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BOCC Eyes Incentive Deal For Candy Maker Morinaga

By Elizabeth Friend Posted September 6, 2013 at 1:28 am

HILLSBOROUGH- Orange County officials have been negotiating in secret for months to bring a major candy manufacturer to the Mebane area. At Thursday’s meeting of the board of commissioners the public got a first look at the incentive package offered to sweeten the deal.

“We had to find a way to be competitive, to make our site draw them here,” said Economic Development Director Steve Brantley. “They very much liked the idea of living in Orange County. They particularly told me that the [company] president likes the diversity. But that was not enough. We had to do more.”

Morinaga & Company announced this week it would invest $48 million to build a manufacturing facility in Orange County’s Buckhorn Economic Development District. The facility will employ at least 90 people, paying average salaries of $38,000 a year.

And though local leaders are seemingly thrilled to have landed the deal, the package of incentives that helped attract the company will have to be formally approved by the board of commissioners following a public hearing this fall.

To that end, Brantley laid out the details of an incentive package that had previously been kept tightly under wraps. He stressed the money will not come out of the county’s general fund, but will come out of the property taxes on the new facility instead.

“It’s based upon the investment by the company,” said Brantley. “We have proposed 75 percent of the estimated taxes of the project’s capital investment for up to five years, so if for example the company made a $48 million dollar investment, it would receive approximately $308,000 annually in a performance grant for each of five years.”

Brantley added there will be a claw-back provision for the county to recoup the money should the company fail to meet its growth goals.

The City of Mebane is also considering an incentive package, and the N.C. Department of Commerce will offer a quarter million dollar grant from the One North Carolina Fund.

The 20 acre Buckhorn site is currently undeveloped, lacking water, sewer, electricity and road access. Brantley said all these will be put in place at no charge to Morinaga, as North Carolina and Orange County will share the cost.

“We are highly confident that the state of North Carolina has pre-qualified this project as eligible to apply for and receive a Community Development Block Grant and it will reimburse Orange County for 75 percent of our initial costs to front the water and sewer extensions to the site,” said Brantley.

Water and sewer infrastructure are estimated to cost about $675,000, some of which could come from the county’s quarter-cent sales tax.

In addition, the N.C. Department of Transportation has offered half a million dollars to provide road access to the site, and gas and electricity will be extended to the building free of charge by PSNC Energy and Progress Duke Energy.

County Manager Frank Clifton told the board that if the Morinaga facility develops as planned it could become one of the top three taxpayers in the county. More importantly, he said this project could spark renewed interested in Orange County’s economic development districts.

“This is only 20 acres out of roughly 700 that have been rezoned by this county commission for economic development purposes in the Buckhorn area,” said Clifton. “Twenty acres has the potential to produce roughly $100 million dollars of asset valuation for Orange County. That’s a significant impact and it offers us great opportunities for the future. It is a big deal in Orange County.”

The public hearing on the incentive package will likely be held in October. If all parties approve the deal, Morinaga could host a ground-breaking ceremony as early as next March.

 

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