By Brandon Martin
The Henry County Industrial Development Authority (IDA) approved three performance agreements at a Feb. 24 meeting.
The agreements between Crown Holdings, Laminate Technologies and Southwestern Virginia Gas Company provide monetary incentives to facilitate growth from the industries and are key to upcoming economic development projects in the area.
Crown Holdings will receive $500,000 from the Commonwealth Development Opportunity Fund (COF) upon reaching $75 million of investment into the county and the creation of 100 jobs. The company will receive another $500,000 upon hitting its overall promise of an $145 million investment and 126 jobs.
“All the incentive money comes to us as a county and we allocate it to the company based on the benchmarks in the agreements,” County Administrator Tim Hall said.
In addition to incentives from the COF, Crown Holdings will receive $3 million from the Harvest Opportunity Fund (HOF) upon reaching the same initial benchmarks set forth with the COF. The funds are to be disbursed on or after Dec. 31, 2021. After the company hits the second COF benchmark, they will receive the remaining $2 million from the HOF, to be disbursed on or after Dec. 31, 2022.
The “Harvest (Foundation) has provided $5 million for this deal,” Hall said. “Again, they send it to us, and we send it to the company. Both of these agreements have pretty significant benchmarks.”
The company also will receive a $3 million Virginia Investment Performance (VIP) grant from the Commonwealth.
“That is a direct relationship between the state and the company, so we have no play in that,” Hall said.
The county also agreed to a third incentive agreement with Crown Holdings, according to Hall, who added it was a first for the county.
“It captures all the incentives that I’ve just outlined” and “letters from utility providers saying where their utility is and how it needs to be brought to” Lot 4 of Commonwealth Crossing Business Centre (CCBC), Hall said.
While not agreed upon at the meeting, Hall said the county will eventually enter into a land conveyance agreement with Crown Holdings once the approximate 58 acres of land on Lot 4 is officially surveyed.
Hall said the relocation of operations by Crown is “the largest single initial capital investment in the county’s history.
“This company makes cans, and they make a lot of cans,” Hall said. “This property will have two lines” operating 24 hours per day, seven days per week and 365 days per year.
“Each line will produce 2,800 cans a minute. Therefore, two lines (will be) 5,600 cans a minute. This will allow Crown to catch up with its share of the marketplace. It is now importing millions of cans from Saudi Arabia to fulfill its demand,” Hall said, and added the county was first made aware of the deal on Nov. 12, 2020.
“We were told on Dec. 22 that they were coming,” he added. “That’s six weeks. We’ve never had a project that went that quickly of this magnitude.”
During that period, Hall said the county received four visits from company representatives.
“The big one that we had, we held at CCAT (Commonwealth Centre for Advanced Training) which is a huge draw for this company,” Hall said. “They can train while they are building so it was a huge difference maker for us.”
Hall said 19 different state and local entities were present for the meeting at CCAT.
“Some of those were local contractors who were called in and not told who they were talking to but they took questions on how quickly things could be built,” Hall said, adding that representatives from Patrick Henry Community College were also present to close the deal.
“As they were leaving, their HR (human resources) folks told us that they site plants all over the world,” Hall said. “He told us that they have never seen a more impressive local presentation than what they got with us. The teamwork worked.”
Hall said the company hopes to start operations in December or early next year.
With the beginning of operations, Hall said the company will likely hire local talent to run the lines.
He added that PressGlass, the first tenant at CCBC, demonstrated the ability to acquire a strong workforce from Henry County residents.
“We were able to access their management teams and their HR people in meetings with Crown and we walked out,” Hall said. “It was just the two companies talking to each other and (PressGlass) was able to demonstrate that they got their folks and are happy with their folks. They told them their experience was really good and they had no issue employing the people that they needed.”
He said the average salary for the 126 new jobs will be approximately $49,000 a year.
“We’ve got 1,600 people a day who leave this community and go to the Piedmont Triad to work. All you’ve got to do is give them a reason to turn right before they leave town,” Hall said. “These are well above average wages and you save an hour to an hour and half of your day, every day that you’re not driving. It gives you time to coach soccer, teach Sunday School, or volunteer at the Kiwanis Club.”
Hall said he expects the company to look for employees that “have already proven they want to work and just want a better job,” adding that companies who lose employees will likely “backfill” those positions from those out of work.
In addition to agreements with Crown Holdings, the IDA also approved agreements with Laminate Technologies.
With a first performance date of Dec. 31, 2024, the company will receive $50,000 from the COF upon reaching $4 million of capital investment and 42 new jobs. If the company maintains those benchmarks, it will receive another $50,000 on Dec. 31, 2025.
The Martinsville-Henry County Economic Development Corporation is also providing a $50,000 cash grant to Laminate Technologies.
“Both Crown and Laminate are located in Enterprise Zones so they will get those statutory benefits,” Hall said. “You pay your real estate and personal property taxes in your first year. You pay 100 percent of it, we document it, and we rebate 100 percent of it. In years 2-5, you pay them, we document it, and we pay you back half of that. It’s year six before they begin to pay 100 percent of their total local tax burden.”
In conjunction with requirements for operations of Crown Holdings, the IDA also approved a performance agreement with Southwestern Virginia Gas Company.
“Crown needed natural gas infrastructure to Lot 4. That would be a deal killer if we did not provide that,” Hall said. “We don’t currently have that at the park, so we had to figure out a way to solve that pretty quickly.”
To that end, Hall said the county took up the financial responsibility for the project.
“The Board of Supervisors approved up to $3.5 million out of the fund balance. We’ve already gotten a grant from the Appalachian Regional Commission for $1.5 million,” Hall said. “This will work as a draw down. It may not take all that we’ve allocated for it but we wanted to do a not-to-exceed number so we didn’t have to come back and do it again.”
Hall said details are still being discussed about the financial benefits towards the county but “we will also get paid back for use of the gas. There is a utility tax based on consumption.”
Hall said adding natural gas will complete the park’s utility portfolio.
“Natural gas is the only utility not at the park. Once that is available, we become what is called a Tier 5 site,” Hall said. “As site developers or site consultants begin to search for a place to go, Tier 5 sites come up first.”