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HomeMy WebLinkAboutAgenda - 04-12-2005-8aORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: April 12, 2005 Action Agenda Item No. ~-q SUBJECT: Public Hearing: Agreement with Orange Enterprises DEPARTMENT: Economic Development/ PUBLIC HEARING: (Y/N) No Purchasing & Central Services ATTACHMENT(S): Agreement INFORMATION CONTACT: Dianne Reid, (919) 245-2325 Pam Janes, (919) 245-2652 TELEPHONE NUMBERS: Hillsborough 732-8181 Chapel Hill 968-4501 Durham 688-7331 Mebane 336-227-2031 PURPOSE: To receive public comment regarding an agreement between Orange County and Orange Enterprises which will provide Orange Enterprises (OE) building support and operational support to enable OE to purchase property tripling the production capacity of OE and increasing significantly employment opportunities far persons now served and persons who can be served by OE; to approve an agreement between OE and Orange County with respect to Orange County's financial support to OE and establishing economic development expectations of the operations of OE at the new site; and to authorize the reallocation of capital funds appropriated by the County to expand the current OE building to be used by OE toward the purchase of the new facility, BACKGROUND: OE is a private, non-profit organization whose mission is "to assist people who face employment barriers to achieve vocational potential from the beginning of work until retirement by offering services that allow individuals to attain the greatest level of vocational success of which they are capable." This mission is accomplished in a variety of ways including assisting persons to find competitive work in the community and providing contract work an site that is utilized to teach vocational and personal skills. OE has operated in County-owned buildings for decades, most recently moving to the Valley Forge Road site in the 1970's. OE provides a valuable safety net for certain members of the community -workers, who without the presence of OE, would perhaps be unemployable, QE's contribution to the quality of life for such workers cannot be measured only in money. In November 2004, OE presented a proposal requesting that Orange County authorize capital funds for use in the purchase of a building and 10 acres on Elizabeth Brady Road. Orange County had previously appropriated $525,000 in the 2004-2014 County Capital Investment Plan to expand the County-owned building on Valley Forge Road for OE expansion, z The building OE proposes to purchase was previously the location for the FB .Johnston Company and is one of two manufacturing buildings located on a 20 acres site, OE proposes to purchase Building #2 and 10 acres of the property. Building #2 is located toward the back of the property. The building contains 25,400 square feet, including 3,000 square feet of office space and 22,400 square feet of manufacturing and warehouse space, The building, which was constructed in late 1979, has been well maintained and, with the exception of some needed Americans with Disabilities Act (ADA) and OE operations needed upfit, is favorably matched to the OE operation. OE has provided a business plan that demonstrates its ability to meet the higher financial demands that would be required by the new facility, As discussed further below, OE's capacity to compete for additional contracts is severely limited by the current facility. OE has two subsidiary enterprises, a custodial business and a landscaping business, Through a relationship with National Industries for the Severely Handicapped (NISH), an organization that manages the federal set-aside programs under the ,Davits-Wagner-O'Day Act, OE has been awarded two custodial contracts this year, valued at almost $850,000 annually, which helps contribute to the fiscal stability of the organization. The mail fulfillment work performed in-house by persons with disabilities has been limited by space constraints. This component employs approximately 100 persons a day with production sales of about $450,000 per year, Additional space will enable OE to expand this division and compete for NISH manufacturing projects (products manufactured by disabled persons for use in government agencies), Financial projections prepared by OE indicate that the organization will be able to maintain support and revenue in excess of expenses over the next five years, including debt service, The additional space will enable OE to expand employment and aver the next six years, OE projects that it will provide 57 new jobs for disabled persons and 43 new jobs for non-disabled persons. The attached agreement spells out the employment projections and the expectation of payment of living wages for OE staff and commensurate wages for all other employees. The agreement also provides that OE will convey a Conservation Easement to the County for the land in the flood hazard area of the Eno River, Kathy Bryant, OE Executive Director, and Dianne Reid, Orange County Economic Development Director, will present additional information during the public hearing, FINANCIAL IMPACT: The purchase price of the building and ten acres to OE is $950,000, Orange County is being asked to contribute $525,000 in the 2004-2005 fiscal year and $100,000 in each of the 2005-2006, 2006-2007 and 2007-2008 fiscal years. Further, the County is being asked to increase its operational support in an amount equal to $120,000 over the period ending with the 2009-2010 fiscal years. The specific annual operating appropriations are set forth in the agreement. RECOMMENDATION(S): The Manager recommends that the Board: • Receive public comment regarding the agreement between Orange County and OE; and • Approve the agreement with OE; and • Approve the reallocation of capital funds to be used by OE toward the purchase of the facility as outlined herein; and Authorize the Chair to sign the agreement on behalf of the Board, DRAFT Prepared by and Return to: Geoffrey E. Gledhill, Attorney, Coleman, Gledhill, Hargrave & Peek, P.C. P.O. Drawer 1529, Hillsborough, NC 27278 SLATE OF NORTH CAROLINA ORANGE COUNTY AGREEMENT This AGREEMENT (this "Agreement"), dated as of ,between ORANGE ENTERPRISES, INC., anon-stock, not-for-profit corporation with an office in Hillsborough, Orange County, North Carolina ("Orange Enterprises") and ORANGE COUNTY, NORTH CAROLINA, a body politic and corporate, a political subdivision of the State ofNorth Carolina ("the County" or "County"). RECITALS: WHEREAS, the County has the power, pursuant to N.G Gen. Stat, § 158-71(a) to make appropriations for aiding and encouraging the location of manufacturing enterprises and increasing the business prospects of the County and to fund these appropriations by the levy of property taxes and by the allocation of other revenues whose use is not otherwise restricted by law; uid DRAFT 4 WHEREAS, Orange Enterprises is a Community Rehabilitation Program operating in the County whose mission it is to assist people who face employment barriers to achieve their vocational potential by offering services that assist these individuals in attaining the greatest level of vocational success which they are capable; and WHEREAS, persons served by Orange Enterprises include adults with developmental disabilities, students with developmental disabilities, adults and students with mental illnesses, learning and emotional disabilities, substance abuse disabilities, physical disabilities and individuals in the Work First Program; and WHEREAS, Orange Enterprises is operating its business on property provided by the County located on Valley Forge Road, Hillsborough, Orange County, North Carolina which property and its facilities has an estimated annual rental value of $58,000, which facility is made available to Orange Enterprises by Orange County at no cost to Orange Enterprises; and WHEREAS, the building located on Orange County-owned property within which Orange Enterprises operates has approximately 10,400 square feet of usable space, 6,000 of which is production space, approximately 2,000 of which is wazehouse space and approximately 2,400 ofwhich is administrative space; and WHEREAS, this building is used to its maximum capacity and there will be no opportunity for Orange Enterprises to expand its staff'and persons with disabilities working in these facilities unless they were to be expanded; and WHEREAS, in addition to its approximately $58,000 azmual contribution to Orange Enterprises in facility value, the County presently makes an annual appropriation to Orange Enterprises of $43,175 in operational support; and DRAFT WHEREAS, Orange Enterprises has been offered the opportunity to purchase improved property with a building and parking and other amenities located on Elizabeth Brady Road, Hillsborough, Orange County, North Carolina which building is 25,400 square feet in size and can be modified to provide 20,400 square feet ofproduction/warehouse space and 5,000 square feet of'administrative space thus more than tripling the production capacity and increasing significantly available pazking spaces which would become necessary to accommodate increases in staff and persons with disabilities working in the facility; and WHEREAS, Orange Enterprises has the opportunity to purchase the new facilities, including approximately 10 acres of land, for the sum of $950,000; and WHEREAS, Orange Enterprises has been able to obtain a loan for the purchase of the property in an amount sufficient to do so conditioned upon the County's contribution of $825,000 towazd the purchase price; and WHEREAS, financial projections prepared by Orange Enterprises indicate that Orange Enterprises will be able to maintain support and revenue in excess of expenses including the payment of the principal component of debt service provided the County contributes $825,000 towards the purchase of the building and provides the other financial support as outlined in this agreement; and WHEREAS, the additional production/warehouse space and administrative space will enable Orange Enterprises to increase materially the number of persons it can employ and the number of disabled persons that it can employ as well as enable Orange Enterprises to operate as an "affirmative enterprise," such that persons with disabilities can be employed at the same wages and have a benefit package that is the same as those who don't have disabilities; and DRAFT WHEREAS, on April _, 2005 the County conducted a public hearing, following publication of notice of that public hearing at least 10 days before the hearing was held, for the purpose of receiving public comment on this proposed Agreement between the County and Orange Enterprises; and WHEREAS, at that public hearing information was provided by or on behalf of Orange Enterprises as follows: 6 1. Orange Enterprises projects that it will be able to maintain support and revenue in amounts in excess of expenses including the payment of the principal component of debt service; 2, Orange Enterprises projects the following with respect to total employees, County resident employees, number of disabled employees, new jobs for disabled employees and new ,jobs for' non-disabled employees through the end of'the County fiscal year ending July 1, 2010: Summary of Employment Projections 2004- 2005- 2006- 2007- 2008- 2009- 2005 2006 2007 2008 2009 2010 Employees 201 225 240 249 250 271 O,C. 157 166 181 193 199 203 Residents # of 149 164 172 178 183 188 Disabled Employees New .Yobs 13 11 8 9 8 8 For Disabled New .lobs 3 9 7 6 9 9 for Non- Disabled Employees DRAFT 3. All Orange Enterprises staff are paid at or above the living wage as determined by the County, All other employees are paid at commensurate wages (wages based on ability as compared to workers without disabilities); 4. Orange Enterprises will begin an "affirmative enterprise" wherein persons with disabilities are employed at the same wages and have a benefit package that is the same as those who don't have disabilities; 5. Orange Enterprises will purchase the property known as Building Lot # 2 located at 348 Elizabeth Brady Road, Hillsborough, Orange County, North Carolina for the sum of $950,000 and will invest approximately $.300,000 for upfit and improvements to the building so that it can be used as Orange Enterprises' operation center and place of business; 6. Orange Enterprises presently contracts with National Industries for the Severely Handicapped (NISH), anon-profit organization specializing in federal contract bids, for jobs and anticipates contracting with the division of National Industries for the Severely Handicapped that develops products (for example, picture frames, air gauges for plane tires, first aid kits, belts for military uniforms, protective suits for use in war areas against chemical warfare and other products) that can be manufactured in the new Orange Enterprises facility resulting in the employment of County residents; and WHEREAS, the County, by resolution on this day, makes the determination that contributions that it will make as provided in this Agreement will aid and encourage the location of manufacturing enterprises and business prospects for residents of the County and particularly for disabled residents of the County the totality of which will have the effect of providing employment and improved quality of life for' those served by Orange Enterprises and reducing DRAFT the cost to the citizens of the County, the State of North Carolina and the United States in any number of public assistance programs; and WHEREAS, the total increase in employment that will be provided by Orange Enterprises with the expanded facilities together with the availability to the County, for other public purposes, of the present Orange Enterprises facility owned by the County are singularly and together adequate consideration to Orange County for the payments made by the County under this Agreement. WITNESSETH: In consideration of the payment by the County to Orange Enterprises of the following building support and operational support, Orange Enterprises agrees to perform its obligations in accordance with the terms of this Agreement. If; however, there shall be any default in any of the covenants, terms or conditions contained in this Agreement or any other agreement made a part of this Agreement and such default is not cured within ninety (90) days after written notice, then and in any of such events, without further notice, the Premises, more particularly described as follows: [Legal Description Here] DRAFT shall revert to and become the sole property of the County. In the event of an uncured default and in response to the County demanding that it do so, Orange Enterprises agrees to convey the Premises by North Carolina warranty deed with such title exceptions as exist on the date of the recordation in the Office of the Orange County Register of Deeds of this Agreement, to Orange County, North Carolina, This requirement that Orange Enterprises convey the Premises to the County in the event of a default under this Agreement shall be one that is specifically enforceable by the courts of North Carolina. 2. The County shall provide the following building support and operational support to Orange Enterprises: Year Building Support Operational Support 2004-2005 $525,000 $43,175 2005-2006 $100,000 $73,175 2006-2007 $100,000 $73,175 2007-2008 $100,000 $73,175 2008-2009 0 $63,175 2009-2010 0 $53,175 DRAFT 10 3. Orange Enterprises shall purchase the Premises for the sum of $950,000 and make the necessary improvements to the Premises in the amount estimated to be $300,000 in order to improve and upfit the Premises to accomplish the other obligations of Orange Enterprises as contained in this Agreement. The Premises maybe subjected to a deed of trust in favor of a commercial lending institution in an amount not to exceed $440,000 BUT NO OTHER without the written consent of the County. 4. Orange Enterprises agrees to insure the Premises for its replacement value, pay all taxes, assessments, utilities and other charges on the property and keep the property at ali times properly maintained as specifically provided in pazagraph 7 of this Agreement. 5. Orange Enterprises makes the following additional representations as an inducement to and the basis for its undertakings and the County's agreement to provide the building support and operational support as provided herein. These representations are covenants and the failure of Orange Enterprises to comply and remain in compliance with them constitutes an event of default under this agreement: (i) Orange Enterprises is a corporation duly incorporated under the laws of and is in good standing in the State of North Carolina, is authorized to do business in North Carolina and has the power to enter into this Agreement and by proper corporate action has been duly authorized to execute and deliver this Agreement; (ii) neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of compliance of the terms and conditions of this Agreement, conflict with or result in a breach of any of the terms, conditions or provisions of any corporate restriction or any agreement or instmment to which Orange Enterprises is now a pazty or by which it is bound, or constitute a default under any of the DRAFT foregoing, or result in the creation or imposition of any lien, charge or encumbrance of any 11 nature whatsoever upon the Premises, except as provided in this Agreement, under the terms of any instrument or agreement; (iii) Orange Enterprises agrees to operate the Premises in order to provide employment as follows: 2004- 2005- 2006- 2007- 2008- 2009- 2005 2006 2007 2008 2009 2010 Employees 201 225 240 249 250 271 O.C. 157 166 181 193 199 203 Residents # of 149 164 172 178 183 188 Disabled Employees New .lobs 13 11 8 9 8 8 For Disabled New Jobs 3 9 7 6 9 9 for Non- Disabled Employees in order to serve adults with developmental disabilities, students with developmental disabilities, adults and students with mental illnesses, leazning and emotional disabilities, substance abuse disabilities, physical disabilities and individuals in the Work First Program; (iv) Orange Enterprises will pay all of its staff a living wage as determined by Orange County from time to time and will pay or cause to be paid those persons it serves at a commensurate wage (a wage based on ability as compared to workers without disabilities); (v) Orange Enterprises agrees to operate as an "affirmative enterprise" such that persons with disabilities can be employed at the same wages and have a benefit package that is the same as those that don't have disabilities,. DRAFT 6. Orange Enterprises will convey to Orange County an assignable, perpetual Conservation Easement extinguishing all development rights in as much of the Premises as is located in the flood hazard area of the Eno River as detern~ined by a survey of the Premises. Orange Enterprises agrees to grant no easements to the Premises other than the Conservation Easement described here and an access easement for ingress, regress, egress and for utility purposes to the owner of the adjoining property containing Building Number # 1 as shown on Exhibit A hereto without first obtaining the prior written consent of the County. 12 Orange Enterprises agrees that it will, at its own expense (i) keep the Premises in reasonably safe condition and (ii) keep the building and all other improvements forming a part of the Premises in good repair and in good operating condition, making from time to time all necessazy repairs thereto (including external and structural repairs) and renewals and replacements thereof, Orange Enterprises may, also at its own expense, make from time to time any additions, modifications or improvements to the Premises it may deem desirable for' its business purposes that do not adversely affect the structural integrity of any buildings or structures located on the Premises or substantially reduce the value of the Premises; provided that all such additions, modifications and improvements to the Premises shall be located wholly within the boundary lines of the Premises. All such additions, modifications and improvements so made shall become a part of the Premises; provided that any item of personal property, machinery, equipment, furniture or fixture installed by Orange Enterprises for its business purposes which does not constitute a part of the Premises, may be removed by Orange Enterprises at any time and from time to time; and provided further, that any damage to the Premises occasioned by such removal shall be repaired by Orange Enterprises at its own expense. Orange Enterprises will not permit any mechanics' lien, security interest or other DRAFT 13 encumbrance to remain against the Premises for labor or materials furnished in connection with any additions, modifications, improvements, repairs, renewals or replacements so made by it; provided, that if Orange Enterprises shall first notify the County of its intention so to do, Orange Enterprises may in good faith contest any mechanics' or other liens filed or established against the Premises, and in such event may permit the item so contested to remain undischarged and unsatisfied during the period of such contest and any appeal therefrom unless the County shall notify Orange Enterprises that, in the opinion of independent counsel, by nonpayment of any such items, title to the Premises will be materially endangered or the Premises or any part thereof will be subject to loss or forfeiture, in which event Orange Enterprises shall promptly pay and cause to be satisfied and discharge all such unpaid items. Orange Enterprises releases the County from and covenants and agrees that the County shall not be liable for, and to indemnify and hold the County harmless against, any loss or damage to property or any injury to or death of any person occurring on or about or resulting from any defect in the Premises or improvements located on the premises provided, that this indemnity shall not be effective for damages that result from negligence or intentional acts on the pazt of the County.. To this end, Orange Enterprises will provide for and insure not only its own liability in respect of these matters but also the liability herein assumed. 8 The following shall be "events of default" under this Agreement and the terms "event of default" or "default" shall mean, whenever they are used in this Agreement, any one or more of the following events: (i) Failure by Orange Enterprises to observe and perform any covenant, condition or agreement on its part to be observed or performed which failure continues for a period of ninety (90) days after written notice, specifying such failure and requesting that it be DRAFT 14 remedied, given to Orange Enterprises by the County, unless the County shall agree in writing to an extension of such time prior to its expiration, or if the default be of a nature that it is not reasonably susceptible to being cured within ninety (90) days, the time to cure maybe extended by the County so long as Orange Enterprises is diligently attempting to cure such default. The County shall not unreasonably withhold agreement to extend the time period to cure. (ii) The dissolution or liquidation of Orange Enterprises or the filing by Orange Enterprises of a voluntary petition in bankruptcy, or failure by Orange Enterprises promptly to lift any execution, garnishment or attachment of such consequence as will impair its ability to carry on its operations at the Premises, or the commission by Orange Enterprises of any act of bankruptcy, or adjudication of Orange Enterprises as a bankrupt, or assignment by Orange Enterprises for the benefit of its creditors, or the entry by Orange Enterprises into an agreement of composition with its creditors, or the approval by a court of competent,jurisdiction of a petition applicable to Orange Enterprises in any proceeding for its reorganization instituted under the provisions of the Bankruptcy Act, as amended, or under any similar act which may hereafter be enacted. The term "dissolution or liquidation of Orange Enterprises," as used in this subsection, shall not be construed to include the cessation of the corporate existence of Orange Enterprises resulting either from a merger or consolidation of Orange Enterprises into or with another corporation, provided the merged or consolidated entity continues to perform those covenants, conditions and teens of this Agreement required of Orange Enterprises.. The foregoing provisions of this Paragraph are subject to the following limitations: If by reason of force majeure Orange Enterprises is unable in whole or in part to carry out its agreements on its part herein contained, Orange Enterprises shall not be deemed in default during the continuance of such inability. The term "force majeure" as used herein shall mean, DRAFT 15 without limitation, the following: Acts of God, acts of public enemies, orders of any kind of the govenunent of the United States or of North Carolina or any of their departments, agencies, or officials, or any civil or military authority, insurrections, riots, epidemics, landslides, lightning, earthquake, fire, hurricanes, storms, floods, washouts, droughts, azrests, restraint of government and people, civil disturbances, explosions, breakage or accident to machinery, partial or entire failure of utilities, or any other cause or event not reasonably within the control of Orange Enterprises. Orange Enterprises agrees, however, to remedy with all reasonable dispatch the cause or causes preventing Orange Enterprises from carrying out its agreements. In the event Orange Enterprises should default under any of the provisions of this Agreement and the County should employ attomeys or incur other expenses for the enforcement of performance or observance of any obligation or agreement on the pazt of Orange Enterprises herein contained, Orange Enterprises agrees that it will, on demand therefor, pay to the County the reasonable fee of such attomeys and such other expenses so incurred by the County.. In the event any provision contained in this Agreement should be breached by either party and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach hereunder. 10. Consider adding here an option to purchase the Premises in favor of the County for some sum not exceeding $950,000 in the event Orange Enterprises EVER ceases to do business as a Community Rehabilitation Program creating employment opportunities for adults with developmental disabilities, students with developmental disabilities, adults and students with mental illnesses, learning and emotional disabilities, substance abuse disabilities, physical disabilities and individuals in the Work First Program, DRAFT 1 ~ 11. All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed given when mailed by registered mail, postage prepaid, addressed as follows: If to the County, at Orange County, North Carolina, Office of Purchasing and Central Services, Post Office Box 8181, Hillsborough, North Carolina 27278, Attention of Purchasing Director; if to Orange Enterprises, at The County and Orange Enterprises may by notice given hereunder, designate any further or different address to which subsequent notices, certificates or other communications shall be sent. 12. This Agreement shall inure to the benefit of and shall be binding upon the County, Orange Enterprises and their respective successors and assigns, subject, however, to the limitations contained herein, 13. In the event any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof 14. Except as otherwise provided in this Agreement, it may not be effectively amended, changed, modified, altered or terminated without the written consent of the County and Orange Enterprises. 15. This Agreement maybe executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. IN WITNESS WHEREOF the County and Orange Enterprises have caused this agreement to be executed in their respective corporate names and attested by their duly authorized officers, all as of the date first above written, DRAFT ATTEST: By: Donna S. Baker, Clerk to the Board of Commissioners By: ATTEST: By: Secretary NORTH CAROLINA ORANGE COUNTY ORANGE COUNTY, NORTH CAROLINA By: Moses Carey, Ir,, Chair, Board of Commissioners ORANGE ENTERPRISES, INC. President 17 I, , a Notary Public of the County and State aforesaid, certify that Donna S. Baker personally came before me this day and acknowledged that she is Clerk to the Board of Commissioners for Orange County, North Carolina and that by authority duly given and as the act of said County, the foregoing instrument was signed in its name by the Chair of said Board of Commissioners and attested by her as Clerk to said Board of Commissioners. DRAFT Witness my hand and official stamp or seal, this the My commission expires: NORTH CAROLINA ORANGE COUNTY day of Notary Public 18 2005. I, , a Notary Public of the County and State aforesaid, certify that personally came before me this day and acknowledged that he/she is of Orange Enterprises, Inc. and acknowledged, on behalf of Orange Enterprises, Inc., the due execution of the foregoing instrument. Witness my hand and official stamp or seal, this the My commission expires: day of , 2005.. Notary Public Isg:omngeeounty\omnge enterprises agmt doc