North Carolina

Buncombe County, NC Approves $18M Incentives for Project X

The Board of Commissioners of Buncombe County, North Carolina yesterday approved an $18.38 million package of incentives for an economic development project codenamed “Project X” without revealing the identity of the company involved.

Project X

Project X (photo – wikimedia)

As per the agreement, Project X would invest $126 million for setting up a new manufacturing facility, including purchase of new equipment and machinery.

The company will create 52 new full-time jobs with average annual wages of $40,000, and will retain hundreds of existing full-time jobs. This is higher than the median wage in the County, and the new investment will additionally create more indirect jobs.

The existing full-time jobs in the area currently pay average annual wages of $57,000. The total annual labor income impact of the company’s existing and new jobs is pegged at $34 million.

In order to secure the expansion and retain the company’s existing jobs, Buncombe County is offering them a $2.68 million cash grant, to be paid out over a decade from 2015 through 2024. The company will in turn commit to creating 52 new jobs, and they would have to retain existing jobs for ten years.

Project X has also been offered a land swap deal that will cost the county $15.7 million, including constructing a 20,000-square-foot-building on one property and then swapping it for another one to be used for constructing a 125,000-square-foot facility.

The site preparation and construction costs for this second building would be $10.6 million, and it would then be leased for 15 years to Project X for locating a facility for manufacturing components.

Buncombe County expects additional tax revenues worth around $5.616 million over the next ten years, generated by increased property taxes over the site improvements and sales tax from equipment and material purchase.

Buncombe County’s largest manufacturers that have between 500-1000 employees are Eaton Corporation, Borgwarner Turbo Systems and Kendro Laboratory Products LP.

Borgwarner makes turbochargers for vehicle engines, while Kendro makes lab equipment. Eaton Corporation (NYSE: ETN) is a global power management company that produces electrical components and systems, and has facilities located in Arden, North Carolina.

Google to Invest $600M for Lenoir, NC Data Center Expansion

Google announced that it plans to invest another $600 million for an expansion of its data center in Lenoir, North Carolina.

Google Lenoir, NC data center

Google Lenoir, NC data center (photo – google.com)

The Lenoir data center project was announced by Google in 2007 with an initial investment of $600 million, so their total investment in Lenoir now stands at $1.2 billion.

The data center is now fully operational and already has 110 employees.

Google Data Center Operations Manager Enoch Moeller.said in a statement that when the company builds data centers, they choose sites big enough to accommodate future growth in a location where they can establish long-term commitments with the community.

Google has stated previously that it chose the Lenoir location because it offers the right combination of energy infrastructure and developable land.

The land will certainly come in handy for this latest $600 million expansion. As for the energy infrastructure – that is the real news today.

Google announced that it has managed to convince Duke Energy, which provides the power consumed by this data center, to provide a separate green tariff for companies like Google that want to purchase renewable energy.

Up to now, the problem with North Carolina’s data center cluster was that they could only be as green as Duke Energy was.

Duke has separate tariffs for home users, companies, and large-scale companies such as Google. What they will do now (if the state regulators approve it) is add one more green tariff category for companies that wish to buy power that comes from a renewable source.

Gary Demasi, Director, Global Infrastructure, Google, pointed out in a blog post the advantages of this approach where companies without the resources to directly generate clean energy on-site can use their utility company’s strength in power generation and delivery.

Google has previously published a whitepaper advocating this concept. Duke Energy will now be filing with the North Carolina Utilities Commission within the next three months. If approved, they will run a pilot test of this approach with Google for the Lenoir data center.

Paul Newton, Duke Energy state president for North Carolina, said the proposed renewable rate plan would help companies such as Google to enhance their sustainability efforts and boost the use of renewable energy in North Carolina.

Google has sunk a billion dollars into alternative energy ventures that can provide wind and solar power, and some of that may end up being actually used by Google in Lenoir if Duke decides to purchase renewable energy.

Trinity Frozen Foods to Set Up Manufacturing Plant in Pembroke, NC

Trinity Frozen Foods, whose management offices are currently in Charlotte, North Carolina, announced that they will be setting up a sweet potato processing facility in Pembroke, NC.

Sweet potato fries

Sweet potato fries (photo – Trinity Frozen Foods)

Trinity will invest $15 million for the project, which is expected to create 149 new jobs over the next three years with a total payroll of $34.8 million plus benefits.

The company will initially employ 60 people in the 150,000-square-foot facility and produce 12 to 15 million pounds of sweet potato fries at the new facility, which should be operational by July.

They have expansion plans to eventually meet an annual production target of 50 million pounds.

NC Governor Pat McCrory, who made the announcement, said it made sense for Trinity to site the new facility close to the majority of the growers in North Carolina and the Southeast. North Carolina has been the top sweet potato producer in the U.S. since 1971, and produces on average half of the entire supply in the U.S.

Trinity started looking for a location back in January, after they closed on a first round of equity financing. As per Chip Wilson, the company’s CFO and spokesman, they saw an opportunity for this plant because raw sweet potatoes are currently shipped hundreds of miles from North Carolina all the way to processing plants in Louisiana, Arkansas, and even Quebec.

Trinity looked at sites all over the Carolinas, with the main criterion being that the location should be close to the major growing regions in the state. The company considered several sites in economically depressed areas in both North Carolina and South Carolina.

Jere Null, CEO of Trinity Frozen Foods, said the facility will be the most technologically advanced one of its kind in the world.

The company has been approved for a $500,000 grant from the One North Carolina Fund, which is performance-based and paid out through the local government which also needs to approve its own matching grant.

The NC Department of Commerce was assisted by the Golden LEAF Foundation in securing the project, as did the North Carolina Rural Economic Development Center and the Robeson County Economic Development Commission.

North Carolina to Create Public-Private Economic Development Partnership

During a visit to the Copland fabrics plant in Burlington, North Carolina Governor Pat McCrory announced that the state is undertaking plans to create a new non-profit “Partnership for Prosperity.”

NC Dept. of Commerce

NC Dept. of Commerce (photo – thrivenc.com)

This public-private entity will take over all of the economic development functions currently under the purview of the NC Department of Commerce.

New legislation will be introduced for restructuring the Dept. of Commerce to carve out a new public-private entity in charge of everything from small business development to FDI, import/export, entrepreneurship, and travel and tourism.

Governor McCrory said the plan would unleash the state’s economic potential with a new approach for retaining and recruiting business.

He said the state was losing projects to South Carolina, Tennessee and other states across the nation, and the new system would take all this into consideration.

N.C. Commerce Secretary Sharon Decker went the other way, talking about the importance of local level engagement at the city and county level. Both Decker and Gov. McCrory said the restructuring would ensure these local stakeholders would be integrated under the umbrella of the new public-private partnership.

Rep. Tom Murry said the state’s current approach to economic development lacked focus, and involved duplication of efforts by multiple agencies and wasted state resources. Decker had said last month that some existing regional partnerships may be eliminated as part of the impending restructuring.

Decker added that the state needs to move fast on this proposal, especially with regards to job recruitment. The legislation required will be introduced this week, and should be approved and signed into law by the end of the year.

The plan apparently is to get the private sector more involved, and reduce the amount of state dollars being used up by the North Carolina Dept. of Commerce and other non-profits for economic development projects.

The details, including the Partnership for Prosperity budget and organizational structure, will be developed over the next 45 days, along with a clear timeline for implementation of the restructuring.

Bill Elmore, vice chairman of Coca-Cola Bottling Co. Consolidated, will be heading up this review process that will come up with a clear plan for the new public-private partnership.

NC Signs Brownfields Agreement for ReVenture Eco-industrial Park

North Carolina Governor Pat McCrory announced the signing of a brownfields agreement for ReVenture West. The agreement authorizes the development of the region’s largest eco-industrial park on a former 667-acre Superfund site in Charlotte.

ReVentue Park

ReVentue Park (photo – reventurepark.com)

“This project is an extraordinary example of how public and private sectors can partner to benefit the economy and the environment,” said Gov. McCrory. “This brownfields project will create jobs and allow us to transform a once highly contaminated site into a new and thriving energy-related complex.”

ReVenture West is the first of three redevelopment projects that will make up ReVenture Park, the site of a former textile dye-manufacturing complex. In 1983, the site was determined to be contaminated enough to be placed on the federal Superfund list for cleanup.

As Charlotte’s first eco-industrial park, it is now expected to become a hub for renewable energy projects and is anticipated to generate more than 700 new jobs.

The site’s existing infrastructure makes it uniquely positioned to support an eco-industrial park with over 500,000 square feet of industrial space, rail access and significant electrical interconnectivity including multiple sub-stations and transmission lines throughout the property.

ReVenture West alone is expected to produce about 245 jobs, $73.5 million in investment and up to $12 million in environmental remediation. ReVenture East is expected to bring another 485 jobs and $235 million in investment.

The ReVenture project plan includes a waste-to-energy power plant, solar fields, incubator labs, wastewater treatment and reuse, R&D facilities, and on-campus classrooms. It also has a 177-acre conservation easement that connects the Carolina Thread Trail to the U. S. National White Water Center.

Clariant Corporation, the site’s owner since 1985, ceased dye operations at the site in 2005 and has spent about $40 million cleaning up contamination with help from ReVenture Park.

“Old, unused manufacturing facilities shouldn’t be liabilities,” said Tom McKittrick, president and founder of Forsite Development, Inc., and the lead developer for ReVenture Park. “Developing an energy park on a dormant industrial complex is an opportunity where the private sector, public policy and environmental interests align to promote the clean energy economy. We are transforming liabilities into assets – the essence of recycling.”

Metlife Relocates 2600 Jobs to North Carolina

Global life insurance giant MetLife, Inc. (NYSE: MET) intends to create 2,600 jobs in Charlotte and Cary, North Carolina by the end of 2015. This is the largest jobs announcement in recent North Carolina history.

NC Gov. Pat McCrory at MetLife event

NC Gov. Pat McCrory at MetLife event (photo – NC Governor’s Office)

“We’re proud that a strong corporate partner like MetLife has decided to invest in North Carolina,” said Governor McCrory. “These jobs will complement our financial services sector in Charlotte and our high-tech hub in Wake County, two distinct sectors we want to expand.”

MetLife plans to establish hubs for its U.S. Retail Business in Charlotte and for its Global Technology and Operations organization in Cary. To this end, the company expects to invest $125.5 million into its new Mecklenburg and Wake County campuses.

These 2,600 jobs, paying average annual wages of $82,000, are positions being relocated to North Carolina from two locations in California and from five states in the east – Connecticut, Massachusetts, New Jersey, Pennsylvania and Rhode Island.

Metlife was enticed in part by a massive state and local incentives package that adds up to $100 million. Metlife was approved for a performance-based state Job Development Investment Grant (JDIG). The twelve annual grants equal to 75 percent of the state personal income tax withholdings from the eligible new jobs created, which could add up to $87.2 million.

As much as $29.09 million in additional funds from the company’s JDIG award could be added to the state’s Utility Fund for infrastructure improvements in economically distressed counties.

Metlife is also getting a grant from the One North Carolina Fund of up to $2 million. Community colleges in the state are pitching in with $5 million in training assistance. Mecklenburg County and the City of Charlotte are in the process of approving $2.9 million in local grants. Wake County and the Town of Cary are likewise expected to approve another $4 million.

“We would like to thank Governor McCrory, Commerce Secretary Decker, Mecklenburg County, the City of Charlotte, Wake County and the Town of Cary for their partnership through this process,” said Marty Lippert, executive vice president, MetLife. “MetLife is pleased to be joining the other great companies that make up the North Carolina business community.”

“North Carolina has much to offer our employees and the company. The strong sense of community in Cary and Charlotte, as well as the region’s robust infrastructure and sustainable talent pool were all compelling reasons for coming here,” added Eric Steigerwalt, executive vice president, MetLife.

New York-based MetLife has more than 66,000 employees, of which around 23,000 are administrative positions spread around the northeast.

AREVA to Relocate North American HQ to Charlotte, NC

French Nuclear Energy company AREVA will be expanding its operations in Charlotte, North Carolina to include its North American headquarters, which is currently located in Bethesda, Maryland.

AREVA

AREVA (photo – charlottechamber.com)

AREVA currently employs 562 people in Charlotte and another 78 at its Columbiana Hi Tech subsidiary located in Greensboro.

The company plans to create 130 high-paying new jobs in North Carolina by the end of 2016 and invest $404,000 into its Mecklenburg County location.

Compensation will vary by job function, but the average annual wage for the new jobs is expected to be more than $130,000 plus benefits.

“We are working to make our state the very best place to live and do business,” said NC Governor Pat McCrory. “Businesses have choices, and we are proud that AREVA has chosen North Carolina for its headquarters.”

The project was made possible in part by a performance-based award from the state Job Development Investment Grant (JDIG) program. Under the terms of the company’s JDIG award, AREVA is eligible to receive up to nine annual grants equal to 65 percent of the state personal income tax withholdings from the eligible new jobs created.

Over nine years, the JDIG award could yield aggregate benefits to AREVA of upto $2.5 million. In addition, up to $851,000 in additional funds from the company’s JDIG award could be added to the state’s Utility Fund for infrastructure improvements in economically distressed counties.

“North Carolina is a great place to do business because of its quality of life, extensive business infrastructure, investments in workforce development and commitment to forming partnerships with industry,” said Michael W. Rencheck, CEO of AREVA.

The North Carolina Department of Commerce, Mecklenburg County, City of Charlotte, the Charlotte Chamber and Duke Energy were all involved in securing the project for the state.

“The Charlotte Chamber is honored to be a part of AREVA’s dynamic growth and commitment to our city and state. Announcements such as this provide further proof of our emerging energy hub status,” said Bob Morgan, Charlotte Chamber president.

AREVA has 46,000 employees worldwide, including 5,000 employees at more than 40 locations in North America.

Report – DNC Had Lasting Economic Impact on Charlotte

A report unveiled by Charlotte, North Carolina Mayor Anthony Foxx says that the 2012 Democratic National Convention (DNC) was the single largest event in the city’s history, producing an economic impact of $163.6 million.

DNC 2012 impact on Charlotte, NC

DNC 2012 impact on Charlotte, NC (photo – charlottein2012.com)

This total includes $91 million represented in direct convention-related spending and another $72.6 million in indirect and induced spending.

“The results of this report reaffirm what we as Charlotteans already know—that the 2012 Democratic National Convention had a tremendously positive impact on our city and our region,” Mayor Foxx said. “Not only did it inject millions of dollars into our local economy, it exposed our community to millions of people around the world and put Charlotte on an international stage. Thanks to the work of thousands of people and many partner organizations, the convention continues to be hailed as one of the best ever and a major turning point that will continue to pay dividends for our city for years to come.”

The DNC drew approximately 35,000 delegates, media and visitors who came to listen to 108 speakers at Time Warner Cable Arena, and participate in nearly 1,200 other meetings of state delegations, political interest groups, trade associations and media organizations.

Hotel occupancy rates for the week in question in Sept 2012 were as high as 92 percent, with average daily room rates reaching $220 throughout the 6-county metropolitan area. The overall length of stay by delegates and non-delegates averaged 4.2 days with an estimated $235 spending per day.

The report also says that apart from the direct financial effects and the global branding boost obtained due to the presence of 15,000 media members, the DNC also served as a valuable business and economic development platform.

The economic impact study was prepared by Tourism Economics, an Oxford Economics research firm. It was funded with $25,000 contributed by the City of Charlotte, Charlotte Chamber, Charlotte Center City Partners, Charlotte Regional Partnership and Charlotte Regional Visitors Authority.

See more details in the Charlotte, North Carolina DNC economic impact fact sheet.

SBA Approves Upto $50M For NC Venture Fund

Hatteras Venture Partners of Durham, North Carolina has been approved as the first licensee in the Early Stage Innovation Funds initiative, a part of the U.S. Small Business Administration’s (SBA) Small Business Investment Company (SBIC) capital investment program.

SBA SBIC

SBA SBIC (photo – sba.gov)

Licensed Early Stage Innovation Funds such HVP will receive up to a maximum of $50 million in SBA-guaranteed funding to match their privately raised capital.

They are required to invest at least 50 percent of their investment dollars in early stage small businesses.

Hatteras has already raised $88 million, and plans to use the SBA-guaranteed loans to reach its funding investment capital goal of $125 million.

The SBA statement said that HVP was selected because it demonstrated that it has a strong team with a clear, focused strategy and a track record investing in an undercapitalized region.

“The New Year is the perfect time to celebrate new businesses and win-win opportunities like the Early Stage Initiative,” said SBA Administrator Karen Mills. “The Early Stage Innovation Funds initiative promotes American innovation and job creation by encouraging private sector investment in early stage small businesses. And by licensing funds like Hatteras Venture Partners IV, we can expand entrepreneurs’ access to capital at no cost to taxpayers.”

High-growth, early stage companies commonly experience a gap in the availability of funding between $1 million and $4 million levels. This gap is often referred to in the venture capital industry as the “Valley of Death.”

Since January 2006, less than 10 percent of all U.S. venture capital dollars went to seed funds investing at those levels, and approximately 70 percent of those dollars went to just three states: California, Massachusetts, and New York.

The SBA’s Early Stage Innovation Funds initiative targets this gap by licensing and guaranteeing leverage to funds focused on early/seed stage investments.

SBA has committed up to $1 billion in SBA-guaranteed leverage for this program over a five-year period for selected Funds using its current SBIC program authorization.

SBICs use a combination of funds raised from private sources and money raised through the use of SBA guarantees to make equity and mezzanine capital investments in small businesses. There are nearly 300 SBICs with more than $18 billion in capital under management.

More information on the Early Stage Innovation Funds initiative and the regulations governing these SBICs may be found at sba.gov.

Winston-Salem, NC Lands $130M Herbalife Manufacturing Plant

Herbalife Ltd. (NYSE:HLF) announced that it had chosen Winston-Salem, North Carolina as the site for a $130 million manufacturing plant for dietary supplements and food products.

Herbalife

Photo – Herbalife

The project will create 493 new jobs with average annual wages of $40,000, which works out to a total payroll of more than $19.8 million, plus benefits.

The $130 million investment the company is making will be spent on buying and retrofitting the 750,000 sq ft former Dell plant, which has been vacant since last year.

“North Carolina continues to be a top choice for companies looking to establish advanced manufacturing facilities,” said NC Gov. Perdue. “We know we have a strong business climate and the skilled workforce that Herbalife needs to grow and flourish in North Carolina.”

Herbalife plans to produce a wide range of its nutrition products at the new Winston-Salem operations, which will be Herbalife’s largest owned manufacturing facility. They were considering Winston-Salem, NC and other sites near Atlanta, GA for this expansion.

“Herbalife is thankful to Gov. Perdue, who played a key role in our decision to locate our operations in North Carolina, as well as all those involved from the North Carolina Department of Commerce, the Forsyth County Board of Commissioners, the Winston-Salem City Council and various business development groups,” said Rich Goudis, Herbalife chief operating officer. “Herbalife is excited about the opportunities this new facility offers to both our business and the local economy.”

To help facilitate this expansion, the company has been awarded a grant of up to $1 million from the state’s One North Carolina Fund.

In addition, the state Economic Investment Committee voted to award a Job Development Investment Grant (JDIG) to Herbalife. If the company meets the job targets called for under the agreement and sustains them for 11 years, the JDIG could yield as much as $5.55 million in maximum benefits for the company.

The JDIG will also result in up to $1.8 million being added to North Carolina’s Utility Fund for infrastructure improvements in economically distressed counties.

Local incentives offered to Herbalife include $2.25 million from the City of Winston-Salem, and another $1.19 million from Forsythe County.

Los Angeles, California-based Herbalife generated net sales of $3.5 billion in 2011 for weight management, nutritional supplement and fitness products marketed through a network of 2.7 million independent distributors in 80 countries. The company has 5,100 employees in offices and facilities all over the world.

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