $4,749,359 TOTAL REVENUE $917,208.32 $974,027.32 $1 ,030,846.32 $1 ,100,785.32 $1 ,157,603.32 $5,180,470.60 Incentive $(400,000) $(400,000) $(400,000) $(400,000) $(400,000) $(2,000,000) Payment EWA Dec 2023 Dec 2024 Dec 2021 Dec 2022 Project Timeline 1st Incentive 2nd Incentive 3rd Incentive 4th Incentive 5 Incentive Payment to Payment to Payment to Payment to Payment to Wegmans Wegmans Wegmans Wegmans Wegmans (Fi al) 2017 2018 2019 2020 2021 T2022 2023 2024 2025 Jul Jan Dec Jan Jan Jan Jan Jan 5th year Performance Measures 4th year ; Persona Property Valuation Performance Retail Sales Measures 350 FTE Employment Property Valuation 3rd year Performance L $78,000,000 Retail Sales Measures ��+ dft Employment I $3.8M Real Property Valuation I I I I f year Retail Sales Performance Measures Employment Property Valuation 1st year $8.0'M Personal Performance 2A 1AII111M Retail Sales I I Measures " Employment Incentive Payments to Wegmans $3.8M Real& 3rd Max. Incentive $8.OM Personal Property Valuation Onn Year] MM Payout $62,000,000 Retail Sales Orange $400,000 $400,000 $400,000 $400,000 $400,000 I $2,000,000 Employment County Certificate of Occupancy(spring 2019) Town of The performance period will run 12 months from the date issued. Chapel $400,000 $400,000 $400,000 $400,000 $400,000 $2,000,000 Site Work&Redevelopment Hill ■Building Permits(winter 2017) Yearly $800,000 $800,000 $800,000 $800,000 $800,000 $4,000,000 Total ■Demolition Permits(Fall 2017) Estimated timeline dates subject to change based on when the actual Commencement Date Performance Automall relocates to Durham takes place and when the performance information is obtained annually. Attachment 5 75,2. 37 -ll.) mesas WEGMANS FOOD MARKETS, INC.: AN OVERVIEW Wegmans is a regional supermarket chain with 91 stores:46 in New York, 17 in Pennsylvania, seven in New Jersey, nine in Virginia, eight in Maryland, and four in Massachusetts. It is one of the largest private companies in the U.S.: • Over 46,000 employees • Annual sales in 2015 of$7.9 billion • 33rd on the 2015 Supermarket News list of the Top 75 Supermarkets based on sales volume OWNERSHIP AND MANAGEMENT: Wegmans is a family-owned company,founded in 1916, headquartered in Rochester NY. Danny Wegman is CEO;Colleen Wegman, his daughter, is president. Danny's daughter Nicole Wegman is sr.vice president. Robert Wegman, Danny's father, was chairman until his death in April 2006. OUR FOUNDERS: Brothers Walter and John Wegman (Robert Wegman's father and uncle) learned the food business by working in their parents' store in Rochester. John peddled fresh produce from a pushcart, and in 1916, he opened the Rochester Fruit& Vegetable Company,which marks the beginning of Wegmans Food Markets.Walter joined him a year later. Robert Wegman assumed leadership of the company in 1950,guiding it until his death in 2006. DISTINCTIONS: • Ranked#4 on FORTUNE magazine's 2016 list of the 100 Best Companies to Work For.Wegmans has been on the list every year since it first ran in 1998, and in 2005, ranked#1. • Ranked#5 on FORBES magazine's 2016 list of America's Best Employers. • Dubbed America's Favorite Supermarket in 2016 based on a consumer study by Market Force Information. • Wegmans raises the bar on the shopping experience:the best quality; a spectacular abundance of choice; restaurant- quality prepared foods; beautiful stores and displays; and a nearly telepathic level of customer service. • In 2015, more than 4,000 people contacted Wegmans asking for a store in their community.Another 7,300 wrote to say how much they like shopping at Wegmans or appreciate the way Wegmans employees treat them. • Consistent low prices on the items families buy every week.Wegmans also offers the choice of Family Pack size on products throughout the store to save time and money—30%or more compared to regular size. • Exceptional levels of charitable donations focused on programs that reduce hunger; help young people succeed; promote healthy eating and activity; strengthen neighborhoods; and support United Way initiatives. Last year, Wegmans donated about 13.5 million pounds of food to local food banks and programs that feed the hungry. • Strong employee benefit programs, including an employee scholarship program that provides$4.5 million in tuition assistance to employees each year.Wegmans has awarded $105 million in scholarships to more than 33,000 employees since this program began in 1984. 38 OUR STORES: • Offer more choice:50,000 to 70,000 products (in the largest stores), compared to an average of just over 40,000 (according to the Food Marketing Institute) in most supermarkets. More than 3,000 organic products throughout the store. • Are larger than most supermarkets: (We need room for all that stuff!)Stores run 75,000 to 140,000 square feet in size,with spacious aisles. • Look and feel like a European open-air market: Dazzling displays of fresh produce, artisan breads,and other baked goods hot from the oven several times a day. Meat,fresh-caught seafood, deli products and imported cheeses, international foods, plus all the grocery,dairy,frozen, and household items usually found in a supermarket. • Customers will also find: • A Market Café—offering take-out or in-store dining,with seating for 100 to upwards of 300 • Restaurant-quality entrees,soups, appetizers,gourmet sandwiches and side dishes • Sushi made fresh daily, in a variety of vegetable, cooked, and raw made-to-order selections • Old-fashioned Sub Shop offering hot and cold subs/wraps, party trays, and cookies • The Buzz Coffee Shop with specialty coffee,tea, and breakfast sandwiches • Organic Salad Bar,Veggie Bar, Homestyle Bar,and Asian Bar • Pizza Shop featuring thin-crust pizza, calzones and chicken wings • Bakery—European breads and rolls,water-boiled bagels, muffins, pies, cakes, and pastries • Nature's Marketplace—natural and organic foods, supplements, premium teas,and foods for special dietary needs, including gluten-free • Pharmacy, offering free home shipping, automated refills, and even pet medications • Housewares and seasonal merchandise—everything to entertain, prepare, serve, and celebrate food • Floral Shop,greeting cards, and gifts • Health and beauty care products; cosmetics; bath and body WHO WE ARE—OUR VALUES: • We care about the well-being and success of every person. • High standards are a way of life.We pursue excellence in everything we do. • We make a difference in every community we serve. • We respect and listen to our people. • We empower our people to make decisions that improve their work and benefit our customers and our company. WHAT WE BELIEVE: At Wegmans,we believe that good people,working toward a common goal, can accomplish anything they set out to do. In this spirit,we set our goal to be the very best at serving the needs of our customers. Every action we take should be made with this in mind. We also believe that we can achieve our goal only if we fulfill the needs of our own people. To our customers and our people we pledge continuous improvement, and we make the commitment: "EVERY DAY YOU GET OUR BEST" Last updated September 2016 2 39 Attachment 6 Chronology Economic Development Recruitment Efforts by Orange County & Town of Chapel Hill • Spring 2016 - Town of Chapel Hill began discussions with the consulting firm Altus Group on regarding a proposed redevelopment of the Performance Automall site and the attraction of a significant retail tenant that is renowned in its business sector. • May 20, 2016 - Project was referred to Orange County Economic Development as a recruitment opportunity by the Economic Development Partnership of North Carolina. • May 25, 2016 - First joint meeting between the Town, County and consultant firm (Dave Cockey w/Altus Group)to discuss "Project Eagle". • June 29, 2016 - First joint meeting was held between the leadership & staff of Orange County (BOCC Chair Earl McKee, County Manager Bonnie Hammersley, Deputy Manager Travis Myren) and the Town of Chapel Hill (Mayor Hemminger, Town Manager Roger Stancil)to consider any interest to pursue joint financial recruitment incentives, closed session discussions, etc., to recruit the business to Chapel Hill. • July 1 & 5, 2016- Orange County&Town staff continued discussions on retail sales tax projections based on Project Eagle's proposed retail sales tax value. • July 19, 2016 - Orange County (BOCC Chair Earl McKee, Manager Hammersley, Deputy Manager Travis Myren) and Chapel Hill (Town Manager Roger Stancil) senior leadership met with the consultant Dave Cockey with Altus Group, & Dan Aken, Wegmans' Director of Corporate Real Estate & Site Development. • July 20, 2016 - Orange County Board of Commissioners held their first closed session meeting to discuss the project. • July 25, 2016—Chapel Hill Town Council held their first closed session meeting to discuss the project. • August 9 & 16, 2016 -County&Town staff met to continue discussions. • September 12, 2016 - Orange County Board of Commissioners &the Chapel Hill Town Council met separately to hold a second closed session discussion, with mutual consensus reached by both local governments to continue talks with the Company and develop an incentive agreement proposal. Prospective Timeline of Wegmans Development Process • Summer 2017— Performance Automall relocates to Durham • Fall 2017 - Demolition Permits are obtained by Wegmans from the Town of Chapel Hill • Winter 2017— Building permits are obtained by Wegmans from the Town of Chapel Hill • Calendar Year 2018—Construction is expected to take place throughout 2018 • Spring 2019—Wegmans obtains Certificate of Occupancy from the Town of Chapel Hill • Spring—Summer 2019—Targeted Commencement Date for a store opening Attachment 7 40 �pWNOF i ORANGE COUNTY 'ygPEL N\\* NORTH CAROLINA NEWS RELEASE FROM TOWN OF CHAPEL HILL AND ORANGE COUNTY FOR IMMEDIATE RELEASE: OCTOBER 12, 2016 Wegmans Chooses Chapel Hill - Orange County Foodie Appetite with Business Proposal Performance-Based Economic Incentive Proposal to be considered by Town Council and Orange County Board of Commissioners A Unique Proposal CHAPEL HILL, NC— Chapel Hill, we love to be a food destination, a Foodie Town in Orange County that values our local farms and Chapel Hill -Orange County have farmers. With a multitude of restaurants, taverns, farmers markets, collaborated on a first-of-its-kind food trucks, supermarkets and local cooperatives, some might incentive due to unique elements: wonder if there are no bounds to our appetite for wonderful food. • Improvements to gateway location • Proximity to potential light rail stop • Introducing: Wegmans Food Markets, "America's Favorite Number of jobs created (350) Supermarket." That's according to Market Force Information which, • Quality of jobs (incl. health insurance) • Investment to redevelop site ($30 M) in April 2016, published results from a study of 10,000 consumers • Environmental clean-up required nationwide. Wegmans has also been ranked consistently as the • New property and sales taxes country's best supermarket by Consumer Reports magazine. • Replacement for Performance Headquartered in Rochester, N.Y., the family-owned company has AutoMall, a vehicle sales facility 91 stores in New York, Pennsylvania, New Jersey, Virginia, Maryland, • Regional draw for shoppers and Massachusetts; more than 46,000 employees and $7.9 billion in • Natural fit for foodie culture, values revenue (2015). "We are delighted to move forward with our plans for a store in Chapel Hill," says Ralph Uttaro, Wegmans senior vice president of real estate. "I know that we will bring a unique shopping experience to the market that will deliver on our promise of incredible customer service, the best ingredients, restaurant-quality prepared foods, and consistent low prices." The Town of Chapel Hill and Orange County have initiated a performance-based economic incentive proposal to potentially become the future home of a Wegmans supermarket --and its 350 new full-time equivalent jobs and $30 million in investment. The proposed 14-acre property on Hwy 15-501 is currently the location of Performance AutoMall, which is slated to close in July 2017. Per the proposal, Leon Capital Group of Dallas would invest about $30 million to redevelop the property. Due to its 30-year history as a vehicle sales and service facility, environmental remediation will be necessary for its new use. -more- 41 2 -Performance-Based Economic Incentive Proposal "Located on the eastern gateway to Chapel Hill, this is a unique site, one that has challenges as well as opportunity," said Mayor Pam Hemminger. "We are working proactively to bring new retail to our town and believe that Wegmans will further solidify Chapel Hill as a regional foodie destination." Orange County Board of Commissioners Chair Earl McKee said Orange County is seeking out a new market for area farmers and food producers. "We are working together to attract companies that create diversified, well- paying employment opportunities for our residents," McKee said. "This incentive proposal will help us take another step toward making Orange County more competitive—especially by adding a substantial market for farmers and food producers." The Interlocal Agreement between the Town and County outlines a proposed plan for each government to contribute a maximum amount of$2 million over five years -- if Wegmans meets specific targets for new jobs, and increases in sales and property tax revenue. The agreement will be considered by the Town Council on Monday, Oct. 17, 2016, and Orange County Board of Commissioners on Oct. 18, 2016. "If approved, the agreement is based on performance," said Town Manager Roger Stancil. "Incentives are paid only after the company meets specific goals in jobs, property tax and sales tax from increased revenues received by the Town and County from the project. Goals are annual and achievement must be documented." The Town and County would each commit to providing a maximum "We are delighted to move annual $400,000 incentive for five years, depending upon the retailer's forward with our plans for a performance each year. Orange County would serve as the primary store in Chapel Hill," says Ralph administrator of the performance-based incentive agreement with Uttaro, Wegmans senior vice Wegmans, and the Town will have an Interlocal Agreement with the County to contribute its portion. president of real estate. "I know that we will bring a "This collaborative effort is historic, and we hope to have future unique shopping experience to successful recruitment initiatives, said Orange County Manager Bonnie Hammersley. the market that will deliver on our promise of incredible Chapel Hill and Orange County expect an increase of$1.7 million customer service, the best annually in net-new tax revenue derived from sales and property taxes as a result of the 120,000 SF project. In addition to revenue ingredients, restaurant-quality increases, the store will provide new employment opportunities for prepared foods, and consistent hundreds of local workers. low prices." Wegmans ranks #4 on FORTUNE Magazine's 2016 list of the "100 Best Companies to Work For" and has been on this list every year since it first began in 1998, and in 2005, ranked #1. It also ranks #5 on FORBES 2016 list of"America's Best Employers." The company has an employee scholarship program, available to both part-time and full-time employees, that has awarded more than $105 million in college tuition assistance to more than 33,000 employees since the program began in 1984. -more- 42 3 -Performance-Based Economic Incentive Proposal Development Review Process—The Incentives Agreement does not change the Town of Chapel Hill's regular development review process for the site. The applicant will submit a concept plan and Special Use Permit Application subject to the normal reviews by Town staff professionals and advisory boards, and then scheduled public hearings. Our Shared Goals: We're Open to Business— Chapel Hill and Orange County have partnered on initiatives to boost job creation, tax base growth and help companies grow and stay in the area. Today, these efforts are evolving further with the drafting of a joint incentives protocol. "Our goals are to ensure a strong economy that helps pay for the quality services our residents expect and support lower tax rates by diversifying our tax base," said Jim Kitchen, chair of the Orange County Economic Development Advisory Board. "This has been a long-standing goal in our communities." "Chapel Hill and Orange County are open to business," said Dwight Bassett, Town of Chapel Hill economic development officer. "We're stepping up to incentivize businesses that are a natural fit and connect with our community values." ### FOR MORE INFORMATION: The detailed proposed agreements are published for public review at the Town of Chapel Hill at http://www.townofchapelhill.org/town-hall/government/council-minutes-and-videos and Orange County at http://www.orangecountync.gov/departments/boardof county commissioners/agendas.php. If you have any questions, please contact Catherine Lazorko,Town of Chapel Hill Communications Manager, at 919-969-5055 or clazorko @townofchapelhill.org and Travis Myren, Orange County Deputy Manager, at 919-245-2308 or tmyren @orangecountync.gov The Town of Chapel Hill anticipates a concept plan submission for this project from Leon Capital Group of Dallas. All concept plans are posted at http://www.townofchapelhill.org/town-hall/departments- services/planning-and-sustainability/gis-analytics/development-activity-report. For more information on the concept plan, please contact the developer directly. What are Concept Plans? Concept Plans are required prior to the formal submittal of a major development proposal in Chapel Hill. The Town Council and Community Design Commission review concept plans at a public meeting. The concept plan process provides an opportunity for the Council and the public to review and provide early input to the developer. Following the completion of the concept plan process, the developer may proceed to a formal development application to the Town.