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05-03-2021 Closed Session Meeting Minutes BOCMay 3, 2021, Closed Session #1 Page 1 of 15 Person County Board of Commissioners Minutes of a Closed Session DATE: May 3, 2021 MEMBERS OF BOARD OF COMMISSIONERS PRESENT: Chairman Powell, Vice Chairman Puryear, Commissioner Gentry, Commissioner Palmer, and Commissioner Sims OTHERS PRESENT: County Manager, Heidi York, Clerk to the Board, Brenda Reaves, County Attorney, Ellis Hankins, Economic Development Director, Sherry Wilborn, and Jordan Jones of UNC School of Government Development Finance Initiative CLOSED SESSION #1 A motion was made by Commissioner Sims and carried 5-0 to enter into Closed Session at 9:53pm per General Statute 143-318.11(a)(4) for the purpose of discussion of matters relating to the location or expansion of industries or other businesses in the county (economic development) with the following individuals permitted to attend: County Manager, Heidi York, Clerk to the Board, Brenda Reaves, Economic Development Director, Sherry Wilborn, County Attorney, Ellis Hankins, Jordan Jones, UNC School of Government Development Finance Initiative and Economic Development Commission Chairman, Phillip Allen. Chairman Powell called the Closed Session #1 to order at 9:55pm. Economic Development Director, Sherry Wilborn introduced Jordan Jones from the UNC School of Government Development Finance Initiative who also presented to the Economic Development Commission (EDC) at its April meeting along with his cohort, Emily Bailey. Ms. Wilborn stated both Mr. Jones and Ms. Bailey assisted the EDC with the Request for Proposals (RFP) solicitation for the North Park site shell building and the evaluation of the two proposals submitted. Ms. Wilborn said one of the two proposals was a build to suit proposal and the other proposal had an incomplete budget; a counter proposal may be in order. Ms. Wilborn stated three commissioners were present at the April EDC meeting and were included in the closed session presentation by Mr. Jones. She added she would share the EDC recommendation to the Board at the end of Mr. Jones’ presentation. Mr. Jones stated he works as a development advisor assisting local governments on economic development projects specifically public private partnerships, downtown revitalization efforts and overall master planning of communities. Mr. Jones said he could provide context and information about the RFP, local market data and comparison between the proposals received. Mr. Jones shared the following presentation: May 3, 2021, Closed Session #1 Page 2 of 15 May 3, 2021, Closed Session #1 Page 3 of 15 May 3, 2021, Closed Session #1 Page 4 of 15 May 3, 2021, Closed Session #1 Page 5 of 15 May 3, 2021, Closed Session #1 Page 6 of 15 May 3, 2021, Closed Session #1 Page 7 of 15 May 3, 2021, Closed Session #1 Page 8 of 15 May 3, 2021, Closed Session #1 Page 9 of 15 May 3, 2021, Closed Session #1 Page 10 of 15 May 3, 2021, Closed Session #1 Page 11 of 15 May 3, 2021, Closed Session #1 Page 12 of 15 May 3, 2021, Closed Session #1 Page 13 of 15 May 3, 2021, Closed Session #1 Page 14 of 15 May 3, 2021, Closed Session #1 Page 15 of 15 County Manager, Heidi York stated she found it interesting that the County could build cheaper than being privately developed. Ms. Wilborn told the group that the EDC had the following recommendations:  Proceed with a County RFQ for clearing and grading the site to be pad ready and marketing it for virtual building for a build to suit tenant,  County to consider pursuing the construction manager at risk route, and/or  Obtain estimates for the clearing and grading. Ms. Wilborn stated she had not prepared a RFP for the clearing and grading however, she obtained a local quote for the 8-acre site plan/footprint at $2.35M. Commissioner Gentry noted that as a government entity, the project would have to be bid out and questioned if the county had staff to manage such processes. County Attorney, Ellis Hankins stated there is statutory authority for counties to build shell buildings with the expectation of exercising the bidding procurement process. Ms. Wilborn added the public process also included going through the Local Government Commission for approval. EDC Chairman, Phillip Allen reiterated the fact that the County has no product noting the County would have to make an investment with the risk of not having a return; same scenario even if the county had funds to readily invest. He added because of the risks, the County was back to the starting point of having no product. Commissioner Sims asked if there were any other investments planned to consider. Mr. Allen stated there was many things needed to be done and the County should diversify. Ms. Wilborn stated the first step would be to acquire property so that clearing and grading could take place to make it more attractive noting the topography and wetlands provided some challenges, as the assumption to a tenant is that the property would be conveyed. Ms. Wilborn said she reached out to Piedmont Electric regarding their revolving loan program through USDA and they have a capacity of $1.3M at a 1% interest rate. Mr. Jones summarized the development costs at $4.9M with a $2.8M delta (where market price is today versus total development costs) plus $2.35M for the grading/clearing for a projected cost of $7.2M. Everyone noted the risks were huge and timing was bad with construction costs increasing without a guarantee of a tenant. Commissioner Gentry suggested continuing to explore options, keep searching and see what happens in the marketplace. The Board accepted the update without a consensus or any direction to staff at this time. A motion was made by Commissioner Gentry and carried 5-0 to return to open session at 10:34pm. May 3, 2021, Closed Session #2 Page 1 of 2 Person County Board of Commissioners Minutes of a Closed Session DATE: May 3, 2021 MEMBERS OF BOARD OF COMMISSIONERS PRESENT: Chairman Powell, Vice Chairman Puryear, Commissioner Gentry, Commissioner Palmer, and Commissioner Sims OTHERS PRESENT: County Manager, Heidi York, Clerk to the Board, Brenda Reaves, County Attorney, Ellis Hankins, and Economic Development Director, Sherry Wilborn CLOSED SESSION #2 A motion was made by Commissioner Gentry and carried 5-0 to enter into Closed Session at 10:36pm per General Statute 143-318.11(a)(4) for the purpose of discussion of matters relating to the location or expansion of industries or other businesses in the area served by the public body, including agreement on a tentative list of economic development incentives that may be offered by the public body in negotiations with the following individuals permitted to attend: County Manager, Heidi York, Clerk to the Board, Brenda Reaves, Economic Development Director, Sherry Wilborn and County Attorney, Ellis Hankins. Chairman Powell called the Closed Session #2 to order at 10:37pm. Economic Development Director, Sherry Wilborn stated the purpose of Closed Session #2 was to review financial incentives for Project Famous. Ms. Wilborn proposed financial incentives for Project Famous in April to which the Board consented to $1,522,331.37 grant over a 10-year period. Ms. Wilborn explained Project Famous requested reconsideration noting that in April, the average wage was projected to be $47,120 and now was being modified to $51,487 based on a 3% multiplier. Ms. Wilborn provided the Board with a handout illustrating a revised 10-year grant that totaled $1,899,096.32. Ms. Wilborn reminded the Board that the new capital investment is $61M with 300 pledged jobs. Ms. Wilborn noted the state of NC was not revising its financial incentives and they included $3M with an additional $1M (CDBG Building Reuse Grant). Ms. Wilborn further noted this would make them the second largest private sector employer with the largest footprint of industrial space. In addition, Ms. Wilborn advised the Board that this company had a late personal property filing for 2020, which means they will have a penalty. She said the Tax Administrator has estimated the penalty to be around $11,000. May 3, 2021, Closed Session #2 Page 2 of 2 Ms. Wilborn asked the Board to consider her proposal of increasing the financial incentives for Project Famous based on the new information and making it contingent that the company does not appeal its penalty with the Board of Commissioners noting the agreement would be written so that they would not have the ability to appeal a late listing penalty. To summarize the new financial incentives proposed, Ms. Wilborn said over a 10-year period, the County would offer $1.9M and not the previously consented $1.5M with the understanding the company would not appeal the late listing penalty or at any future time while under the financial incentives agreement. County Attorney, Ellis Hankins said that typical provisions in a financial incentives agreement is that the company complies with all applicable laws that includes paying its taxes. The Board consented to the revised financial incentives, as proposed by the Economic Development Director at $1,899,096.32. A motion was made by Commissioner Gentry and carried 5-0 to return to open session at 10:50pm.