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032017 Special City of AsheboroMarch 20, 2017 -- Special Joint Meeting with the City of Asheboro The Randolph County Board of Commissioners met jointly with the Asheboro City Council in a duly advertised special session at 6:00 p.m. in the 1909 Randolph County Historic Courthouse Meeting Room, 145 Worth Street, Asheboro, NC. Commissioners David Allen, Darrell Frye, Stan Haywood, Kenny Kidd and Maxton McDowell were present, as well as, County Manager Hal Johnson; Finance Officer Will Massie; County Attorney Ben Morgan; Associate County Attorney Aimee Scotton; Amanda Varner, Clerk to the Board and Dana Crisco, Deputy Clerk to the Board. In attendance from the City of Asheboro were Mayor David Smith; Council members Charles Swiers, Clark Bell, Katie Snuggs, Eddie Burks, Walker Moffitt, and Jane Redding; City Manager John Ogburn; Holly Doerr, Clerk to the Council; City Finance Officer Debbie Reaves, and City Attorney Jeff Sugg. At 6:00 p.m., Chairman Allen welcomed everyone to the meeting. Mayor David Smith called the meeting to order on behalf of the City and opened the public hearing for the City. Chairman Allen called the meeting to order on behalf of the County and opened the public hearing for the County. Randolph County EDC President Bonnie Renfro said she was presenting information about an exciting economic development project that will result in new job creation, job retention, and new capital investment in one of our community's legacy industry sectors. Ms. Renfro stated that the company is MAS Capital, one of the world's largest and most recognized design -to -delivery solution providers in apparel and textile manufacturing. MAS is a private company, headquartered in Sri Lanka in Asia. They employ 84,000 people in 48 manufacturing facilities in 15 countries. Although MAS does not have any manufacturing presence in the US, they do have a design office in New York. She listed garments that MAS produces which included sportswear, intimate wear, and swimwear for brands such as Nike, Lululemon, Victoria's Secret, Polo Ralph Lauren, L Brands, Columbia, and Phillips -Van Heusen Corporation. MAS is a company specializing in product innovation, advanced manufacturing technologies, 3D design and simulation, and is one of the global industry leaders in seamless knitting. It is also a founding member of the Sustainable Apparel Coalition with a focus on energy efficiency. Forty-four percent of their total energy consumption is renewable. They are also at the forefront of women's empowerment with the "Women Go Beyond" initiative focused on career advancement, skill development, and work -life balance. Ms. Renfro said MAS is considering the acquisition and expansion of the manufacturing assets of Acme -McCrary Corporation which is headquartered in Asheboro. It will form a new subsidiary company, MAS US Holdings Inc., to acquire, expand and operate the business. Acme -McCrary Corporation will continue to own real estate assets including those in downtown Asheboro and the primary manufacturing building on Pritchard Street. 3/20/2017 Acme -McCrary is a more than 100 -year-old textile company that is privately owned. They are the largest private label producer of hosiery in the US and the third largest in the world behind Hanes Brand and Kayser -Roth. They currently employ more than 250 in Randolph County and 130 in Chatham County. Their core products include ladies sheer hosiery, tights, seamless apparel, trouser socks and children's tights. Ms. Renfro stated that the acquisition and expansion project would focus on clothing manufacturing, product design and development, and warehousing. They would operate at Acme's locations in Asheboro, Siler City and Honduras. This project would expand MAS' ability to serve its North American customer base from a domestic location and also allow them to partner with well-known local and international companies in the apparel manufacturing industry. She said this project could mean broad benefits for continued growth in Asheboro and Randolph County. MAS US Holdings has requested consideration of economic assistance and incentives from the City, County and State of North Carolina to offset costs during the initial phases of establishing a new operation. The company is considering new capital investment of approximately $20 million over the next four years in both real and personal property in Asheboro to create new manufacturing capacity, offices, and an innovation center. Investment would occur at the plant located at 647 E. Pritchard Street. Ms. Renfro stated that the manufacturing strategy requires highly -skilled motivated technical staff and manufacturing teams. The project will retain Acme's existing jobs based in Asheboro and would result in creation of 133 new jobs over four years. The annual wages for the new jobs will vary by position, but will average $30,637. The company will offer health care benefits, paying at least 50% of the premium, consistent with North Carolina's requirement for economic incentives. The project is expected to generate new tax revenues totaling more than $300,000 each for Asheboro and Randolph County over four years. The revenue is based on the proposed taxable capital investment for the project. MAS has stated that the project is competitive with other locations in the western hemisphere and across its global footprint. She clarified that Sapona Manufacturing is not a part of this project. Sapona Manufacturing is affiliated with Acme -McCrary and manufactures yarn at their Cedar Falls location in Randolph County where they employ 240. They will continue to operate as a separate company. Ms. Renfro asked for the following considerations: o The City of Asheboro and Randolph County approve resolutions and document preparation to enter into an economic development incentives contract with MAS US Holdings Inc., as permitted by North Carolina General Statute Section 158-7.1. o The City of Asheboro and Randolph County provide to MAS US Holdings a total of $300,000 to assist the company with costs associated with the expansion project, sharing equally in the funding at $150,000 each. 3/20/2017 o The funding be paid in no less than four annual installments contingent on the company meeting job creation and investment performance requirements. Those requirements would be formalized in an economic incentives agreement. They will include investment of $19,954,757 in real and personal property, the creation of 133 new jobs at average wages of $30,637 and the retention of the current jobs based in Asheboro. o The company would agree to remain in operation in Randolph County for four years following the date of the final installment of the incentive payment. If the company does not remain in full operation, a portion of the incentive money must be returned to the City and County. Ms. Renfro said this is a significant project to see the transition and new beginning for a home grown company that started in Asheboro in 1909 and has grown to be a world class operation. It is a testament to the quality of product and to Acme's continuous ability to adapt, innovate and invest in its people. Their hard work and commitment to excellence has attracted a world leader in textiles and apparel to consider our community. MAS explored many options for its first US and western hemisphere location. They are focused on Asheboro because of its quality workforce, business climate, textile supply chain, technical and training support, and the opportunity to partner with a highly productive and well regarded industry leader. Chairman Allen asked what type of grants were being requested and who would administer them. Ms. Renfro responded that the project would be considered for a $575,000 One NC grant from the State. The grant requires the City of Asheboro and Randolph County match 50% of the grant over four years. The project may also be eligible for a Building Reuse Grant. The incentives requested will cover the local match requirements of both grants. The City of Asheboro would administered any grants received. Mayor Smith inquired about the total amount of money needed. Ms. Renfro stated the County and the City would each provide $150,000. Commissioner Frye questioned whether the Siler City facility was included in this request. Ms. Renfro explained that it was part of the purchase but was not included in the County or City's consideration of incentives nor part of our project performance. Garrett Perdue, Envision IP, LLC., 555 Fayetteville St., Suite 300, Raleigh, NC; spoke on behalf of MAS and in favor of the project. He said MAS is a leading textile manufacturer. They were planning to update the facility technologically and to also improve the quality of life for the current and future employees. MAS is committed to making this facility a showplace. They will also be partnering with the NC State College of Textiles for collaborative research and development. Commissioner Frye thanked Acme -McCrary for everything they have done throughout the years. He said he was pleased to see them moving forward like this. Chairman Allen stated that he appreciated the retention of the current jobs as well as the new jobs being created. Commissioner Kidd said that he agreed with Chairman Allen's statement and reiterated how important job retention is for our community. 3/20/2017 Hearing no further comments, Mayor Smith closed the public hearing on behalf of the City. Chairman Allen closed the public hearing on behalf of the County. Adoption of Resolution Approving Incentive Request On motion of Haywood, seconded by Frye, the Board voted unanimously to approve the resolution authorizing the County of Randolph to enter into an Economic Development Incentives Contract with the City of Asheboro for MAS US Holdings, Inc., as follows: RESOL UTION A UTHORIZING THE COUNTY OF RANDOLPH TO ENTER INTO AN ECONOMIC DEVELOPMENT INCENTIVES CONTRACT WHEREAS, Section 158-7.1 of the North Carolina General Statutes authorizes a county to undertake an economic development project by extending assistance to a company in order to cause the company to locate or expand its operations within the county; and WHEREAS, the Board of Commissioners of Randolph County has held a public hearing to consider whether to participate in an economic development project that will result in the County of Randolph (the "County'), the City of Asheboro (the "City'), and MAS US Holdings, Inc., and all related entities, (the "Company') approving an economic development incentives package whereby the County and the City each contribute up to one -hundred fifty thousand dollars ($150, 000.00) for a total expenditure of up to three hundred thousand dollars ($300,000.00) to oron behalf of the Company to offset the costs of the Company's acquisition and expansion of the manufacturing and distribution operations of the Acme -McCrary Corporation in the City of Asheboro, Randolph County, North Carolina; and WHEREAS, said incentives shall be granted pursuant to an economic development incentives contract as provided in Section 3 of this resolution, said contract to be inclusive of the local match requirements for any and all state grants awarded to the project; and WHEREAS, upon the completion by the Company of this expansion project, the Company will have generated new value/investment in real and personal property and equipment associated with the project in an amount equal to or in excess of nineteen million nine hundred fifty-four thousand seven hundred and fifty-seven dollars ($19,954,757.00) and created a minimum of one hundred thirty-three (133) new full-time jobs in the County and City; and WHEREAS, this economic development project will stimulate and stabilize the local economy, promote business in the County and City, and result in the creation of a significant number of jobs in the County and City; and WHEREAS, the County has in its General Fund available revenues sufficient to fund this economic development project; 3/20/2017 NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of Randolph County, this 20th day of March, 2017, as follows: Section 1. The County is authorized to expend up to one hundred fifty thousand dollars ($150,000.00) of County funds for the MAS economic development project. Section 2. Of the appropriation outlined in Section I above, a portion will be used, in combination with equal contributions from the City of Asheboro, as one- half of the required local match(es) for any state grants awarded to the project. Section 3. The remaining appropriation outlined in Section I above will be paid to or on behalf of the Company pursuant to a performance-based incentive contract. In addition to the standard terms found in contracts that the County routinely executes in the ordinary course of business, the economic development incentives contract entered into by and between the County, the City, and the Company must contain the following essential terms and conditions: a. The total payment made to or on behalf of the "Company" under this contract shall not exceed three hundred thousand dollars ($300, 000.00). b. Fifty percent of the contract amount will be paid by the County, and the other fifty percent of the contract amount will be paid by the City. c. The contract amount will be paid over a period of four (4) years to coincide with the Company's satisfactory completion of certain performance requirements. The said performance requirements include, but are not limited to, the following: i. The Company must deliver to the County and the City written certification that the actual value of new investment by the Company in real and personal property and equipment in connection with this project equals or exceeds nineteen million nine hundred fifty-four thousand seven hundred and fifty-seven and no/100 dollars ($19,954,757.00). The written certification of the actual value of the new investment shall further certify that said new investment is located within the corporate limits of the City of Asheboro; and ii. In addition to the retention of the current job base, the Company must provide Employment Security Reports to the County and the City evidencing the creation of one hundred thirty-three (133) new full-time jobs. 3/20/2017 d. The contract must provide the County and the City with a means of recouping a portion of the contract amount if the Company's facilities, as expanded, do not remain in full operation, maintaining the newly created jobs referenced above, for a period of four (4) years immediately following the date on which the final installment of the contract amount is paid to the Company. e. If the Company does not remain in full operation during this four (4) year period, a portion of the incentive money must be returned. The amount to be returned shall decrease on a pro -rated amount for each year of said period that the company remains in full operation in the City and County. Any amounts returned by the company in this manner shall be divided equally between the County and the City. Section 4. The Chairman of the Randolph County Board of Commissioners is hereby authorized to execute on behalf of the County of Randolph a contract drafted in accordance with Section 3 of this resolution and any other documents necessary for the implementation of this economic development project. Section S. Participation by the County in this economic development project is expressly contingent upon equal participation by the City of Asheboro. City of Asheboro Approval of Incentive Request The City of Asheboro also voted unanimously to approve the incentive request. Proiect Yates Update Chairman Allen stated that an update from the EDC on Project Yates was not ready and the item was being removed from the agenda. City of Asheboro Adiournment The Asheboro City Council adjourned. County Adiournment At 6:19 p.m., on motion of Frye, seconded by Kidd, the meeting adjourned. David Allen, Chairman Stan Haywood Maxton McDowell Darrell L. Frye Kenny Kidd Dana Crisco, Deputy Clerk to the Board 3/20/2017