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HomeMy WebLinkAbout060-13BOARD OF SUPERVISORS Resolution NAVY FEDERAL CREDIT UNION WHEREAS, NAVY FEDERAL CREDIT UNION has made known its intent to expand its operation by making new taxable real estate and personal property investments and retain and create jobs; and WHEREAS, the company meets the policy guidelines of the Frederick County Economic Development Incentives Policy as established by the Winchester - Frederick County Economic Development Commission in 1995; BE IT RESOLVED, that the Board of Supervisors for the County of Frederick, Virginia, does hereby approve and appropriate the payment of $250,000.00 as stated in the executed Performance Agreement to the Industrial Development Authority of Frederick County, Virginia from the Frederick County's Fund Balance to assist in expanding the operation for NAVY FEDERAL CREDIT UNION in Frederick County, Virginia. BE IT RESOLVED, that said funds are subject to an executed Performance Agreement outlining the required performance criteria. BE IT FURTHER RESOLVED, that the Board of Supervisors for the County of Frederick, Virginia, does authorize the County Administrator to execute the Performance Agreement on its behalf. ADOPTED, this 12"' day of June 2013. Upon motion duly made by Charles S. DeHaven, Jr. seconded by Robert A. Hess and on the votes hereafter recorded, Richard C. Shickle Aye Robert A. Hess Aye Charles S. Dehaven, Jr. Aye Gary A. Lofton Aye Gene E. Fisher Aye Opcquon District Vacant Christopher E. Collins Absent A COPY .. Riley, Jr. Board of Supervisors Resolution No.: 060 -13 GOVERNOR'S DEVELOPMENT OPPORTUNITY FUND PERFORMANCE AGREEMENT This PERFORMANCE AGREEMENT made and entered this day of July 2013, by and among the COUNTY OF FREDERICK, VIRGINIA (the "Locality ") a political subdivision of the Commonwealth of Virginia (the "Commonwealth "), NAVY FEDERAL CREDIT UNION (the "Company "), a federally chartered credit union, and the INDUSTRIAL DEVELOPMENT AUTHORITY OF THE COUNTY OF FREDERICK, VIRGINIA (the "Authority "), a political subdivision of the Commonwealth, WITNESSETH: WHEREAS, the Locality has been awarded a grant of and expects to receive $250,000 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, equip and operate an operations center in the Locality (the "Facility "), thereby making a significant Capital Investment, as hereinafter defined, and creating and retaining 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 promises to meet 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 $250,000 (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 and retaining 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, equipping and operation of the Facility will entail a capital expenditure of approximately $20,000,000, of which approximately $5,000,000 will be invested in machinery and equipment, and approximately $15,000,000 will be invested in site improvements and the construction of a new building; WHEREAS, the expansion, equipping and operation of the Facility will further entail the creation and maintenance of 400 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; NFCU GOF Performance Agreement FINAL Page 1 of 9 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 covenant and agree as follows. Section 1. definitions. For the purposes of this Agreement, the following terms shall have the following definitions: "Capital Investment" means a capital expenditure by or on behalf of the Company 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 at the Facility as of July 1, 2012. The total capital expenditure of $20,000,000, 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. Positions for the New Jobs will be treated as Maintained during periods in which such positions axe not filled due to (i) temporary reductions in the Company's employment levels (so long as there is active recruitment for open positions), (ii) strikes, and (iii) other temporary work stoppages. "New Job" means new permanent full -time employment 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 $40,000. 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 556 full -time jobs at the Facility as of July 1, 2012. "Performance Date" means December 31, 2015. 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 sole and absolute 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, nor VEDP, nor 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 $20,000,000 and to create and Maintain at least 400 New Jobs, in addition to maintaining the current 556 jobs at the Facility, all as of the Performance Date. NFCU GOF Performance Agreement FINAL Page 2 of 9 "Virginia Code" means the Code of Virginia of 1950, as amended. Section 2. Targets The Company will expand, equip and operate the Facility in the Locality, make a Capital Investment of at least $20,000,000, and create and Maintain at least 400 New Jobs at the Facility, all as of the Performance Date. The Locality and the Authority hereby strongly encourage the Company to ensure that at least thirty percent (30 %) of the New Jobs are offered to "Residents" of the Commonwealth, as defined in Virginia Code Section 58.1 -302. In pertinent part, that definition includes natural persons domiciled in Virginia or natural persons who, for an aggregate of more than 183 days of the year, maintained a place of abode within the Commonwealth, whether domiciled in the Commonwealth or not. The average annual wage of the New Jobs of at least $40,000 is more than the prevailing average annual wage in the Locality of $38,534. The Locality is not a high - unemployment locality, having an unemployment rate for 2011, which is the last year for which such data is available, of 5.9% as compared to the 2011 statewide unemployment rate of 6.2 %. The Locality is not a high - poverty locality, with a poverty rate for 2010, which is the last year for which such data is available, of 7.4% as compared to the 2010 statewide poverty rate of 11.1 %. Section 3. Disbursement of the Grants. (a) GOF Grant: By no later than August 1, 2013, the Locality will request the disbursement to it of the GOF Grant. If not so requested by the Locality by August 1, 2013, this Agreement will automatically terminate and the Company will have no claim whatsoever against the Locality or the Authority. The Locality and the Company will be entitled to reapply for the GOF Grant thereafter, based upon the terms, conditions and availability of funds at that time. The GOF Grant in the amount of $250,000 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 at the Facility. The Company will use the GOF Grant proceeds for workforce training and the construction or build -out of publicly or privately owned buildings, as permitted by Section 2.2- 115(D) of the Virginia Code, This Performance Agreement shall terminate and shall be of no force or effect in the event that the GOF Grant is not received by the Locality on before June 1, 2013. (b) LEDIG Grant: As an inducement to the Company to achieve the Targets at the Facility and provided that the Company in not in default under the terms of this Performance Agreement, the LEDIG in the amount of $250,000 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 for workforce training and the construction or build -out of publicly or privately owned buildings. NFCU GOF Performance Agreement FINAL Page 3 of 9 Section 4. Break -Even Point; State and Local Incentives. VEDP has estimated that the Commonwealth will reach its "break -even point" by the Performance Date. 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 expects to provide incentives in the following amounts: Category of Incentive: Total Amount GOF Grant $ 250,000 Virginia Jobs Investment Program ( "VJIP ") (Estimated) 200,000 The Locality expects to provide the following incentives, as matching grants or otherwise, for the Facility: Category of Incentive: Total Amount Local Economic Development Incentive Grant (LEDIG) $ 250,000 If, by the Performance Date, the LEDIG funds disbursed or committed to be disbursed by the Locality to the Company through the Authority total less than the $250,000 GOF Grant local match requirement, the Locality, subject to appropriation, will make an additional grant through the Authority to the Company of the difference at the Performance Date, so long as the Company has met its Targets. The proceeds of the GOF Grant shall be used for the purposes described in Section 3(a). The VJIP grant proceeds shall be used by the Company to pay or reimburse itself for recruitment and training costs for its employees. The proceeds of the LEDIG shall be used for the purposes described in Section 3(b). Section 5. 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 and Maintain 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. Failure by the Company to meet either of these statutory minimum eligibility requirements by the Performance Date shall constitute a breach of this Agreement and the entire amount of both Grants must be repaid by the Company to the Authority. (b) If Statutory Minimum Requirements are Met: The provisions of this subsection (b) are applicable only if the Company has met the statutory minimum eligibility requirements set forth in subsection (a). For purposes of repayment, each of the Grants is to be allocated as $125,000 (50 %) for the Company's Capital Investment Target and $125,000 (50 %) for its New Jobs Target. If the Company has met at least ninety percent (90 %) of both of the Targets as of the Performance Date, then and thereafter the Company is no longer obligated to repay any NFCU GOF Performance Agreement FINAL Page 4 of 9 portion of either Grant. If the Company has not met at least 90% of both of its Targets at the Performance Date, the Company shall repay to the Authority that park of the Grants that is proportional to the Target or Targets for which there is a shortfall. For example, if at the Performance Date, the Capital Investment is only $10,000,000 or 50% of the Capital Investment Target, and only 200 New Jobs or 50% of the New Jobs Target have been created and Maintained, the Company shall repay to the Authority fifty percent (50 %) of the moneys allocated to the Capital Investment Target ($125,000) and fifty percent (50 %) of the moneys allocated to the New Jobs Target ($125,000) for each the GOF Grant and the LEDIG (for a total repayment of $250,000). The Company's repayment obligation hereunder shall survive the Performance Date to the extent that the Locality subsequently receives information to the effect that the Company did not meet the Targets. (c) Determination of Inability to Comply; If the Locality or VEDP 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, the Authority or VEDP shall have promptly notified the Company of such determination, the Company must repay the entire amount of the Grants to the Authority. Such a determination will be based solely on such circumstances as a filing by or on behalf of the Company under Chapter 7 or Chapter 11 of the U.S. Bankruptcy Code, the liquidation of the Company, an abandonment of the Facility by the Company or other similar significant event that demonstrates the Company will be unable or is unwilling to satisfy the Targets for the Grants, as determined by the Locality or VEDP. (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, whichever shall first occur —Any LEDIG moneys shall be repaid by the Company to the Authority within 30 days after request for payment is made by the Locality or the Authority and thereafter be paid by the Authority to the Locality.. The Locality and the Authority shall use their best efforts to recover such funds, including legal action for any breach of this Agreement by the Company. In the event that the Company fails to comply with the repayment obligations set forth in this Section 4, the Locality and the Authority shall be entitled to recover their reasonable attorney's fees and costs incurred in connection with such default by the Company, whether or not such proceedings are instituted to collect such repayment funds. The Authority shall not have any responsibility whatsoever for the repayment of any sums hereunder to the Locality unless and until said sums have been received by the Authority from the Company. In the event that the Company fails or refuses to repay any of the LEDIG moneys as called for in this Section 4, such sums shall be assessed interest at the rate of 8,00% annum until repaid in full by the Company. (i) GOF Grant: Any GOF Grant moneys repaid by the Company to the Authority hereunder shall be repaid by the Authority to the Locality within 30 days after the repayment by the Company to the Authority, and shall be repaid by the Locality promptly to VEDP for redeposit into the Governor's Development Opportunity Fund. NFCU GOF Performance Agreement FINAL page 5 of 9 (ii) LEDIG Grant: Any LEDIG moneys repaid by the Company to the Authority hereunder shall be repaid by the Authority to the Locality within 30 days after repayment by the Company to the Authority. (iii) Recovery of Funds and Repayment: The Locality and the Authority shall use their best efforts to recover such funds, including legal action for any breaeh of this Agreement by the Company. The Company shall be liable for all attorney's fees and costs incurred by the Locality and/or the Authority in connection with any legal action brought to collect such funds. 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. (iv) Interest: In the event that the Company fails or refuses to repay any of the LEDIG moneys as called for in this Section 4, such sums shall be assessed interest at the rate of 8.00 % per annum until repaid in full by the Company. Section 6. Company Reporting The Company shall timely provide, at the Company's expense, written detailed verification satisfactory to the Locality and the Authority of the Company's progress on achieving the Targets. The Company shall provide for review by the Locality the Company's quarterly payroll tax filings and will denote on those filings which of the employees met the definition of New lobs to confirm satisfaction with the Company's progress on achieving the Targets for New Jobs. The Company also will permit the Locality to review annual tax filings to confirm reasonable satisfaction with the Company's progress on achieving the Capital Investment Targets. The Locality's right to review annual tax filings shall also apply to any amendments to such tax filings for the duration of the time such amendments are permitted under applicable law and for one year after the final disposition of such amendments. Such progress reports will be provided annually, starting on December 1, 2013, and at such other times as the Locality or the Authority may reasonably require. The Company shall provide a letter confirming the Targets for Capital Investment and New Jobs. This letter wi4l shall confirm Capital Investment incurred by or on behalf of the Company and the number of New Jobs created by the Company at the facility. The Company shall provide an affirmative signed statement by an authorized Company Officer or Director that information provided in progress reports are true and correct and certify the status of its efforts to achieve the Targets for New Jobs and Capital Investment. Section 7. 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: with a copy to: NFCU GOF Performance Agreement FINAL Page 6 of 9 Navy Federal Credit Union 141 Security Drive Winchester, VA 22602 Attention: Susan Brooks if to the Locality, to: County of Frederick 107 North Kent St Winchester, VA 22601 Attention: County Administrator if to the Authority, to: Industrial Development Authority of the County of Frederick, Virginia 107 North Kent St Winchester, VA 22601 Attention: Chair if to VEDP, to: Virginia Economic Development Partnership 901 East Byrd Street, 19 Floor Post Office Box 798 (zip: 23218 -0798) Richmond, Virginia 23219 Attention: President and CEO Section 8. Miscellaneous. Navy Federal Credit Union 820 Follin Lane Vienna, VA 22180 Attention: George Eichert with a copy to: County of Frederick 107 North Kent St Winchester, VA 22601 Attention: County Attorney with a copy to: Industrial Development Authority of the County of Frederick, Virginia 107 North Kent St Winchester, VA 22601 Attention: General Counsel with a copy to: Virginia Economic Development Partnership 901 East Byrd Street, 19 Floor Post Office Box 798 (zip: 2321 8 -0798) Richmond, Virginia 23219 Attention: General Counsel (a) Entire Agreement; Amendments: This Agreement constitutes the entire agreement among the parties hereto as to the Grants 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, which consent may be withheld by 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, Virginia, and such litigation shall be brought only in such court. Jurisdiction and venue for any litigation arising out of or involving the LEDIG under the terms of this Agreement shall lie in the NFCU GOF Performance Agreement FINAL Page 7 of 9 Circuit Court of the County of Frederick, Virginia, 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 enforceability, validity and legality 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] NFCU GoF Performance Agreement FINAL Page 8 of 9 IN WITNESS WHEREOF, the parties hereto have executed this Performance Agreement as of the date first written above. COUNTY OF FREDERICK, VIRGINIA By Name: Title: r's��a Act m ,,,•%4ryJr>- Date: G INDUSTRIAL, DEVELOPMENT AUTHORITY OF THE COUNTY OF FREDERICK, VIRGINIA By Name: Title: Date: NAVY FEDERAL CREDIT UNION By Name: Title: Date: NFCU GOF performance Agreement FINAL Pagc 9 of 9