August 26, 2015 - 12:30 PM - County Board of Commissioners Meeting Minutes (Special)

10 758 Meeting of the Johnston County Board of Commissioners August 26 , 2015 Special Meeting The Johnston County Board of Commissioners met in special joint session Wednesday , August 26 , 2015 at 12 30 pm with the Clayton Town Council at the Workforce Development Center , 135 Best Wood Drive , Clayton , North Carolina The following members of the Board of Commissioners were present Present Chairman Tony Braswell , Vice Chairman DeVan Barbour , Cookie Pope , Allen L Mims , Jr , Jeffrey P Carver , Ted G Godwin , and Chad M Stewart Absent None Also Present County Manager Rick J Hester , Clerk to the Board Paula G Woodard , Assistant County Manager and Finance Director J Chad McLamb , County Attorney Jennifer J Slusser , and Paralegal Deputy Clerk to the Board Dana Cuddington Chairman Tony Braswell called the meeting of the Johnston County Board of Commissioners to order at 12 30 pm followed by Clayton Mayor Jody McLeod calling the Clayton Town Council meeting to order Chairman Braswell and Mayor McLeod led those in attendance in the Pledge of Allegiance to the American Flag Chairman Braswell noted the purpose of the meeting is for a public hearing regarding an economic development incentive grant opportunity Chairman Braswell called on Johnston County Economic Development Director Chris Johnson to present Mr Johnson began his remarks by stating there are a lot of communities and counties that talk about public and private partnerships , but Johnston County sets the standard that others can only dream of emulating Mr Johnson stated in working with the Town of Clayton and all the other partners throughout the entire process , everyone worked together and no one took center stage He continued that as the Johnston County Workforce th Development Center celebrates its 10 anniversary next week , the seeds of collaboration for the facility were sown over 12 years ago and today the citizens of Clayton and Johnston County are again reaping the harvest Mr Johnson stated it has been said that nothing empowers a person more than a good paying job with a living wage and he commended former Economic Development Advisory Board Chairman Linwood Parker and the entire Advisory Board who were involved in the establishment of the Research Training Zone which led to the creation of the Workforce Development Center Mr Johnson stated it is because of that leadership and vision along with the collaboration between Novo Nordisk , Grifols , and others that Johnston County is able to offer its citizens that personal empowerment right here Mr Johnson continued that it has been mentioned the Novo Nordisk project could quite possibly be the largest pharmaceutical project to date , in the world He noted the project has been discussed with a value of 1234 billion ; however , it is anticipated the project will be much more Mr Johnson stated it has been widely published that the State of North Carolina has been trying to recruit an automotive manufacturer for some time , but this project is three times that size Mr Johnson reported the project is anticipated to create 691 jobs with an average annual salary of 68,000 which is 22,000 more than the average Johnston County salary and 15,000 more than the median household income for the County Mr Johnson also reported over 2,000 construction jobs will be needed to build the facility that will take almost five years to complete He noted those jobs will add a tremendous amount to the local economy through short - term housing , hotels , restaurants , and retail sales Mr Johnson stated the Economic Development Corporation has acquired options for approximately 96 acres of land on Gordon Road for a purchase price of approximately 22 million The Economic Development Corporation will make an equity investment of 350,000 and the County will acquire title to the property and convey it to Novo Nordisk for the price paid by the County all by October 31 , 2015 Mr Johnson reported whatever Novo Nordisk pays for the land it will receive later in incentives The County will reimburse Novo Nordisk for its acquisition costs , including the purchase price plus commercially reasonable closing costs and Novo Nordisk’s internal costs of capital , not to exceed 4 per year until fully reimbursed Mr Johnson stated the project is recommended to the Johnston County Board of Commissioners for the jobs and the 45 million in net tax revenue to the County it will generate over the next 20 years and the 15 million it will generate over the next 10 years Mr Johnson stated considering how large the project is , the cost of fire protection within the fire district will be greatly reduced due to the additional tax revenues received from the project which will save citizens in the area a tremendous amount of money He reported due to the magnitude of the project Johnston County and the Town of Clayton , with assistance from the Golden Leaf Foundation , have been exploring the opportunity to create a regional wastewater facility that would not only serve Novo Nordisk , but other neighboring pharmaceutical companies and help to recruit more opportunities in the future Page759 August 26 , 2015 – Special Meeting Continued Mr Johnson stated the Novo Nordisk project has been very competitive within the region , the State , and beyond and would not have been possible without the generous help and support from the economic development partners which first and foremost includes Novo Nordisk and their Project Director Gary Lohr Mr Johnson expressed everyone’s appreciation to Novo Nordisk for their continued support and commitment to Johnston County and Clayton Mr Johnson also thanked Company Attorney Ernie Pearson with Nexsen Pruet , North Carolina Governor Pat McCrory , the Economic Development Partnership of North Carolina , the North Carolina Department of Commerce and in particular , Existing Industry Specialist Anna Lea Moore who coordinated the project at the State level from beginning to end Mr Johnson thanked Representative Leo Daughtry for working behind the scenes to introduce House Bill 343 which will allow the Town of Clayton to expand their ETJ into the site Mr Johnson thanked Duke Energy , the North Carolina Biotech Center , the North Carolina Department of Transportation and Division 4 Engineer Tim Little , the Golden Leaf Foundation and President Dan Gerlach , the North Carolina Community College System , Johnston Community College , County Attorney Jennifer Slusser , and the Public Utilities Staff of both Johnston County and the Town of Clayton Mr Johnson gave a special thank you to his assistant , Economic Development Technician Janel Parker for all her work and support Mr Johnson stated the project has been referred to as a “ legacy project ” and he is most grateful to Johnston County Manager Rick Hester for giving him the opportunity to serve as the Economic Development Director Mr Johnson concluded his remarks by stating it is an honor and privilege to work for the Johnston County Board of Commissioners as well as the citizens and taxpayers of Johnston County Novo Nordisk Project Director Gary Lohr stated it is encouraging to witness the collaboration between Johnston County and the Town of Clayton and he is glad to finally see this project announce Mr Lohr reported they have been working to narrow down sites and on behalf of Novo Nordisk he would like to express their appreciation for everything that has been done on the project and for the consideration from the Johnston County Board of Commissioners and the Clayton Town Council Mr Lohr stated Novo Nordisk is proud to say that Johnston County is their home noting there was a lot of competition for the project He explained Novo Nordisk began an extensive selection process to search for an expansion site in the United States to help offset the need for diabetes medicines and it became apparent that the Clayton location was the place to be Mr Lohr stated the North Carolina community has been a part of their global organization for 20 years which was made possible by the County and Town’s leadership as well as the community’s support and they are excited to add 700 new employees to the economy Mr Lohr expressed his appreciation for the Workforce Development Center and the local workforce talent in the area He stated Novo Nordisk greatly appreciates the incentives that are being offered for the project Mr Lohr thanked Johnston County and the Town of Clayton for their support to Novo Nordisk , its employees , and to the continued fight against diabetes Chairman Braswell stated words cannot express how excited and grateful the Commissioners are that Johnston County was selected for the expansion project He stated they are also excited for the citizens of Johnston County and for all those people who have diabetes Chairman Braswell expressed his pride that medicines are being manufactured right here in Johnston County to help improve the quality of life for those that suffer from diabetes Mayor McLeod expressed the Town of Clayton’s appreciation by stating the project is wonderful and is an answered prayer Mayor McLeod commented the keyword is collaboration and he believes that today shows what can happen when everyone comes together with a common goal and vision Chairman Braswell opened the County public hearing Mayor McLeod opened the Town public hearing Johnston Community College Board of Trustees Chair Lyn Austin congratulated and thanked everyone for all the hard work that has been done on the project Mrs Austin stated the project is an investment for the future of the people in Johnston County Mrs Austin spoke on the creation of the Workforce Development Center and its importance for training a workforce that is needed by the industries She stated Johnston Community College is proud to produce that workforce in Johnston County Mrs Austin expressed her appreciation for the continued support and investment in Johnston Community College There being no further public comments , Chairman Braswell closed the County public hearing Mayor McLeod closed the Town public hearing Chairman Braswell called on County Attorney Jennifer Slusser Page760 August 26 , 2015 – Special Meeting Continued Ms Slusser explained that the Board of Commissioners is being asked to consider adopting a resolution authorizing real estate transactions and other incentives for economic development Ms Slusser reported the resolution contains a project summary that is consistent with the information Mr Johnson outlined earlier in his comments Ms Slusser stated as the Board reviews the resolution there are certain determinations that must be made She stated the first determination is that the project , the land transactions , and other incentives will stimulate the local economy , promote business , and result in the creation of a substantial number of jobs , approximately 691 , paying an average salary of 68,420 per year 3450 per hour , which is significantly higher than the average County wage of 45,629 per year 2281 per hour as computed by the Department of Commerce , Division of Employment Security for the fourth quarter of 2015 , the most recent period for which data is available Ms Slusser continued the second determination that must be made is that the fair market value of the land is approximately 24 million and that the consideration to the County resulting from the land transaction will be approximately 15 million over the next 10 years as determined by subtracting the transactional costs from the projected tax revenues resulting directly from the project Ms Slusser stated this is significantly more than the value of the property to be acquired Ms Slusser stated all of the information is contained within the resolution presented to the Board for consideration Chairman Braswell asked if there were any questions or comments from the Commissioners regarding the resolution as presented by staff There being no further questions or comments , Commissioner DeVan Barbour moved the Board adopt the following resolution authorizing real estate transactions and other incentives for economic development Commissioner Cookie Pope seconded the motion which carried by unanimous vote RESOLUTION OF THE JOHNSTON COUNTY BOARD OF COMMISSIONERS AUTHORIZING REAL ESTATE TRANSACTIONS AND OTHER INCENTIVES FOR ECONOMIC DEVELOPMENT WHEREAS , Novo Nordisk Pharmaceutical Industries , Inc the Company has planned to expand its industrial and commercial operations in the County , including 1 the investment of at least 124 Billion Dollars 1,240,000,000 in real and business property for the construction and outfitting of a manufacturing facility for the production of pharmaceutical products the Facility , 2 the employment of approximately six hundred ninety - one 691 full - time workers to operate the Facility at an average salary of approximately Sixty Eight Thousand Four Hundred Twenty Dollars 68,420 per year , 3 contracting to construct and outfit the Facility which will generate the temporary employment of approximately two thousand 2,000 construction workers , and 4 the operation of the Facility for a term not less than fifteen 15 years in exchange for the grant by the County of certain economic incentives set forth below and in the Project Summary attached to this resolution the Incentives ; WHEREAS , the Johnston County Economic Development Corporation the EDC has acquired options for the acquisition of approximately 96 acres on Gordon Road Johnston County Real Estate ID Nos 4171775 and a portion of 4239723 the Property , for , among other things , industrial or commercial use for a collective purchase price of approximately Two Million Two Hundred Thousand Dollars 2,200,000 ; and WHEREAS , the EDC has committed to invest Three Hundred Fifty Thousand Dollars 350,000 in acquisition of the Property ; WHEREAS , the EDC , the County , and the Company have agreed in principle for the County to acquire the Property and convey it to the Company for the future expansion of its manufacturing and commercial operations in the County to the Company for the purchase price paid by the County , all by October 31 , 2015 the Transactions ; WHEREAS , the County and the Company have agreed in principle for the County to reimburse the Company for its acquisition costs , including the purchase price , commercially reasonable closing costs and internal costs for capital not to exceed four percent 4 per year until reimbursed in full the Company’s Costs ; WHEREAS , North Carolina General Statute 158 - 71 a authorizes the County to make appropriations to aid and encourage the location of manufacturing enterprises , industrial and commercial plants within the County and other purposes which will increase the population , taxable property and business prospects of the County ; andPage761 August 26 , 2015 – Special Meeting Continued WHEREAS , North Carolina General Statute 158 - 71 b authorizes the County to acquire options for the acquisition of real property for industrial or commercial use ; and WHEREAS , North Carolina General Statute 158 - 71 d authorizes the County to lease or convey real property held or acquired for industrial or commercial use ; and WHEREAS , the Board has determined that granting the Incentives in exchange for the commitment of the Company to locate and operate the Facility in Johnston County would be beneficial to the County’s efforts to increase economic opportunities for its residents , its population , ad valorem tax revenues , sales tax revenues , and business prospects in general , including the creation of a substantial number of jobs that pay at or above Forty Five Thousand Six Hundred Twenty Nine Dollars 45,629 per year , the median average wage in Johnston County ; and WHEREAS , the Board has , pursuant to the notice and hearing requirements of North Carolina General Statute 158 - 71 , held a public hearing to consider whether to grant the Incentives in exchange for the commitment of the Company to locate and operate the Facility in Johnston County on terms not materially inconsistent with the Project Summary attached to this resolution the Summary ; NOW THEREFORE , the Board A Authorizes the Chairman of the Board and , alternatively , the County Manager , to enter into an economic development agreement and other agreements on behalf of the County for the County to enter into the Transactions and grant incentives equivalent in value to the Company’s Costs , and the grant of other Incentives on terms not materially inconsistent with the Summary in exchange for the commitment by the Company to 1 invest at least 124 Billion Dollars 1,240,000,000 in real and business property for the construction and outfitting of the Facility , 2 employ approximately six hundred ninety - one 691 full - time workers to operate the Facility at an average salary of approximately Sixty Eight Thousand Four Hundred Twenty Dollars 68,420 per year , 3 contract for the employment of at least two thousand 2,000 construction workers to construct and outfit the Facility , and 4 operate the Facility and employ that number of full - time workers to do so for a term not less than fifteen 15 years B Determines that 1 On the basis of public records regarding land adjacent to the Property , the fair market value of the Property is approximately Two Million Four Hundred Thousand Dollars 2,400,000 ; 2 On the basis of written information from the Company , the probable average salary to be paid to full - time workers to operate the Facility on the Property will be approximately Sixty Eight Thousand Four Hundred Twenty Dollars 68,420 per year ; 3 In consideration for the County entering into the Transactions , the County will receive ad valorem tax revenues net of the Incentives of approximately Fifteen Million Dollars 15,000,000 over the next ten 10 years ; and 4 Conducting the Transactions and granting the other Incentives in exchange for the commitment by the Company to construct and operate the Facility in Johnston County will stimulate the local economy , promote business , and result in the creation of a substantial number of jobs in Johnston County that will pay at or above Forty Five Thousand Six Hundred Twenty Nine Dollars 45,629 per year , the median average annual salary in Johnston County for all insured industries as computed by the Department of Commerce , Division of Employment Security for Fourth Quarter 2014 , the most recent period for which data is available Adopted this the 26th day of August , 2015 PROJECT SUMMARY COMPANY – COUNTY – EDC August 2015 • Schedule Project Years 1 - 20 , with County FY 2015 - 16 PY 1 and County FY 2034 - 35 PY 20 • Investment by CompanyPagePage pageNumber5762 August 26 , 2015 – Special Meeting Continued o Real property improvements and business property by January 1 of PY’s 2 - 5 and 10 1 20 for PY 6 for conformity with NCGS § 158 - 71 d2 2 Investment in Real Property Investment in Business Property Project Yr Co Fiscal Yr Improvements by Jan 1 by Jan 1 PY 1 2015 - 16 - 0 - - 0 - PY 2 2016 - 17 10,000,000 - 0 - PY 3 2017 - 18 100,000,000 - 0 - PY 4 2018 - 19 383,600,000 66,400,000 PY 5 2019 - 20 - 0 - 450,000,000 PY 6 2020 - 21 - 0 - 224,000,000 Totals 493,600,000 740,400,000 o Projected 691 additional full - time employees hired and 2,000 construction workers projected o Retention of those improvements , business property and employee count through PY 20 6 30 35 o Monetary incentives for investment in real and business property and reimbursement for mitigation of environmental impact will be adjusted as follows if , on January 1 of the PY on which Company is scheduled to begin receipt of incentives ? Monetary incentives and reimbursement for mitigation will not commence and will not be paid for so long as Company employs fewer than 100 full - time workers for the Project ? Monetary incentives will be paid proportionately to the ratio of # of full - time workers 691 plus half of the difference between one and that ratio for so long as Company employs between 100 and 553 full - time workers for the Project and in full for so long as the Company employs more than 553 full - time workers for the Project substantial compliance For example , Company is scheduled to begin receipt of incentives on February 1 of PY 5 As of January 1 of PY 5 , Company employs 500 full - time workers for the Project In PY 5 , Company will receive 723 + 1 - 723 2 862 of the incentives that it would receive had it employed 691 workers for the Project on January 1 of PY 5 • Land Transactions in Exchange for Commitment to Investment by Company o County acquires 96 acres for approximately 22 MM o EDC makes equity investment of 350,000 o County to acquire title to Property and convey it to Company for purchase price paid by County , all by October 31 , 2015 o County to reimburse Company for its acquisition costs , including purchase price , commercially reasonable closing costs , and Company’s internal costs of capital in an amount not to exceed four percent per year until paid • Other Incentives for Completion and Operation of Investment by Company o Payment and performance of incentives by County are conditional on Company not being in default of any obligation to County , including the taxes and contracts o County will apply for “ pass - through ” grant from Duke Energy o Company may elect which PY to begin its receipt of monetary incentives on notice no later than February 1 of the prior PY o County will grant additional incentives to Company in the amount of 35 MM for out - of - pocket costs incurred by Company in mitigating environmental impact to and site development for the Project PagePage pageNumber6763 August 26 , 2015 – Special Meeting Continued o Incentives for investment in business property are cash payments for 15 years equivalent to 390 per 1,000 in assessed value of business property on January 1 of the preceding fiscal year for PY 6 , the investment must be complete by 10 1 20 for conformity NCGS § 158 - 71 d2 2 o Incentives for investment in real property improvements are ? Cash payments for 10 years equivalent to 780 per 1,000 in assessed value of improvements on January 1 of the preceding fiscal year for PY 6 , the investment must be complete by 10 1 20 for conformity with NCGS § 158 - 71 d2 2 th ? In the 11 PY of incentives , a cash payment equivalent to 702 per 1,000 in assessed value of real property improvements constructed and maintained on the project site on January 1 of the prior PY th ? In the 12 PY of incentives , a cash payment equivalent to 624 per 1,000 in assessed value of real property improvements constructed and maintained on the project site on January 1 of the prior PY th ? In the 13 PY of incentives , a cash payment equivalent to 546 per 1,000 in assessed value of real property improvements constructed and maintained on the project site on January 1 of the prior PY th ? In the 14 PY of incentives , a cash payment equivalent to 468 per 1,000 in assessed value of real property improvements constructed and maintained on the project site on January 1 of the prior PY th ? In the 15 PY of incentives , a cash payment equivalent to 390 per 1,000 in assessed value of real property improvements constructed and maintained on the project site on January 1 of the prior PY • Incentives for investment in real and business property will be adjusted for then - current economic trends in Johnson County , correlated dollar for dollar to changes in the County’s ad valorem tax rate Following action by the Board of Commissioners , the Clayton Town Council discussed and took action on their respective resolution There being no further business , Commissioner Cookie Pope moved the Board adjourn Commissioner Allen L Mims , Jr seconded the motion , which carried by unanimous vote The meeting adjourned at 12 57 pm ____________________________ Tony Braswell , Chairman Paula G Woodard , Clerk to the BoardPage