039-04
BOARD OF SUPERVISORS
Resolution
M&H Plastics
WHEREAS, M&H Plastics has made known its intent to locate 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;
BE IT RESOLVED, that the Board of Supervisors for the County of Frederick, Virginia
does hereby approve and appropriate the payment of $100,000.00 to the Industrial
Development Authority of Frederick County, Virginia from the Frederick County Economic
Development Incentive Fund to assist to locate a manufacturing operation for M&H Plastics in
Frederick County, Virginia.
BE IT RESOLVED, that the Board of Supervisors for the County of Frederick, Virginia
does hereby approve and appropriate the payment of $100,000.00 to the Industrial
Development Authority of Frederick County, Virginia from the Governor's Opportunity Fund to
assist to locate a manufacturing operation for M&H Plastics in Frederick County, Virginia.
BE IT RESOLVED, that said funds are subject to an executed Memorandum of
Understanding 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 Memorandum of
Understanding on its behalf.
Upon motion duly made by Lvnda J. Tv] er , seconded by Gina A. Fnrn'<"tpr
and on the votes hereafter recorded,
ADOPTED, this 28th day ::!!:!;!!~!:L_, 2004.
Richard C. Shickle
Aye
Gary Dove Aye
Lynda Tyler
Ave
-~--
Barbara Van Osten _Ave
W. Harrington Smith, Jr.
Ay.:!_
Bill Ewing _Aye
Gina Forrester
Aye
Resolution No.: 039-04
A COPY TESTE:
~
~~-~~.
Clerk, Board of Supervisors
MEMORANDUM OF UNDERSTANDING
THIS MEMORANDUM OF UNDERSTANDING, (the "Memorandum") made and dated this 281h day
of January, 2004, evidences the agreement among the COUNTY OF FREDERICK, 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 M&H Plastics ("MH"), an United Kingdom corporation, regarding a
new location of a manufacturing facility in the Commonwealth of Virginia.
RECITALS
A. MH intends to invest One Million Dollars ($1,000,000.00) in new taxable real estate and
taxable improvements, to invest Eleven Million Dollars ($11,000,000.00) in new taxable
machinery and tools, and to create Fifty-Seven (57) new jobs (collectively the "projecr).
at the manufacturing facility to be located in Frederick County, Virginia (the "Facility").
B. The County agrees to make a cash grant to the IDA in the sum of One Hundred
Thousand Dollars ($100,000.00), and the IDA agrees, upon receipt of such funds, to
make a cash grant to MH in an identical amount (the "IDA Grant") to be applied by MH in
order to complete the Project, as more fully set forth hereinafter.
C. The IDA shall also receive a grant of One Hundred Thousand Dollars ($100,000.00) from
the Governor's Opportunity Fund (the "Opportunity Fund Grant") and the IDA, as
administrator of the Opportunity Fund Grant, upon receipt of such funds, shall disburse
such funds to MH as partial reimbursement for site purchase costs and subsequent site
development expenditures, as more fully set forth hereinafter.
MOU: MH Plastics - January 2004
Frederick County, Virginia
page 1 of 5
NOW THEREFORE WITNESSETH: That for and in consideration in the sum of Ten Dollars ($10.00),
cash in hand paid by each of the parties hereto unto the other, the receipt and sufficiency of which is
hereby acknowledged, and other consideration deemed adequate at law, including, but not limited to,
the covenants and conditions set forth in this Memorandum, the parties do hereby agree as follows:
1. Recitals: The Recitals are made a material part hereof and incorporated herein by
reference as if set out in full.
2. Terms and Conditions of Disbursement:
a. The obligations of the IDA to make disbursement of the IDA Grant to MH is expressly
contingent upon receipt of such funds by the IDA from the County.
b. The obligation of the IDA to make disbursement of the Opportunity Fund Grant to MH
is expressly contingent upon receipt of such funds by the IDA from the Governor's
Opportunity Fund.
c. Provided that the IDA receives the IDA Grant and Opportunity Fund Grant in a timely
fashion, the IDA shall disburse such funds to MH after March 1, 2004, but no later
than June 30, 2004.
3) Reimbursement/Default: MH agrees to make reimbursement to the IDA of the IDA
Grant and the Opportunity Fund Grant, as described in Section 4, below, in the event that
MH fails to satisfy all the following terms and conditions (the "Conditions"), as
reasonably determined by the IDA:
a. MH acquires and has fully operational new taxable real estate in an amount of not
less than $1,000,000.00, new taxable machinery and tools in an amount of not
less than $7,000,000.00 and create 32 net new jobs at the Facility located in
Frederick County, Virginia by December 31,2004;
b. In addition to the new taxable real estate, new taxable machinery and tools, and
net new jobs set forth in subsection (a), above, MH acquires and has fully
operational additional new taxable machinery and tools in an amount of not less
than $4,000,000.00 and create an additional 25 net new jobs at the Facility
MOU: HP HOOD - January 2004
Frederick County, Virginia
page 2 of 5
located in Frederick County, Virginia by December 31,2006;
c. MH employees created by the Project will average an annual salary of not less
than $34,730, excluding benefits by December 31,2006;
d. MH maintains the level of taxable investment, creates new jobs and wage levels
as part of the Project until December 31, 2008; and
e. MH continues the operation of the Project in Frederick County, Virginia for a four
(4) year period commencing on December 31,2008.
4. Refund:
a. In the event that MH fails to meet all of the foregoing Conditions
set forth in Section 3, above, then and in that event MH shall refund to the IDA
such portion of the IDA Grant and the Opportunity Fund Grant as is proportionate
to MH's shortfall in satisfying the Conditions (the "MH Refund"). Upon receipt of
the MH Refund from MH, the IDA shall return the same, or such proportionate
share thereof as called for herein, to the County and to the Governor's
Opportunity Fund, respectively.
b. Notwithstanding the foregoing, however, if MH has met ninety percent (90%) of
the investment and employment goals set forth in this Memorandum by
December 31,2006, maintains that ninety percent (90%) level of investment and
jobs created through the Project for a period of two (2) years beginning on
December 31,2006, and remains fully operational in Frederick County, Virginia
for a period of four (4) years commencing on December 31, 2008, then and in
that event, MH shall be deemed to have substantially complied with the terms of
this Memorandum and shall not be obligated to repay the MH Refund or any
portion thereof unto the IDA.
5. Coo Deration: The County agrees to use its best efforts to "fast track" any
building permits required for the construction and installation of the Facility by MH so
MOU: HP HOOD - January 2004
Frederick County, Virginia
page 3 of 5
that the appropriate building permits, if otherwise prepared and submitted in proper
form, can be issued in a timely manner in order to meet the deadlines set forth
above. The County and the Commission agree to reasonably cooperate with MH, its
equipment suppliers and its equipment contractors, in order to assist MH in meeting
its operational deadlines so that the Facility is fully equipped by not later than
December 31, 2006. Nothing contained in this Section 5 shall be interpreted to in
any way require the County to issue any building permits unless and until all
applicable terms and conditions as required by law for such building permits have
been met and satisfied by MH.
6. Time: Time is of the essence as to all matters set forth in this Memorandum.
7. Bindina Effect: This Memorandum shall be binding upon and inure to the
benefit of the parties hereto and their respective successors upon the date of
acceptance of this Memorandum.
8. Construction: This Memorandum and the terms thereof shall be interpreted
and construed in accordance with the laws of the Commonwealth of Virginia.
9. Assianment: This Memorandum may not be assigned by any party hereto.
10. Ratification and ImDlementation: This Memorandum must be fully ratified by
all parties hereto not later than 5:00 p.m. on March 1, 2004, and the implementation
by MH of the terms of this Memorandum must have commenced by December 31,
2004; otherwise, this Memorandum and the terms hereof shall be deemed withdrawn
and of no further force and effect, and anv funds disbursed by the IDA to MH shall
immediately refunded bY MH to the IDA.
MOU: MH Plastics - January 2004
Frederick County, Virginia
page 4 of 5
COUNTY OF FREDERICK, VIRGINIA
BY:_~..&--_______(SEAL)
JOh~~~tJr ~ur1tY-Administrator
INDUSTRIAL DEVELOPMENT AUTHORITY OF THE
COUNTY OF FREDERICK, VIRGINIA
By:
(SEAL)
WINCHESTER-FREDERICK COUNTY ECONOMIC
DEVELOPMENT COMMISSION
By:_______________________(SEAL)
MH Plastics
By:___________________(SEAL)
MOU: MH Plastics - January 2004
Frederick County, Virginia
page 5 of 5
FINAL 01.10.04
APPENDIX A
NET FISCAL IMPACT
PROPOSAL: MH Plastics
2004 2005 2006 2007 2008
NET DIRECT FISCAL IMPACT
Annual Return $94,811 $80,811 $117,212 $95,212 $87,212
Cumulative Return $94,811 $175,622 $292,835 $388,047 $475,259
NET INDIRECT RESIDENTIAL FISCAL IMPACT
Annual Return ($7,774) ($7,774) ($8,253) ($8,253) ($8,253)
Cumulative Return ($7,774) ($15,548) ($23,801) ($32,054) ($40,307)
NET IMPACT
Annual Return $87,037 $73,037 $108,959 $86,959 $78,959
Cumulative Return $87,037 $160,075 $269,034 $355,993 $434,952
$269,034 I
$434,952 I
ASSUMPTIONS
Demoaraohics
Persons per Residential Unit
School Children per Residential Unit
2.60
0.70
Investment and Emolovee Plen
(totals - 5 Year)
Real Estate
Machinery & Tools
Personal Property
Business License
$12,000,000
$1.000,000
$11,000,000
$0
$0
Employees
Averaae Hourlv Waae Emolovee
57
$16.70
r'.'
FINAL 01.10.04
ASSUMPTIONS
PROPOSAL: MH Plastics
SUMPTIONS
Source
us Census 2000
Item
Persons per Residential Unit
School Children per Residential Unit
School Children per Residential Unit (Elementary)
School Children per Residential Unit (Middle)
School Children r Residential Unit H' h School
Value
2.60
0.70
0.39
0.14
0.17
NOTE: ALL VALUES ARE FY ANNUAL TOTALS
Residential
Per Residential Unit Real Estate Tax Revenue
Per Residential Unit Other General Fund Revenue
Per Residential Unit General Fund Service
Per Residential Unit General Fund Service (no educ)
$1,220
$1,665
$3,124
$830
Per Capita Fiscal Impact Analysis Model, Frederick County 2002
Per Capita Fiscal Impact Analysis Model, Frederick County 2002
Per Capita Fiscal Impact Analysis Model, Frederick County 2002
Per Capita Fiscal Impact Analysis Model, Frederick County 2002
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 Unit
Capital Facilities Costs: Public Safety - Per Residential Unit
Ca . I Facilities Costs: Parkland - Per Residential Unit
Per Capita Fiscal Impact Analysis Model, Frederick County 2002
Per Capita Fiscal Impact Analysis Model, Frederick County 2002
Per Capita Fiscal Impact Analysis Model, Frederick County 2002
Per Capita Fiscal Impact Analysis Model, Frederick County 2002
Per Capita Fiscal Impact Analysis Model, Frederick County 2002
Per Ca Ita Fiscal 1m ect Anal Is Model, Frederick Count 2002
_,"-Residential
See Investment and Employment Plan Sheet
See Investment and Employment Plan Sheet
$175 Per Capita Fiscal Impact Analysis Model. Frederick County 2002
Real Estate Tax Retum
M&T,BPOL,BE.PP*Tax
Per Employee Other General Fund Revenue
Per Employee General Fund Service
Capital Facilities Costs: Public Safety - Per Employee
Average Hourly Wage Employee
Residential-Non-Residential Linka
$132
$2
Per Capita Fiscal Impact Analysis Model, Frederick County 2002
Per Capita Fiscal Impact Anelysls Model, Frederick County 2002
Taxes
Real Estate
Machinery and Tools
Year 1 (60%)
Year 2 (50%)
Year 3 (40%)
Year 4 (30%)
Personal Properly
property taxed at 30% of original value
$0.73
$2.00
60% $1.20
50% $1.00
40% $0.80
30% $0.60
$4.20
$1.26
1%
i>,"illi1
ulher Assumotions
Revenue end Expenditure (Operetlng & Capital) Levels will remain at 2000 - 2001 levels
No changes In eny tax rates
No slack capacity In any general fund revenues and operating expenditures
No changes In number of persons per residential unit or school children per residential unit
Weldon Cooper Center, University of Virginia
Weldon Cooper Center, University of Virginia
Weldon Cooper Center, University of Virginia
Weldon Cooper Center, University of Virginia
Weldon Cooper Center, University of Virginia
Weldon Cooper Center, University of Virginia
Weldon Cooper Center. University of Virginia
Weldon Cooper Center, University of Virginia
Weldon Cooper Center, University of Virginia
American Chamber of Commerce and Research Association
FINAL 01.10.04
APPENDIX C
INVESTMENT AND EMPLOYMENT PLAN
PROPOSAL: MH Plastics
rojected Plans
2004
2005
2006
2007
2008
Value of New Construction
Phasa 1
Phase 2
Phase 3
Phase 4
Phase 5
1.000.000
Annual Value
1,000.000
Value of Machinery & Tools
Phase 1
Phase 2
Phase 3
Phase 4
Phase 5
7,000.000
4,200,000
3,500,000
4,000,000
2,800,000
2,100,000
2.100.000
2,400,000
2.000.000
1,600,000
Annual Value
4,200.000
3,500,000
5,200,000
4,100,000
3.700.000
Value of taxable personal property
Phase 1
Phase 2
Phase 3
Phase 4
Phase 5
Annual Value
Sales Tax Return from Employ..e
Phase 1
Phase 2
Phase 3
Phase 4
Phase 5
2.181
2.181
2.181
2,181
2.181
1,362
1,362
1,362
Projected Emptoyment
Phase 1
Phase 2
Phase 3
Phase 4
Phase 5
2,181 2,181 3,544 3,544 3,544
1 ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR
32
25
32 25
1 ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR
1,004,200 1,004,200 1,004.200 1.004.200 1,004,200
627,131 627,131 627,131
Annual Value
Annual Value
ProJected Wages
Phase 1
Phase 2
Phase 3
Phase 4
Phase 5
Annual Value 1.004,200 1.004,200 1,631.331 1,631,331 1,631,331
Cumulative Value 1,004,200 2,008,401 3,639,732 5,271,064 6,902.395
1.~~._l_!lI[_IB:~_Il&rli~~"lilt.I~.il!llJ!!ll!tJJj~Jj
-----_._------_._--~-
APPENDIX D
Real Estate Tax Return
FINAL 01.10,04
DIRECT FISCAL IMPACT
PROPOSAL: MH Plastics
2004 2005 2006 2007 2008
$7,300 $7,300 $7,300 $7,300 $7,300
$7,300 $14,600 $21 ,900 $29,200 $36,500
2004 2005 2006 2007 2008
$84,000 $70,000 $104,000 $82,000 $74,000
$84,000 $154,000 $258,000 $340,000 $414,000
2004 2005 2006 2007 2008
DIRECT REVENUES
Annual Revenues
Cumulative Revenues
M&T,BPOL,BE,PP*Tax
Annual Revenues
Cumulative Revenues
Sales Tax
Annual Revenues $2,181
Cumulative Revenues $2,181
Local sales tax receipts reflect portion of purchases by new workers
(Based on 54,5% of annual payroll spent on taxable purchases - US Chamber 2000) (New taxable sales based on proportion of total taxable
sales between Winchester and Frederick County for 2001 - Virginia Department of Taxation)
$2,181
$4,363
$3,544
$7,906
$3,544
$11,450
$3,544
$14,993
Other General Fund Revenue
2004
$5,601
$5,601
2005
$5,601
$11,202
2006
$9,977
$21,179
2007
$9,977
$31,156
2008
$9,977
$41,133
Annual Revenues
Cumulative Revenues
DIRECT REVENUES 2004 2005 2006 2007 2008
Annual Revenues $99,082 $85,082 $124,820 $102,820 $94,820
Cumulative Revenues $99,082 $184,165 $308,985 $411,805 $506,826
"""'\f'C'''"l!i''i"'',''J*'!''''''''IJl'S''_;lf'Iilii.~!l!!li~'_1I!l'i"'1l!t''''''''Wi.4'''''!!!"t"""R'lI:1"!!lll\li!ll!IIllI'mJl1'i>$1"i'''\'%'"!!l1l\\lC"<'~jl':!i!ll'''ffl''"''''1i1'''.i!!liW"li'il
\f<1liliii"'<:''''',"''i!lllW'''''''''Il?'I>i!'''''''.''
DIRECT EXPENDITURES
General Fund: Operating Costs 2004 2005 2006 2007 2008
Annual Costs $4,213 $4,213 $7,505 $7,505 $7,505
Cumulative Costs $4,213 $8,426 $15,931 $23,436 $30,941
Capital Facilities Costs 2004 2005 2006 2007 2008
Annual Costs $58 $58 $103 $103 $103
Cumulative Costs $58 $116 $219 $322 $425
DIRECT EXPENDITURES 2004 2005 2006 2007 2008
Annual Costs $4,271 $4,271 $7,608 $7,608 $7,608
Annual Return
$94,811
$80,811
$117,212
$911,212
$87,212
-------------------------------------------
APPENDIX E
FINAL 01.10.04
INDIRECT RESIDENTIAL FISCAL IMPACT
PROPOSAL: MH Plastics
INDIRECT REVENUES
Potential New Residential Units 2004 2005 2006 2007 2008
Annual Units 3 1
Cumulative Units 3 3 4 4 4
Real Estate Tax Return 2004 2005 2006 2007 2008
Annual Revenues $3,904 $3,904 $5,077 $5,077 $5,077
Cumulative Revenues $3,904 $7,808 $12,885 $17,962 $23,039
General Fund Revenue (Other) 2004 2005 2006 2007 2008
Annual Revenues $5,328 $5,328 $6,929 $6,929 $6,929
Cumulative Revenues $5,328 $10,657 $17,586 $24,515 $31,445
INDIRECT REVENUES 2004 2005 2006 2007 2008
Annual Revenues $9,232 $9,232 $12.006 $12,006 $12,006
INDIRECT EXPENDITURES
General Fund: Operating Costs 2004 2005 2006 2007 2008
Annual Costs $5,779 $5,779 $6.577 $6.577 $6,577
Cumulative Costs $5,779 $11,559 $18,136 $24,714 $31,291
Capital Facilities Costs 2004 2005 2006 2007 2008
Annual Costs $11.227 $11.227 $13.682 $13,682 $13,682
Cumulative Costs $11,227 $22,453 $36,136 $49,818 $63,500
INDIRECT EXPENDITURES 2004 2005 2006 2007 2008
Annual Costs $17,006 $17,006 $20,260 $20,260 $20,260
NET
Annual Return
- ------ ------- - - --------------------
APPENDIX F
FINAL 01.10.04
INDIRECT RESIDENTIAL CAPITAL FACILITIES COSTS
PROPOSAL: MH Plastics
POTENTIAL NEW STUDENTS
Elementary 2004 2005 2006 2007 2008
Annual New Public School Students 2 0
Cumulative New Public School Student 2 2 2 2 2
Middle 2004 2005 2006 2007 2008
Annual New Public School Students 0
Cumulative New Public School Student 1
High 2004 2005 2006 2007 2008
Annual New Public School Students 1 0
Cumulative New Public School Student 1 1
POTENTIAL CAPITAL FACILITIES COSTS
Elementary 2004 2005 2006 2007 2008
Annual Capital Facilities Costs 4,160 4,160 5,035 5,035 5,035
Cumulative Capital Facilities Costs 4,160 8,320 13,354 18,389 23,424
Middle 2004 2005 2006 2007 2008
Annual Capital Facilities Costs 2,456 2,456 2,972 2,972 2,972
Cumulative Capital Facilities Costs 2,458 4,912 7,884 10,857 13,829
High 2004 2005 2006 2007 2008
Annual Capital Facilities Costs 3,568 3,568 4,319 4,319 4,319
Cumulative Capital Facilities Costs 3,568 7,136 11,455 15,773 20,092
POTENTIAL OTHER CAPITAL FACILITIES COSTS
2004 2005 2006 2007 2008
Annual Capijal Facilities Costs 1,043 1,043 1,357 1,357 1,357
Cumulative Capital Facilities Costs 1,043 2,086 3,443 4,799 6,156
TOTAL INDIRECT RESIDENTIAL CAPITAL FACILITIES COSTS
2004 2005 2006 2007 2008
Annual Capital F acilitias Costs 11,227 11,227 13,682 13,682 13,682
Cumulative Capijal Facilities Costs 11,227 22,453 36,136 49,818 63,500
~~
~~ WINCHESTER I FREDERICK COUNTY
~ ~ Economic Development Commission
DATE:
January 28, 2004
TO:
Frederick County Board of Supervisors
FROM:
Patrick Barker, Executive Director
CC:
John R. Riley, Jr., County Administrator
RE:
Local Government Agreements for M&H Plastics
Attached for your review and comments are the Memorandum of Understanding (MOU)
and BOS resolution regarding M&H Plastics. As you recall, BOS seemed favorable in
providing a local match to the Governor's Opportunity Fund of $100,000.00 to secure this
location. Governor Warner has approved a grant amount of $100,000.00 from the
Governor's Opportunity Fund to assist in Frederick County securing the location of this
project.
I would like to request that the MOU and BOS resolution for this project be placed on the
BOS's January 28th agenda. As you are aware, the Governor had already formally
announced the State's financial assistance.
Thanks for your help. I am available if you have any questions or comments on these
materials on this 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