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RESOLUTION
APPROVING GOVERNOR'S DEVELOPMENT OPPORTUNITY FUND LOCAL ECONOMIC
- DEVELOPMENT INCENTIVE GRANT PERFORMANCE AGREEMENT FOR
FISHER SCIENTIFIC COMPANY, LLC
WHEREAS, Fisher Scientific Company, LLC, has made known its intent to expand a manufacturing
operation by making new taxable real estate and machinery and tools investments and new jobs; and
WHEREAS, the company meets the policy guidelines of the Frederick County Economic Development
Incentives Fund as established by the Winchester- Frederick County Economic Development Commission
in 1995.
NOW, THEREFORE, BE IT RESOLVED, that the Board of Supervisors of the County of Frederick, Virginia,
does hereby approve the Governor's Development Opportunity Fund Local Economic Development
Incentive Grant Performance Agreement between the County of Frederick, Virginia, Fisher Scientific
Company, LLC, and the Industrial Development Authority of Frederick County.
BE IT FURTHER RESOLVED, that the Board of Supervisors of the County of Frederick, Virginia, does
authorize the County Administrator to execute the Performance Agreement on its behalf.
ADOPTED this 13th day of January, 2010.
VOTE:
Richard C. Shickle Aye
Christopher E. Collins Aye
Charles S. DeHaven, 1r. Aye
Gary W. Dove Aye
Resolution i'�044 -10
Bill M. Ewing
Aye
Gene E. Fisher
Aye
Gary A. Lofton
Nay
A COPY TESTE:
R. Riley, Jr., Clerk
Board of Supervisors
`WINCHESTER
FREDERfCK COUNTY
VIRGINIA EDC
DATE: December 21, 2009
TO: John R. Riley, Jr.
County Administrator
FROM: Patrick Barker, AICP
Executive Director
RE: Performance Agreements for Thermo Fisher Scientific
Attached for your review and comment are the Performance Agreement and Board of
Supervisors resolution for the expansion of Thermo Fisher Scientific. As you recall, the
Board of Supervisors seemed favorable in executive session in providing $90,000.00 to secure
this expansion. An equal match from the Governor's Opportunity Fund has been approved.
Thermo Fisher Scientific opened their Frederick County facility in 1 978 and is currently
located off Valley Pike in Middletown. They currently employ approximately 180 people
performing contract manufacturing in diagnostics, biotechnology formulation, and packaging.
Its diagnostic offerings include blood bank saline, coagulation products, parasitology products,
deionized water, and clinical chemistry reagents to assist in laboratory testing.
With this $8.9 million expansion, Thermo Fisher Scientific will relocate its east coast trutol
glucose tolerance beverages manufacturing operations. These beverages are used to screen
for hyperglycemia (diabetes mellitus and gestational diabetes) and hypoglycemia (low blood
sugar). The relocation of these lines will prompt amid -size building expansion of 50,000 sf to
their existing structure of 282,788 sf.
I would like to request these items at the BOS's next available meeting.
All parties' legal counsels (VEDP, County, IDA and Thermo Fisher Scientific) have reviewed
and approved the performance agreement. For tax purposes and other related matters, the
performance agreement addresses Fisher Scientific Company LLC. This was the name of the
company prior to the merger with Thermo Electron.
Thanks for your help. I am available if you have any questions or comments on these
materials for this project.
Attachment:
• Memorandum of Understanding
• BOS Resolution
Your Move. Our Commitment.
45 East 13oscawen Street ♦Winchester. VA 2260! ♦ 540 -665 -0973 ♦Fax 540 - 722 -0609 ♦ www.winva.cam
GOVERNOR'S DEVELOPMENT OPPORTUNITY FUND
LOCAL ECONOMIC DEVELOPMENT INCENTIVE GRANT
PERFORMANCE AGREEMENT
This PERFORMANCE AGREEMENT made and entered this _day of January
2010, by and among the COUNTY OF FREDERICK, VIRGINIA (the "Locality ")apolitical
subdivision of the Commonwealth of Virginia (the "Commonwealth "), FISHER SCIENTIFIC
COMPANY LLC (the "Company "), a Delaware corporation authorized to transact business in
the Commonwealth, and the INDUSTRIAL DEVELOPMENT AUTHORITY OF
FREDERICK COUNTY (the "Authority "),apolitical subdivision of the Commonwealth.
WITNESSETH:
WHEREAS, the Locality has received a grant of and expects to receive $90,000 from the
Governor's Development Opportunity Fund (a "GOF Grant ") through the Virginia Economic
Development Partnership Authority ( "VEDP ") for the purpose of inducing the Company to
expand and improve a manufacturing facility in the Locality (the "Facility "), thereby making a
significant Capital Investment, as hereinafter defined, and creating a significant number of New
Jobs, as hereinafter defined;
WHEREAS, the Locality is willing to provide the funds to the Authority with the
expectation that the Authority will provide the funds to or for the use of the Company, provided
that the Company meets certain criteria relating to Capital Investment and New Jobs;
._ WHEREAS, the Locality wishes to make a Local Economic Development Incentive
Grant in the amount of $90,000 (the "LEDIG ") through the Authority to the Company for the
purpose of inducing the Company to expand and improve the Facility, thereby making a
significant Capital Investment and creating a significant number of New Jobs;
WHEREAS, the Locality, the Authority and the Company desire to set forth their
understanding and agreement as to the payout of the GOF Grant and the LEDIG (together, the
"Grants "), the use of the proceeds of the Grants, the obligations of the Company regarding
Capital Investment and New Job creation, and the repayment by the Company of all or part of
the Grants under certain circumstances;
WHEREAS, the expansion, improvement and operation of the Facility will entail a
capital expenditure of approximately $8,900,000, of which approximately $6,000,000 will be
invested in machinery and equipment, and approximately $2,900,000 will be invested in the
expansion and improvement of the Facility, and will further entail the creation and maintenance
of 50 New Jobs at the Facility; and
WHEREAS, the stimulation of the additional tax revenue and economic activity to be
generated by the Capital Investment and New Jobs constitutes a valid public purpose for the
expenditure of public funds and is the animating purpose for each of the Grants:
Thermo Fisher 2009 GOF and LEDIG Perf Agr Page 1 of 7
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NOW, THEREFORE, in consideration of the foregoing,. the mutual benefits, promises
and undertakings of the parties to this Agreement, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby covenant
and agree as follows.
Section 1. Disbursement of Grants.
a) GOF Grant:
The GOF Grant in the amount of $90,000 will be paid to the Locality, upon its request.
Within 30 days of its receipt of the GOF Grant proceeds, the Locality will disburse the GOF
Grant proceeds to the Authority. Within 30 days of its receipt of the GOF Grant proceeds, the
Authority will disburse the GOF Grant proceeds to the Company as an inducement to the
Company to achieve the Targets, as hereinafter defined, at the Facility. The Company will use
the GOF Grant proceeds to extend utilities at and around the Facility, as permitted by Section
2.2- 115(C) of the Code of Virginia of 1950, as amended (the "Virginia Code ").
By no later than, the Locality will request the disbursement to it of the GOF Grant. If not
so requested by the Locality by no later than February 28, 2010, this Agreement will terminate.
The Locality and the Company will be entitled to reapply for a GOF Grant thereafter, based upon
the terms, conditions and availability of funds at that time.
b) LEDIG Grant:
,_ As an inducement to the Company to achieve the Targets at the Facility, the LEDIG in
the amount of $90,000 will be paid by the Locality to the Company through the Authority on or
before the date that the GOF Grant proceeds are disbursed by the Authority to the Company.
The Company will use the LEDIG proceeds to extend utilities at and around the Facility.
Section 2. Targets; Definitions.
The Company will expand, improve and operate the Facility in the Locality, make a
Capital Investment of at least $8;900,000 and create and Maintain, as hereinafter defined, at least
50 New Jobs at the Facility, all as of the Performance Date, as hereinafter defined. The average
annual wage of the New Jobs of at least $36,317 is less than the prevailing average annual wage
in the Locality of $36,764, but is more than 85% of that prevailing average annual wage
($31,249). The Locality is ahigh- unemployment locality, with an unemployment rate of 4.3% as
compared to the 2008 statewide unemployment rate of 4.0 %.
For the purposes of this Agreement, the following terms shall have the following
definitions:
"Capital Investment" means a capital expenditure in taxable real property, taxable
tangible personal property, or both, at the Facility excluding the purchase of land or existing real
property improvements. The Capital Investment must be in addition to the capital improvements
Thermo Fisher 2009 GOF and LEDIG Perf Agr Page 2 of 7
FINAL
at the Facility as of October 1, 2009. The total capital expenditure of $8,900,000 is referred to in
this Agreement as the "Capital Investment."
"Maintain" means that the New Jobs created pursuant to the GOF Grant will continue
without interruption from the date of creation through the Performance Date.
"New Job" means new permanent full -time employment of an indefinite duration at the
Facility for which the standard fringe benefits are paid by the Company for the employee, and
for which the Company pays an average annual wage of at least $36,317. Each New Job must
require a minimum of either (i) 35 hours of an employee's time per week for the entire normal
year of the Company's operations, which "normal year" must consist of at least 48 weeks, or (ii)
1,680 hours per year. Seasonal or temporary positions, positions created when a job function is
shifted from an existing location in the Commonwealth, and positions with construction
contractors, vendors, suppliers and similar multiplier or spin -off jobs shall not qualify as New
Jobs. The New Jobs must be in addition to the 168 full -time jobs at the Facility as of October 1,
2009.
"Performance Date" means December 31, 2012. If the Locality, in consultation with the
Authority and VEDP, deems that good faith and reasonable efforts have been made and are being
made by the Company to achieve the Targets, the Locality in its discretion may agree to extend
the Performance Date by up to 15 months. If the Performance Date is extended, the Locality
shall send written notice of the extension to the Authority, the Company and VEDP and the date
to which the Performance Date has been extended shall be the "Performance Date" for the
purposes of this Agreement. Neither the Locality, the Authority and /or VEDP, or any of them,
shall have any obligation whatsoever to extend the Performance Date
"Targets" means the Company's obligations to make Capital Investments at the Facility
of at least $8,900,000 and to create and Maintain at least 50 New Jobs at the Facility, all as of the
Performance Date.
Section 3. Break -Even Point; State and Local Incentives.
VEDP has estimated that the Commonwealth will reach its "break -even point" by 2011.
The break -even point compares new revenues realized as a result of the Capital Investment and
New Jobs at the Facility with the Commonwealth's expenditures on incentives, including but not
limited to the GOF Grant. With regard to the Facility, the Commonwealth will provide
incentives in the following amounts:
Category of Incentive: Total Amount
GOF Grant $90,000
Virginia Jobs Investment Program (Estimated) $41,300
The Locality has committed to provide the following incentives, as matching grants or
otherwise, for the Facility:
Thermo Fisher 2009 GOF and LEDIG Perf Agr Page 3 of 7
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Category of Incentive• Total Amount
,_ Local Economic Development Incentive Grant $90,000
The proceeds of the GOF Grant and the LEDIG shall be used for the purposes described
in Section 1. The VJIP grant proceeds shall be used by the Company to pay or reimburse itself
for recruitment and training costs.
Section 4. Repayment Obligation.
(a) If Statutory Minimum Requirements are Not Met: Section 2.2 -115 of the Virginia
Code requires that the Company make a Capital Investment of at least $5,000,000 in the Facility
and create at least 50 New Jobs at the Facility in order to be eligible for the GOF Grant, and the
Locality's policy is to administer its LEDIG similarly. If the Company fails to meet either of
these eligibility requirements by the Performance Date, the entire amount of both Grants must be
repaid by the Company to the Authority.
(b) If Statutory Minimum Requirements are Met: For purposes of repayment, each of
the Grants is to be allocated as $45,000 (50 %) for the Company's Capital Investment Target and
$45,000 (50 %) for its New Jobs Target. If the Company has met at least ninety percent (90 %) of
the Capital Investment Target at the Performance Date and has created and Maintained at least
50 New Jobs as of the Performance Date, then and thereafter the Company is no longer obligated
to repay any portion of either Grant. As noted in subsection (a) above, if the Company does not
meet at least one hundred percent (100 %) of its New Jobs Target, it must repay the entire amount
of both Grants. If the Company has met its New Jobs Target, but has not met at least ninety
percent (90 %) of its Capital Investment Target or $8,010,000, the Company shall repay to the
Authority that part of the Grants that is proportional to that Target. For example, if at the
Performance Date, the Capital Investment is only $6,675,000 or 75% of the capital investment
target, and at least 50 New Jobs have been created, the Company shall refund to the Authority
twenty -five percent (25 %) of the moneys allocated to the Capital Investment Target ($11,250)
for each the GOF Grant and the LEDIG (for a total repayment of $22,500).
(c) Determination of Inability to Comply: If the Locality and VEDP in their sole and
absolute discretion, shall determine at any time prior to the Performance Date (a "Determination
Date ") that the Company is unable or unwilling to meet and maintain its Targets by and through
the Performance Date, and if the Locality or VEDP shall have promptly notified the Company of
such determination, the Company must repay the entire amount of both Grants to the Authority.
(d) Repayment Dates: Such repayment shall be due from the Company to the
Authority within thirty days of the Performance Date or the Determination Date, as
applicable. Any GOF moneys repaid by the Company to the Authority hereunder shall be repaid
by the Authority to the Locality and shall be repaid by the. Locality promptly to VEDP for
redeposit into the Governor's Development Opportunity Fund. Anything in this Agreement to
the contrary notwithstanding, neither the Locality nor the Authority shall have any responsibility
for the repayment of any sums hereunder unless said sums have been received by the Authority
from the Company.
Thermo Fisher 2009 GOF and LEDIG Perf Agr Page 4 of 7
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Section 5. Comnany Reporting.
~ .The Company shall timely provide, at the Company's expense, detailed verification
reasonably satisfactory to the Locality, the Authority and VEDP of the Company's progress on
the Targets. Such progress reports will. be provided annually, starting at March 1, 2011, relating
to its performance through the end of the prior calendar year, and at such other times as the
Locality, the Authority or VEDP may require.
Section 6. Notices.
Any notices required or permitted under this Agreement shall be given in writing, and
shall be deemed to be received upon receipt or refusal after mailing of the same in the United
States Mail by certified mail, postage fully pre -paid or by overnight courier (refusal shall mean
return of certified mail or overnight courier package not accepted by the addressee):
if to the Company, to:
Thermo Fisher Scientific
8365 Valley Pike
P. O. Box 307
Middletown, VA 22645
Attention: VP /General Manager
if to the Locality, to:
County of Frederick
107 North Kent St
Winchester, VA 22601
Attention: County Administrator
if to the Authority, to:
with a copy to:
Thermo Fisher Scientific
81 Wyman Street
Waltham, MA 02451
Attention: Legal Department - SDG
with a copy to:
County of Frederick
107 North Kent St
Winchester, VA 22601
Attention: County Attorney
with a copy to:
County of Frederick Industrial Development Michael L. Bryan, Esq
Authority 116 South Braddock Street
107 North Kent St Winchester, VA 22601
Winchester, VA 22601
Attention: Chair
if to VEDP, to:
Virginia Economic Development Partnership
901 East Byrd Street, 19th Floor
Post Office Box 798 (zip: 23218 -0798)
Richmond, Virginia 23219
Attention: Executive Director
Thermo Fisher 2009 GOF and LEDIG Perf Agr
FINAL
with a copy to:
Virginia Economic Development Partnership
901 East Byrd Street, 19th Floor
Post Office Box 798 (zip: 23218 -0798)
Richmond, Virginia 23219
Attention: General Counsel
Page 5 of 7
Section 7. Miscellaneous.
w (a) Entire Agreement; Amendments: This Agreement constitutes the entire agreement
between the parties hereto as to the GOF Grant and the LEDIG and may not be amended or
modified, except in writing, signed by each of the parties hereto. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective successors and
assigns. The Company may not assign its rights and obligations under this Agreement without
the prior written consent of the Locality, the Authority and VEDP.
(b) Governing. Law; Venue: This Agreement is made, and is intended to be
performed, in the Commonwealth and shall be construed and enforced by the laws of the
Commonwealth. Jurisdiction and venue for any litigation arising out of or involving the GOF
Grant under the terms of this Agreement shall lie in the Circuit Court of the City of Richmond,
and such litigation shall be brought only in such court.. Jurisdiction and venue for any litigation
arising out of or involving the LEDIG Grant under the terms of this Agreement shall lie in the
Circuit Court of the County of Frederick, and such litigation shall be brought only in such court.
(c) Counterparts: This Agreement may be executed in one or more counterparts,
each of which shall be an original, and all of which together shall be one and the same
instrument.
(d) Severability: If any provision of this Agreement is determined to be
unenforceable, invalid, or illegal, then the validity, legality and enforceability of the remaining
provisions will not in any way be affected or impaired, and such provision will be deemed to be
restated to reflect the original intentions of the parties as nearly as possible in accordance with
applicable law.
(e) Time: Time is of the essence as to all matters set forth in this Performance
Agreement.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK)
Thermo Fisher 2009 GOF and LEDIG Perf Agr Page 6 of 7
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IN WITNESS WHEREOF, the parties hereto have executed this Performance
Agreement as of the date first written above.
COUNTY OF FREDERICK, VIRGINIA
By
Name: Richard Shickle
Title: Chair, County of Frederick Board
of Supervisors
Date:
INDUSTRIAL DEVELOPMENT
AUTHORITY OF THE COUNTY OF
FREDERICK, VIRGINIA
:�
Name: Richazd Dick
Title: Chair, County of Frederick
Industrial Development
Authori
Date:
FISHER SCIENTIFIC COMPANY LLC
�I
Name: Mary Jo Deal
Title: Vice President &General
Manager CDD Contract Services
Date:
Thermo Fisher 2009 GOF and LEDIG Perf Agr Page 7 of 7
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