102020 Public Hearing Avocado and SystemsOctober 20, 2020 — Public Hearings
The Randolph County Board of Commissioners met in special session at 5:30 p.m. in the
Asheboro City Public Works Meeting Room, 1312 N. Fayetteville St., Asheboro. Chairman
Darrell Frye, Vice -Chairman David Allen, Commissioner Kenny Kidd, Commissioner Maxton
McDowell, and Commissioner Hope Haywood were present. Also present were County Manager
Hal Johnson, Finance Officer Will Massie, County Attorney Ben Morgan, Associate County
Attorney Aimee Scotton, Clerk to the Board Dana Crisco, and Deputy Clerk to the Board Sarah
Pack. Also present were Asheboro Mayor David Smith, Asheboro City Council Members Charles
Swiers, Clark Bell, Walker Moffitt, Eddie Burks, Katie Snuggs, and Jane Redding. Also present
with the City of Asheboro were City Manager John Ogburn, Attorney Jeff Sugg, City Finance
Director Debbie Reaves, and Clerk to the Board Holly Doerr. City Council member Linda Carter
was absent. Also present were Crystal Gettys, Economic Development Corporation (EDC)
Business Recruitment Director, and Kevin Franklin, EDC President. Required social distancing
was maintained throughout the meeting due to the COVID-19 pandemic.
Chairman Frye welcomed attendees and recognized Mayor Smith. At 6:01 p.m. Mayor Smith
called the meeting to order for the City and Chairman Frye called the meeting to order for the
County.
At 6:02 p.m. Mayor Smith opened the Public Hearing.
Proiect Avocado
Kevin Franklin gave an overview of Project Avocado.
The Project Avocado code name represents an international company called StarPet that is
considering a significant investment in its Asheboro facility. The proposed investment of $17.4
million includes $12.2 million in machinery and equipment for a new production line to produce
a recycled product. This initiative is part of a company -wide commitment to increase its production
of recycled material. The proposed $5.2 million investment in real property includes upfits to
existing space and construction of new warehouse space.
The company is committing to create eleven new fulltime jobs and retaining its current fulltime
workforce of one hundred and three employees. The average annual wage of the new jobs is
anticipated to be $50,909, adding approximately $560,000 to the company's annual payroll.
The company is eligible for a Building Reuse Grant from NC Commerce in the amount of
$100,000 to assist with real property renovation and expansion costs. Since the company is located
within the corporate limits of the City of Asheboro, the city will consider approving a resolution
authorizing the application. The application requires a five percent local government match
commitment of $5,000 which is incorporated into the total $455,000 incentive proposal.
As stated above, the project is heavily focused on recycling, and equipment and facilities
dedicated solely to recycling are exempt from local property taxes in North Carolina. The total
payment made to or on behalf of the company shall be determined based upon the value of the
equipment and facilities subject to local property tax. The EDC recommends that the payments
made to the company be an amount equal to fifty percent of the anticipated tax revenue generated
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by the project over a Five-year period as determined by an audit performed by the North Carolina
Department of Environmental Quality.
The EDC believes that Project Avocado is a good economic development project for the City
of Asheboro and Randolph County, increasing the value of the building and resulting in the
creation of 11 new quality jobs. Therefore, the EDC requests that the City and County approve a
five-year incentive agreement for the company in an amount up to $455,000.
Mr. Franklin recognized Mallory Sparks who was present in the audience as a representative of
Starpet.
Vice -Chairman Allen asked if the City was the actual applicant for the reuse grant. Mr. Franklin
said yes.
Chairman Frye asked how the money is paid out. Mr. Franklin said it is paid out once the
company verifies it has begun to expend funds towards the renovation project.
Chairman Frye asked how taxable property will be assessed. Mr. Franklin said the North
Carolina Department of Environmental Quality will conduct an audit to determine what is taxable,
and this information will determine what the incentive payments will be.
Mr. Ogburn noted that the increase in personnel over the five year period equates to a ten
percent increase in the employee base.
Commissioner Kidd asked if there would be any land use change. Mr. Ogburn said likely not
as the site is tight as it is.
On motion of Allen, seconded by Kidd, the Board voted unanimously to adopt the Resolution
Authorizing the County of Randolph to Enter into an Economic Incentives Contract with Starpet,
Inc. as follows:
RESOL UTIONA 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 StarPet Inc., (the "Company') approving an economic development
incentives package whereby the County and the City each contribute up to Two
Hundred Twenty -Seven Thousand Five Hundred Dollars ($227,500.00) for a total
expenditure of up to Four Hundred Fifty -Five Thousand Dollars ($455, 000.00) to the
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Company to offset the costs of the Company's expansion in the City of Asheboro,
Randolph County, North Carolina, said incentives to be granted pursuant to the local
match requirement of a NC Building Reuse Grant and an economic development
incentives contract entered into pursuant to Section 3 of this resolution; 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 up to Seventeen Million Four
Hundred Thousand Dollars ($17,400, 000.00) and created a minimum eleven (11) 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 ofjobs in the County and City; and
WHEREAS, the County has in its General Fund available revenues sufficient to
fund this economic development project;
NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of
Randolph County, this 20" day of October, 2020, as follows:
Section]. The County is authorized to expend up to Two Hundred Twenty -Seven
Thousand Five Hundred Dollars ($227,500.00) of County funds for the StarPet
economic development project.
Section 2. Of the appropriation outlined in Section I above, Two Thousand Five
Hundred Dollars ($2,500. 00) will be paid to the City of Asheboro as one-half of the
required local match for a NC Building Reuse Grant for the benefit of the Company,
the City serving as the grant applicant.
Section 3. The remaining amount of up to Two Hundred Twenty Five Thousand
Dollars ($225, 000.00) of the 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 be determined based upon the value of the equipment and facilities subject to
local property tax. The project is heavily focused on recycling, and equipment and
facilities dedicated solely to recycling are exempt from local property taxes in
North Carolina. The payments made to the Company pursuant to this contract
shall be an amount equal to fifty percent (50%) of the anticipated tax revenue
generated by the project over a five-year period as determined by an audit
performed by the North Carolina Department of Environmental Quality. The total
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payment made by the County and the City to the Company under this contract shall
not exceed Four Hundred Fifty Thousand Dollars ($450, 000.00).
b. Fifty percent of the total contract amount will be paid by the County, and the
other fifty percent of the total contract amount will be paid by the City.
c. Payments made pursuant to the contract shall not begin until the Company
has met certain performance requirements. These performance requirements
include, but are not limited to, the following:
i. The Company must provide Employment Security Reports to the
County and the City evidencing the creation of eleven (11) new full-time
jobs.
ii. The Company must deliver, to the County and the City, an audit
conducted by the North Carolina Department of Environmental Quality
detailing the equipment and facilities subject to local property tax. The
contract amount will be paid based upon the formula stated in paragraph
(a) over a period offive (5) years beginning upon the receipt by the County
and City of both the Employment Security Reports and the audit referenced
above.
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 five (5) 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 five (5) 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 County is hereby authorized to make a payment to the City of
Asheboro in the amount of Two Thousand Five Hundred Dollars ($2,500.00) as
outlined in Section 2 above. Furthermore, 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.
Mayor Smith closed the public hearing for Project Avocado at 6:14 p.m. after hearing no
comments.
Chairman Frye opened the public hearing for Project Systems at 6:14 p.m.
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Proiect Systems
Crystal Gettys gave an overview of Project Systems.
Sedia Systems, Inc. is a global fixed lecture room, auditorium and multipurpose seating
company who is considering a consolidation of their two NC facilities and relocation of their
Chicago Headquarters and showroom to Asheboro, NC. The project is in competition with two
other facilities in Indiana and Michigan.
The purpose of the project would be to retrofit an existing 60,000 SF building located at 335
Commerce Place and 401 Commerce Place to accommodate the consolidation of their two
facilities in High Point (one in Randolph County and one in Guilford County) as well as their
headquarters and showroom. The project will create 14 new jobs over five years with an average
wage of $90,714. The current private sector average wage for the county is $36,622.
The incentive proposal of $36,532 is based on the projected investment in building renovations
of $750,000 and personal property investment of $832,018 and reflects a 50% property tax
incentive over five years.
The project will be eligible for consideration of a Building Reuse Grant through the NC
Commerce Rural Infrastructure Authority. Based on 9 new jobs in the first two years of the grant
term, the maximum BRG consideration would be $100,000 with a 5% match of $5,000 divided
evenly between Randolph County and the City of Asheboro. The EDC recommends any match
requirement for a state grant be included in the overall local incentive offer of $36,532.
The EDC is seeking consensus from Randolph County and the City of Asheboro for a total
incentives offer of $36,532, including any required grant matching dollars, with the clear
understanding that a final incentive amount will be a calculation of 50% of projected tax revenue
over 5 years based on the state's determination of taxable property following complete build -out.
Chairman Frye asked for clarification regarding the number of jobs that will be created. Ms.
Gettys said that nine jobs will be created for the building reuse grant during first two years. Over
the first five year, 14 jobs will be created. Chairman Frye what expertise is require that justifies
the high average wage. Ms. Gettys said the positions include a number of high end engineer,
accounting, and comptroller positions. The assembly and manufacturing jobs are contracted and
are seasonal.
Commissioner Kidd asked if there will be manufacturing at the site. Ms. Gettys said yes on a
contracted basis. Commissioner Kidd asked if the proposed incentive package gives the EDC the
edge they need to put their best foot forward. Ms. Gettys said that incentives will help with the
building reuse grant, and having the City and County on board offers a good message of support.
Chairman Frye agreed and said it's good to incentivize local business.
After hearing no comments, Chairman Frye closed the public hearing at 6:24 p.m.
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On motion of Kidd, seconded by Haywood, to the Board voted unanimously to adopt the
Resolution Authorizing the County of Randolph to Enter into an Economic Incentives Contract
with Sedia Systems, LLC, as follows:
RESOL UTIONA 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 Sedia Systems, Inc. (the "Company') approving an economic
development incentives package whereby the County and the City each contribute up
to Eighteen Thousand Two Hundred Sixty -Six Dollars ($18,266.00) for a total
expenditure of up to Thirty -Six Thousand Five Hundred Thirty -Two Dollars
($36,532.00) to or on behalf of the Company to offset the costs of the Company's
acquisition and expansion of manufacturing and distribution operations 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, above and beyond the purchase price of a building, new
value/investment in real and personal property and equipment associated with the
project in an amount equal to or in excess of One Million Five Hundred Eighty -Two
Thousand Dollars ($1,582, 000.00) and created a minimum of fourteen (14) 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 ofjobs in the County and City; and
WHEREAS, the County has in its General Fund available revenues sufficient to
fund this economic development project;
NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of
Randolph County, this 20 day of October 2020, as follows:
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Section 1. The County is authorized to expend up to Eighteen Thousand Two
Hundred Sixty -Six Dollars ($18,266.00) of County funds for the Sedia Systems
economic development project.
Section 2. Of the appropriation outlined in Section I above, Two Thousand Five
Hundred Dollars ($2,500.00) will be used, in combination with an equal contribution
from the City of Asheboro, as one-half of the required local match of Five Thousand
Dollars ($5, 000.00) for the building reuse grant from the North Carolina Department
of Commerce, Rural Development Division.
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 Thirty -One Thousand Five Hundred Thirty -Two Dollars
($31,532.00).
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 five (5) years to coincide
with the Company's satisfactory completion ofcertain 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, above and beyond the purchase price of a building,
the actual value of new investment by the Company in real and
personal property and equipment in connection with this project
equals or exceeds One Million Five Hundred Eighty -Two Thousand
Dollars ($1,582,000.00). The written certification of the actual value
of the new investment shall further certify that said new investment is
located within the corporate limits ofthe City ofAsheboro; and
ii. The Company must provide Employment Security Reports to the
County and the City evidencing the creation offourteen (14) new full-
time jobs.
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 five (5) years immediately following the date on which the final
installment of the contract amount is paid to the Company.
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e. If the Company does not remain in full operation during this five (5) 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 County is hereby authorized to make a payment to the City of
Asheboro in the amount of Two Thousand Five Hundred Dollars ($2,500.00) as
outlined in Section 2 above. Furthermore, 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.
Chairman Frye pointed out that a local business is doing well and expanding, while another
business is potentially coming to Randolph County, yet neither project is receiving any local news
coverage.
Commissioner Kidd was also frustrated by the lack of news coverage. He commended Mr.
Franklin and Ms. Gettys for their efforts and said that Randolph County is "open for business."
At 6:28 p.m., on motion of Allen, seconded by Haywood, the Board of Commissioners voted
unanimously to adjourn.
Darrell L. Frye, Chairman David Allen
Kenny Kidd
Hope Haywood
Maxton McDowell
Sarah Pack, Deputy Clerk to the Board
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