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Home My WebLink AboutAgenda 12-02-19 Item 8-e - Resolution to Accompany the North Carolina Department of Commerce’s Building Reuse Grant Incentive Application for ABB, Inc. 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: December 2, 2019 Action Agenda Item No. 8-e SUBJECT: Resolution to Accompany the North Carolina Department of Commerce's Building Reuse Grant Incentive Application for ABB, Inc. DEPARTMENT: Economic Development ATTACHMENT(S): INFORMATION CONTACT: Resolution Steve Brantley, Economic Development Director, (919) 245-2326 PURPOSE: To approve a supporting Resolution, based on a request from the North Carolina Department of Commerce as part of the required documentation for the State's Building Reuse Grant incentive that was awarded to ABB, Inc. in July 2019, that endorses the County's role to help administer the eventual transfer of State funds from the North Carolina Department of Commerce to ABB for the State's Building Reuse Grant incentive related to the company's recent July 10t" announcement to expand its Orange County manufacturing facility. BACKGROUND: ABB, Inc. is a multi-national Swiss/Swedish owned electrical components manufacturer operating a large 400,000 square foot electrical assembly operation in western Orange County. Employing almost 600 employees, ABB is the County's single largest private employer and highest average salaried manufacturer. This operation was purchased from GE Industrial Energy Solutions in July 2018. In early 2019 ABB employed the site selection firm Deloitte USA to evaluate all cost and benefits options concerning a multi-state competitive analysis, with a primary focus on whether to consolidate operations and expand the firm's Mebane, Orange County operation, or choose another ABB plant location in Mississippi. This effort led to the State of North Carolina, Orange County, and the City of Mebane working in partnership to quote potential financial incentives intended to encourage ABB to expand operations in Orange County. On July 10, 2019, ABB and North Carolina Governor Roy Cooper formally announced the firm had decided to select Mebane/Orange County to invest $39.5 million, add an additional 200,000 square feet of manufacturing space, and create 403 new jobs (with an average salary up to $70,789) over the next five years. In addition to Orange County and Mebane subsequently approving local performance-based financial incentives (Orange County's approval occurred on July 23rd), the State of North Carolina offered technical training support by the N. C. community college system, a 2 discretionary Jobs Development Investment Grant (JDIG) valued at $4.4 million, and, a $500,000 Building Reuse Grant. The Building Reuse Grant is essentially a forgivable loan requiring ABB to invest at least $500,000 in new renovation improvements to its existing facility, and create a targeted level of new job creation in the initial 2 - 3 years. Once ABB meets those requirements, the forgivable loan will convert to a grant. State requirements for the Building Reuse Grant also involve a local government agreeing to serve as the administrator during a company's building renovation and job hiring phase. That local government role includes the transfer of State funds from the N. C. Department of Commerce directly to the local government, which, in turn, passes the funds over to the recipient industry. Documentation includes (1) an initial grant application, which requires a Resolution, and (2) a formal contract. The local government must also issue a Deed of Trust with the contract. In the case of ABB's expansion, the grant application with the State has already been filed, while the contract phase will begin soon (coming to the BOCC for review at a later date). Orange County and ABB have mutually agreed to delay the request of State funds from the Building Reuse Grant until after ABB has actually satisfied making all required building renovation improvements and job hiring goals. Therefore, language outlining this mutual agreement will be added by the County to the contract document. This method will remove any potential local government liability with the County receiving and transferring the $500,000 in State funds to ABB up front, before ABB completes all investment and hiring requirements, in the remote case that ABB were to not perform and cause the County to have to repay the State funds. At this time, the County's first step is to issue the required Resolution in support of participating in the State's Building Reuse Grant for ABB. The additional contract agreement between Orange County and the North Carolina Department of Commerce will proceed at a later date, with BOCC review. Although the Resolution refers to the County agreeing to provide a local 5% match, or $25,000, for the State's $500,000 Building Reuse Grant incentive award to ABB, Orange County's funds match is already provided as part of the County's $972,722 performance-based County incentive which the BOCC approved for ABB in a public hearing on July 23, 2019. FINANCIAL IMPACT: There is no additional financial impact associated with the proposed Resolution. 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. ENVIRONMENTAL IMPACT: The following Orange County Environmental Responsibility Goal impacts are applicable to this item: • ENERGY EFFICIENCY AND WASTE REDUCTION Initiate policies and programs that: 1) conserve energy; 2) reduce resource consumption; 3) increase the use of recycled and renewable resources; and 4) minimize waste stream impacts on the environment. 3 • RESULTANT IMPACT ON NATURAL RESOURCES AND AIR QUALITY Assess and where possible mitigate adverse impacts created to the natural resources of the site and adjoining area. Minimize production of greenhouse gases. ABB's new 200,000 square foot manufacturing facility will receive site plan review and approval by the City of Mebane's planning office, which will administer land use permits that will be consistent with State environmental guidelines. In addition, Orange County's Planning & Inspections Department staff will administer the County's sedimentation control and storm water management regulations. RECOMMENDATION(S): The Manager recommends that the Board approve and authorize the Chair to sign the Resolution. RES-2019-072 4 ORANGE COUNTY BOARD OF COMMISSIONERS Resolution Supporting the North Carolina Department of Commerce's Building Reuse Grant Application for ABB, Inc. (Project Clear Blue Sky) WHEREAS, the Orange County Board of Commissioners had indicated its desire to assist in economic development efforts for business and industry within Orange County; and, WHEREAS, the Board fully supports the proposed manufacturing expansion project by ABB, Inc. which will result in the renovation and new construction of a facility located at 6801 Industrial Drive, Mebane, NC 27302 and will create a minimum of 403 new jobs for Orange County; and, WHEREAS, the Board wished to pursue a formal application for Building Reuse Grant funds in the amount of$500,000.00 from the NC Department of Commerce; and, WHEREAS, the Board certifies it will provide the 5% match required ($25,000.00) and will meet all other requirements of the North Carolina Department of Commerce; NOW, THEREFORE, BE IT RESOLVED, by the Orange County Board of Commissioners: That Orange County is authorized to submit a formal application to the North Carolina Department of Commerce in order to provide assistance to benefit ABB, Inc. That this Resolution shall take effect immediately upon its adoption. Adopted this the 2"d day of December, 2019 in Orange County, North Carolina. Penny Rich, Chair Orange County Board of Commissioners ATTEST: (Seal or Signature)