OPEN SESSION AGENDA ECONOMIC DEVELOPMENT AUTHORITY...
Transcript of OPEN SESSION AGENDA ECONOMIC DEVELOPMENT AUTHORITY...
EDA/IDA Board Meeting October 6, 2017 Page 1
OPEN SESSION AGENDA
ECONOMIC DEVELOPMENT AUTHORITY (EDA) AND
INDUSTRIAL DEVELOPMENT AUTHORITY (IDA)
October 6, 2017 - 8:00 A.M.
Two City Center 11820 Fountain Way, Suite 301
Newport News, Virginia
1. Call to Order – Chair Minter
2. Port of Virginia Economic and Infrastructure Development Grant Program Presentation to Continental Automotive Systems – Mr. Diamonstein, Board of Commissioners, Port of Virginia and Mr. Lindsey, Manager, Human Relations, Continental Automotive Systems
3. Newport News Marriott at City Center
A. Conference Center Marketing 2016 Expense Review – Ms. Jones, Manager, Dixon Hughes Goodman, LLP
B. Conference Center 2016 Activity Review – Mr. Butcher, General Manager and Ms. Coyne, Director of Sales and Marketing
4. Ferguson Enterprises, Inc.’s Expansion Project in City Center at Oyster Point – Mrs. Kingston
A. Authorize that Certain Amendment to the Second Amended and Restated Development Agreement, dated as of February 21, 2005, between the EDA and Newport News Town Center, L.L.C., in Connection with the EDA’s Purchase of Development Rights Associated with the Planned Expansion by Ferguson Enterprises, Inc.
B. Authorize that Certain Expansion/Relocation Cost Reduction Enterprise Zone Incentive Agreement by and between the EDA and Ferguson Enterprises, Inc.
C. Authorize that Certain Agreement of Purchase and Sale of Commercial Real Estate by and between the EDA and Ferguson Enterprises, Inc.
EDA/IDA Board Meeting October 6, 2017 Page 2
D. Authorize that Certain Commonwealth’s Development Opportunity Fund Performance Agreement by and among the City of Newport News, Ferguson Enterprises, Inc. and the EDA
E. Authorize a Design Services Proposal and Contract from Saunders + Crouse Architects, LLC, for Design Services for the Fourth Public Parking Garage and Extension of Pearl Way in City Center at Oyster Point, and Funding, in an Amount Not to Exceed $563,440
F. Authorize a Scope of Services under City of Newport News Annual Services Contract #2017-2613-13 with McPherson Consulting, LLC for a Traffic Impact Analysis in Connection with the Fourth Public Parking Garage and Extension of Pearl Way in City Center at Oyster Point, and Funding, in an Amount Not to Exceed $92,000
5. Quarterly Hampton Roads Economic Development Alliance Report – Mr. Miller
6. Quarterly Workforce Development Report – Mr. James
7. Quarterly Business Retention Report – Mr. Johnson
[BREAK] 8. Secretary/Treasurer’s Report – Mrs. Kingston 9. Assistant Secretary’s Report – Ms. Croushore
10. Madison Government Affairs’ Consultant Report
11. Closed Session (Section 2.2-3711.A):
Real Estate (3) Prospective Business (5)
EDA/IDA Board Meeting October 6, 2017 Page 3
12. Reconvene Open Session (Section 2.2 – 3712 (D)) 13. Action(s) Coming Out of Closed Session 14. Committee Reports
Design Review Committee A. Committee Report – Ms. Aldrich B. Board Ratification Executive Committee A. Committee Report – Ms. Greene
Marketing Committee A. Committee Report – Ms. Aldrich
Revolving Loan Fund Committee A. Committee Report – Ms. Smith-Brown B. Board Ratification
15. Approval of Minutes of the Regular Meeting of September 1, 2017 16. Unfinished Business 17. New Business 18. Adjournment
EDA/IDA Board Meeting October 6, 2017 Page 4
Documents Provided:
A. Agenda Documents
1. Draft First Amendment to Second Amended and Restated Development Agreement Between EDA and Newport News Town Center, L.L.C. (To be Provided Under Separate Cover)
2. Draft Expansion/Relocation Cost Reduction Enterprise Zone Incentive Agreement By and Between the EDA and Ferguson Enterprises, Inc.
3. Draft Agreement of Purchase and Sale of Commercial Real Estate By and Between the EDA and Ferguson Enterprises, Inc. (To be Provided Under Separate Cover)
4. Draft Commonwealth’s Development Opportunity Fund Performance
Agreement By and Among the City of Newport News, Ferguson Enterprises Inc. and the EDA
5. Monthly Financial Report
6. Committee Meeting Schedule
7. Motion to Go Into Closed Session
8. September 1, 2017 Regular Meeting Minutes
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EXPANSION/RELOCATION COST REDUCTION
ENTERPRISE ZONE INCENTIVE AGREEMENT
THIS EXPANSION/RELOCATION COST REDUCTION ENTERPRISE ZONE
INCENTIVE AGREEMENT (this “Agreement”) is made this ____ day of October, 2017, by and
between the ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF NEWPORT
NEWS, VIRGINIA, a political subdivision of the Commonwealth of Virginia (the "EDA") and
FERGUSON ENTERPRISES, INC., a Virginia corporation, together with its affiliates,
collectively hereinafter (“FEI”), authorized to do business in Virginia, (EDA and FEI
collectively referred to as the “Parties”).
WHEREAS, FEI has announced the expansion of certain operations in the City of
Newport News, Virginia (the “City”) to combine and grow its information technology and sales
support operations into a new campus in City Center at Oyster Point (the “Campus”) and the
creation of a significant number of new jobs, as outlined below, in the City; and
WHEREAS, EDA, in order to attract the FEI Project, as hereinafter defined, has offered
certain Enterprise Zone benefits to be further described below (the "Expansion/Relocation Cost
Reduction Enterprise Zone Incentive" or the "Incentive"); and
WHEREAS, FEI plans to invest approximately $68.4 million in new real estate
improvements at the Campus and approximately $14.4 million in new business personal property
at the Campus; FEI also plans to create approximately 350 new jobs in the City with salaries
averaging $45,000 annually (collectively, the “FEI Project”); and
WHEREAS, FEI will receive the Incentive based upon its projected employment
expansion, average wage and taxable investment due to the location of the FEI Project at the
Campus; and
WHEREAS, EDA and FEI both recognize that the EDA Grants and Initial EDA Grants,
as defined hereinafter, will be based upon the amount of taxes actually paid by FEI; and
WHEREAS, EDA and FEI have entered into an Agreement of Purchase and Sale of
Commercial Real Estate (the “Purchase Agreement”) dated October ____, 2017, and anticipate
entering into a Parking License Agreement (the “Parking Agreement”), further outlining the FEI
Project; and
WHEREAS, FEI has been awarded a Commonwealth’s Development Opportunity Fund
Grant in the amount of $2 million, the local match for which is being delivered through donated
land, further outlined and described in the Commonwealth’s Development Opportunity Fund
Performance Agreement and Purchase Agreement; and
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WHEREAS, EDA and FEI desire to set out the terms and conditions of the
Expansion/Relocation Cost Reduction Enterprise Zone Incentive.
NOW, THEREFORE, THIS AGREEMENT WITNESSETH: That for and in
consideration of the foregoing, EDA and FEI hereby agree as follows:
1. WAIVER OF PARKING AND INFRASTRUCTURE CONTRIBUTION AND
EDA GRANTS
A. Investment: As part of the FEI Project, FEI plans to construct and equip its
Campus through the improvement of real property and the purchase of business personal
property, the cost of which is anticipated to total $82.8 million, and plans to create approximately
350 new jobs in the City with salaries averaging $45,000 annually, collectively the “Investment.”
B. Waiver of Parking and Infrastructure Contribution: Through the Incentive
and to support the Investment, the EDA shall waive the parking and infrastructure contribution
required of property owners located in City Center at Oyster Point (the “Waiver”). Based upon
anticipated parking needs, the estimated value of the Waiver is $2.7 million. The Waiver is
further outlined and described in the Parking Agreement.
C. EDA Grants: Through the Incentive, the EDA shall grant to FEI an amount
equal to 50% of the taxes on the Net New Taxable Investment, as hereinafter defined, 50% of the
taxes on the real estate land value of the Campus, and 50% of any leasehold taxes levied on FEI
for parking spaces in City Center at Oyster Point, actually paid by FEI semi-annually to the City
(the "EDA Grants") during the course of the Grant Period, as hereinafter defined, and subject to
the terms outlined below. Unless mutually agreed otherwise, the Grant Period shall commence
on the first day of the first calendar year following the year during which FEI receives its final
certificate of occupancy for its first building at the Campus (the “EDA Grants Commencement
Year”).
Beginning with the date of acquisition of the real estate for the Campus by FEI and ending on the
last day of the calendar year immediately preceding the EDA Grants Commencement Year, FEI
shall also receive grants associated only with the taxes paid on the real estate land value of the
Campus (the “Initial EDA Grants”). Initial EDA Grants shall be in an amount equal to 50% of
the taxes paid on the real estate land value of the Campus.
D. Definitions:
(i) Taxable Investment means the total taxable value of the Campus
calculated in accordance with applicable codes and regulations, and all improvements therein,
and any of FEI’s business personal property, located at the Campus.
(ii) Net New Taxable Investment means the positive change in Taxable
Investment occurring from the date hereof through the end of the Grant Period, segregated into
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(a) real property improvement taxable assessment due to the construction or alteration of real
property improvements as measured against those real property improvement assessments in
effect on July 1, 2017, which, for the purposes of this Agreement, was $0, and (b) business
personal property assessments as measured against those assessments in effect on January 1,
2017, which was $0.
E. Grant Period: The Great Period (the “Grant Period”) shall commence on the first
day of the EDA Grants Commencement Year and shall end on the last day of the tenth calendar
year thereafter. The EDA Grants will be delivered in a series of 20 semi-annual grants over the
Grant Period. The Initial EDA Grant will be delivered in a series of semi-annual grants over the
period commencing on the date of the acquisition of the real estate for the Campus by FEI and
ending on the last day of the calendar year immediately preceding the EDA Grants
Commencement Year.
F. Other Conditions: As a condition of FEI receiving the EDA Grants and Initial
EDA Grants, all real estate taxes and assessments assessed by the City on all FEI properties in
Newport News and all taxes and assessments assessed by the City on the FEI machinery and
tools and business personal property, as well as any and all other taxes and fees owed to the City
by FEI, must be current, in good standing and not delinquent. If FEI is contesting any assessment
or levy by the City, then the EDA may delay delivery of any EDA Grant or Initial EDA Grant
until such matters between FEI and the City are resolved.
2. ENTERPRISE ZONE CRITERIA
A. Minimum Qualification Criteria: The “Minimum Qualification Criteria” to be
used in determining FEI’s eligibility for the Incentive for the Grant Period are as follows: (1) a
taxable capital investment by or on behalf of FEI at the Campus of at least $2,500,000 in real
property improvements, machinery and equipment and/or business personal property to be
measured by the cost of improvements to real estate and original cost of machinery and tools
property and/or business personal property newly taxed in the City at the Campus; and (2) the
creation of at least 25 new full time equivalent positions. The term "full time equivalent
positions" shall mean employees or contract workers of FEI in the City, working a minimum of
35 hours per week. The term “job” as used in this Agreement, above or below, shall have the
same meaning as “full time equivalent positions”. The Minimum Qualification Criteria must be
maintained through the Grant Period.
B. Calculating the Grant Amount: The mechanism by which the EDA Grants are
calculated is as follows: EDA will receive a grant from the City (the "City Grant") subject to
appropriation in approximately August and in February of the applicable year equal to the sum
of:
(i) 50% of the taxes on Net New Taxable Investment at the Campus paid to
the City by or for the benefit of FEI during each year of the Grant Period, and
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(ii) 50% of the real estate taxes on the land value of the Campus, paid to the
City by or for the benefit of FEI during each year of the Grant Period; and
(iii) 50% of the leasehold taxes on parking spaces in City Center at Oyster
Point paid to the City by or for the benefit of FEI during each year of the Grant Period.
In no case will more than 20 City Grants be made within the Grant Period. The City Grants will
be calculated and paid semi-annually.
In the case of the Initial EDA Grants, the City Grants shall be equal to 50% of the real estate
taxes on the land value of the Campus. The EDA Grants and Initial EDA Grants will be equal to
the City Grants paid in accordance with this Agreement.
C. Grant Delivery: Provided that FEI has paid to the City all applicable taxes and
assessments actually due in a timely manner, the EDA shall deliver the EDA Grants and Initial
EDA Grants to FEI no later than (i) July 31st of the applicable year for the first semi-annual
installment and (ii) the following January 31st for the second semi-annual installment.
D. Grant Adjustments: If after a payment of a semi-annual grant by the EDA to
FEI, the City adjusts the taxes or assessments of the Taxable Investment, the land value of the
Campus or leasehold taxes on parking spaces in City Center at Oyster Point, and issues a refund
to FEI of taxes and assessments paid by FEI on the Taxable Investment, land value of the
Campus or leasehold taxes on parking spaces in City Center at Oyster Point, FEI shall reimburse
the EDA 50% of the amount refunded by the City or by mutual agreement of the Parties 50% of
the amount refunded may be deducted by the EDA from subsequent grant payments.
3. GRANT TERMINATION
A. If FEI fails to meet the Minimum Qualification Criteria to receive the Incentive
by the December 31st immediately preceding the first year of the Grant Period and/or if FEI fails
to maintain the Minimum Qualification Criteria in each year of the Grant Period, this Agreement
shall terminate, unless extended by mutual agreement of the Parties.
B. This Agreement shall terminate on December 31 of the last year of the Grant
Period, unless the Parties have not resolved any claims or disputes arising from this Agreement,
in which case this Agreement shall be continued until any and all such disputes have been
resolved.
4. DISPUTE RESOLUTION
The Parties agree to resolve any claims or disputes arising from this Agreement through
mediation. The Parties shall share equally in the cost of such mediation. If mediation does not
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resolve the claim or dispute, then the Parties may negotiate a binding arbitration agreement or the
Parties may seek redress in the Circuit Court of the City of Newport News, Virginia.
5. NOTICES
Any notice required or permitted to be given hereunder shall be in writing and may be
given by personal delivery or by certified mail, return receipt requested, and if given personally
or by certified mail, shall be deemed made and sufficiently given if addressed to FEI or to EDA
at the address noted herein below, receipt deemed received four (4) days after certified mailing.
Either party may by notice to the other specify a different address for notice purposes. A copy of
all notices required or permitted to be given to EDA hereunder shall be concurrently transmitted
to such party or parties at such address as EDA may from time to time hereafter designate by
notice to FEI.
EDA: Economic Development Authority of the
City of Newport News, Virginia
ATTN: Secretary/Treasurer
c/o Department of Development
2400 Washington Avenue 3rd
Floor
Newport News, Virginia 23607
COPY TO: Raymond H. Suttle, Jr., Esquire
Conway H. Shield, III, Esquire
Jones, Blechman, Woltz & Kelly, P.C.
701 Town Center Drive, Suite 800
Newport News, Virginia 23606
FEI: Ferguson Enterprises, Inc.
12500 Jefferson Avenue
Newport News, VA 23602
Attention: Carl Briener, Vice President - Facilities
COPY TO: Ferguson Enterprises, Inc.
12500 Jefferson Avenue
Newport News, VA 23602
Attention: Steven D. Adcox, Esq.
6. MISCELLANEOUS
A. Entire Agreement; Amendments: This Agreement constitutes the entire
agreement among the Parties hereto as to the Incentive, and may not be amended or modified,
except in writing, signed by each of the Parties hereto. This Agreement shall be binding upon
and inure to the benefit of the Parties hereto and their respective permitted successors and
permitted assigns. FEI may not assign its rights and obligations under this Agreement without
the prior written consent of the EDA, such consent not to be unreasonably conditioned, delayed
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or withheld. Notwithstanding the foregoing, FEI shall be able to assign its rights and obligations
under this Agreement to any person or entity which controls, is controlled by, or is under
common control with FEI, or to any person or entity resulting from the merger or consolidation
with FEI, or to any person or entity which acquires all assets of FEI as a going concern of the
business that is being conducted on the Campus, provided that said assignee assumes, in full, the
obligations of FEI under this Agreement.
B. Governing Law; Venue: This Agreement is made, and is intended to be
performed, in the Commonwealth of Virginia and shall be construed and enforced by the laws of
the Commonwealth of Virginia. Jurisdiction and venue for any litigation arising out of or
involving this Agreement shall lie in the Circuit Court of the City of Newport News, Virginia,
and such litigation shall be brought only in such court.
C. Counterparts: This Agreement may be executed in one or more counterparts,
each of which shall be an original, and all of which together shall be one and the same
instrument.
D. Severability: If any provision of this Agreement is determined by a court of
competent jurisdiction to be unenforceable, then the remaining provisions of this Agreement
shall, in the discretion of the EDA, be voidable or interpreted as in effect as if such
unenforceable provisions were not included therein.
E. Enterprise Zone Updates: The EDA agrees to keep FEI informed of any
changes to state or local Enterprise Zone programs that may affect FEI.
F. Reporting: FEI shall provide, at its sole expense, to the EDA, detailed un-audited
verification, reasonably satisfactory to the EDA, of FEI’s progress toward and retention of the
Investment requirements. Such progress reports will be provided annually on April 1 and will
cover the prior January 1 – December 31 calendar year, beginning on April 1, 2019, and
continuing through the end of the Grant Period. The first report may include any capital
investment or job creation occurring on or after May 1, 2017. Following the submission of each
report, the EDA will have 30 days from the receipt of such report to make its determination if
FEI has met and maintained the Minimum Qualification Criteria and to notify FEI should grant
termination apply in accordance with Section 3(A).
7. DRAFTER
No party or parties to this Agreement shall be deemed to be the drafter of this Agreement,
and if this Agreement shall be construed by a court of law, such Court shall not construe any
portion of this Agreement deemed ambiguous against any party as the drafter.
[REMAINDER OF PAGE INTENTIONALLY BLANK; EXECUTION PAGE FOLLOWS]
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WITNESS the execution hereof on the day and year first above written.
ECONOMIC DEVELOPMENT AUTHORITY OF
THE CITY OF NEWPORT NEWS, VIRGINIA
By:____________________________________
C. Gary Minter, Chair
ATTEST:
By:_____________________________________
Florence G. Kingston, Secretary/Treasurer
Approved as to Form for the Economic
Development Authority of the
City of Newport News, Virginia
By:_____________________________________
Raymond H. Suttle, Jr., Esquire
Ferguson Enterprises, Inc.
A Virginia corporation
By:
Title:
its duly authorized signatory
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Ferguson COF Performance Agreement 1
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COMMONWEALTH’S DEVELOPMENT OPPORTUNITY FUND
PERFORMANCE AGREEMENT
This PERFORMANCE AGREEMENT made and entered this ____ day of
__________, 2017, by and among the CITY OF NEWPORT NEWS, VIRGINIA (the
“Locality”), a political subdivision of the Commonwealth of Virginia (the “Commonwealth”),
FERGUSON ENTERPRISES, INC. (the “Company”), a Virginia corporation, and the
ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF NEWPORT NEWS,
VIRGINIA (the “Authority”), a political subdivision of the Commonwealth.
WITNESSETH:
WHEREAS, the Locality has been awarded a grant of and expects to receive $2,000,000
from the Commonwealth’s Development Opportunity Fund (a “COF Grant”) through the
Virginia Economic Development Partnership Authority (“VEDP”) for the purpose of inducing
the Company to construct and operate an office, sales and information technology facility in
City Center at Oyster Point in the Locality (the “Facility”), thereby making a significant Capital
Investment, and creating and Maintaining a significant number of New Jobs, as such capitalized
terms are hereinafter defined;
WHEREAS, the Locality is willing to provide the COF Grant funds to the Authority
with the expectation that the Authority will provide the funds to or for the use of the Company,
provided that the Company promises to meet certain criteria relating to Capital Investment and
New Jobs;
WHEREAS, the Locality, the Authority and the Company desire to set forth their
understanding and agreement as to the payout of the COF Grant, the use of the COF Grant
proceeds, the obligations of the Company regarding Capital Investment and New Jobs, and the
repayment by the Company of all or part of the COF Grant under certain circumstances;
WHEREAS, the construction and operation of the Facility will entail a capital
expenditure by or on behalf of the Company of approximately $82,800,000, of which
approximately $68,400,000 will be invested in the construction and up-fit of the building and
approximately $14,400,000 will be invested in furniture, fixtures and equipment;
WHEREAS, the construction, equipping and operation of the Facility will further entail
the creation and Maintenance of 434 New Jobs; and
WHEREAS, the stimulation of the additional tax revenue and economic activity to be
generated by the Capital Investment and New Jobs constitutes a valid public purpose for the
expenditure of public funds and is the animating purpose for the COF Grant:
NOW, THEREFORE, in consideration of the foregoing, the mutual benefits, promises
and undertakings of the parties to this Agreement, and other good and valuable consideration,
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the receipt and sufficiency of which are hereby acknowledged, the parties covenant and agree as
follows.
Section 1. Definitions.
For the purposes of this Agreement, the following terms shall have the following
definitions:
“Capital Investment” means a capital expenditure by or on behalf of the Company in the
acquisition or improvement of real property (including buildings, fixtures and other
improvements thereon), tangible personal property, or both, at the Facility. The Capital
Investment must be in addition to the capital improvements at the Facility as of May 1, 2017.
“Maintain” means that the New Jobs will continue without interruption from the date of
creation through the Performance Date. Positions for the New Jobs will be treated as
Maintained during periods in which such positions are not filled due to (i) temporary reductions
in the Company’s employment levels (so long as there is active recruitment for open positions),
(ii) strikes, and (iii) other temporary work stoppages.
“New Job” means new permanent full-time employment at the Facility or elsewhere at
headquarters-related operations in the Locality or the City of Hampton, whether as an employee
of the Company or as an independent contractor or employee of an independent contractor of
the Company, for which the standard fringe benefits are provided for the employee by his or her
employer and for which, with respect to all New Jobs counted toward the employment goals
herein, the employee receives an average annual wage of at least $45,000. Each New Job must
be of an indefinite duration and require a minimum of either (i) 35 hours of an employee’s time
per week for the entire normal year of the Company’s operations, which “normal year” must
consist of at least 48 weeks, or (ii) 1,680 hours per year. Seasonal or temporary positions,
positions created when a job function is shifted from an existing location in the Commonwealth,
and positions with construction contractors, vendors, suppliers and similar multiplier or spin-off
jobs shall not qualify as New Jobs. The New Jobs must be in addition to the 2,011 full-time
jobs at headquarters-related operations in the Locality or the City of Hampton as of May 1,
2017.
“Performance Date” means January 1, 2022. If the Locality, in consultation with the
Authority and VEDP, deems that good faith and reasonable efforts have been made and are
being made by the Company to achieve the Targets, the Locality may request an extension of
the Performance Date by up to 15 months. Any extension of the Performance Date shall require
the prior approval of the Board of Directors of VEDP. If the Performance Date is extended, the
Locality shall send written notice of the extension to the Authority, the Company and VEDP
and the date to which the Performance Date has been extended shall be the “Performance Date”
for the purposes of this Agreement.
“Targets” means the Company’s obligations to make Capital Investments of at least
$82,800,000 and to create and Maintain at least 434 New Jobs, all as of the Performance Date.
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“Virginia Code” means the Code of Virginia of 1950, as amended.
Section 2. Targets; Statutory Criteria.
(a) Targets: The Company will construct and operate the Facility in the Locality,
make a Capital Investment of at least $82,800,000, and create and Maintain at least 434 New
Jobs, all as of the Performance Date.
(b) Encouragement to Offer New Jobs to Residents of the Commonwealth: The
Locality and the Authority hereby strongly encourage the Company to ensure that at least 30%
of the New Jobs are offered to “Residents” of the Commonwealth, as defined in Virginia Code
Section 58.1-302. In pertinent part, that definition includes natural persons domiciled in
Virginia or natural persons who, for an aggregate of more than 183 days of the year, maintained
a place of abode within the Commonwealth, whether domiciled in the Commonwealth or not.
(c) Prevailing Wage; Unemployment and Poverty Rates: The average annual wage
of the New Jobs of at least $45,000 is less than the prevailing average annual wage in the
Locality of $51,227, but is more than 85% of that prevailing average annual wage ($43,543).
The Locality is a high-unemployment locality, with an unemployment rate for 2016, which is the
last year for which such data is available, of 5.1% as compared to the 2016 statewide
unemployment rate of 4.0%. The Locality is a high-poverty locality, with a poverty rate for
2015, which is the last year for which such data is available, of 16.8% as compared to the 2015
statewide poverty rate of 11.2%.
(d) Disclosure of Political Contributions: The Company acknowledges that the
name of the Company will be shared by VEDP with the Governor of Virginia, and any campaign
committee or political action committee associated with the Governor. The Company
acknowledges that within 18 months of the date of this Performance Agreement, the Governor,
his campaign committee, and his political action committee will submit to the Virginia Conflict
of Interest and Ethics Advisory Council a report listing any contribution, gift, or other item with
a value greater than $100 provided by the Company to the Governor, his campaign committee, or
his political action committee, respectively, during the period from the date of the Company’s
application for the COF Grant through the one-year period immediately after the date of this
Agreement.
Section 3. Disbursement of COF Grant.
(a) Disbursement of the COF Grant: By no later than January 1, 2019, the Locality
will request the disbursement to it of the COF Grant. If not so requested by the Locality by
January 1, 2019, this Agreement will terminate. The Locality and the Company will be
entitled to reapply for a COF Grant thereafter, based upon the terms, conditions and availability
of funds at that time.
The COF Grant in the amount of $2,000,000 will be paid to the Locality, upon its
request. Within 30 days of its receipt of the COF Grant proceeds, the Locality will disburse the
COF Grant proceeds to the Authority. Within 30 days of its receipt of the COF Grant proceeds,
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the Authority will disburse the COF Grant proceeds to the Company as an inducement to the
Company to achieve the Targets.
(b) Use of the COF Grant Proceeds: The Company will use the COF Grant
proceeds for construction or build-out of a privately-owned building at the Facility, as permitted
by Section 2.2-115(D) of the Virginia Code.
Section 4. Break-Even Point; State and Local Incentives.
(a) State-Level Incentives: VEDP has estimated that the Commonwealth will reach
its “break-even point” by the Performance Date. The break-even point compares new revenues
realized as a result of the Capital Investment and New Jobs with the Commonwealth’s
expenditures on incentives, including but not limited to the COF Grant. With regard to the
Facility, the Commonwealth expects to provide incentives in the following amounts:
Category of Incentive: Total Amount
COF Grant $2,000,000
Virginia Jobs Investment Program (“VJIP”) (Estimated) 347,200
Enterprise Zone Real Property Improvement Grant (“EZRPIG”)
(Estimated)
200,000
Enterprise Zone Job Creation Grant (“EZJCG”) (Estimated) 1,251,200
The proceeds of the COF Grant shall be used for the purposes described in Section 3(b).
The VJIP grant proceeds shall be used by the Company to pay or reimburse itself for
recruitment and training costs. The proceeds of the EZRPIG and the EZJCG may be used by the
Company for any lawful purpose.
(b) Locality-Level Incentives: The Locality expects to provide the following
incentives, as matching grants or otherwise, for the Facility:
Category of Incentive: Total Amount
Direct Company Incentive:
Phase I Land Contribution $ 2,977,000
Waived Parking and Infrastructure Contribution 2,700,000
Enterprise Zone Expansion/Relocation Cost Reduction (ERCR)
Incentive Grants – 10 Years
4,800,000
Skybridge Connection(s) to Parking Garage 500,000
Dynamic Plaza, Landscaping, Public Art and Lighting
Contribution
500,000
Public Infrastructure:
City Center Parking Garage 25,500,000
Construction of Pearl Way Extended 700,000
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If, by the Performance Date, the funds disbursed or committed to be disbursed by the
Authority to the Company total less than the $2,000,000 COF Grant local match requirement,
the Authority, subject to appropriation, will make an additional grant to the Company of the
difference at the Performance Date, so long as the Company has met its Targets. It is
acknowledged that the Phase I Land Contribution will satisfy the COF Grant local match
requirement.
The contribution of the Phase I Land, the Waived Parking and Infrastructure
Contribution, the Skybridge Connection(s) to Parking Garage, and the Dynamic Plaza,
Landscaping, Public Art and Lighting Contribution will reflect cost savings to the Company.
The City Center Parking Garage and the Construction of Pearl Way Extended will provide
additional capacity and enhance the parking and traffic system in City Center for the benefit of
the Company’s employees. The proceeds of the Locality’s ERCR may be used by the Company
for any lawful purpose.
Section 5. Repayment Obligation.
(a) If Statutory Minimum Eligibility Requirements are Not Met: Section 2.2-115 of
the Virginia Code requires that the Company make a Capital Investment of at least $1,500,000
and create and Maintain at least 15 New Jobs in order to be eligible for the COF Grant. Failure
by the Company to meet either of these statutory minimum eligibility requirements by the
Performance Date shall constitute a breach of this Agreement and the entire COF Grant must be
repaid by the Company to the Authority.
(b) Allocation of COF Proceeds: For purposes of repayment under subsection (c),
the COF Grant is to be allocated as 50% ($1,000,000) for the Company’s Capital Investment
Target, and 50% ($1,000,000) for the Company’s New Jobs Target.
(c) If Statutory Minimum Eligibility Requirements are Met: The provisions of this
subsection (c) shall become applicable only if the Company has met the statutory minimum
eligibility requirements set forth in subsection (a). If the Company has met at least 90% of
both of the Targets at the Performance Date, then and thereafter the Company is no longer
obligated to repay any portion the COF Grant. If the Company has not met at least 90% of
either or both of its Targets at the Performance Date, the Company shall repay to the Authority
that part of the COF Grant that is proportional to the Target or Targets for which there is a
shortfall. For example, if at the Performance Date, the Capital Investment is only $41,400,000
(reflecting achievement of 50% of the Capital Investment Target) and only 217 New Jobs have
been created and Maintained (reflecting achievement of 50% of the New Jobs Target), the
Company shall repay to the Authority 50% of the moneys allocated to the Capital Investment
Target ($500,000) and 50% of the moneys allocated to the New Jobs Target ($500,000). As a
further example, if at the Performance Date, the Capital Investment is $78,660,000 (reflecting
achievement of 95% of the Capital Investment Target) and only 260 New Jobs have been
created and Maintained (reflecting achievement of approximately 60% of the New Jobs Target),
the Company shall not be required to repay to the Authority any of the moneys allocated to the
Capital Investment Target, but will be required to repay 40% of the moneys allocated to the
New Jobs Target ($400,000).
Ferguson COF Performance Agreement 6
I-1488754.3
(d) Determination of Inability to Comply: If the Locality or VEDP shall determine
at any time prior to the Performance Date (a “Determination Date”) that the Company is unable
or unwilling to meet and Maintain its Targets by and through the Performance Date, and if the
Locality, the Authority or VEDP shall have promptly notified the Company of such
determination, the Company must repay to the Authority all of the COF Grant proceeds
previously disbursed to the Company. In such event, the Authority will repay to VEDP all of
the COF Grant proceeds repaid to the Authority and all COF Grant proceeds not previously
disbursed to the Company. Such a determination will be based on such circumstances as a
filing by or on behalf of the Company under Chapter 7 of the U.S. Bankruptcy Code, the
liquidation of the Company, an abandonment of the Facility by the Company or other similar
significant event that demonstrates the Company will be unable or is unwilling to satisfy the
Targets for the COF Grant (in the latter case, only after the Company has been provided with
written notice of the event and sixty (60) days to provide the Authority, Locality and VEDP
with evidence, reasonably satisfactory to the Authority, Locality and VEDP, that Company is
able and willing to meet and maintain its Targets by and through the Performance Date).
(e) Repayment Dates: Such repayment shall be due from the Company to the
Authority within ninety days of the Performance Date or the Determination Date, as
applicable. Any moneys repaid by the Company to the Authority hereunder shall be repaid by
the Authority to the Locality and shall be repaid by the Locality promptly to VEDP for
redeposit into the Commonwealth’s Development Opportunity Fund. The Locality and the
Authority shall use their best efforts to recover such funds, including legal action for breach of
this Agreement. Neither the Locality nor the Authority shall have any responsibility for the
repayment of any sums payable by the Company hereunder unless said sums have been received
by the Authority from the Company.
Section 6. Company Reporting.
The Company shall provide, at the Company’s expense, detailed verification reasonably
satisfactory to the Locality, the Authority and VEDP of the Company’s progress on the Targets.
Such progress reports will be for the January 1 – December 31 calendar year and will be
provided annually, starting at April 1, 2019, and covering the prior calendar year. Further, the
Company shall provide such progress reports at such other times as the Locality, the Authority
or VEDP may reasonably require.
With each such progress report, the Company shall report to VEDP the amount paid by
the Company in the prior calendar year in Virginia corporate income tax. VEDP has represented
to the Company that it considers such information to be confidential proprietary information
that is exempt from public disclosure under the Virginia Freedom of Information Act and that
such information will be used by VEDP solely in calculating aggregate return on invested
capital analyses for purposes of gauging the overall effectiveness of economic development
incentives.
The Company hereby authorizes the Locality, including the Locality’s Commissioner of
the Revenue and Treasurer, to release to VEDP and the Authority the Company’s real estate tax,
Ferguson COF Performance Agreement 7
I-1488754.3
business personal property tax and machinery and tools tax information. Such information shall
be marked and considered confidential and proprietary and shall be used by VEDP and the
Authority solely for verifying satisfaction of the Capital Investment Target. If the Locality, the
Office of the Commissioner of the Revenue or the Office of the Treasurer should require
additional documentation or consents from the Company to access such information, the
Company shall promptly provide, at the Company’s expense, such additional documentation or
consents as the Locality, the Authority or VEDP may reasonably request.
If requested by VEDP or the Authority, the Company shall provide to VEDP or the
Authority copies of the Company’s quarterly filings with the Virginia Employment Commission
covering the period from May 1, 2017, through the Performance Date.
Section 7. Notices.
Formal notices and communications between or among, VEDP, the Locality, the
Authority and the Company shall be given either by (i) personal service, (ii) delivery by a
reputable document delivery service that provides a receipt showing date and time of delivery,
or (iii) mailing utilizing a certified mail postage prepaid service of the United States Postal
Service that provides a receipt showing date and time of delivery, addressed as noted below.
Notices and communications sent in accordance with this Section 7 shall be deemed effective
upon receipt or refusal thereof. Notices and communications mailed shall be deemed effective
on the second business day following deposit in the United States mail. Such written notices and
communications shall be addressed to:
if to the Company, to: with a copy to:
Ferguson Enterprises, Inc.
12500 Jefferson Avenue
Newport News, Virginia
Attention: Steven R. Adcox, Esq.
Ferguson Enterprises, Inc.
12500 Jefferson Avenue
Newport News, Virginia 23602
Attn: Carl Briener, Vice President - Facilities
if to the Locality, to: with a copy to:
City Of Newport News, Virginia
2400 Washington Avenue
10th Floor
Newport News, Virginia 23607
Facsimile: 757.926.3503
Email: [email protected]
Attention: City Manager
City Of Newport News, Virginia
2400 Washington Avenue
9th Floor
Newport News, Virginia 23607
Facsimile: 757.926.8549
Email: [email protected]
Attention: City Attorney
Ferguson COF Performance Agreement 8
I-1488754.3
if to the Authority, to: with a copy to:
Economic Development Authority of the
City of Newport News, Virginia
2400 Washington Avenue
3rd Floor
Newport News, Virginia 23607
Facsimile: 757.926.3504
Email: [email protected]
Attention: Secretary/Treasurer
Economic Development Authority of the
City of Newport News, Virginia
c/o Jones Blechman Woltz & Kelly
701 Town Center Drive, Suite 800
Newport News, Virginia 23606
Facsimile: 757.873.8103
Email: [email protected]
Attention: Counsel
if to VEDP, to: with a copy to:
Virginia Economic Development Partnership
One James Center, Suite 900
901 East Cary Street
Post Office Box 798 (zip: 23218-0798)
Richmond, Virginia 23219
Facsimile: 804.545.5611
Email: [email protected]
Attention: President and CEO
Virginia Economic Development Partnership
One James Center, Suite 900
901 East Cary Street
Post Office Box 798 (zip: 23218-0798)
Richmond, Virginia 23219
Facsimile: 804.545.5611
Email: [email protected]
Attention: General Counsel
Section 8. Miscellaneous.
(a) Entire Agreement; Amendments: This Agreement constitutes the entire
agreement among the parties hereto as to the COF Grant and may not be amended or modified,
except in writing, signed by each of the parties hereto and consented to by VEDP. This
Agreement shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. The Company may not assign its rights and obligations
under this Agreement without the prior written consent of the Locality, the Authority and
VEDP.
(b) Governing Law; Venue: This Agreement is made, and is intended to be
performed, in the Commonwealth and shall be construed and enforced by the laws of the
Commonwealth. Jurisdiction and venue for any litigation arising out of or involving this
Agreement shall lie in the Circuit Court of the City of Newport News, and such litigation shall
be brought only in such court.
(c) Counterparts: This Agreement may be executed in one or more counterparts,
each of which shall be an original, and all of which together shall be one and the same
instrument.
Ferguson COF Performance Agreement 9
I-1488754.3
(d) Severability: If any provision of this Agreement is determined to be
unenforceable, invalid or illegal, then the enforceability, validity and legality of the remaining
provisions will not in any way be affected or impaired, and such provision will be deemed to be
restated to reflect the original intentions of the parties as nearly as possible in accordance with
applicable law.
(e) Attorney’s Fees: Attorney’s fees shall be paid by the party incurring such fees.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
Ferguson COF Performance Agreement 10
I-1488754.3
IN WITNESS WHEREOF, the parties hereto have executed this Performance
Agreement as of the date first written above.
CITY OF NEWPORT NEWS,
VIRGINIA
By
Cynthia D. Rohlf, City Manager
Date: _______________, 2017
ATTEST:
By
Mabel Washington Jenkins, MMC, City Clerk
APPROVED AS TO FORM FOR THE
CITY OF NEWPORT NEWS, VIRGINIA
By
Collins L. Owens, Jr., City Attorney
ECONOMIC DEVELOPMENT
AUTHORITY OF THE CITY OF
NEWPORT NEWS, VIRGINIA
By
C. Gary Minter, Chair
Date: _______________, 2017
ATTEST:
By
Florence G. Kingston, Secretary/Treasurer
APPROVED AS TO FORM FOR THE ECONOMIC
DEVELOPMENT AUTHORITY OF THE CITY OF
NEWPORT NEWS, VIRGINIA
By
Raymond H. Suttle, Jr., Esquire
Ferguson COF Performance Agreement 11
I-1488754.3
FERGUSON ENTERPRISES, INC.
By
Name:
Title:
Date: _________________________
ECONOMIC/INDUSTRIAL DEVELOPMENT MANAGED FUNDS AND PROPERTIESSTATEMENT OF NET POSITION
SEPTEMBER 25, 2017
(Unaudited)
9/25/2017 8/23/2017 DIFFERENCE
ASSETS
Cash and Investments:
Cash 5,076,932$ 4,983,092$ 93,841$
Restricted Cash - ARC 303,185 515,888 (212,704)
Restricted Cash-Air Service 1,236,313 1,235,702 611
Restricted Cash-LTD Oyster Point 1,240,051 1,252,932 (12,881)
Restricted Cash-Animal Shelter Capital Reserve 50,000 - 50,000
Restricted Cash - Apprentice School Garage Maintenance Reserve 20,000 20,000 -
Restricted Cash-Newport News Capital, Micro Loan 461,296 458,461 2,835
Restricted Cash - CCOP & City Operations Center 4,198,627 4,107,284 91,343
Restricted Cash - Parking Fund 1,619,921 3,232,895 (1,612,974)
Restricted Cash - Rouse Tower 3,073,387 2,728,188 345,199
Restricted Cash - Tourism Zones Guaranty Account 1,520,399 1,517,610 2,789
Restricted Cash - Tourism Zones Performance Guaranty Grant Account 500,572 499,696 875
Restricted Cash - Coats & Clark Escrow 86,369 94,041 (7,673)
Restricted Cash - Brooks Crossing 25,328 25,282 46
Restricted Cash - FIG Grant 643,780 643,780 -
CCOP Garage Property Management Escrow 90,000 90,000 -
Total Cash 20,146,158 21,404,851 (1,258,693)$
Receivables:
Accounts, Notes & Grants 26,506 26,506 -
Note Receivable - Hotel Loan 4,105,115 4,105,115 -
Note Receivable - Land Loan 399,999 399,999 -
Notes Receivable - Newport News Capital Fund 1,108,348 1,112,330 (3,982)
Notes Receivable - New Market Tax Credit 4,619,345 4,619,345 -
Other Receivables 907,466 652,208 255,258
Total Receivables 11,166,779$ 10,915,503$ 251,276$
Construction in Progress: 8,963,617$ 13,385,278$ (4,421,660)$
Land Held For Lease or Resale:
Oakland Industrial Park 4,043,163$ 4,043,163$ -
Patrick Henry CommerCenter 1,897,080 1,897,080 -
Oyster Point 2,516,903 2,516,903 -
Chase - 1300 Marshall Avenue 1,105,938 1,105,938 -
Sears 399,943 399,943 -
Virginia Specialty Store Property 530,000 530,000 -
T E Williams 60,000 60,000 -
Brenner's Bakery 114,300 114,300 -
Downtown Engineering Ctr 753,600 753,600 -
Coats & Clark 676,882 676,882 -
Greek Church 75,000 75,000 -
Jefferson Center - Research & Tech 4,486,797 4,486,797 -
Diligence Drive 276,725 276,725 -
Clements - 75 Yorktown Road 492,068 492,068 -
Jefferson/Habersham 2,246,599 2,246,599 -
Port Warwick - Light Rail 1,036,640 1,036,640 -
Southeast Corridor 1,674,200 1,674,200$ -
Parking Fund Land 874,323 874,323 -
606 Morris Drive 74,900 74,900 -
Oriana Road 1,066,900 1,066,900 -
515 Ivy Road 21,112 21,112 -
Rouse Tower 1,164,800 1,164,800 -
2914 West Avenue 101,665 101,665 -
Upper Warwick Corridor 1,350,809 1,350,809 -
South Police Precinct 357,200 357,200 -
Sherwood 2,529,606 2,529,606 -
Apprentice School Garage 641,700 641,700 -
Total Land Held For Lease or Resale 30,568,852$ 30,568,852$ -$
Property and Equipment:
Shipyard/Sears Facility 13,484,037 13,484,037 -
Coats & Clark 1,884,237 1,884,237 -
Downtown Engineering Ctr Building 30,668,716 30,668,716 -
5th Oakland Shell (CITI) Building 5,436,903 5,436,903 -
Shipyard/VSS Facility 12,653,210 12,653,210 -
ARC Building 16,368,065 16,368,065 -
Greek Church Building 276,680 276,680 -
Merchant's Walk Garage 12,465,741 12,465,741 -
Conference Center 29,115,656 29,115,656 -
Fountain Way Garage 15,703,399 15,703,399 -
809 Omni Blvd 2,628,946 2,628,946 -
Mariner's Row Garage 16,787,034 16,787,034 -
Rouse Tower 20,383,665 20,383,665 -
Apprentice School Garage 12,174,759 12,174,759 -
South Police Precinct 6,257,667 6,257,667 -
Sherwood 5,305,259 5,305,259 -
Improvements Other than Buildings 19,232,150 14,496,355 4,735,795
Equipment 84,674 84,674 -
Accumulated Depreciation (63,108,373) (63,108,373) -
Total Property and Equipment 157,802,426$ 153,066,631$ 4,735,795$
Infrastructure
Merchant's Walk Garage Infrastructure 1,521,049$ 1,521,049$ -
Fountain Way Garage 1,022,450 1,022,450 -
Deferred Outflows of Resources
Deferred Charge - Debt Refunding 5,577,422 5,577,422$ -
Total Deferred Outflows of Resources 5,577,422$ 5,577,422$ -$
TOTAL ASSSETS AND DEFERRALS 236,768,756$ 237,462,038$ (693,282)$
LIABILITIES AND NET POSITION
Liabilities:
Trade Accounts Payable 5,592$ 148,828$ (143,236)$
Accrued Liabilities 87,431 103,949 (16,518)
Deferred Revenue - - -
Notes Payable and Due to City (ARC) 19,351,591 19,389,474 (37,883)
IDA/EDA Leased Project Bonds - All Projects 84,358,575 85,573,407 (1,214,833)
Total Liabilities 103,803,188$ 105,215,658$ (1,412,470)$
Net Position:
Invested in capital assets, net of related debt 79,846,152$ 75,512,977$ 4,333,175$
Restricted for:
Debt Service -$ -$ -$
Capital Projects 8,043,346 8,184,650$ (141,304)
Capital Loans 1,569,644 1,570,791$ (1,147)
Unrestricted 43,506,426 46,977,963$ (3,471,537)
Total Net Assets 132,965,567$ 132,246,380$ 719,187$
TOTAL LIABILITIES AND NET POSITION 236,768,756$ 237,462,038$ (693,282)$
P:\Audtshar\monthlyIDAfs2018\Financials.FY2018Sept 1 10/2/2017
ECONOMIC/INDUSTRIAL DEVELOPMENT FUNDSTATEMENT OF REVENUE AND EXPENSES FOR THE THREE MONTHS ENDED
SEPTEMBER 25, 2017
(Unaudited)
9/25/2017 9/25/2017 BUDGETCURRENT
MONTH YEAR TO DATE YEAR TO DATE FY 2018 BUDGET
Operating Revenues:
Sale of Property - -$ 169,988$ 679,951$
Miscellaneous Property Rental - Operating Leases 275,674 1,123,873 1,210,709 4,842,837
ARC Revenue 141,681 190,066 437,700 1,750,801
Regional Air Service Enhancement - Contributions from localities - - 42,334 169,337
Rent Income Rouse Towers 104,667 156,792 620,253 2,481,011
Parking Income 43,384 150,711 196,708 786,831
CCOP Revenue - Land Sales, Parking Contributions, Interest 5,453 22,343 56,098 224,391
E-Commerce Program Interfund Transfer - - - -
Total Operating Revenues 570,859$ 1,643,786$ 2,733,790$ 10,935,159$
Operating Expenses:
NNIDA Operating Expenses:
Board and Committee Compensation 1,350 3,750$ 5,000$ $20,000
City Development Department Reimbursement 9,583 19,167 23,750 95,000
Direct Salary Charges 29,793 76,535 109,727 438,906
Fringe Benefits 16,683 38,132 55,863 223,452
Contractual Services 92,726 127,296 285,556 1,142,225
Materials, Supplies, Meetings 4,797 7,780 15,169 60,675
Marketing and Promotion - 745 40,000 160,000
Reserve for Contingency - - - -
Total NNIDA Operating Expenses 154,932$ 273,406$ 535,065$ 2,140,258$
CCOP Facilities Operation and Maintenance 52,264 156,623 307,336 1,229,342
Rouse Towers Operating and Maintenance Expenses 97,963 116,463 354,264 1,417,055
Hospitality Marketing - - 75,000 300,000
Regional Air Service - - 27,108 108,431
Sherwood Operating and Maintenance - 5,615 - -
Contributed Land & 10% Commission on Sales - NN Green Foundation - - - -
Real Estate Commissions - - - -
Business Initiatives 15,000 41,072 12,500 50,000
Façade Improvement Grants - 60,186 37,500 150,000
Enterprise Zone Grant - - 439,157 1,756,629
Tourism Grants - - 210,771 843,082
Property Rental 85,133 246,131 261,680 1,046,720
ARC Expenses 71,685 111,430 247,790 991,161
DT Engineering Retail/City - - 34,078 136,311
Depreciation Expense - - 1,212,628 4,850,513
Bond Amortization Expense - - - -
Other, including financing fees - - - -
Total Operating Expenses 476,977$ 1,010,926$ 3,754,876$ 15,019,502$
Operating Income 93,882$ 632,860$ (1,021,086)$ (4,084,343)$
Non - Operating Revenues (Expenses):
Interest Earned 3,980 4,208$ 34,500$ 138,000$
Interest Earned - Mortgages 20,325 26,396 21,388 85,552
IRB Fees 121,284 121,684 18,750 75,000
Property Administrative Fees 6,157 18,471 60,525 242,099
Bond Interest Expense (256,300) (1,357,269) (751,934) (3,007,734)
Bond Issue Expense, Letter of Credit and Trustee Fees (250) (750) (1,781) (7,125)
Cost of Land Sold - - - -
Commonwealth Opportunity Fund - - - -
Land Option Revenue - - 2,500 10,000
Gain (Loss) on Fixed Assets - - - -
Miscellaneous Revenue (includes GOF's) 309,412 336,199 60,980 243,921
Non - Operating Expenses 204,608$ (851,060)$ (555,072)$ (2,220,287)$
Net Income (Loss) Before Operating Transfers 298,490$ (218,200)$ (1,576,158)$ (6,304,630)$
Transfers From Economic/Industrial Fund - - - -
Transfers To Economic/Industrial Fund - - - -
Transfers - In From City of Newport News - Enterprise Zone Grant - - 439,152 1,756,609
Transfers - In From City of Newport News - Air Service Fund - - 9,036 36,143
Transfers - In From City of Newport News - Tourism Grants - - 210,771 843,082
Transfers - In From City of Newport News 1,164,852 5,583,320 2,385,944 9,543,777
Net Income (Loss) 1,463,342$ 5,365,119$ 1,468,745$ 5,874,981$
P:\Audtshar\monthlyIDAfs2018\Financials.FY2018Sept 2 10/2/2017
ECONOMIC/INDUSTRIAL DEVELOPMENT FUNDSTATEMENT OF CASH FLOWS FOR THE THREE MONTH ENDED
SEPTEMBER 25, 2017
(Unaudited)
9/25/2017 9/25/2017
YEAR
MONTH TO DATE
Cash Flows From Operating Activities:
Receipts from customers $ 744,602 $ 1,728,521
Receipts from land sales, net of settlement charges - -
Payments to suppliers (598,618) (1,437,815)
Payments to employees (57,409) (137,584)
Other - -
Net cash provided by operating activities $ 88,574 $ 153,122
Cash Flows from Capital and Related Financing Activities:
Acquisition of capital assets $ (865,145) $ (1,012,593)
Proceeds from sale of property or equipment - -
Acquisition of land for lease or resale - (1,097,603)
Acquisition of land held for lease or resale - Transfer from city - -
Acquisition of property and equipment - -
Loss on sale of fixed assets - -
Improvements Other than Buildings - -
Proceeds from issuance of industrial revenue bonds and notes payable - -
Repayment and retirement of industrial revenue bonds (1,214,833) (5,221,797)
Repayment of bonds payable - -
Notes Payable and Due to City (ARC) (37,500) (304,167)
Bond Issuance Costs - -
Deferred Charge - Bond Refunding - -
Interest Paid (256,300) (1,357,269)
Payments of Governor's Opportunity Fund Grants - -
Other revenue and expenses, net 436,603 475,604
$ (1,937,176) $ (8,517,825)
Cash Flows From Investing Activities:
Interest Received $ 24,305 $ 30,605
Loan issued thru Newport News Capital Fund - -
Note Receivable Issued - -
Deferred Charge - Debt Refunding - -
Net Investment in Direct Financing activities - -
Net Cash provided by investing activities $ 24,305 $ 30,605
Cash Flows Provided by Non - Capital Financing Activities - Transfers from City
of Newport News $ 1,164,852 $ 5,583,320
Increase (decrease) in cash, restricted cash and cash equivalents (659,444) (2,750,778)
Cash and restricted cash and cash equivalents at beginning of year 20,805,602 22,896,936
Cash and restricted cash and cash equivalents at end of year $ 20,146,158 $ 20,146,158
Reconciliation of operating income (loss) to net cash used by operating activities:
Operating Income $ 93,882 $ 632,860
Adjustment to reconcile operating income to cash provided by operating activities:
Depreciation - -
Gain on land sold - -
Proceeds from land sales - -
Amortization - -
Changes in assets and liabilities:
Accounts, notes and grants - 18,204
Note Receivable - Hotel Loan - -
Note receivable - Land Loan - -
Notes receivable - Newport News Capital Fund 3,982 14,327
Notes Receivable - New Market Tax Credit - -
Other receivables 169,761 52,205
Prepaid Expenses - Other - -
Accrued Payable (143,236) (468,466)
Accrued Liabilities (35,815) (96,008)
Net cash provided by operating activities $ 88,574 $ 153,122
ÿ
Forgiveness of note payable deed of trust $ - $ -
P:\Audtshar\monthlyIDAfs2018\Financials.FY2018Sept 3 10/2/2017
ECONOMIC/INDUSTRIAL DEVELOPMENT AUTHORITIES
FY 2018 PROJECT DEBT AND MORTGAGE RECEIVABLE BALANCES
9/25/2017 8/23/2017 DIFFERENCE
Industrial Development Authority
CITI Series Bond A - Bank of America 1,585,918 1,608,238 (22,321)
CITI Series Bond B - Bank of America 326,014 330,766 (4,752)
Apprentice School Garage - Towne Bank 9,769,228 10,746,152 (976,924)
Total - IDA 11,681,160$ 12,685,156$ (1,003,997)$
Economic Development Authority
Shipyard/Sears - Bank of America 1,203,281 1,292,832 (89,551)
Shipyard/VSS - Bank of America 1,092,190 1,173,475 (81,285)
DT Engineering Bldg - Series B - Wells Fargo 10,955,000 10,955,000 -
DT Engineering Bldg - Refunded Series A - Wells Fargo 2,440,000 2,480,000 (40,000)
Merchant's Walk Garage - SunTrust 3,576,000 3,576,000 -
Refunding Bonds Series 2012A 25,390,000 25,390,000 -
Refunding Bonds Series 2012B 21,110,000 21,110,000 -
Add Bonds Premium 2,979,849 2,979,849 -
Refunding GO Bonds 2015 3,660,000 3,660,000 -
Add Bonds Premium 271,095 271,095 -
Total - EDA 72,677,415$ 72,888,251$ (210,836)$
TOTAL - ALL PROJECTS 84,358,575$ 85,573,407$ (1,214,833)$
Notes Payable and Due To
809 Omni Blvd - Bank of America 1,462,500 1,500,000 (37,500)$
Towne Bank Note A 4,736,667 4,736,667 -
Towne Bank Note B 2,996,667 2,996,667 -
ARC - Due to City 10,155,757 10,156,140 (383)
TOTAL - NOTES PAYABLE AND DUE TO 19,351,591$ 19,389,474$ (37,883)$
Newport News Capital Fund
Coastal Forms 26,254 26,254 -
Martin's Custom Designs 32,404 33,122 (718)
Bryant Equipment 120,622 122,450 (1,828)
CCOP Thimble Shoals One 500,000 500,000 -
Eagle Land II 429,068 430,504 (1,436)
1,108,348$ 1,112,330$ (3,982)$
P:\Audtshar\monthlyIDAfs2018\Financials.FY2018Sept 4 10/2/2017
ECONOMIC/INDUSTRIAL DEVELOPMENT AUTHORITIES
FY 2018 CONSTRUCTION IN PROGRESS
9/25/2017 8/23/2017 DIFFERENCE
Construction in Progress
Patrick Henry Parkway 2,072,536.75 1,222,537 850,000
Canon Expansion - Infrastructure 4,745,310 4,745,310 -
City Center Third Garage 325,609 325,609 -
Liebherr Expansion 1,596,525 1,545,298 51,227
Tech Center 223,637 223,637 -
Southeast Grocery Store Parking Field and Infrastructure - 2,560,679 (2,560,679)
ARC HVAC & Roof Improvements - 2,762,208 (2,762,208)
Total Construction in Progress 8,963,617$ 13,385,278$ (4,421,660)$
P:\Audtshar\monthlyIDAfs2018\Financials.FY2018Sept 5 10/2/2017
P:\IDA\IDA17-18\Board Meetings\October 2017\Committee Schedule 10.06.2017.docx
EDA/IDA COMMITTEE SCHEDULE
(All meetings to be held in the EDA/IDA Board Room unless otherwise noted.)
MONTHLY
Design Review Thursday 10/19/17 8:00 a.m. Executive Tuesday 10/17/17 12:00 p.m. Marketing Thursday 10/19/17 10:30 a.m. Revolving Loan Fund Wednesday 10/25/17 12:30 p.m.
QUARTERLY (January, April, July, October)
Conference Center Wednesday 10/11/17 8:00 a.m. (Marriott) South Newport News Tuesday 01/02/18 4:00 p.m.
(City Hall, 3rd Floor)
P:\IDA\IDA17-18\Board Meetings\October 2017\Motion Going into Closed Session 10.06.2017.docx
MOTION FOR CLOSED MEETING - ROLL CALL VOTE
This is a motion for the Authority to go into a closed meeting pursuant to VA Code Section
§2.2-3711.A: Real Estate (3), Prospective Business (5), for the following purposes and
subjects:
(3) Discussion or consideration of the acquisition of real property for a public purpose
or of the disposition of publicly held real property where discussion in an open
meeting would adversely affect the bargaining position or negotiating strategy of
the public body, the subject of which is proposed property dispositions located in
the northern, central and southern sections of the City; and
(5) Discussion concerning a prospective business or industry or the expansion of an
existing business or industry where no previous announcement has been made of
the business or industry’s interest in locating or expanding its facilities in the
community, the subject of which is an unannounced expansion of an existing
business located in the southern section of the City.
MOTION AFTER OPEN MEETING IS RECONVENED REQUIRES ROLL CALL VOTE
This is a motion to certify pursuant to VA Code Section §2.2-3712(D) that to the best of
each member’s knowledge:
(D) (i) only public business matters lawfully exempted from open meeting requirements
under this chapter; and
(ii) only such public business matters as were identified in the motion by which the
closed meeting was convened were heard, discussed or considered in the meeting
by the public body.
MINUTES OF THE REGULAR MEETING OF THE
ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF NEWPORT NEWS,
VIRGINIA AND THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE
CITY OF NEWPORT NEWS, VIRGINIA
Mr. Minter called the meeting to order at 8:00 a.m. on Friday, September 1, 2017, in the
EDA/IDA Board Room at Two City Center, 11820 Fountain Way, Suite 301, Newport News,
Virginia.
Those members present were:
C. Gary Minter, Chair
Cassandra P. Greene, Vice Chair
Mary Aldrich
Alonzo R. Bell, Jr.
Jennifer Smith-Brown
Cynthia D. Rohlf, City Manager, ex-officio
Florence G. Kingston, Secretary/Treasurer, ex-officio
Absent:
Cary B. Epes, Excused
Jeffrey Verhoef, Excused
Legal Counsel:
Raymond H. Suttle, Jr.
Staff:
Kearston Milburn, Recording Secretary
Cherry Croushore, Assistant Secretary
Also present:
Doreen Kopacz, Port Development Administrator
Collins Owens, City Attorney
Robert Pealo, Senior Assistant City Attorney
Jerri Wilson, Management & Legislative Program Analyst, City Manager’s Office
EDA/IDA Board Meeting September 1, 2017 Page 2
Mr. Minter opened the meeting by welcoming everyone.
Seafood Industrial Park West Bulkhead Project Presentation
Mr. Minter called on Ms. Kopacz for the Seafood Industrial Park West Bulkhead Project
Presentation. Ms. Kopacz provided a powerpoint presentation, describing how the Virginia
Port Authority’s FY2016 Commonwealth Port Fund Grant award of $638,292, coupled with
$617,299 of City funds, was used to refurbish the Seafood Industrial Park’s (SIP’s) aging
and damaged West Bulkhead. Ms. Kopacz explained that 1,376 linear feet of old, damaged,
and unsafe wooden fender commercial mooring along the west side of the SIP had been
completely replaced with new concrete pilings, raised to compensate for higher water levels,
and fitted with other features to improve its safety, security, and overall appearance. Ms.
Kopacz stated that these improvements added capacity and had already gained high praise
from the local seafood businesses. Ms. Kopacz informed the Board that SIP had been
selected by the Virginia Port Authority to receive FY2018 Grant funding in the amount of
$404,627 for a new project to include refurbishment and modifications to the Outer Harbor
Pier and Dolphins.
Mr. Minter asked if there were any questions for Ms. Kopacz and there were none. Mr.
Minter thanked Ms. Kopacz for her report.
Secretary/Treasurer’s Report
Mr. Minter asked for the Secretary/Treasurer’s Report. Mrs. Kingston congratulated Marc
Rodgers, who was awarded an MBA on August 27th from William and Mary. Mrs. Kingston
stated that Marc had completed William and Mary’s 18-month Executive MBA Program.
She commended his ambition and effort to further his education and professional
development.
Mrs. Kingston stated she was excited about the recent groundbreaking for Building One @
Tech Center. She extended appreciation to those who were able to attend the event. Mrs.
Kingston stated that, Karen Jackson, Virginia’s Secretary of Technology, had shared
comments at the event, noting Building One @ Tech Center represented the first step in
creating the newest technology and innovation center in the Commonwealth – one that will
attract new, high-growth businesses and young, talented workers to Newport News. Mrs.
Kingston told the Board that she looked forward to the continued development of Tech
Center Research Park and the possibilities for collaboration it would bring to the City. She
thanked staff for the many hours spent in preparation for this important event.
EDA/IDA Board Meeting September 1, 2017 Page 3
Mrs. Kingston said that she was pleased to report that the annual Newport News State of
the City luncheon would be held on Tuesday, October 3rd at noon at the Marriott. She
stated that this year’s theme was “Building Our Future, One Block at a Time”. Mrs. Kingston
noted that the EDA would again serve as a table sponsor for the event and that Board
Members should inform Kearston if they would like to attend.
Mrs. Kingston advised that also on Tuesday, October 3rd, the Department of Development
would be sponsoring a small business seminar featuring Marc Willson, Retail/Restaurant
Consultant for the Virginia Small Business Development Center. She stated Mr. Willson had
conducted seminars several times in Newport News and the emphasis of his visit this time
would be helping small retailers prepare for the Christmas holiday shopping season. She
noted that Staff would publicize the seminar through our business Constant Contact list and
through our various business resource partners. She recognized our local Small Business
Development Center, headed by Jim Carroll, who had helped to facilitate and coordinate Mr.
Willson’s visits.
Mrs. Kingston informed the Board that the Monthly Financial Statements were in their
packages, noting a few highlights and offering to answer questions. There were no
questions.
Mrs. Kingston offered the City Manager an opportunity to comment. Ms. Rohlf expressed
her excitement for the annual Newport News State of the City luncheon and encouraged
Board Members to participate.
Ms. Rohlf stated that a Federal Notice of Funding Availability for $130,000,000 had recently
posted for which participants in the Choice Neighborhoods Initiative (CNI) could apply. Ms.
Rohlf explained that she was pleased that this additional funding was going to be available
for CNI, particularly at the federal level, and advised that the City would be putting together
an application to request $30,000,000 of the available implementation grant funds. She
noted that in terms of timing, this would be an accelerated approach to seeking
implementation funding, as the City is still completing its Transformation Plan under the CNI
planning grant previously awarded, but that she felt the City would develop a very
competitive application. Ms. Rohlf noted that the application due date of November 22nd
would provide a tight timeframe for submission, but that staff was working diligently to meet
the deadline. Ms. Rohlf also stated that the EDA’s collaborative role would be significant in
the application process. Mr. Minter asked Ms. Rohlf how long it would take for HUD to notify
applicants of an award for the implementation grant, and Ms. Rohlf responded that in the
past it has taken approximately 5-6 months for a decision to be made.
EDA/IDA Board Meeting September 1, 2017 Page 4
Ms. Rohlf concluded her comments by thanking Mrs. Kingston and her staff for being in the
forefront of some important efforts, not only for the City, but regionally as well.
Mr. Minter asked if there were any questions for Mrs. Kingston or Ms. Rohlf, and there were
none.
Assistant Secretary’s Report
Mr. Minter asked for the Assistant Secretary’s Report. Ms. Croushore advised the Board
that the Committee Meeting Schedule was in their package and noted relevant details.
Madison Government Affairs Consultant Report
Mr. Minter advised the Board that the Madison Government Affairs Report was in written
format and asked if there were any comments or questions. There were none.
At 8:26 a.m., Ms. Greene moved for the Authority to go into a closed meeting pursuant to
VA Code Section §2.2-3711.A: Real Estate (3), Prospective Business (5), for the following
purposes and subjects: (3) Discussion or consideration of the acquisition of real property for
a public purpose or of the disposition of publicly held real property where discussion in an
open meeting would adversely affect the bargaining position or negotiating strategy of the
public body, the subject of which is proposed property dispositions located in the central
section of the City; and (5) Discussion concerning a prospective business or industry or the
expansion of an existing business or industry where no previous announcement has been
made of the business or industry’s interest in locating or expanding its facilities in the
community, the subject of which is an unannounced expansion of an existing business
located in the southern section of the City and unannounced prospective businesses
interested in locating in the central section of the City. Mr. Bell seconded the motion which
passed unanimously on a roll call vote.
At 9:05 a.m., the EDA/IDA Board returned to open session following a certification motion by
Ms. Greene, in accordance with VA Code Section §2.2-3712(D) that to the best of each
member’s knowledge: (D) (i) only public business matters lawfully exempted from open
meeting requirements under this chapter; and (ii) only such public business matters as were
identified in the motion by which the closed meeting was convened were heard, discussed
or considered in the meeting by the public body. Ms. Aldrich seconded the motion, which
passed unanimously on a roll call vote.
EDA/IDA Board Meeting September 1, 2017 Page 5
Committee Chair’s Reports
Mr. Minter called for the Committee Reports. Ms. Aldrich presented the Design Review
Committee Report, which passed unanimously on a roll call vote. Ms. Greene presented the
Executive Committee Report, which passed unanimously on a roll call vote. Ms. Aldrich
presented the Marketing Committee Report, which passed unanimously on a roll call vote.
Ms. Smith-Brown presented the Revolving Loan Fund Committee Report, which passed
unanimously on a roll call vote.
Approval of Minutes of the Regular Meeting of August 4, 2017
Mr. Minter asked for a motion that the Minutes of the Regular Meeting of August 4, 2017 be
approved. Mr. Bell so moved and Ms. Smith-Brown seconded the motion, which passed
unanimously on a roll call vote.
Unfinished Business
Mr. Minter asked for any unfinished business. There was none.
New Business
Mr. Minter asked for any new business. There was none.
There being no further business to come before the Board, Mr. Minter adjourned the
meeting at 9:17 a.m.
_________________________________
Florence G. Kingston
Secretary/Treasurer
P:\IDA\IDA17-18\Board Meetings\September 2017\FINAL Approved Minutes September 1 2017 Board Meeting.docx