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Consider a “STEP 4” Economic Development Incentive Grant for Confidential Company (Project Nickel) in an Amount Not to Exceed $2,350,000 over a Five-Year period
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INFORMATION CONTACT:
Ron Mahle, Economic Development, Director, 980-476-5279
ACTION REQUESTED:
1) Award a “STEP 4” Economic Development Incentive Grant in an amount not to exceed $2,350,000 over a five-year period and 2) authorize the County Manager to negotiate and execute an agreement substantially consistent with this agenda item.
PRIOR BOARD ACTIONS:
February 3, 2025, Regular Meeting, Agenda Item # 25-049 - Conduct Public Hearing.
BACKGROUND:
The Union County Department of Economic Development started conversations with Confidential Company under codename Project Nickel in mid-2024 about the potential location of an advanced manufacturing operation within Union County valued at approximately $100,000,000 in a new manufacturing building and the purchase and installation of new sophisticated processing equipment.
The name of the company will be released later contingent upon the award of State of North Carolina economic development incentives.
Based on the anticipated capital investment, it is proposed that the Board award a STEP 4 Economic Development Incentive Grant in an amount-not-to-exceed $2,350,000 paid over a 5-year period beginning in FY 2028. The value of the incentive grant will be based upon appraised value each year as appraised by the Union County Tax Administration Office. This grant is based on the company’s projected investment of approximately $100,000,000 in new construction and installation of related processing equipment over the grant period, but not less than $2,000,000. Based on its projected investment in Union County, the current tax rate, and assuming a consistent assessed value with no depreciation, the company will pay estimated ad valorem taxes on the new taxable investment in the amount of $2,940,000 over the grant period. Actual tax revenue to the County will be based on the assessed value of the investment each year by the Union County Tax Administration Office and will vary each year depending upon the depreciation schedule and the timing of the investments.
The grant is also contingent upon the company retaining its current number of employees.
FINANCIAL IMPACT:
The project, if brought to Union County, would have an economic development incentive grant in an amount-not-to-exceed $2,350,000 but would generate approximately $2,940,000 over the 5-year grant period. Actual tax revenue to the County will be based on the assessed value of the investment each year by the Union County Tax Administration Office and will vary each year depending upon the depreciation schedule and the timing of the investments.