HomeMy WebLinkAboutAgenda - 07-23-19 Special Meeting Item 1 - Public Hearing and Decision Regarding an Economic Development Recruitment Incentive for ABB, Inc 1
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: July 23, 2019
Action Agenda
Item No. 1
SUBJECT: Public Hearing and Decision Regarding an Economic Development Recruitment
Incentive for ABB, Inc.
DEPARTMENT: Economic Development
Department, Manager's Office,
Attorney's Office
ATTACHMENT(S): INFORMATION CONTACT:
A. Performance Agreement between Steve Brantley, Economic Development
Orange County & ABB, Inc. Director, (919) 245-2326
B. Powerpoint Brief Summary Travis Myren, Deputy County Manager,
C. ABB, Inc. Detailed Project Overview (919) 245-2308
D. Public Hearing Notice
E. Orange County News Release
PURPOSE: To:
1) Conduct a public hearing on the issuance of a performance-based economic
development incentive by the County to a private company; and
2) Consider approval of a proposed five-year performance-based incentive agreement, with
claw-back provisions, for the recruitment of ABB, Inc.'s manufacturing facility expansion
in Orange County.
BACKGROUND: Local and state government in North Carolina have 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 for the benefit
of its residents. The Local Government Act, North Carolina General Statute (NCGS) 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:
ABB, Inc., with an existing 400,000 square foot manufacturing facility located in western Orange
County, plans to invest $39.9 million to update the existing manufacturing facility and expand
the Company's total facility size by an additional 200,000 square feet. ABB also plans to add
403 new jobs over the next 5 years of operation at this facility. These jobs will include
production, maintenance, office, and management staff and have an average salary of $70,789
per year.
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The ABB, Inc. plant in Orange County ranks as the County's largest private employer, with
nearly 600 current associates, who hold the highest average salaried manufacturing jobs in the
County. The original plant was acquired in June 2018 from General Electric's Industrial
Solutions division.
Under ABB's new management, in mid-2019, the Company hired the Deloitte U.S. site selection
consulting firm to assist in the evaluation of ABB expanding operations either at the Company's
competing Senatobia, Mississippi location or at the Orange County, NC plant. This competitive
site search, code named "Project Clear Blue Sky", evaluated consolidating operations into one
U.S. hub for the manufacturing, engineering, & related electrical products of ABB's "Distribution
Services" line. As part of the location evaluation, ABB considered financial inducement
proposals from the State of North Carolina, Orange County and the City of Mebane.
The proposed incentive will be performance-based with respect to the County's annual
verification of ABB's targeted increases in (1) employment, wages & benefits, and, (2) new
taxable real & personal property value over the next five years, as the Company expands its
Mebane presence. Incentives would only be paid following confirmation of the Company's
required annual growth measures.
Basis to Calculate the Value of Orange County Performance-Based Incentives:
(1) INVESTMENT — ABB will increase property valuation by at least $24,300,000 in real
property and at least $15,600,000 in personal property, to total $39,900,000 over 5 years
as detailed in the table below. If these real and personal property valuation targets are
not achieved, the proposed annual incentive payment will be reduced proportionally.
. . IIIIIIIIIIIIIIIIM
Real Property $5,000,000 $16,600,000 $2,700,000 $24,300,000
Personal $200,000 $10,200,000 $5,200,000 $15,600,000
Pry opertY
Total $5,200,000 $26,800,000 $7,900,000 $39,900,000
(2) EMPLOYMENT - ABB will add net new employment consistent with the job growth chart
below. If annual job targets are not achieved, the annual incentive payment will be
reduced by $500 per full time equivalent employee not hired. By year #5, the Company
will create 403 new positions with an average salary of $70,789 per year.
. . 4 �
1 s Year 2nd Year 3r Year 41—" Year 5th Year
2020 2021 2022 2023 2024
New Full Time 104 274 8 8 9
Jobs
The proposed inducement payment will be in the form of a performance-based grant paid over a
five (5) year period at an amount equal to 75% of ABB's projected net increase in real &
personal property tax valuation. This specific formula represents the County's current incentive
policy that has been offered in the past to other industrial and commercial prospects. It ensures
that annual tax revenues from this project's additional investment, net of annual incentive
payments, remain positive in all years of the incentive agreement.
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A company representative has been invited to attend tonight's meeting and will be available for
comment and questions.
-EVE"'Orange
1 S Year 22--Year 31 Year 4—Year 5—Year TOTAL
2020 2021 2022 2023 2024
New Property
Tax $45,131 $277,554 $337,110 $324,489 $312,679 $1,296,963
Revenues
Incentive -$33,848 -$208,166 -$252,832 -$243,367 -$234,509 -$972,722
Payments
Annual Net $11,283 $69,289 $84,277 $81,122 $78,170 $324,241
Revenues
Orange County • •
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New Property Tax $2,706,336
Revenues ,
Incentive Payments -$972,722
Annual Net Revenues $1,733,614
Additional Partners' Participation:
The State of North Carolina's "Economic Investment Committee" approved the following State
incentives for ABB, Inc. at the North Carolina Department of Commerce's July 10t" meeting.
Immediately following this event, a public announcement was held at the State Capitol Building
in Raleigh, which was led by North Carolina Governor Roy Cooper, and attended by
representatives from ABB, Inc., Orange County and the City of Mebane. The public
announcement addressed ABB's decision to expand the Company's existing facility located in
Orange County, instead of the competing location in Mississippi, subject to approval of local
government incentives.
State of North Carolina — Incentives
Sales Tax Exemption on Machinery & Equipment $1,053,000
Jobs Development Investment Grant $4,369,500
Rural Division Building Reuse Grant *(forgivable loan) $500,000
N.C. Community College System's Customized Training $644,800
*Note Regarding the State of N.C.'s "Rural Division Building Reuse Grant":
Orange County will have a managerial role as the "grant administrator" for the State of North
Carolina's "Rural Division Building Reuse Grant" offer to ABB, Inc. This program is intended to
support the renovation or expansion of vacant buildings, or buildings occupied by a company
operating in North Carolina for at least 12 months. The program, which must be administered
by a local government entity, requires the local government to hold a Deed of Trust on the
building. This can create a potential financial obligation on the local government in the event the
Company does not perform as expected. As ABB incurs actual costs associated with the facility
improvements it plans to make to the existing building, and creates new employment, the
$500,000 State grant will be passed through the County to the Company. The grant is in the
form of a forgivable loan that is satisfied once ABB fulfills all investment and employment
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requirements. To eliminate any financial risk for the County, the pass-through funds will not be
requested from the State until the Company meets all investment and employment criteria and
satisfies any other program requirements.
City of Mebane
ABB's existing facility is currently located within the City of Mebane's Extraterritorial Jurisdiction
(ETJ). The Company has agreed to annexation and the City of Mebane will consider the
following additional incentives at the August 5, 2019 City Council meeting and public hearing.
IIIIM� City of Mebane Incentives- Ammmmdl��
Performance Based Incentive $997,500
Waiver of Development Fees $150,000
FINANCIAL IMPACT: The attached Performance Agreement between Orange County and
ABB, Inc. outlines a total financial impact of up to $972,722 payable in five (5) annual
installments. Actual annual payments will be based on the Company's investments that create
new property tax value of at least $24,300,000 in Real Property, and at least $15,600,000 in
new Personal Property, totaling a combined $39,900,000 in new taxable value. Annual
incentive payments by the County will be paid from net new property tax revenues generated by
ABB, Inc. and from available Article 46 funds.
The Company will create at least Four Hundred Three (403) full-time jobs with an average
annual salary of $70,789 per year at the Mebane facility. Other economic benefit multipliers to
the County include enhanced job skills for those employees through advanced technical training
to be provided by the Orange County campus of Durham Technical Community College.
Construction employment for the new 200,000 square foot facility, and renovations to the
existing 400,000 square foot facility, will also create many additional skilled trade jobs.
SOCIAL JUSTICE IMPACT: The following Orange County Social Justice Goal is applicable to
this 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) Conduct the Public Hearing and receive public comments;
(2) Close the Public Hearing; and
(3) Approve the five-year performance-based economic development incentive agreement
between Orange County and the Company, ABB, Inc., subject to final review by the
County Attorney, and authorize the Chair to sign the agreement on behalf of the County.
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Attachment A
STATE OF NORTH CAROLINA
ORANGE COUNTY
PERFORMANCE AGREEMENT BETWEEN ORANGE COUNTY, NORTH CAROLINA,
AND ABB, INCORPORATED
This Performance Agreement("Agreement")made and entered into this the day of ,2019 by
and between Orange County, a body politic existing under the laws of the State of North Carolina
("County") and ABB, Inc., a multinational corporation, with facilities to be located in Mebane, Orange
County,North Carolina("Company"), for the purpose of incentivizing Company's investment in
Orange County.
Company is a multinational corporation situated and headquartered in Zurich, Switzerland, with North
American headquarters in Cary,NC. Company's Facility shall expand their existing electrical
components manufacturing. 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 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,the State of North Carolina and the City of Mebane,North Carolina have offered separate
inducement packages to the Company; and
WHEREAS, Pursuant to G.S. Section 153A-449, 158-7.1, and 158-7.2, as construed by the North
Carolina Supreme Court in its opinion in Maready v. The City of Winston-Salem, et al, 342 N.C. 708
(1996), and other judicial authority,the County may enter into an agreement with the Company in
connection therewith; and
WHEREAS, the County finds that awarding the Company a grant based on its Total Taxable Investment
will increase the taxable property base for the County and help create new jobs in the County at the
agreed average annual salary, all of which will result in an added and valued benefit to the taxpayers of
the County; and
WHEREAS,but for the offer of an inducement package the Company would not be locating its
manufacturing facility within Orange County.
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.
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B. "Baseline Employment." Number of employees, , employed by Company as of
the date of execution of this Agreement.
C. "Baseline Valuation." Current assessed valuation of the Subject Property as assessed by
the Orange County Tax Administrator prior to the investment contemplated in this
Agreement. Upon revaluation by the County the Baseline Valuation shall be adjusted as
determined by the Orange County Tax Administrator.
D. "Commencement Date." The date in which the Company begins actual production
operations 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 December 31, 2020.
E. "Company." ABB, Inc. and includes its affiliates, successors, and assigns.
F. "Eligible Property." Includes (a)the Subject Property(as defined in Exhibit D,Legal
Description of Real Property), other real property in the County, and all improvements
the Company or an Affiliate of the Company constructs or installs, or causes to be
constructed or installed, at the Subject Property or such other real property, including all
buildings,building systems, and building improvements, and(b) all personal property
(as defined in Exhibit C, Personal Property) the Company or an Affiliate of the
Company purchases or leases and installs, at or relocates to,the Facility or such other
real property. Does not include property valued for the Baseline Valuation.
G. "Grant."An economic incentive grant to the County pursuant to Section 2 of this
Agreement.
H. "Inducement Grant." An economic development grant provided to Company for the
purpose of securing the Company's location of its manufacturing facility in Orange
County,North Carolina.
I. "Minimum Taxable Investment." The aggregate Qualifying Expenditures made by the
Company that Company anticipates will be made annually as reflected in Exhibit B and
verified by the Orange County Tax Assessor and which will be used for calculating the
annual Inducement Grant payment.
J. "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 Mebane, Orange County,North Carolina in and on which
Company conducts its business and/or operations.
K. "Person." Any individual,partnership,trust, estate, association, limited liability
company, corporation, custodian,nominee, governmental instrumentality or agency,
body politic or any other entity in its own or any representative capacity.
L. "Personal Property." All personal 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
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purposes, (d) all additions to any of the foregoing, and all replacements of any of the
foregoing in excess of$100,000.
M. "Qualifying Expenditure." All expenditures the Company, an Affiliate, or lessor to the
Company or an Affiliate makes for Eligible Property which is subject to Tax in the
County, and is not subject to an exemption or exclusion from Tax,that the Company
uses.
N. "State." The State of North Carolina.
O. "Subject Property." The property on which Company constructs and/or operates the
Orange County Facility.
P. "Tax"or"Taxes." Ad valorem property tax levied on real and personal property located
in the Count y 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.
Q. "Term" or"Full Term." The duration of this Agreement meaning_August_, 2019
through and including January 31, 2025.
R. "Total Taxable Investment." The taxable value of all Qualifying Expenditures made by
Company in and to its Orange County Facility as of January 31, 2025.
2. INDUSTRIAL INVESTMENT AND EMPLOYMENT AGREEMENT
A. INVESTMENT
1. The Company anticipates it shall, during the term of this Agreement, directly invest a
Minimum Taxable Investment annually in accordance with the investment plan attached
as Exhibit B in addition to 2019 assessments in real and taxable business personal
property as described in Exhibit C and Exhibit D. If the Company does not make the
Total Taxable Investment by on or before January 31, 2025 (and as may be extended
below),the amount of the Inducement Grants will be adjusted as provided in Subsection
2A3.
2. The Company shall achieve the Total Taxable Investment by January 31, 2025.
3. If total increase of taxable investment falls below the Minimum Taxable Investment
levels, due to failure to meet the investment goals set forth in Exhibit B or removal of
equipment, as assessed by the Orange County Tax Assessor,the amount of the
following annual Inducement Grant installment payment will be reduced by a pro-rata
percentage of the shortfall. The Baseline Valuation shall be excluded from calculations
to determine whether the investment goals have been met.
B. EMPLOYMENT
1. On or before December 31, 2024, at least 403 persons will be employed in full-time
positions at the Facility("Jobs Minimum"). The number of full-time positions shall be
evidenced by one or more Quarterly Tax and Wage Reports (Form NCUI 101) filed
with the N.C. Employment Security Commission.
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2. During the Term and at the expiration of this Agreement,the Company, and its
Affiliates, shall employ, at the Facility in Orange County, new full time equivalent
employees in accordance with Exhibit A. Employees counted toward the total
numbers reflected in Exhibit A shall include only new employees of the Company
employed and located at Company's Facility in Orange County,North Carolina
provided such employees are employed in Orange County on a full time basis and are
eligible to participate in Company sponsored health insurance programs. For purposes
of this section"full time equivalent employees" shall be defined as actively employed
individuals and shall not include vacant positions for which the Company is actively or
otherwise recruiting and shall not include positions counted toward the Baseline
Employment. It is understood that vacancies occur and that when such occur the
Company will immediately, or as soon as is reasonably possible thereafter, fill said
vacancies. The average wage of the 403 new full time equivalent employees shall be,
as of the last day of this Agreement, at the annual rate of Seventy Thousand Seven
Hundred Eighty-Nine dollars ($70,789.00).
C. DEVELOPMENT GRANT PARTICIPATION: Where applicable,the Company agrees to
partner, through the commitment to create new jobs,with Orange County and other applicable
agencies to apply for 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. The
Company agrees to meet with program representatives, and to participate in the grant request
process as necessary to secure the required funding.
D. GUARANTEED MINIMUM LEVEL OF PERFORMANCE: The Company agrees that its
minimum level of performance pursuant to this Agreement shall be as set out in this Section 2.
Furthermore, Company agrees that failure to meet the minimum level of new employment as
reflected in Section 2B shall entitle the County to make reductions in inducement installments
paid to the Company in an amount of Five Hundred dollars ($500.00)per employee not hired as
reflected in Exhibit A. Company further agrees that failure to meet the minimum level of direct
investment as reflected in Section 2A shall entitle County to make pro rata reductions in
inducement installments paid to the Company as set out in Section 3. It is agreed and
understood by the parties hereto that the failure of the Company to meet the level of
performance with respect to minimum level of investment or minimum level of new
employment as specified herein shall not be considered a breach of this Agreement.
E. 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 Grant to offset
Facility development, expansion, and acquisition costs in an amount estimated at Nine Hundred
Seventy-Two Thousand Seven Hundred Twenty-Two Dollars ($972,722.00)payable in five
installments . The estimated annual amount of each year's grant payment is shown in Exhibit B.
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The first installment shall occur on January3l, 2020 upon receipt of proof, as described in
Section 5 of this Agreement, that the minimum employment and investment numbers referenced
in Section 2 of this Agreement have been met and proof 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 installments will occur during the month of January for the term of this
Agreement with the final installment occurring in January 2024. 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 employment and investment levels has been submitted to the
County. Subject to Section 3C the final Inducement Grant amount shall be determined based on
the Company's Total Taxable Investment at the time of the final inducement installment and
according to the formula in 3B.
B. TOTAL COUNTY COMMITMENT: The maximum amount of the Inducement Grant
payment is based on the Total Taxable Investment by Company in an amount of Thirty-Nine
Million Nine Hundred Thousand Dollars ($39,900,000.00). The Inducement Grant payments
shall be calculated based on the Company's Minimum Taxable Investment for the time period
preceding the current Inducement Grant payment. County shall adjust the Inducement Grant
payment amount according to the following formula: Amount of investment divided by 100
multiplied by the current ad valorem tax rate(currently$0.8679 per$100 of valuation)
multiplied by 0.75 (percentage of inducement)multiplied by 5 (number of years). Utilizing this
formula, and an estimate of depreciation as outlined in Exhibit B, a taxable investment currently
estimated at Thirty-Nine Million Nine Hundred Thousand Dollars ($39,900,000.00)would result
in an Inducement Grant in the amount of Nine Hundred Seventy-Two Thousand Seven Hundred
Twenty-Two Dollars ($972,722.00)payable in 5 installments. Subject to 3C below, in the event
the amount of taxable investment increases or decreases,the amount of inducement shall
increase or decrease based on the formula specified herein, however the total amount of
inducement shall not exceed Nine Hundred Seventy-Two Thousand Seven Hundred Twenty-
Two Dollars ($972,722.00). Further,this example assumes a static Total Taxable Investment of
Thirty-Nine Million Nine Hundred Thousand Dollars ($39,900,000.00)throughout the 5 year
term. The formula specified herein shall be applied to the taxable investment annually during
the term to determine the actual amount of the 5 inducement installments.
C. MAXIMUM COUNTY COMMITMENT: The Inducement Grant SHALL NOT EXCEED
Nine Hundred Seventy-Two Thousand Seven Hundred Twenty-Two Dollars ($972,722.00).
This is the maximum allowable inducement amount based on an estimated Total Taxable
Investment by the Company of Thirty-Nine Million Nine Hundred Thousand Dollars
($39,900,000.00). This maximum amount may be reduced based on lower than anticipated
investment by the Company.
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
Section 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.
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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. Acceptable forms of proof for taxable
investment shall be the records of the County Tax Administrator. Acceptable forms of proof of
payment of taxes shall be in the form of cancelled checks, and receipts of payment from the
County Tax Administrator. Acceptable forms of proof for employment numbers shall be in the
form of a notarized statement from a North Carolina licensed Certified Public Accountant and
shall be verified by the North Carolina Employment Security Commission.
Until that date which is one (1)year following the date of the final Incentive Grant payment, the
Company shall allow representatives of the County to enter the Facility during normal business
hours upon forty-eight(48)hours prior notice for the purpose of confirming that the claimed
investment and employment goals have been met. Company will not be held liable for injuries to
representatives of the County while at the Facility.
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 Section 1 IA of
this Agreement upon thirty(30) days written notice to the County.
B. DELAY OF INDUCEMENT PACKAGE INITIATION: If the Company believes that it will
not meet employment and investment goals that are to be met pursuant to this Agreement by
June 30, 2020, the onset of this Agreement may be delayed up to one (1)year, at the option of
the Company. Written notification of the exercise of this option to delay onset must be received
by the County no later than June 30, 2020. In that event this Agreement shall initiate no later
than June 30, 2021 and shall expire no later than January 31, 2025. In the event the
employment and investment goals are not met due to causes beyond the control of the
Company, the period in which such employment and investment goals are to be met may,
upon written notice to, and agreement by the County, be tolled by the period of such delay,
up to one (1) year, caused by such causes beyond the control of the Company(for purposes
of this Section 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). Notwithstanding anything else herein the Commencement Date shall not be beyond
June 30, 2022. If Company cannot meet this this Agreement shall terminate automatically
without fault or further obligation to County. Company shall remain free to negotiate a new
incentive agreement with County based on new terms and timelines.
C. INVESTMENT AND EMPLOYMENT PACKAGE: If the Company does not meet and
maintain either the investment or employment goals within the annual timetable set forth in this
Agreement, and does not opt to delay the onset of this Agreement as described above, then the
county will reduce the annual installment payment as set forth in Section 2D of this Agreement
until such time as the Company once again meets both the investment and employment goals.
Reduction shall be computed based on the percentage of the goal not met. In order to qualify for
the full reimbursement, including recovery of any prior reductions,both investment and
employment must meet or exceed the minimum standards outlined above prior to the natural
termination of this Agreement.
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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
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 by 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 any claims,
complaints, 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 claim,
complaint, suit or action.
10. INDEMNIFICATION
The Company hereby agrees to indemnify, protect and save the County and its officers,
directors, and employees harmless from all liability, obligations, losses, claims, damages,
actions, suits,proceedings, costs and expenses, including reasonable attorneys' fees, arising
out of, connected with, or resulting directly or indirectly from the business, construction,
maintenance, or operations of the Company or the Facility or the transactions contemplated
by or relating to this Agreement, including without limitation,the possession, condition,
construction or use thereof, insofar as such matters relate to events subject to the control of
the Company and not the County. The indemnification arising under this Article shall
survive the Agreement's termination.
11. TERMINATION
A. COMPANY: Upon Company's meeting its Employment and Investment obligations asset
out in Section 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 Section 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 Section 3 of this Agreement; or,under the same circumstances, failure of the
County to make future inducement installments, as provided for in Section 3 of this
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Agreement. Should the Company exercise its option to terminate this Agreement,pursuant to
this Section for failure by the County,the Company shall be entitled to retain all funds paid to or
for the benefit of the Company pursuant to this Agreement. On the other hand, 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 or further obligation 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 Direct Investment goes
below thirty percent(30%) of the guaranteed minimum levels of performance commitments for
either Full Time Equivalent Employees or Direct Investment as reflected in Section 2 above.
Notwithstanding the foregoing, if the aforesaid decline in the number of full time equivalent
employees or the Company's failure to make the required direct investments is attributable to an
overall national economic decline (as such may be recognized by the United States Bureau of
Labor Statistics),this shall not be deemed an abandonment of operations entitling the County to
terminate this Agreement, and the Company shall not be deemed in default. In such event,the
Company's and the County's obligations shall be suspended for one year and resume thereafter.
If after one year the aforesaid decline continues the County may declare an Abandonment of
Operations and proceed as set forth herein.
C. NATURAL: In any event,the above terms notwithstanding,this Agreement shall
terminate upon the 31St day of January 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 OF
THE COUNTY WITHIN THE MEANING OF ANY CONSTITUTIONAL DEBT
LIMITATION. NO PROVISION OF THIS AGREEMENT SHALL BE
CONSTRUED OR INTERPRETED AS DELEGATING GOVERNMENTAL POWERS
NOR AS A DONATION OR A LENDING OF THE CREDIT OF THE COUNTY
WITHIN THE MEANING OF THE STATE CONSTITUTION.
THIS AGREEMENT SHALL NOT DIRECTLY OR INDIRECTLY OR
CONTINGENTLY OBLIGATE THE COUNTY TO MAKE ANY PAYMENTS BEYOND
THOSE APPROPRIATED IN THE COUNTY'S SOLE DISCRETION FOR ANY
FISCAL YEAR IN WHICH THIS AGREEMENT SHALL BE IN EFFECT.
NO PROVISION OF THIS AGREEMENT SHALL BE CONSTRUED TO PLEDGE
OR TO CREATE A LIEN ON ANY CLASS OR SOURCE OF THE COUNTY'S
MONEYS,NOR SHALL ANY PROVISION OF THE AGREEMENT RESTRICT TO
ANY EXTENT PROHIBITED BY LAW,ANY ACTION OR RIGHT OF ACTION
Page 8 of 19
13
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 Section 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: Subject to the specific provisions of this Agreement, this
Agreement shall be binding upon and inure to the benefit of and be enforceable by the
Parties and their respective successors and assigns.
C. TIME: Time is of the essence in this Agreement and each and all of its provisions.
D. CONSTRUCTION: Nothing in this Agreement shall be construed to the effect that the
County has any right to influence the Company's business decisions or to receive business
information from the Company(except as expressly provided in Section 2B and Section 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 I IA and Article 40 of North Carolina General Statute Chapter 66.
F. AUTHORITY: The parties and each person executing this Agreement on behalf thereof
represent and warrant that they have the full right and authority to enter into this Agreement,
which is binding, and to sign on behalf of the party indicated, and are acting on behalf of
themselves, the constituent members and the successors and assigns of each of them. The parties
shall reasonably assist one another and cooperate in the defense (should any defense ever be
necessary) of this Agreement and/or the incentives granted hereunder, so as to support and in no
way undercut the same.
G. FORCE MAJEURE: Subject to the provisions of Section 6 neither party shall be liable
towards the other party for non-compliance with its contractual obligations hereunder, if and to
the extent such non-compliance is directly attributable to events of force majeure. Events of
force majeure are events or causes which are not under a parry's reasonable control and render
the execution of a party's obligations impossible. Each party shall forthwith inform the other
Page 9 of 19
14
parties of the occurrence of a force majeure event preventing such party from complying with its
contractual obligations. Force Majeure does not include failure of the Company to secure
permitting necessary for the project to proceed.
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,
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, and 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 section is not intended to limit and does not limit the definition of
breach to discrimination.
B. E-VERIFY, ISRAEL BOYCOTT,AND IRAN DIVESTMENT: By executing this
Agreement Company affirms that 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, have not been identified, and have not utilized the services of
any agent or subcontractor, on the list created by the North Carolina State Treasurer pursuant to
Articles 6E and 6G of Chapter 147 of the North Carolina General Statutes.
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 , 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 Section to the other Party.
Page 10 of 19
15
AGREEMENT REVIEWED AND ACCEPTED BY:
President Attest:
Inc.
Chair Attest: Donna Baker
Orange County Board of Commissioners Clerk to the Board
Orange County Commissioners
This instrument has been pre-audited in the manner required by the Local Government Budget and
Fiscal Control Act.
Chief Financial Officer
Approved as to form and legal sufficiency.
Office of the County Attorney
Page 11 of 19
16
EXHIBIT A- PROJECT SUMMARY FORM FOR STATE OF NORTH CAROLINA INCENTIVE REVIEW
PROJECT SUMMARY FORM
ABB,Inc. 1
Average Wages
Avg-Annual
New Jobs By Year 3-Year 5-Year Wage of ALL Minimum
403 New Avg-Annual
2020 2021 2022 2023 2024 TOTAL TOTAL Jobs Wage of Jobs
104 274 a S 386 403 $70,789 S70,789
New Investment By Year 3-Year 5-Year
2019 2020 2021 2022 2023 TOTAL TOTAL
Real Property $5,000,000 $16,600,000 $2,700,000 $0 =_ $24,300,000 $24,300,000
Tangible Personal Property $200:000 $10,200,000 $5,200,0001 $D SU $15,600,000 $15.600,000
Total Investment 1 $5,200,0001 $26,800,0001 $7,900,0001 1 900,000 539,900,000
EXHIBIT B - PROPOSED ORANGE COUNTY INCENTIVE
COMPANY $39,900,000 TAX RATE $0.8679 -JOBS 403 INCENTIVE 75% of new property tax for 5 years
AVERAGE WAGE $70,789 DEPRECIATION RATE 10%
New Value Yr 1 i 02 i i i i r -
Real $5,000,000 $21,600,000 $24,300,000 $24,300,000 $24,3013,000 $24,300,000 $24,300,000 $24,300,000 $24,300,000 $24,300,000 $24,300,000 $24,300,000
Pers Prop Yr 1 $200,000 $180,000 $162,000 $145,800 $131,220 $118,098 $106,288 $95,659 1,86,093 $77,484 $69,736 $200,000
Pers Prop Yr 2 $0 $10,200,000 $9,180,000 18,262,000 $7,435,800 $6,692,220 $6,022,998 $5,420,698 $4,878,629 14,390,766 $3,951,689 $10,200,000
Pers Prop Yr 3 $0 $0 $5,200,900 14,6W,000 $4,160,000 $3,640,000 $3,120,000 $2,600,000 $2,080,000 $1,560,000 $1,040,000 $5,200,000
Pers Prop Yr 4 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Pers Prop Yr 5 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Pers Prop Yr 6 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Pers Prop Yr 7 $0 $0 $0 $0 $0 $0 $0 LO S,_0 $00 $00 $0
Tax Value $5,200,000 $31,980,000 $38,842,000 $37,387,800 $36,027,020 $34,750,319 $33,549,296 $32,416,359 $31,34-4,722 $30,328,250 $29,361,425 $39,900,000
i i i i i
Property Tax $0 $45,131 $277,554 $337,110 $324,489 $312,679 $301,598 $291,174 $281,342 $272,041 $263,219 $2,706,336
Incentives $0 -$33,84a -$208,166 -$252,832 -$243,367 -$234,509 $0 $0 $0 $0 $0 -$972,722
Annual Net $0 $11,293 $69,389 $84,277 $81,122 $78,170 $301,598 $291,174 $281,342 $272,041 $263,219 $1,733,614
Cash Flow $0 $11,293 $90,671 $164,949 $246,071 $324,241 $625,939 $917,013 $1,199,354 $1,470,395 $1,733,614
$2,000,000
$1,8{IQ464
17
EXHIBIT C - BUSINESS PERSONAL PROPERTY
Parcel Identification Number 9834088521
Address 6801 Industrial Drive, Mebane,NC 27302
2019 Orange County Personal Property Value $7,192,268
18
EXHIBIT D -DESCRIPTION OF REAL PROPERTY
Parcel Identification Number 9834088521
Address 6801 Industrial Drive, Mebane,NC 27302
Acreage 100.75
Building Size 400,000 SF
2019 Orange County Real Property Value $12,889,300
19
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Prepared by: Richard J. Archie j
WHITE & ALLEN, P.A.
Mail to: Melissa Meyroxitz
Weil, Gotshal & Manges LLP
757 Fifth Avenue, New York,
NY 10153
Property waslwas not Grantors primary residence
NORTH CAROLINA
SPECIAL WARRANTY DEED
orange
Excise Tax: Exempt, pursuant to NC
statute §105.22929
Parcel No.: 9834081459 (Tract 1) and
9834189598 (Tract 2)
T1—1
THIS DEED, made this 27th day of June, 2017, effective as
of August 1, 2017 ("Effective Date"), by GENERAL ELECTRIC COMPANY,
whose address is 1 River Road, Schenectady, New York 12345, _
Grantor; to INDUSTRIAL CONNECTIONS & SOLUTIONS LLC, whose address !
is 4200 Wildwood Parkway, Atlanta, GA 30339, Grantee;
W I T N E S S E T H: i
That Grantor, for a valuable consideration paid by
Grantee, the receipt of which is hereby acknowledged, has sold, and
by these presents, does, as of the Effective Date, grant, bargain,
sell and convey unto Grantee, his/her/their heirs and assigns, that
parcel of land lying and being in MEBANEIORANGE County, North
weiJ�se+x2a+i�a>ano Door
Su hri rred el ec tronl ca 11y by "Kennon crave r, PLLC'
in coup
li once with north tarollna 1 Icutes governlnq recordahle doc unenis
and the terns of the submit ter ag re ene nt with the ura nge tountY Keg1s[er of Seeds.
20
R05M 399 215
Carolina, and more particularly described on Exhibit A attached
hereto and incorporated herein by reference.
This property was conveyed to Grantor by Deed recorded in
the above named County Registry in Book 22B, Page 731; Book 228;
Page 829; Book 228, Page 1031; Book 232, Page 586; Book 232, Page
590, and Book 241, Page 1432.
TO HAVG AND TO HOLD the aforesaid parcel of land and all
i
privileges and appurtenances thereto belonging to the Grantee in i
fee simple.
And the Grantor covenants with the Grantee that Grantor
i
has done nothing to impair such title as Grantor received, and
Grantor will warrant and defend the title against the lawful claims
of all persons claiming by, under or through Grantor, subject to
taxes and other assessments, reservations in patents and all
easements, rights-of-way, encumbrances, liens, covenants,
conditions, restrictions, obligations and liabilities, and such
additional exceptions as may be hereinafter stated. Title to the
property hereinalbove described .is subject to the following
additional exceptions:
None.
The designation Grantor and Grantee as used herein shall _
include said parties, their heirs, successors and assigns, and
shall include singular, plural, masculine, feminine or neuter as
[]W000.0007P11756pyyk) -
wf iLIMI 72041WA7890AP307
21
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9
required by context. Grantor makes no other representations or
warranties of any kind or nature, statutory express or implied.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
I
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I
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1300D00•D�a77117F61NFll]
3
wq�:+ysr7zoa�+maraeo.osa�
22
IN WITNESS WHEREOF,Grantor has duly executed the foregoing as of the day and year First above written.
GENERAL ELECTRIC COMPANY,
a New York oorporation
I
f
By:
Name,Au ngapore
Title:Authorized Signatory
I
ACKNOWLEDGMENT
STATE OF CONNECTICUT ]
}SS.: !
COUNTYOF9
On the day of�ti�,2017,before me,the undersigned,personally appeared Aun Singapore,
who acknowledged hlmseHlherself to be the Authorized Signatory of Generat Electric Company,a corporation,and that _
helshe,as suoh Aullrofited Signatory,being authorized so to do,executed the foregoing instruments for the purposes i
therein contained by signing the name of the corporaeon by himselflherself as Authorized Signatory.
In v ilness whereof I heretinto set my hand.
Notary Public ,;g'r iysoif�sa�Fsy:
Date Commission Expires: _ :��yd1ARr
,�ONNECS�O
I
I
i
f
Esignatu re Page to iaengw Wa r,anty Deed tlde6an6,Nolih Carol na!l
23
exHiB1T A
Lying and being more particularly described as follows:
TRACT 1"
i�
BEING all of that tract of land,*Walning 06.753 acres,more or less,labeled as"Sewer Easement Plat
Property of General Electric Co.'and shown on that plat dated July 13.2011 by Jeffrey P.Williams,PLS.
and retarded in Plat Book 109,Page 15.Office of the Register of Deeds of Orange County,North Carolina,
being most of the property conveyed to Dead Book 226,Page 731,Office of the Register of Deeds of Orange
County,North Carolina.
TRACT 22
Being all of that tract of land,containing 4 acres,more or less,adjoining the lands of Albright,William
Holman and Oldham and more particularly described in the deed recorded in Book 61,Page 47.Office of
the Register of Deeds of Orange County,North Carafina.See also peed Boric 236,Page 794 and Deed
Book 241.Page 1432,Office of the Register of Deeds of Orange County,North Carolina.
i
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5
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24
ORANGE COUNTY
NORTH CAROLINA
Proposal for Orange County's
Financial Incentives for
ABB , Inc.
Public Hearing by Orange County Board of
Commissioners
Whitted Building - Hillsborough, NC
July 23, 2019
Location of ARC Inc. in Orange Count 25
F � ,
............................ MR
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3
J
�.,ORANGE COUNTY
�, •I NORTH CAROLINA
N 1 in=1,500 feet
.62 ...`n ._. .....---...... Feet
0 Site of Interest 0 750 1,500
Jrange County Planning and Inspection
2 _____I Orange County Boundai; BC5ns12019
Mebane City Limits & ETJ : ABB, Inc. 26
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Gr:M- W-
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ORANGE COUNTY
j' NORTH CAROLINA
N 1 in="500 feet
Site of Interest Mebane CityLimits Feet
� 0 750 1,500
u Mebane ETJ Orange County Planning and Inspection
3 f Orange County Boundary BC 512012019
27
Description of ABB's " Project Clear Blue Sky"
• Consolidation into one U .S. hub of the manufacturing, engineering, &
related electrical products of ABB Is "Distribution Services" line.
• ABB hired consultant Deloitte U.S. to evaluate Mebane, NC versus a
competing ABB site in Senatobia, MS.
• $39.9 million in investment
• $24.3 MM in real property; $15.6 MM in personal property
• Forecast to occur in the first 3 years of operation
• New building construction of 200,000 sq. ft. (approx. half of the investment)
• Additional improvements to 400,000 sq. ft. existing building
• Introduction of world-class sheet metal and copper fabrication equipment
• Transfer of personal property (Relocation of existing machinery from another ABB
plant to the Mebane plant; estimated at only 10-15% of the total M&E investment
to be made)
• 378 new jobs in first 2 years, increasing to 403 jobs by 5th year
• $70,789 average annual salary, plus benefits.
• Mebane operations would lose 110 jobs if MS site was selected.
ORANGE COUNTY
NORTH CAROLINA
4
28
Company History JL III III
• Multinational Swiss/Swedish company j1% Ir or
headquartered in Zurich, Switzerland
• Founded 130 years ago
• 147,000 employees globally
• Presence in over 100 countries
• 24,000 employees in the United States (2018)
— 3,000 in North Carolina & $45 million in annual payroll statewide
• 65 manufacturing locations in the United States (2018)
• Five market-leading entrepreneurial divisions:
— Electrification Products
— Power Grids (selling this division to Hitachi by 2020)
— Industrial Automation
— Robotics & Discrete Automation
— Motion Control (Industrial motors & drives, traction control)
ORANGE COUNTY
NORTH CAROLINA
5
29
Company History
;"irrY�S4
• Orange County, NC GE Industrial Solutions
was acquired in June 2018 to strengthen ABB's mji
position in electrification globally, and expand
access to the North America market `
• ABB's U.S. operations are headquartered in Cary, N .C. ;
a significant financial backer of the North Carolina Theatre.
• With over 575 employees currently at ABB's site in Mebane, the
firm is Orange County's #1 largest private employer, the largest
manufacturing employer, and pays the highest average
manufacturing salary among all industries in the County.
ORANGE COUNTY
NORTH CAROLINA
6
30
Outline of All Performance-Based Incentives
� � m . � ym
Sales Tax Exemption on Machinery & Equipment $1 ,053,000
Jobs Development Investment Grant $4,369,500
Rural Division Building Reuse Grant (forgivable loan) $5007000
N.C. Community College System's Customized Training $644,800
Performance Based Incentive (as proposed) $9727722
Performance Based Incentive* $997,500
Waiver of Development Fees* $1507000
U6
*(Only available if the ABB site is annexed into Mebane's city limits)
ORANGE COUNTY
NORTH CAROLINA
7
31
Forecast of ABB's Capital Investment Schedule
New Taxable Investment (Real & Personal Property)
Real $5,000,000 $16,600,000 $2,700,000 $24,300,000
Property
Personal
Property $200,000 $10,200,000 $5,200,000 $15,600,000
Total $5,200,000 $26,800,000 $7,900,000 $397900,000
ORANGE COUNTY
NORTH CAROLINA
a
32
Forecast of ABB's New Job Creation
Hiring Schedule for New Jobs, with Benefits
Full-Time 104 274 8 8 9 403
Jobs
ORANGE COUNTY
NORTH CAROLINA
9
33
Orange Countv's Performance-Based Incentive
Orange County Proposed Incentive
— Performance-based incentive on outlined jobs (403) and
capital investment ($39,900, 000)
— Up to $972, 722 paid out over 5 years upon verification of
actual jobs and investment numbers per year
— Incentive value calculated at 75% of actual new property
tax valuation
ORANGE COUNTY
NORTH CAROLINA
10
34
Oranqe County's Performance-Based Incentive
State of N .C.'s Rural Division Building Reuse Incentive
— This State program is intended to support the renovation or
expansion of vacant buildings, or buildings occupied by a
company operating in North Carolina for at least 12 months.
— Orange County would serve as the administrative entity for this
State of North Carolina financial grant that is structured as a
forgivable loan program, once ABB's new jobs are created.
— As ABB incurs actual costs associated with the facility
improvements it plans to make to the existing building, and
creates new employment, the $500, 000 State grant will be
passed through the County to ABB.
— To eliminate any financial risk for the County, the pass-through
funds will not be requested from the State until ABB meets all
investment and employment criteria, and satisfies any other
program requirements.
ORANGE COUNTY
NORTH CAROLINA
11
35
Orange Countv's Performance-Based Incentive
Revenue Projections:
5-YearJL2020 ,do 2021dJ6. 1 1 1
Property
Taxes $45, 131 $277,554 $337, 110 $3247489 $312,679 $152969963
Received
Incentive -$33,848 -$208, 166 -$252,832 -$243,367 -$234,509 -$972,722
Annual $113283 $69,389 $84,277 $81 , 122 $78, 170 $324,241
Net
Property Taxes $2,706,336
Received
Incentives -$972,722
ORANGE COUNTY
12 Annual Net Revenues $1 ,733,614 NORTH CAROLINA
36
Proposal for Orange County's Financial
Incentives for ABB, Inc.
Questions & Discussion
�1
ORANGE COUNTY
NORTH CAROLINA
37
Attachment C
ORANGE COUNTY
NORTH CAROLINA
Orange County Board of Commissioners
Detailed Summary of Economic Development Recruitment
Project Clear Blue Sky
(ABB, Inc. plant expansion)
July 23, 2019
Purpose:
• Expansion of the existing ABB, Inc. factory (former General Electric Industrial Energy
Solutions) facility located in Orange County. (The current tax value of existing operations as
of Jul 10, 2019 is $20,081,568).
• Consideration of an inducement incentive (based on the County's standard incentives
formula approved by the BOCC with similar manufacturing projects).
Incentive Proposal:
• Performance-based grant calculated at 75% of actual property tax valuation, for 5 years
• Orange County's estimated 5-year incentive total is $972,722.00
Project Description:
• The ABB site search was assisted by the accounting consulting firm Deloitte US and the
State of NC to conduct the project evaluation: Mississippi vs. North Carolina expansion.
• $39.9 million in new capital investment (forecast to occur in the first 3 years of operation).
o New building construction of 200,000 sq. ft. (approx. half of the investment)
o Plus building improvements to the existing 400,000 sq. ft. factory
o World-class sheet metal and copper fabrication equipment
o Transfer of personal property
• 378 new jobs in first 2 years, increasing to 403 lobs by 5th year
• $70,789.00 average annual salary, plus benefits.
• With Mebane site being selected, the current 400,000 sq. ft. footprint would be expanded
by 50% and updated with world-class sheet metal and cooper fabrication equipment.
• ABB currently has 550 employees, and is the largest manufacturer, with the most advanced
technology, and highest average salary, among all major industries in Orange County.
38
Project Competition:
• Competing site has been an existing ABB location in Senatobia, MS. Both state and local
economic development agencies in Mississippi have provided meaningful incentive offers
to the company to expand that facility.
• If the Mississippi facility was chosen, the Mebane facility would lose approximately 110
existing jobs based in Orange County.
Location of ABB, Inc. Site in Orange County
Orange County,North Carolina
ABB Plant Site
W.
IJ 1 1
6 .
Rp
�t x_,
ORANGE COUNTY
- NORTH CAR01INA
Q Site of Interest - Utility Easements 2'Contours(NCIDOT)
�Faer
Gravity Sewer -Water Line Streams o zoo- aou
0, ;i.C.*Planning-d In.p-1ii n
Force Main Sewer Be rs zats
Participation by the City of Mebane:
• ABB, Inc. has now agreed to be annexed into the Mebane city limits, as the factory is
currently located within the ETJ (Extraterritorial Jurisdiction). In the current configuration,
the City of Mebane would continue to handle the project review and permitting, and would
is being annexed into the city limits.
• Mebane offers the company a list of benefits that annexation offers (examples: lower
water/sewer rates, expedited permitting reviews, financial recruitment incentive).
39
Chronological History:
• May 17, 2019 - First meeting between Deloitte US, ABB leadership, Economic Development
Partnership of North Carolina, NC Community College System, Orange County, and City of
Mebane to discuss "Project Clear Blue Sky".
• May 21, 2019 - BOCC closed session discussion to consider County incentives.
• July 10, 2019 - ABB & N.C. Governor Roy Cooper publically announced the project for
Orange County at the State Capitol in Raleigh.
• July 23rd - Orange County's special meeting of the BOCC to hold the public hearing on
County incentives to ABB, Inc.
Summary of Incentives -State of North Carolina, Orange County& City of Mebane
Parameters of Factory Expansion:
➢ 403 new jobs in 5 years
➢ $70.789 avg. salary of all jobs, with full benefits
➢ $39.9 million capital investment in 5 years
STATE OF NORTH CAROLINA
(1) Statutory Incentives
• Sales Tax Exemption on machinery & equipment $1,053,000.00
(2) Discretionary Incentives
• Jobs Development Investment Grant (JDIG) $4,369,500.00
(Reimbursement of employee withholding taxes)
• Rural Division Building Reuse Fund $500,000.00
(3) Workforce Development Incentive:
• N. C. Community Colleges (technical training) $644,800.00
TOTAL (State of NC) $6,567,300.00
LOCAL GOVERNMENT
• Orange County $972,722.00
• City of Mebane (with annexation) $1,147,500.00
TOTAL (State & Local) $8,687,522.00
40
Other Local Governments, State of N.C. Agencies & Utilities Partnered with Orange County:
• N.C. Community Colleges System & Durham Tech/Hillsborough campus, and possibly
Alamance Community College (will receive State funding to provide technical training of
employees, and evaluate development of certificate/apprenticeship programs to meet
company specific training needs (i.e. Advanced Electrical Product Technician Certificate)
• N.C. Department of Commerce &the Economic Development Partnership of N. C. (offering
state incentives and as a liaison on workforce development & pre-screening of applicants
by NC Works, NCDOT road improvements, and community college support)
• City of Mebane (project review and site plan approvals, financial incentive.)
• Duke Energy (coordination with Duke Energy's economic development group)
Comment Regarding the State of N.C.'s "Rural Division Building Reuse Grant"
Orange County will have a managerial role as the "grant administrator" for the State of N. C.'s
"Rural Division Building Reuse Grant" offer to ABB, Inc., which is a program intended to support
the renovation or expansion of vacant buildings, or buildings occupied by a company operating in
North Carolina for at least 12 months. This program, which must be administered by a municipal
entity, typically requires the local government to hold a Deed of Trust on the building. This can
create a potential financial obligation on the local government in the event the corporate entity
does not perform as expected. As ABB incurs actual costs associated with the facility
improvements it plans to make to the existing building, and creates new employment, the
$500,000 State grant will be passed to the Company via the County. Since the grant is actually a
forgivable loan, once ABB fulfills all requirements to document its' investment and employment,
the repayment obligation ends.
As an alternative structure to remove the County's potential financial risk, it is recommended that
the County follow an example provided by the City of Mebane which negotiated a similar Building
Reuse grant contract with the State for another industry. In that case, the pass-through funds
were not requested from the State, and not given to the Company, until the Company actually first
meets all investment and employment criteria and satisfies the program's requirement.
ABB Company Overview:
• Multinational Swiss/Swedish company headquartered in Zurich, Switzerland
• 147,000 employees globally
• Presence in approx. 100 countries
• 24,000 employees in the United States (2018)
• 65 manufacturing locations in the United States (2018)
• Five market-leading entrepreneurial divisions:
o Electrification Products
o Power Grids (divestment to Hitachi expected to be complete in 2020)
o Industrial Automation
o Robotics & Discrete Automation
o Motion
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• ABB acquired Orange County, NC-based GE Industrial Solutions in June 2018 to strengthen
its position in electrification globally, and expand their access to the North America market
• ABB's U.S. operations are headquartered in Cary, NC
• Currently, ABB operates 11 facilities across North Carolina
0 3,000+ employees in NC
o Approx. $45m in annual payroll statewide in NC
• As part pf the GE Industrial Solutions acquisition in 2018, ABB acquired the Mebane, NC
facility that will undergo this expansion.
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Orange County, North Carolina
ABB Punt Site Vicinity Map
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NORTH CAROLINA
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[___i Orange County Boundary BC 5i2m2019
Attachment D 43
PUBLICATION INSTRUCTION: Please publish the following notice in the Special Notice Section
of the Classified Advertisements as early as Wednesday, July 11, 2019 and by no later than
Saturday, July 13, 2019. The County Seal should be placed above the announcement.
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PUBLIC HEARING
Tuesday, July 23, 2019 — 7:00 PM
RICHARD WHITTED MEETING FACILITY
300 West Tryon Street
Hillsborough, NC 27278
NOTICE OF PUBLIC HEARING REGARDING PROPOSED ECONOMIC
DEVELOPMENT INCENTIVE AGREEMENT FOR ABB, INC.
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
Tuesday, July 23, 2019 at 7:00 PM at the Richard Whitted Meeting Facility, 300 West
Tryon Street, Hillsborough, NC 27278 concerning Orange County entering into an
Economic Development Incentive Agreement with ABB, Inc. to encourage the company to
make a major facility expansion in Orange County.
The Board will consider the appropriation of county general funds for the purpose of
entering into an Economic Development Incentive Agreement with ABB, Inc., an electrical
products manufacturing company, in an amount not to exceed Nine Hundred Seventy Two
Thousand Seven Hundred Twenty Two Dollars ($972,722.00), payable in five (5) annual
installments over a five year period. These funds will be used to assist the company with
expenses associated with expansion of the company to Orange County, to include site
development and facility construction costs. Expansion of the ABB, Inc. facility in Orange
County will create public benefits for the County including the creation of 403 new full time
equivalent jobs, and a capital investment in Orange County of$39.9 million.
Anyone interested in the Economic Development Incentive Agreement or the nature of
ABB, Inc. 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, c/o Clerk to the Board of
Commissioners, 200 S. Cameron Street, Hillsborough, North Carolina 27278.
44
Attachment E
AdIlow-
ORANGE COUNTY
NORTH CAROLINA
Media Contact:
Steve Brantley, Director
Orange County Economic Development Department
Phone: (919) 245-2326
FOR IMMEDIATE RELEASE
ORANGE COUNTY & NORTH CAROLINA SUCCESSFULLY WIN MAJOR
MANUFACTURING EXPANSION OF EXISTING COMPANY, ADDING
SIGNIFICANT NEW JOBS TO COUNTY
ORANGE COUNTY, NC (July 10, 2019) —The Orange County Board of
Commissioners, County Manager's Office and the Economic Development Department
are announcing the successful expansion of the current ABB, Inc. manufacturing facility
located in Mebane, NC, contingent upon local incentive approvals.
The Swiss-Swedish multinational company has selected their existing Orange County
location to consolidate a significant portion of ABB's Distribution Services portfolio of
products into one U. S. hub. ABB acquired the former GE Industrial Solutions' 400,000
sq. ft. facility in June 2018 to strengthen its position in electrification globally and expand
their access to the North American market. This operation currently employs a
workforce of over 500 individuals who assemble highly sophisticated electrical
components. Over the next five years, the company will invest up to $39.9 million to
build a new, state-of-the-art 200,000 sq. ft. manufacturing facility, and create 403 new
jobs that will provide health and retirement benefits. These new positions will offer
highly competitive salaries that are expected to average $70,789.00 a year.
"We are excited to see ABB continue to grow and invest in their operations here in
Orange County," said Board of Commissioners Chair Penny Rich. "As one of our largest
manufacturing operations, we look forward to the excellent new employment
opportunities this corporate expansion will bring to the residents of our community."
The State of North Carolina, to include Governor Cooper's office and the North Carolina
Department of Commerce, were key players in securing the expansion commitment
from ABB. In addition, the City of Mebane has partnered with Orange County to support
the growth of the Company, which is part of the County's overall vision to develop the
45
Buckhorn Economic Development District. The project recruitment also included close
assistance provided by the Economic Development Partnership of North Carolina, and
ABB's site selection consultant Deloitte.
Orange County recognizes the State's role in winning this expansion, specifically
Governor Roy Cooper, N. C. Department of Commerce Secretary Tony Copeland, and
the NC Community Colleges System, and appreciates their support of our community.
"A comprehensive set of incentive offers were used to encourage ABB, Inc. to bring the
expansion to Orange County, including performance grants from the County and City of
Mebane, State of N.C. incentives, and technical training assistance of ABB's new
employees through the North Carolina Community Colleges System," said Orange
County Manager Bonnie Hammersley. "ABB's decision to select Orange County is
contingent upon the successful negotiation of these items with the State, County and
City of Mebane. I am personally delighted to see this exciting new development."
The County's proposed performance-based incentives to ABB, Inc. will be discussed
and voted on at a Public Hearing of the County Commissioners, scheduled for July 23,
2019.
About ABB, Inc.
ABB, Inc. is a pioneering technology leader with a comprehensive offering for digital
industries. With a history of innovation spanning more than 130 years, ABB is today a
leader in digital industries with four customer-focused, globally leading businesses:
Electrification, Industrial Automation, Motion, and Robotics & Discrete Automation,
supported by its common ABB AbilityTm digital platform. ABB's market-leading Power
Grids business will be divested to Hitachi in 2020. ABB operates in more than 100
countries with about 147,000 employees. ABB employs over 3000 across North
Carolina, more than in any other state.