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05-27-2022 Closed Session Meeting Minutes BOCMay 27, 2022, Closed Session #1 Page 1 of 3 Person County Board of Commissioners Minutes of a Closed Session DATE: May 27, 2022 MEMBERS OF BOARD OF COMMISSIONERS PRESENT: Chairman Powell, Vice Chairman Sims, Commissioner Puryear, Commissioner Gentry, and Commissioner Palmer OTHERS PRESENT: County Manager, Heidi York, and Clerk to the Board, Brenda Reaves CLOSED SESSION #1 A motion was made by Vice Chairman Sims and carried 5-0 to enter into Closed Session at 3:00pm 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, and Economic Development Director, Sherry Wilborn. Chairman Powell called the Closed Session #1 to order at 3:01pm. Economic Development Director, Sherry Wilborn stated the purpose of the Closed Session #1 was to update the Board on Project Lamb, along with its supplier, Project Chops noting Project Lamb’s board has approved the project and they are moving forward to identify site location noting they are waiting on updated incentives package to include Project Chops. She noted as the Board previously discussed both projects, the projects have changed along the way. Ms. Wilborn stated they went from 300 acres initially to now 700 acres, and they may want the whole site. In addition, utilities and rail are a requirement for Projects Lamb and Chops. Ms. Wilborn said Projects Lamb and Chops are a great fit for Person County but maybe not the best fit for the Mega Site. Projects Lamb and Chops combined bring $470M investment, 312 jobs noting their power, water, and wastewater needs are low comparatively to other prospects with billions in investment with thousands of jobs. Ms. Wilborn said Project Eddie is a competing project for the Mega Site; she did not consider Project Eddie dead but she felt it would not materialize in Person County. She referenced a Triangle Business Journal article highlighting a mega site shortage with all the momentum for big projects in the state noting the County has potential to land a bigger project at the Mega Site but it could take two to four years. She noted the County’s option on the Mega Site expires Dec. 31, 2023 and the word from the landowners is that it will be a different arrangement. In order to take advantage of the larger projects, Ms. Wilborn sought consideration to acquire the whole site to be patient for a big project. May 27, 2022, Closed Session #1 Page 2 of 3 Ms. Wilborn stated she asked Creative EDC, an economic development consulting group, to complete an economic impact analysis on Projects Lamb and Chops combined. She illustrated through a handout, the total capital investment $470M, 312 jobs, and an average wage of $52,557 for Project Lamb and $68,179 for Project Chops, both well above the county’s average wage. Ms. Wilborn stated the Indirect and Induced Jobs data from Jobs EQ and Implan both totaled about the same at 196 or 197 jobs. The total annual economic output for both Projects Lamb and Chops excluding tax revenue but showing a more ripple effect estimated $154M annually with the construction phase, i.e. retail and service providers, projected 2,438 service related jobs. The total construction phase economic output for both projects $284M. Ms. Wilborn noted the Project Lamb incentives package initially was $8M local, state JDIG $1.7M, CDBG $1.5M and Golden Leaf grant $1.5M; the local upfront investment to Project Lamb was $6M. Project Chops was incentivized locally at $4M. She outlined the wastewater needs costing $15.5M, rail costs for the track only is $3.5M, which would be borne by the company as this was deemed a private line to the company. Ms. Wilborn further noted as the project has changed with the supplier, the state and utility partners were reevaluating the current site plan and incentives. Ms. Wilborn informed the Board that the Mega Site landowners (the Wagstaff family) did not want to sell off the site in chunks, and if the county/prospect was not taking the full site, they want a 2% increase for each year that the option has been in place per acre as well as retain the right to sell the timber. The current option is $20,000 per acre and for a chunk, i.e. 895 acres south of Edwin Robertson Road, the price would be $23,667.52 per acre or $21,182,430 for this project only. Any other projects would be priced accordingly. Ms. Wilborn noted Projects Lamb and Chops desires a big buffer, a remote area with half of the project being a sawmill use. Projects Lamb and Chops desires extra acreage to timber/replant and may be potentially interested in acquiring the entire site. Ms. Wilborn further noted the option would be dissolved if the county or prospect approached them for just a portion of the site, the County would have to renegotiate for the 430 acres above Edwin Robertson Road. She said Projects Lamb and Chops may would like to negotiate with the landowners directly but asked if that was what the County desired. To eliminate all the above noted contingencies and to keep the purchase price at the current $20,000 per acre, Ms. Wilborn said the County would have to purchase the entire site which would cost $27M. Ms. Wilborn stated she called Representative Yarborough, Jr. regarding the Governor’s $161M site development funds in the proposed budget to gage his opinion if there may be $27M that could be used for Person County for acquisition of the Mega Site to which he asked her for a proposal or report with support letters from Duke Energy and Chris Chung from EDPNC and any others as to why the state should support buying the site. Ms. Wilborn asked the commissioners how they felt to incentivize the project when the Mega Site may not be available after the option expires noting nothing was guaranteed and the project was still being considered in other states; she added the site development costs for 200 acres is projected at $54.6M along with mitigation costs (excluding rail) was projected at $21.3M. Vice Chairman Sims said he did not like the landowners wanting more per acre if not the whole site was desired and/or outside this specific project nor having to renegotiate in one year for a new option. Ms. Wilborn stated it might be best to remove the landowners from the equation by purchase of the site. May 27, 2022, Closed Session #1 Page 3 of 3 Commissioner Gentry stated if the Wagstaffs own the property outright, they have the ability to finance a structured deal noting the $20K to $23K per acre was the going rate. She added Person County was behind because the County does not control the property. Ms. Wilborn said the County’s level of free debt was at capacity with the school projects however, the Finance Director’s recommendation was to work with the debt consultants. Ms. Wilborn updated the Board on the second opinion obtained related to the rail noting there was an option to move the turnout south to miss all those homes as previously discussed and to only affect four property owners, one of which is the Wagstaffs. Commissioner Palmer asked if the rail depicted was the one off Haywood Bailey Road to which Ms. Wilborn affirmed. Commissioner Palmer asked why was it proposed to be located there and not connected to the existing Duke rail closer to the site to which Ms. Wilborn responded it was due to the topography and flood plains and that option would be in the wrong direction. Commissioner Gentry asked if there was any other site in the County that could accommodate this project to which Ms. Wilborn stated to assemble 700 acres, the time and costs to bring the infrastructure to the site would take one year per mile. She asked Ms. Wilborn for her opinion to which Ms. Wilborn said it depends if the County could obtain the funding to purchase the site before the option expires and if the Board and citizens have the will to be patient for a big project. She added the Board would signal to the state with its support and signal to the company if you want them in Person County or not. Vice Chairman Sims said if Projects Lamb and Chops falls through, the county has the option to purchase the full site by Dec. 31, 2023 to have control. Commissioner Puryear asked Ms. Wilborn of the interest level of Projects Lamb and Chops to which she replied very high interest. Commissioner Gentry recommended to present to Projects Lamb and Chops and to see if they would like to purchase the property outright from the Wagstaffs and see how it plays out with the project and the Wagstaffs before the County has to decide if they want to purchase the property. Commissioner Puryear and Chairman Powell stated agreement with Commissioner Gentry’s recommendation. County Manager, Heidi York stated the Board has been put on notice about the intent to increase the per acre price if not using the whole site. Ms. Wilborn stated if the project landed, one option would be for the county to purchase the full site and reimbursement from the company for the acres they need. Ms. Wilborn recapped that Projects Lamb and Chops have seen the local incentives of $8M and $4M respectively however the Board previously consented to increase those amounts to $9.2M and $4.4M respectively; she asked the Board for consensus to use the lower amount with discretion to go up to the higher amount to which all the commissioners consented. Ms. Wilborn said this project would require the Board to approve a rezoning to Industrial to accommodate the sawmill use. A motion was made by Vice Chairman Sims and carried 5-0 to return to open session at 3:33pm.