Title
An ordinance authorizing the execution and delivery of an Infrastructure Reimbursement Agreement by and between the City of Rock Hill, South Carolina and Winbro Group Technologies Inc. (the "Corporation"), a Massachusetts Corporation authorized to transact business in South Carolina and previously known to the City as “Project Windstar" pursuant to Title 4, Chapter 1 and Chapter 29, Code of Laws of South Carolina, 1976, as amended, and other matters relating to the foregoing.
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Project Winbro is a company considering a significant business investment in the City of Rock Hill. The company has asked the City to consider providing a Special Source Revenue Credit (SSRC) as an incentive to the company to locate this project in Rock Hill. The SSRC is a reimbursement of property tax revenues (actually fee in lieu of tax revenues) paid by the company to the City. The company will use these reimbursed funds to pay for certain capital investments related to its project. It has been the City's practice in the past to offer incentives of this type to significant new employers locating within the City. Attached to the ordinance as Exhibit B is the Infrastructure Reimbursement Agreement that describes the responsibilities of the City and the Company under this arrangement. The Agreement includes provisions that if the Company fails to meet its commitments related to taxable investment and/or jobs the incentives can be terminated and the company required to refund funds received from the City.
There have been several changes to the Ordinance and to the Infrastructure Reimbursement Agreement since first reading on October 11, 2010. Redline versions and clean versions of both documents are attached. The significant changes are summarized below.
1. The Company's commitments for investment and job creation in both phase 1 and phase 2 of the project have been amended. These changes have been made to allow the company protection against triggering the default provisions of the agreement. The City already enjoys strong protections under the provisions of the agreement in that if the company fails to meet its commitments they must reimburse the City for any benefits received. The changes are as follows: a) the required phase 1 investment has been reduced from $10.4 million to $8 million and the required jobs have been reduced from 25 to 20; b) the required phase 2 investment has been reduced from $30 million to $27 million and the required jobs have been reduced from 100 to 80. So long as the Company meets these reduced threshold levels, it will not be in default of its responsibilities.
2. The phase 2 threshold date has been changed from the 5th year following the final phase 1 infrastructure payment to the 2nd year. This is a change that City staff requested, and it ensures that the Company must make required investments and create required jobs early in the phase 2 time period.
3. The documents approved on first reading provided that if the Company, after meeting the initial threshold date requirements for investment and jobs, failed to meet the investment and jobs thresholds in a subsequent year the Company would forfeit all future infrastructure payments under the Infrastructure Reimbursement Agreement. The revised language provides that failure to meet the investment and jobs thresholds for a single year (after meeting the initial threshold date requirements), results in the Company being ineligible to receive infrastructure reimbursement payments for that particular year, but the Company would remain eligible to receive payments for future years in which the investment and jobs thresholds were met.