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092722 Project Red Oak September 27, 2022 Special Joint Meeting with the City of Archdale – Project Red Oak The Randolph County Board of Commissioners met in a special joint session with the City of Archdale City Council at Archdale City Hall, 307 Balfour Dr., Archdale, during their regular meeting starting at 7:00 p.m. Chairman Darrell Frye, Vice-Chairman David Allen, and Commissioners Kenny Kidd, Maxton McDowell, and Hope Haywood were present. Also present were County Manager Hal Johnson, Assistant County Manager/Finance Officer Will Massie, Associate County Aimee Scotton, Deputy Clerk to the Board Sarah Pack, and Clerk to the Board Dana Crisco. Present for the Archdale City Council were Chairman Lewis Dorsett, Council Members Roger Blackwell, Tim Williams, Lorie McCroskey, Larry Warlick, Trey Gray, John Glass, and City Manager Zeb Holden. Present from Randolph County Economic Development Corporation (EDC) were President Kevin Franklin and Business Recruitment Director Crystal Gettys. At 7:04, Chairman Frye called the meeting to order for the County. Ms. Gettys was introduced by Mayor Dorsett. Ms. Gettys said that Project Red Oak is contemplating a facility location in Archdale, North Carolina. This project remains competitive with other locations, and an incentive offer will factor into Project Red Oak’s consideration of Archdale and Randolph County as the location for its new facility project. Red Oak is an internationally owned comprehensive housing and wood products company focused on residential building supply materials. The parent company has been in the wood business and has accumulated technologies and expertise related to wood for over 300 years. The company has a United States based headquarters and is proposing to open a component manufacturing and distribution facility to distribute building materials. If Archdale is chosen for the manufacturing and distribution facility, Project Red Oak will create 129 new jobs; the average annual wage of the new jobs would be $45,784, exceeding Randolph County’s current private sector average wage of $40,522. The company is contemplating the purchase of approximately 60-acres in Archdale. Project Red Oak’s total investment for the project would be $19.5 million dollars, including $6.5 million in machinery and equipment. The EDC is proposing a total local incentive package of $395,000 paid in four annual installments, divided between the City of Archdale in the amount of $128,000 and Randolph County in the amount of $267,000 with an additional $250,000 also divided between the City of Archdale in the amount of $85,000 and Randolph County in the amount of $165,000 for the extension of Roelee Street which will serve as the access point to the site. Project Red Oak qualifies for a $200,000 grant from the North Carolina Department of Transportation (NCDOT)-Road and a $645,000 grant from the Golden Leaf Foundation for the extension of Roelee St. which is an approximate cost of $1.2 million. Should Project Red Oak proceed with its facility location plans and formally requests NCDOT-Road and Golden Leaf funding, the County would serve as the applicant for these programs and would enter into a separate agreement with Project Red Oak for the grants. 9/27/22 Specific to the City of Archdale, Project Red Oak is contemplating construction of a new rail spur to serve the property under consideration, and the company is eligible for a $200,000 rail grant from the North Carolina Railroad (NCRR) Invests program. Should Project Red Oak proceed with its facility location plans in Archdale and formally request NCRR funding, the city would serve as the applicant for this program and would enter into separate agreement with Project Red Oak for the NCRR Invests program. The EDC believes that Project Red Oak is an exceptional economic development project for the city and county which would increase the value of the property, generate significant investment in new machinery and equipment, and result in the creation of 129 quality new jobs. Therefore, the EDC requests that the City and County approve the resolution offering $395,000 in local incentives and an additional $250,000 for the Roelee Street extension to encourage company decision-makers to locate in Archdale. The EDC also requests that City Council approve the resolution authorizing the city to partner with the North Carolina Railroad to apply for grant funding for the rail spur. At 7:10, Chairman Frye opened the Public Hearing and closed it when no one wished to speak. On motion of Frye, seconded by Kidd, the Board voted 5-0 to approve a Resolution Authorizing the County of Randolph to Enter into an Economic Development Incentives Contract, as follows: RESOLUTION AUTHORIZING 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 Archdale (the “City”), and an unnamed company (the “Company”) approving an economic development incentives package whereby the County contributes up to two hundred sixty-seven thousand dollars ($267,000.00) and the City contributes up to one hundred twenty- eight thousand dollars ($128,000.00) for a total expenditure of up to three hundred ninety-five thousand dollars ($395,000.00) to or on behalf of the Company to offset the costs of the Company’s location of its manufacturing and distribution facility on approximately 60.814 acres (the “Property”) in the City of Archdale, Randolph County, North Carolina; and WHEREAS, said incentives shall be granted pursuant to an economic development incentives contract as provided in Section 2 of this resolution; and WHEREAS, the in order for the Property to be developed for this project, Roelee Street will need to be extended at an estimated cost of one million two hundred thousand dollars ($1,200,000.00); and 9/27/22 WHEREAS, the North Carolina Department of Transportation has agreed to cover three hundred twenty-two thousand five hundred dollars ($322,500.00) of the cost of the street extension; and WHEREAS, the County seeks to apply for a grant from the Golden LEAF Foundation for six hundred forty-five thousand dollars ($645,000.00) to be applied to the road extension costs; and WHEREAS, the County proposes to appropriate and commit up to one hundred sixty-five thousand dollars ($165,000.00) and the City proposes to appropriate and commit up to eighty-five thousand dollars ($85,000.00) for a total expenditure of up to two hundred fifty thousand dollars ($250,000.00) to be applied to the costs of road extension and the acquisition of any easements necessary thereto; and WHEREAS, upon the completion by the Company of the proposed 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 five hundred thousand dollars ($19,500,000.00) and created a minimum of one hundred twenty-nine (129) 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. NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of th Randolph County, this 27 day of September 2022, as follows: Section 1. The County is authorized to expend up to four hundred thirty-two thousand dollars ($432,000.00) of County funds for this economic development project. Section 2. Two hundred sixty-seven thousand dollars ($267,000.00) of the expenditures authorized in Section 1 above will be paid to 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 ninety-five thousand dollars ($395,000.00). b. Two hundred sixty-seven thousand dollars ($267,000.00) of the contract amount will be paid by the County, and one hundred twenty-eight thousand dollars ($128,000.00) of the contract amount will be paid by the City. c. The contract amount will be paid in equal installments 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 property in connection with this project equals or exceeds thirteen million dollars ($13,000,000.00) and that the actual value of new 9/27/22 investment by the Company in personal property, machinery and equipment in connection with this project equals or exceeds five million dollars ($5,000,000.00). In addition, the Company must provide Employment Security Reports to the County and the City evidencing the creation of fifty-seven (57) new full-time jobs located in the City of Archdale, Randolph County. 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 Archdale, Randolph County; and ii. The Company must deliver to the County and the City written certification that the actual value of new investment by the Company in personal property, machinery and equipment in connection with this project equals or exceeds an additional five hundred thousand dollars ($500,000.00) and must provide Employment Security Reports to the County and the City evidencing the creation of an additional twenty- nine (29) new full-time jobs located in the City of Archdale, Randolph County. 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 Archdale, Randolph County. Additionally, the Company must provide written certification that the Company has not reduced its level of operations in the County and the City since the date of the immediately preceding installment payment. By way of illustration and without limitation, the Company shall be deemed to have reduced its level of operations in the County and the City if the Company fails to maintain the entirety of retained and newly- created jobs referenced in Paragraph (i) above; and iii. The Company must deliver to the County and the City written certification that the actual value of new investment by the Company personal property, machinery and equipment in connection with this project equals or exceeds an additional five hundred thousand dollars ($500,000.00) and must provide Employment Security Reports to the County and the City evidencing the creation of an additional twenty- four (24) new full-time jobs located in the City of Archdale, Randolph County. 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 Archdale, Randolph County. Additionally, the Company must provide written certification that the Company has not reduced its level of operations in the County and the City since the date of the immediately preceding installment payment. By way of illustration and without limitation, the Company shall be deemed to have reduced its level of operations in the County and the City if the Company fails to maintain the entirety of retained and newly- created jobs referenced in Paragraph (ii) above; and iv. The Company must deliver to the County and the City written certification that the actual value of new investment by the Company in personal property, machinery and equipment in connection with this 9/27/22 project equals or exceeds an additional five hundred thousand dollars ($500,000.00) and must provide Employment Security Reports to the County and the City evidencing the creation of an additional nineteen (19) new full-time jobs located in the City of Archdale, Randolph County. 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 Archdale, Randolph County. Additionally, the Company must provide written certification that the Company has not reduced its level of operations in the County and the City since the date of the immediately preceding installment payment. By way of illustration and without limitation, the Company shall be deemed to have reduced its level of operations in the County and the City if the Company fails to maintain the entirety of retained and newly- created jobs referenced in Paragraph (iii) above; and 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 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 proportionally between the County and the City. Section 3. The County is authorized to apply for a grant from the Golden LEAF Foundation for six hundred forty-five thousand dollars ($645,000.00) to be applied to the cost of extending Roelee Street for this economic development project. Section 4. The County is authorized to appropriate and commit up to one hundred sixty-five thousand dollars ($165,000.00) to be applied to the costs of extending Roelee Street and the acquisition of any easements necessary to accomplish said extension; and Section 5. 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 the provisions of Section 2 of this resolution and any other documents necessary for the implementation of this economic development project as provided herein. At 7:15, on motion of Allen, seconded by Kidd, the Board voted 5-0 to adjourn. ________________________________ _________________________________ Darrell L. Frye, Chairman David Allen 9/27/22 ________________________________ _________________________________ Kenny Kidd Maxton McDowell ________________________________ ________________________________ Hope Haywood Dana Crisco, Clerk to the Board 9/27/22