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043-02 BOARD OF SUPERVISORS RESOLUTION HP HOOD, INC. \VHEREAS, HP Hood, Inc, currently operates in frederick Facility and has made known its intcnt to expand its operations; and WHEREAS, the company mects the policy guidclines of the Frederick County Economic Developmcnt Incentives Fund as established by the Winchester-Frederick County Economic Dcvelopmcnt Commission in 1995; NOW, THEREFORE, BE IT RESOLVED, that the Board of Supervisors for the County of Frederick, Virginia does hereby appropriate $200,000 to bc dcsignated to the Frederick County Industrial Development Authority, Funds will be disbursed to HP Hood, Ine. to implement a building and equipmcnt expanSlOn, BE IT FURTHER RESOLVED, that said funds are subject to an executed Memorandum of Understanding outlining a performance criteria of the county, BE IT FURTHER RESOLVED, that the Board of Supervisors for the County of Frederick, Virginia does authorize the county administrator to execute this document on its behalf. ADOPTED, this 8th day May, 2002, Upon motion made by Robert M. Sager and seconded by W. Harrington Smith, Jr. , the above resolution was approved by the following recorded vote: Richard C. Shickle Aye Robert M, Sager W. Harrington Smith, Ir, Aye Margaret B. Douglas Lynda J, Tyler Aye Sidney A, Reyes Gina A, Forrester Aye Aye Aye Aye A COPY TESTE: ~~# J hn R, Riley, L Clerk, Board of Supervisors County of Frederick, Virginia BaS Resolution No,: 043-02 ce: Cheryl B. Shiffler, Finance Director C William Orndof1~ Jr., Treasurer C: \T J P\rcso hui oOS'. FY 100 1- 2002\ II PI I oudE ~ pJlIsi DUOS Oil02. wpd BOARD OF SUPERVISORS MEMORANDUM OF UNDERSTANDING THIS MEMORANDUM OF UNDERSTANDING, dated ,2002, evidences the agreement among FREDERICK COUNTY, VIRGINIA, a political subdivision of the Commonwealth of Virginia (the "County"), the INDUSTRIAL DEVELOPMENT AUTHORITY OF THE COUNTY OF FREDERICK, VIRGINIA, a political subdivision of the Commonwealth of Virginia (the "IDA"), the WINCHESTER - FREDERICK COUNTY ECONOMIC DEVELOPMENT COMMISSION, a joint commission of the City of Winchester and Frederick County, Virginia (the "Commission"), and H. P. Hood, Inc. ("the Company"), regarding a building and an equipment expansion in their Frederick County facility. Inducement To Expand: To induce the Company to implement this building and equipment expansion and, thereby invest $15,000,000.00 in machinery and tools and $3,500,000.00 in a new building addition in Frederick County, Virginia and create thirty (30) new jobs by December 31, 2002, (the "Project"), the County agrees to make a cash grant to the IDA in the amount of Two Hundred Thousand Dollars ($200,000.00) and the IDA, in turn, shall make a cash grant to the Company in an identical amount for equipment expansion purposes within its Frederick County, Virginia facility (the "Facility") as an incentive to implement this expansion in Frederick County. The IDA hereby agrees to convey such funds to the Company no later than July 1, 2002 or the date in which the new machine line becomes operational, whichever comes last. This grant shall be used by the Company for the purpose of payment for or reimbursement Page 1 of 4 of equipment purchases and related costs. Conditions. The Company shall diligently pursue such application and procure such approvals from various commercial lending interests to pursue adequate funds to equip the Facility with the new equipment. All incentives described herein shall be provided as and when indicated. Cooperation. The County and the Commission agree to cooperate with the Company, its equipment suppliers and its equipment contractor in connection with helping the Company meet its equipment implementation deadline so that the Facility is equipped by no later than December 31, 2002. Time is of the essence of this Agreement. Nothing in this paragraph shall be interpreted to require the County to issue any permits unless and until all conditions for such permits have been met. Bindinq. This Memorandum of Understanding shall be binding upon and inure to the benefit of the parties and their respective successors upon the date of the acceptance of this Memorandum of Understanding. Default. In the event the Company fails for any reason to 1) have fully operational $15,000,000.00 in new machine and tool investments and invest $3,500,000.00 in a new building addition and existing building modification by December 31, 2002, 2) create thirty (30) net new jobs associated with this Project by December 31, 2002, 3) maintain the level of investment and jobs create through the Project for a period not to exceed two years, 4) remain located in Frederick County for a full four (4) year period, beginning December 31,2002, and upon written demand of the IDA, the Company shall refund to the IDA such portions of the $200,000.00 grant from the County as is proportionate to the Company's shortfall in fulfilling the applicable Page 2 of 4 requirement. Notwithstanding the foregoing, if the Company has met 90 percent (90%) of the investment and employment goals set forth in this agreement by December 31, 2002, maintained the level of investment and jobs create through the Project for a period not to exceed two years and remained located in Frederick County for a full four (4) year period, beginning December 31,2002, then and thereafter, the Company is deemed to have substantially complied with this Memorandum of Understanding and is no longer obligated to repay any portion of the grants provided to it hereunder. Assignment. This Agreement shall not be assigned by any party. Expiration of Aqreement. If the Company has not executed this Memorandum of Understanding by July 1, 2002, or has not begun the implementation process for this project by July 1,2002, this Memorandum of Understanding shall be null and void. THE COUNTY OF FREDERICK, VIRGINIA By This day John R. Riley, Jr., County Administrator of the County of Frederick, appeared before me, a notary public for the State of Virginia, at large, and did acknowledge his signature above fixed all in my state aforesaid. My commission expires eJ lv, \ 0-31- de ():-5 Given under my hand this ~:3\ " day of (\ ,(~.) ,2002. \ (~-': . :1 I,. 1"C> \ \ \ 'I' 1 ~ (' I i. C, ( ) NotarYPublic Page 3 of 4 INDUSTRIAL DEVELOPMENT AUTHORITY OF THE COUNTY OF FREDERICK, VIRGINIA BY: 1laA1f' ;Jm;e ~ TITLE: DATE: /fUM.l Z 5') Zao Z- FREDERICK COUNTY, VIRGINIA BY: f)M<r County Administrator TITLE: DATE: May 13, 2002 WINCHESTER/FREDERICK CO PMENT COMMISSION BY: DATE: &,q/~N:J J~ 28; 2.002- TITLE: H. P. HOOD, INC. BY /~~ TIT(E~~ THERESA M. BRESTEN Treasurer DATE: 7 // /o~ ,. C:\TJP\reSO!UliollS\FY2UOI-2002\fIPl-loodExpansion:'vl0U05080:2.wpd Page 4 of 4 ~~ ~~ WINCHESTER I FREDERICK COUNTY ~ ~ F{'onomic Development Commission HP Hood, Inc. Phase II Expansion Project Summary April 25, 2001 Proposal: add third bottling line Acreage: no additional Building addition: 15,000 sq.ft. Investment: Building Machinery & Tools Total $ 3,500,000 $15,000,000 $11,250,000 Net Fiscal Impact (annual): Year 1 Year 2 Year 3 Year 4 YearS Total 1-5 $ 201,029 $ 171,029 $ 141,029 $ 111,029 $111,029 $ 735,145 Employment: 30, filler operators, 2-shift Average wage: $15.00/hr. Current commitment to Hood (pre-treatment facility): $150,000 per year for 2000-2001,2001-2002,2002-2003,2003-2004 and $100,000 in 2004-2005 based on original tax return of $560,000 per year. Competition: HP Hood facility in Oneida, NY (which does nol have machinery and lools lax) Date of operation of Phase II: June, 2002 Decision time: June, 2001 (lead time for equipment delivery) 45 E. Boscawen Street. Winchester, VA 22601 phone: 540-665-0973 . fax 540-722-0604 . e-mail info@wininva.com web: http://www.wininva.com E~ NET FISCAL IMPACT PROPOSAL: HP HOOD EXPANSION - PHASE 1/ 1ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR NET DIRECT FISCAL IMPACT Annual Return $204,712 $174,712 $144,712 $114,712 $114,712 Cumulative Return $204,712 $379,424 $524,137 $638,849 $753,561 NET INDIRECT RESIDENTIAL FISCAL IMPACT Annual Return ($3,683) ($3,683) ($3,683) ($3,683) ($3,683) Cumulative Return ($3,683) ($7,366) ($11,050) ($14,733) ($18,416) NET IMPACT Annual Return $201,029 $171,029 $141,029 $111,029 $111,029 Cumulative Return $201,029 $372,058 $513,087 $624,116 $735,145 $513,087 l $735,145l _. IThree (3) Year Return IFive (5) Year Return ASSUMPTIONS Demographics Persons per Residential Unit School Children per Residential Unit 2.60 0.70 Investment and Employee Plan (totals - 5 Year) Real Estate Machinery & Tools Personal Property Business License $3,500,000 $15,000.000 $0 $0 Employees """erage Houl1y Wage Employee 30 $15.00 Per Capita Fiscal Impact Model for Frederick County, the Joint Planning Team in October 2001 Revised April 2002 - Budqetarv & Allocation Values =rJlmrl!]l~~r:J ASSUMPTIONS PROPOSAL: HP HOOD EXPANSION - PHASE II "SSUMPTIONS Item Persons per Residential Unit School Children per Residential Unit School Children per Residential Unit (Elementary) School Children per Residential Unit (Middle) School Children per Residential Unit (High School) Value 2.60 0.70 0.39 014 0.17 Source us Census 2000 Capital Facilities Impact Model: Frederick County Planning and Development Capital Facilities Impact Model: Frederick County Planning and Development Capital Fadl\lie'S Impact Model: FredericK County Planning and Development Capital Facilities Impact Model: Frederick County Planning and Development NOTE: ALL VALUES ARE ANNUAL TOTALS Residential Per Residential Unit Real Estate Tax Revenue Per Residential Unit Other General Fund Revenue Per Residential Unit General Fund Service $922 $1,724 $3,278 Per Capita Fiscal Impact Analysis Model, Frederick County 2001 Per Capita Fiscal Impact Analysis Model. Frederick County 2001 Capital Facilities Cost per Pupil (Elementary) Capital Facilities Cost per Pupil (Middle) Capital Facilities Cost per Pupil (High) Capital Facilities Costs: Fire & Rescue - Per Residential Un Capital Facilities Costs: Public Safety - Per Residential Unil Capital Facilities Costs: Parkland - Per Residential Unit $2,333 $3,837 $4,591 $60 $9 $263 Per Capita Fiscal Impact Analysis Model, Frederick County 2001 Per Capita Fiscal Impact Analysis Model, Frederick County 2001 Per Capita Fiscal Impact Analysis Madel, Frederick County 2001 Per Capita Fiscal Impact Analysis Model, Frederick County 2001 Per Capita Fiscai Impact Analysis Model. Frederick County 2001 Per Capita Fiscal Impact Analysis Model, Frederick County 2001 "'on-Residential '"'Real Estate Tax Return M&T, BPOL, BE, PP'Tax Per Employee Other General Fund Revenue See Investment and Employee Plan Sheet See Investment and Employee Plan Sheet $192 Per Capita Fiscal Impact Analysis Model, Frederick County 2001 Per Employee General Fund Service Capital Facilities Costs: Public Safety - Per Employee $145 $2 Per Capita Fiscal Impact Analysis Model, Frederick County 2001 Average Hourly Wage Employee Resldential-Non-Residential Linkage ',"" "., $15.00 10% Virginia Employment Commission, ES-202 Files, 2001 Winchester-Frederick County Economic Development: Survey Research ",,~), :i ,'::"1 ~\'; Taxes Real Estate Machinery and Tools Year 1 (60%) Year 2 (50%) Year 3 (40%) Year 4 (30%) $0.61 $2.00 $1.20 $1.00 $0.80 $0.60 Weldon Cooper Center, University of Virginia Weldon Cooper Center, University of Virginia Weldon Cooper Center, University of Virginia Waldon Cooper Center, University of Virginia Weldon Cooper Center, University of Virginia Weldon Cooper Center, University of Virginia Personal Property property taxed at 30% of original value $4.20 $1.26 Weldon Cooper Center, University of Virginia Weldon Cooper Center, University of Virginia 1% 54.5% Weldon Cooper Center, University of Virginia American Chamber of Commerce and Research Association other Assumptions Revenue and Expenditure (Operating & Capital) Levels will remain al1999 - 2000 levels No changes in any tax rates No slack capacity in any general fund revenues and operating expenditures No changes in number of persons per residential unit Of school children per residential unit 'r~.' :' 7 f:l';' -. . '.I....~ ' , , -M:,. INVESTMENT AND EMPLOYEE PLAN PROPOSAL: HP HOOD EXPANSION - PHASE II Projected Plans 1 ST YEAR 2N D YEAR 3RD YEAR 4 TH YEAR 5TH YEAR Value of New Construction Phase 1 Phase 2 Phase 3 Phase 4 3,500,000 Annual Value Cumulative Value 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 Value of Machinery & Tools Phase 1 Phase 2 Phase 3 Phase 4 15,000,000 Annual Value Cumulative Value 15,000,000 15,000,000 15,000,000 15,000,000 15,000,000 15,000,000 Value of taxable personal property Phase 1 Phase 2 Phase 3 Phase 4 Business License Phase 1 Phase 2 Phase 3 Phase 4 Annual Value Sales Tax Return from Employses Phase 1 1,992 1,992 1,992 1,992 1,992 Phase 2 Phase 3 Phase 4 Annual Value 1,992 1,992 1,992 1,992 1,992 Cumulative Value . ...1,992 3,985 5,977 7,970 9,962 "''', Projected Employment 1 ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR Phase 1 30 Phase 2 Phase 3 Phase 4 Annual Value 30 Cumulative Value 30 30 30 30 30 Projected Wages 1ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR Phase 1 936,000 Phase 2 Phase 3 Phase 4 Annual Value 936,000 Cumulative Value 936,000 936,000 936,000 936,000 936,000 f7'''''I'(''i'^''~i$l'j '....!\l..../t',"i:ij"""\li...~..;.;;;,.,.;l',';~ Annual Revenues Cumulative Revenues DIRECT FISCAL IMPACT PROPOSAL: HP HOOD EXPANSION - PHASE II 1 ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR $21,350 $21,350 $21,350 $21,350 $21,350 $21,350 $42,700 $64,050 $85,400 $106,750 18T YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR $180,000 $150,000 $120,000 $90,000 $90,000 $180,000 $330,000 $450,000 $540,000 $630,000 18T YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR DIRECT REVENUES Real Estate Tax Return Annual Revenues Cumulative Revenues M&T, BPOL, BE, PP*Tax Sales Tax Annual Revenues $1,992 $1,992 $1,992 $1,992 $1,992 Cumulative Revenues $1,992 $3,985 $5,977 $7,970 $9,962 Local sales tax receipts reffect portion of purchases by new workers (Based on 54.5% of annual payroll spent on taxable purchasas - US Chamber 2000) (New taxable sales based on proportion of total taxable sales between Winchester and Frederick County for 1999 - Virginia Department of Taxation) 18T YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR $5,769 $5,769 $5,769 $5,769 $5,769 $5,769 $11,538 $17,307 $23,077 $28,846 1 8T YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR $209,112 $179,112 $149,112 $119,112 $119,112 $209,112 $388,223 $537,335 $656,446 $775,558 Other General Fund Revenue Annual Revenues Cumulative Revenues DIRECT REVENUES Annual Revenues Cumulative Revenues DIRECT EXPENDITURES 18TYEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR $4,340 $4,340 $4,340 $4,340 $4,340 $4,340 $8,679 $13,019 $17,359 $21,699 15T YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR $60 $60 $60 $60 $60 $60 $119 $179 $239 $298 18T YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR $4,399 $4,399 $4,399 $4,399 General Fund: Operating Costs Annual Costs Cumulative Costs Capital Facilities Costs Annual Costs Cumulative Costs DIRECT EXPENDITURES Annual Costs Annual Return Cumulative Return $204,712 $204,712 $174,712 $379,424 $144,712 $524,137 $114,712 $638,849 $114,712 $753,561 , . __.. _ ~~" '.~-l....l &_~ r-~_ ...l_~;_I_ ,..._..~... 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'in"" ,~:rzriY:J7!lJ~J RESIDENTIAL FISCAL IMPACT PROPOSAL: HP HOOD EXPANSION - PHASE II INDIRECT REVENUES Potential New Residential Units 1ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR Annual Units Cumulative Units Real Estate Tax Return 1ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR Annual Revenues $1,063 $1,063 $1,063 $1,063 $1,063 Cumulative Revenues $1,063 $2,127 $3,190 $4,253 $5,317 General Fund Revenue (Other) 1 8T YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR Annual Revenues $1,990 $1,990 $1,990 $1,990 $1,990 Cumulative Revenues $1,990 $3,979 $5,969 $7,958 $9,948 INDIRECT REVENUES 1 ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR Annual Revenues $3,053 $3,053 $3,053 $3,053 $3,053 Cumulative Revenues $3,053 $6,106 $9,159 $12,212 $15,265 INDIRECT EXPENDITURES General Fund: Operating Costs 18TYEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR Annual Costs $3,782 $3,782 $3,782 $3,782 $3,782 Cumulative Costs $3,782 $7,565 $11,347 $15,130 $18,912 Capital Facilities Costs 1 8T YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR Annuel Costs $2,954 $2,954 $2,954 $2,954 $2,954 Cumulative Costs $2,954 $5,907 $8,861 $11,815 $14,768 INDIRECT EXPENDITURES 1 8T YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR Annual Costs $6,736 $6,736 $6,736 $6,736 $6,736 ($3,683) ($3,683) ($3,683) ($3,683) ($14,733) ($3,683) ($18,416) _ _ . _'" ~ . ~ -1_ I c_, r- ~_ ,.J _ _: _L ro _. _ _> 1_; _, .,. __...:_ _ T_ _ -'" :... 1""0...._1.-...... ~ ,...,n('H ~~ INDIRECT RESIDENTIAL CAPITAL FACILITIES COSTS PROPOSAL: HP HOOD EXPANSION - PHASE II POTENTIAL NEW STUDENTS Elementary 1 ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR Annual New Public School Students 0 Cumulative New Public School Student 0 0 0 0 0 Middle 1ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR Annual New Public School Students 0 Cumulative New Public School Student 0 0 0 0 0 High 1ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR Annual New Public School Students 0 Cumulative New Public School Student 0 0 0 0 0 POTENTIAL CAPITAL FACILITIES COSTS Elementary 1 ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR Annual Capital Facilities Costs 1,050 1,050 1,050 1,050 1,050 Cumulative Capital Facilities Costs 1,050 2,100 3,150 4,200 5,250 Middle 1ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR Annual Capital Facilities Costs 620 620 620 620 620 Cumulative Capital Facilities Costs 620 1,240 1,860 2,479 3,099 High iSTYEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR Annual Capital Facilities Costs 901 901 901 901 901 Cumulative Capital Facilities Costs 901 1,801 2,702 3,602 4,503 POTENTIAL OTHER CAPITAL FACILITIES COSTS 1ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR Annual Capital Facilities Costs 383 383 383 383 383 Cumulative Capital Facilities Costs 383 767 1,150 1,533 1,916 TOTAL RESIDENTIAL CAPITAL FACILITIES COSTS 1 ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR Annual Capital Facilities Costs 2,954 2,954 2,954 2,954 2,954 Cumulative Capital Facilities Costs 2,954 5,907 8,861 11,815 14,768 Pa.r r,~nit~ J=iq('~llmn~r:t MnriAI for FrAr.lmick Countv Joint Plannina Team in October 2001 DRAFT RESOLUTION OF THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE COUNTY OF FREDERICK, VIRGINIA WHEREAS, HP Hood, Inc., has made known its intent to construct a 15,000 sq.ft expansion to its accompany an additional bottling line and creating 30 new jobs to its Frederick 11-81 Industrial Park facility; and WHEREAS, the Frederick County Board of Supervisors has met and certifies that the Company meets the policy guidelines of the Frederick County Economic Development Incentives Fund as developed by the Winchester-Frederick County Economic Development Commission in 1995 and has authorized the payment of $200,000 from the Fund to the Industrial Development Authority of Frederick County; and WHEREAS, there has been developed a Memorandum of Understanding (the Agreement) between the parties which details the levels of investment and employment by the Company, and an agreement for repayment in the event of non-performance by the Company; and WHEREAS, the Directors of the Industrial Development Authority of the County of Frederick find that the expansion of this Company's operation in the Frederick/l-81 Industrial Park, and in consideration of the above commitments, is appropriate and in furtherance of the purposes for which the Authority was created, and WHEREAS, an Agreement was prepared by the County Attorney was presented to the Directors, by which the Authority agrees to convey to the Company, $200,000 to be applied to building and equipment costs; NOW, THEREFORE, BE IT RESOLVED that the Agreement between the Industrial Development Authority of the County of Frederick, Virginia, and HP Hood, Inc. is hereby confirmed and that said Agreement be, and it hereby is, approved as to form and content, and that the Chairman of the Board of the Industrial Development Authority and the Secretary be, and they hereby are, authorized and empowered to execute the Agreement on behalf of the Industrial Development Authority of the County of Frederick, Virginia. This will certify that this is a true copy of a Resolution adopted by a majority of the Directors of the Industrial Development Authority of the County of Frederick, Virginia, onXXXXXXXXXXX Secretary, John R Riley, Jr ~~ ~~ WINCHESTER IFREDERICK COUNTY "''' "''' Economic Development (,'ommission DATE: April 29,2002 --_.~ ,/~';~)29::0~~'i-', /~ I ~ ..,.......... " / ,..;0 ... t / -'" /'{~.~)'. . .~..;:~\\ /.~' RECEIVE!) ::;, :'--- :~) , APR 2002 ,) " frederici< CCLlnt'{ .-~' . , Administrator's Office " \J~/) . .=' }_~ ~.:r TO: John R Riley, Jr. FROM: Patrick Barker RE: MOU and IDA resolution for HP Hood Expansion Attached for your review and comments are the revised MOU, IDA and BOS resolutions for the HP Hood Expansion. As you recall, BaS seemed favorable in closed session to provide $200,000 to secure the expansion of a third bottling line to HP Hood's Frederick County location in April 2001. Thanks for your help. I am available if you have any questions or comments on these materials or the project. 45 E. Boscawen Street. Winchester, VA 22601 phone: 540-665-0973 . fax 540-722-0604 . e-mail info@wininva.com web: http://www.wininva.com