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CL-2460 Consent Agenda   Item #: D.       
Meeting Date: 01/05/2021  
Subject:    Economic Development Incentive Appropriations
From: Corrie Bobe

COUNCIL ACTION
First Reading:      12/15/2020                                                             
Final Adoption 01/05/2021
SUMMARY
The Virginia Economic Development Partnership (VEDP) provides incentives for economic development projects resulting in new taxable capital investment and net new employment to the Commonwealth of Virginia. 
 
The City of Danville, the Industrial Development Authority of Danville, Virginia, and PRA Group, Inc., executed a Commonwealth Opportunity Fund performance agreement on September 18, 2019, in the amount of $780,000 to pay or reimburse the cost of the build-out of its facility in Airside Industrial Park. This grant will be provided to the Company in arrears as it meets the performance goals outlined in the agreement.
 
The City of Danville, the Industrial Development Authority of Danville, Virginia, and Essel Propack America, LLC executed a Commonwealth Opportunity Fund performance agreement on January 29, 2019, in the amount of $150,000 to pay or reimburse the cost of construction or build-out of its facility in Airside Industrial Park, as well as for the recruitment and training of employees. This grant will be provided to the Company in arrears as it meets the performance goals outlined in the agreement.
 
The Danville-Pittsylvania Regional Industrial Facility Authority and BGF Industries, Inc. executed a Commonwealth Opportunity Fund performance agreement on October 16, 2018, in the amount of $275,000 to pay or reimburse the cost of grading, drainage, paving, and any other activity required to prepare a site in the Cyber Park for the construction of its facility. Due to the COVID-19 pandemic, plans to construct this facility have been placed on a temporary hold and the company has asked to be released from the requirements of this performance agreement. After this $275,000 grant is appropriated, City staff will return these funds to the Virginia Economic Development Partnership.
 
The Virginia Tobacco Region Revitalization Commission (VTRRC) provides incentives for economic development projects resulting in new taxable capital investment and net new employment to the VTRRC footprint. 
 
The City of Danville and Blue Ridge Fiberboard Inc. executed a Tobacco Region Opportunity Fund grant on September 30, 2016 in the amount of $75,000.  This was a reimbursable grant whereby the company had to submit expenditures for approval before funds are disbursed. The total amount earned for this project totaled $64,875.
BACKGROUND
On December 20, 2018, Governor Ralph Northam announced that PRA Group, Inc. would invest $15.1 million and create 300 new jobs to establish a call center operation in Airside Industrial Park.  Founded in Norfolk, Virginia as Portfolio Recovery Associates, PRA Group, Inc. is now one of the nation’s largest debt recovery firms.  

On December 17, 2018, Governor Ralph Northam announced that Essel Propack of America, LLC would invest $31.2 million and create 45 new jobs in the Airside Industrial Park to expand its manufacturing operations. The business is a global specialty packaging company serving the consumer goods and pharmaceutical sectors. 
 
On October 16, 2018, the Honorable Brian Ball, Virginia Secretary of Commerce and Trade, announced that BGF Industries, Inc., a manufacturer of technical fiber materials, will invest $7 million to relocate its corporate headquarters and research and development operations from Greensboro, North Carolina, to the Cyber Park in Danville.

The Virginia Tobacco Region Revitalization Commission approved a Tobacco Region Opportunity Fund grant on September 30, 2016 to assist Blue Ridge Fiberboard, Inc. with the expansion of its manufacturing operations. Through this agreement, the company committed to adding 26 employees and investing at least $2,000,000 at its Danville facility.
RECOMMENDATION
It is recommended by staff that City Council approve the attached Ordinance Amending the Fiscal Year 2021 Budget Appropriation Ordinance to appropriate funds from the Virginia Economic Development Partnership and the Virginia Tobacco Region Revitalization Commission, to the City of Danville for the purpose of providing an incentive for economic development activities to the aforementioned companies located in the City of Danville and Pittsylvania County.
 

Attachments
Ordinance


    

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