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Agenda - 12-07-2020; 8-h - Proposed One-Year Extension to ABB’s Inc.’s Incentive Performance Agreement Concerning the Company’s Employment & Investment Target Dates
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Agenda - 12-07-2020; 8-h - Proposed One-Year Extension to ABB’s Inc.’s Incentive Performance Agreement Concerning the Company’s Employment & Investment Target Dates
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12/7/2020
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Business
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8-h
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Agenda 12-07-2020 Virtual Business Meeting
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2 <br /> commencement date of no later than June 30, 2020, and by or before the Dec. 31, 2024 <br /> termination date. The Performance Agreement's Section 6. B (Delay of Inducement Package <br /> Initiation) has language that gives ABB, Inc. the option to request an extension of up to a one- <br /> year as a result of an unforeseen delay, if needed, in order to meet required employment and <br /> investment goals. However, the contract's provision requires the Company to first submit a written <br /> request to the County by no later than June 30, 2020 (a date that has since passed). <br /> Due to 2020's COVID pandemic, many businesses across the State have experienced an <br /> unexpected and significant negative impact on their business activity, growth plans and <br /> employment during the current year. While ABB was able to substantially complete construction <br /> of its' new 200,000 sq. ft. factory addition, the firm's employment effort to add new 403 positions <br /> became stalled. Then in mid-2020, the North Carolina Department of Commerce announced a <br /> COVID-related financial remedy to ABB and similar businesses experiencing interrupted <br /> employment goals tied to State incentive goals. On June 30, 2020 the State contacted all <br /> corporate and industrial recipients of North Carolina's special recruitment incentives, to include <br /> ABB, and offered a special one-year extension to allow each of those firms one additional year of <br /> eligibility to meet the State's required employment and investment targets. The State's June 30, <br /> 2020 COVID relief measure sought to compensate businesses such as ABB for this year's <br /> unanticipated shut downs, and employment disruptions caused by the COVID pandemic. <br /> ABB, Inc. received the State's extension notice on June 30, 2020, and accepted that offer on <br /> August 26, 2020 regarding ABB's $4.3 million "Jobs Development Investment Grant" State <br /> incentive. Consequently, ABB missed the County's June 30, 2020 notification deadline, (as <br /> outlined in the Performance Agreement, Section 6. B), to submit a written request to the County <br /> to receive a one-year delay in the incentive schedule. ABB's timing to learn about, and receive a <br /> one-year extension on their State incentive created an unexpected 12-month mismatch with <br /> respect to Orange County's (and Mebane's) original local incentive agreements governing annual <br /> employment and investment target dates. As a result, the company contacted Orange County <br /> (and the City of Mebane) in early September, and asked for similar consideration with our local <br /> financial incentive agreement. <br /> REQUESTED ACTION: ABB, Inc. believes the unexpected consequences of the COVID <br /> pandemic that delayed their employment hiring schedule, plus the timing of the State's June 30 <br /> relief notice to extend North Carolina's incentive-related employment target dates, warrant Orange <br /> County's consideration to likewise align our existing Performance Agreement target dates for an <br /> additional year for ABB's employment and investment goals. The County Attorney advises that <br /> the Board of Commissioners may consider ABB's request by either (1) waiving the Performance <br /> Agreement's Section 6. B (Delay of Inducement Package Initiation) concerning the Agreement's <br /> now-expired June 30, 2020 notification deadline, or, (2) by amending the Agreement to establish <br /> new dates. The Agreement between the County and ABB currently requires the company to <br /> meet's its 403 employment target by December 31, 2024, and complete the $39.9 million total <br /> taxable investment by January 1, 2025. The Board's waiver of Section 6. B, if approved, would <br /> extend the Performance Agreement's termination date to January 1, 2026 and accommodate <br /> ABB's request. <br /> The City of Mebane has verbally informed ABB that it will grant a one-year extension on their joint <br /> $997,500 incentive agreement. <br />
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