s5-5-03Special Meeting — May 5, 2003
The Randolph County Board of Commissioners met in a special called joint meeting with the
Asheboro City Council at 3:00 p.m. in the Training Room, County Office Building, 725 McDowell Road,
Asheboro, NC to hold a public hearing to consider a resolution to enter into an economic incentives
contract with Energizer Battery Manufacturing, Inc. Commissioners Kemp, Frye, Davis, and Holmes
were present. Commissioner Mason entered the meeting where so noted later in these minutes. City
Council members present were John McGlohon, David Smith, Talmadge Baker, Archie Priest, Paul
Trollinger, Linda Carter, and Mayor David Jarrell.
Chairman Kemp called the meeting to order and welcomed those present.
Mayor Jarrell explained the purpose of the meeting and opened the public hearing on behalf of the
City
Chairman Kemp opened the public hearing on behalf of the County and called on Bonnie Renfro,
Director of the Randolph County Economic Development Corporation, for comments.
Ms. Renfro provided the following information about Energizer Battery Manufacturing, Inc.
(EBMI) and the proposed project:
• EBMI began its first operations in Asheboro in 1948 and added a second operation in 1968, with a
full line of alkaline batteries.
• The 2 Asheboro plants are the world's largest alkaline battery manufacturing operation and the
County's and City's largest taxpayer (current assessed value exceeds $128 million).
• EBMI is considering new locations as well as existing operations for its expansion. Asheboro has
several advantages: flexibility, competitive cost structure, access to technological support, and the
quality and loyalty of the existing workforce. Other locations offer strong competition due to
lower wages, tax savings, and aggressive incentives. Their selection of Asheboro is contingent in
part on the ability to improve the competitive situation.
• EBMI is asking for a total of $1,270,000 ($635,000 each) from the County and the City. In return,
upon completion of the project, the company will have generated new investment in real and
personal property associated with the project equal to or greater than $80 million and created a
minimum of 65 new jobs in the county and city. Funding would be paid in 5 installments (once
every fiscal year), contingent on several performance requirements. Ms. Renfro outlined these
requirements.
• The City could expect approximately $400,000 in new tax revenues from EBMI annually upon
completion of the project; the County, approximately $384,000. These new revenues would result
in an incentive payback of 1.59 years for the City and 1.65 years for the County.
• Industry standards say that every new job in the battery industry results in the creation of 2.38
additional jobs.
• The Randolph County EDC feels that, while attracting new companies is important, keeping our
current customers here, and keeping them growing, is even more crucial.
Commissioner Frye asked Ms. Renfro if the company had agreed to the terms of the performance
requirements, and she said that they had.
Chairman Kemp opened the floor for comments from the public.
Bob Crumley, Asheboro, stated that he supports the use of local government funds for economic
development projects, but he has some reservations about this project. He questioned whether the 65 jobs
to be created with this project would be net new jobs or just used to regain some of the 112 jobs
previously lost. He said that 75% of new jobs are created by companies with fewer than 500 employees
and that small businesses in Randolph County should be receiving assistance from the County and City.
He added that the County and City should set up a small business development fund, administered
through the Small Business Center at Randolph Community College, to help small businesses with
expansion projects. He also stated that the County and City should require bids for the EBMI project to
be awarded to Randolph County vendors.
Jim Culberson, retired banker from Asheboro, stated that EBMI has been a great corporate
citizen and that he supports this project.
Skip Sant, EBMI Plant 1 Manager, discussed the company's investment in this project and said
they are competing within their organization (21 manufacturing locations) for expansion dollars.
Jack Marcus, Unilever Plant Manager, voiced his support for this project, stating that Unilever
has just completed a similar project with funding assistance from the County and City.
Commissioner Mason entered the meeting at this point and was present for the remainder of the meeting.
Austin Fine, EBMI Plant 2 Manager, stated that their earlier reduction in force of 112 was
throughout the entire organization; only 12 were local. He said they had since hired those back, plus 10
more.
Mayor Jarrell closed the public hearing on behalf of the City.
Chairman Kemp closed the public hearing on behalf of the County.
On motion of Baker, seconded by Smith, the City Council unanimously adopted a resolution to
enter into an economic development incentives contract with Energizer Battery Manufacturing, Inc.
On motion of Frye, seconded by Holmes, the County Commissioners unanimously adopted the
following resolution to enter into an economic development incentives contract with Energizer Battery
Manufacturing, Inc.:
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 Energizer Battery Manufacturing,
Incorporated (the "Company') entering into an economic development incentives contract whereby the
County and the City each contribute six hundred thirty-five thousand dollars ($635, 000.00) for a total
payment of one million two hundred seventy thousand dollars ($1,2 70, 000.00) to the Company to offset
the site and development costs of the expansion of the Company's existing facilities in the City of
Asheboro, Randolph County, North Carolina; 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 associated with the project in an
amount equal to or in excess of eighty million dollars ($80, 000, 000.00) and created a minimum of sixty-
five (65) new 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 Randolph County, this
Yh day ofMay, 2003, as follows:
Section 1. The County is authorized to expend up to six hundred thirty-five thousand dollars
($635, 000.00) of County funds for the Energizer Battery economic development project.
Section 2. 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 the "Company" under this contract shall not exceed one million
two hundred seventy thousand dollars ($1,2 70, 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 in five (5) installments at a frequency not to exceed one
installment per fiscal year (July 1 -June 30) and tied to the completion by the Company of
certain performance requirements, including but not limited to, the following:
i. The Company must properly obtain from the City a Certificate of Occupancy or
letter/certificate of compliance, as appropriate, certifying that the 94, 000 square
foot expansion at Asheboro I may be occupied or used for Factory -Industrial
Occupancy in accordance with the provisions of zoning, building, and other
applicable ordinances and laws of the City of Asheboro and the State of North
Carolina, and the Company must deliver to the County and the City a written
certification that the actual new value/investment in real and personal property of
the project equals or exceeds the sum of twenty million dollars ($20, 000, 000.00);
and
ii. The Company must deliver to the County and to the City a written certification that
the cumulative new value/investment in real and personal property of the project
equals or exceeds the sum of thirty five million dollars ($35, 000, 000.00), and the
Company must deliver to the County and the City Employment Security Reports
evidencing the creation of fifteen (15) new jobs (full-time or leased); and
in. The Company must deliver to the County and to the City a written certification that
the cumulative new value/investment in real and personal property of the project
equals or exceeds the sum of fifty million dollars ($50, 000, 000.00), and the
Company must deliver to the County and the City Employment Security Reports
evidencing the creation of an additional twenty-five (25) new jobs (full-time or
leased); and
iv. The Company must deliver to the County and to the City a written certification that
the cumulative new value/investment in real and personal property of the project
equals or exceeds the sum of sixty-five million dollars ($65, 000, 000.00), and the
Company must deliver to the County and the City Employment Security Reports
evidencing the creation of an additional twenty-five (25) new jobs (full-time or
leased); and
V. The Company must deliver to the County and to the City a written certification that
the cumulative new value/investment in real and personal property of the project
equals or exceeds the sum of eighty million dollars ($80, 000, 000.00).
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 facility, as expanded, does not remain in full operation for a
period of two (2) 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 two (2) 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 that the company remains 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 3. The County Manager is hereby authorized to execute on behalf of the County of
Randolph a contract drafted in accordance with Section 2 of this resolution and any other documents
necessary for the implementation of this economic development project.
Chairman Kemp called on Jack Marcus, Plant Manager for Unilever Bestfoods, for a report on
their completed economic development project.
Mr. Marcus gave a PowerPoint presentation regarding Unilever and their recent expansion. Under
the terms of the incentives contract with the City and County, Unilever was required to invest $5.5
million. They actually invested $8 million. They created 59 new jobs and added $2.8 million to their
payroll. Mr. Marcus expressed his appreciation for the financial assistance from the City and the County.
On behalf of the City Council, Mayor Jarrell adjourned the meeting.
On behalf of the County Commissioners, Chairman Kemp adjourned the meeting.
Phil Kemp, Chairman
J. Harold Holmes
Robert O. Mason
Darrell L. Frye
Robert B. Davis
Alice D. Dawson, Clerk to the Board