Agenda - 10-18-2016 - 5-b - Public Hearing Regarding an Economic Development Incentive for Wegmans Food Markets, Inc., and Interlocal Agreement Between Orange County & Chapel Hill

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2 158-7.1 outlines the requirements of public hearings, and NCGS 158-7.1(a) specifically addresses the requirement that economic development appropriations "must be determined by the governing body of the city or county to increase the population, taxable property, agriculture industries, employment, industrial output, or business prospects of the city or county". This public hearing has been scheduled in compliance. Project Description: In response to the ongoing relocation by the Performance Automall car dealership operation (owned by Hendrick Automotive Group) out of Chapel Hill and Orange County and to the SouthPoint Mall area in adjacent Durham County, and the resulting transfer of over 300 full-time jobs out of the community, the Town and County have partnered to spur redevelopment of the 14-acre site that serves as an important gateway entry into Chapel Hill. During 2016, the leadership of Orange County and Chapel Hill collaborated closely in this regard to encourage the recruitment of a single high-quality tenant grocery store, with restaurants, prepared foods, a farmers market and related retail businesses by the grocery chain Wegmans Food Markets, Inc. This joint recruitment effort of Wegmans endeavors to attract to the community a significant number of new jobs, with health insurance & related employment benefits, and notable tax revenues that warrant the proposed incentive offer to the company. Considering Wegmans' competitive site selection efforts as it moves down the eastern seaboard and into North Carolina and establishes its first retail locations in the state, Orange County and Town of Chapel Hill have partnered in a joint recruitment and incentivization effort to attract this specific retail business to the U.S. 15-501 location. The proposed joint financial incentive, calculated at a value up to $4.0 million over a proposed 5-year start-up period by the company, will be equally shared 50/50 by the County & Town. The economic development inducement incentive will be performance-based with respect to the County's annual verification of the Company's targeted increases in (1) employment, wages & benefits, (2) net new taxable real & personal property additions, and (3) retail sales tax collections from projected revenue growth, as Wegmans establishes a Chapel Hill retail presence. Incentives would only be paid following confirmation of the Company's required annual threshold growth in these measures, and, on a pro-rata reimbursement in case the company's targeted growth in any year lags current growth projections. Orange County will serve as the primary administrator of the performance-based Inducement Agreement between Wegmans and the local governments, and the County is holding the required public hearing. In addition, there is a separate Interlocal Agreement that governs the cost share incentive payment transactions between the County and Town over the term of the total incentive period. This incentive offering is based off the following benefits a Wegmans retail facility will bring to the community. Community Benefits Offered by the Proposal: • Recruitment to Chapel Hill and Orange County of a significant new retail destination business, Wegmans Food Markets, Inc. has the expected potential to create 185 full-time and approximately 413 part-time (350 full-time equivalent) jobs in the first 6 years of operation. Fringe benefits include health insurance for all full-time employees working at least 30 hours per week.