Agenda - 12-13-2022; 8-c - Proposed Eighteen-Month Extension of the State of North Carolina’s “Building Reuse Grant” Incentive for Industrial Connections & Solutions-ABB Inc.

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2 a company having operated for at least 12 months. The State requires this program to be administered by a local municipal government, and requires that the local government temporarily hold a Deed of Trust on the building. The State's funds are first passed through the local government (as the grant administrator) before the funds are provided to the company. Through negotiations intended to remove Orange County's potential financial risk, an agreement was reached in late 2019 and into early 2020 between the County, ABB and the North Carolina Department of Commerce. That agreement outlines ABB's decision to delay its request for State funds until after all investment and new job creation criteria had been met. This strategy enables the State grant to convert to a forgivable loan, and Orange County will then receive and transfer the State funds to ABB, Inc. without any potential financial risk related to the company's new job hiring schedule. The company has recently requested an eighteen-month extension to the existing termination date (December 31, 2022) in the Agreement due to the following reasons: 1. COVID: COVID caused the project to experience a slower hiring start for the 403 new manufacturing positions to be added. ABB has been able to make up ground and meet the job creation requirement for the other State and Local eighteen-month employment goals. However, the Building Reuse Grant has a minimum six-month job retention requirement that does not align with the other performance incentive agreement requirements. 2. Workforce Availability & Turnover: During COVID and even post-COVID, ABB has had difficulty finding qualified personnel to fill open positions for the project, and when the company does make new hires, the attrition rate has been higher than anticipated. While the pace of new job hiring has improved in recent months, the Building Reuse Grant's six- month job retention requirement continues to be an issue when employee turnover restarts the six-month timeframe to count total new hires. The company fully intends to meet the jobs/investment commitments related to the project. Granting an extension would allow ABB additional time to complete its required hiring target of 403 jobs, after being delayed due to the issues referenced above. As an example, the company currently has 59 open job postings for the Mebane location on its website. Due to the reasons outlined above, the company is requesting an extension of the County/ABB contract in order to complete the total hiring phase, and maximize the total value of the State's Building Reuse Grant. The County/NC Department of Commerce contract allows Orange County to consider granting an extension period as requested by ABB. This extension request aligns with the company's prior request, approved by the BOCC in its December 7, 2020 meeting, allowing one additional year for the company to meet its employment and investment goals for the County's Performance Incentive Agreement. The State of North Carolina also already approved a one-year extension for the separate $4.3 million "Jobs Development Investment Grant" (JDIG) State Incentive that was also awarded to ABB. FINANCIAL IMPACT: There is no financial obligation or cost to the County by participating with ABB, Inc. and the North Carolina Department of Commerce in the State's "Rural Economic Development Grant Agreement Building Reuse Program."