Agenda - 06-07-2011-7a - Laserfiche WebLink

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ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: June 7, 2011 SUBJECT: Economic Development Incentive for AKG Expansion DEPARTMENT: Economic Development, Manager's Office, Attorney's Office ATTACHMENT(S): 1. Company Summary 2. Performance Agreement Between Orange County, NC and AKG North America, Incorporated 3. Offer Letter: Agreement 4. Vicinity Map Action Agenda Item No. ~ - (~ PUBLIC HEARING: (YIN) Yes INFORMATION CONTACT: Gary Shope, Economic Development, 245-2326 Frank Clifton, County Manager, 245- 2300 John Roberts, County Attorney, 245- 2318 5. Aerial Photograph Craig Benedict, Planning and Inspections Director, 245-2592 PURPOSE: To hold a public hearing on the issuance of incentives to a private company by Orange County, City of Mebane and the NC Department of Commerce and to consider approval of an economic development incentive agreement. BACKGROUND: Local and state government has the goal of promoting economic development through the expansion of existing businesses and the relocation of new. The Local Government Act, North Carolina General Statute 158-7.1 et seq., outlines the requirements of public hearings, and the public hearing has been scheduled in compliance. The subject property is within the City of Mebane and also within Orange County wherein both jurisdictions will receive a tax base benefit. A summary of the company and project is provided at Attachment 1. The terms of the agreement are noted in Attachment 2. An aerial photograph is provided at Attachment 5. FINANCIAL IMPACT: AKG presently pays over $113,000 in personal and real property taxes each year to Orange County. The proposed expansion is estimated at approximately $3 million, which will generate approximately $25,700 in additional taxes each year. Designating $20,000 a year as part of an agreement, over five years, will still net the County approximately $5,000 in additional tax revenue each of those five years. In addition ninety (90) new jobs will be created with an average wage of $44,000 a year. Although employees may not reside in Orange County, the $4 million in wages could add to the economic benefit of nearby businesses and housing. There are also other economic benefit multipliers such as construction activities, materials and jobs that create economic positives. RECOMMENDATION(S): The Manager recommends that the Board hold the public hearing, approve the economic development incentive agreement, and authorize the Chair to sign the agreement on behalf of the County.