County OKs deals with Andros, Route 11 Chips

WOODSTOCK – Shenandoah County leaders backed deals this week intended to help two major businesses expand.

The Board of Supervisors voted unanimously to approve three performance agreements related to the planned $73 million expansion of Andros Foods North America’s production facility. Such agreements are becoming increasingly more popular as ways to promote business growth with tax incentives.

Specifically, the board approved the Governor’s Agriculture and Forestry Industries Development Grant Performance Agreement, the Governor’s Opportunity Fund Performance Agreement and a Local Implementation Agreement.

Chairman David Ferguson noted at the board’s meeting Tuesday that the additional tax revenue generated by Andros’ investment will cover the county’s $500,000 contribution. Officials have said they expect the investment to provide significantly more revenue than $500,000.

“It’s a good, economic development agreement,” Ferguson said.

The chairman thanked Brandon Davis, director of the county Office of Community Development, for his work on the expansion deal. Vice Chairman Conrad Helsley added that the Shenandoah Valley Partnership also played a role in the effort.

Agreements lay out the responsibilities of the county and the company, Davis explained Friday. Davis said such agreements appear to generate positive results.

“The way we’ve structured these agreements is the improvements to the facilities will be made and then once the improvements are made the assessed value of the property will increase,” David said. “The company will pay the increase in taxes based on the investment and then at that point once we’ve collected it we will rebate the portion of it as outlined in the agreement.

“So the county’s portion of it is not going to be a capital outlay before we have the cashflow to cover it,” Davis further explained.

Under the agreement with Andros, Shenandoah County will “release” $500,000 over three years as a match to other grant funds, in the form of partial rebates of the additional revenue received. Should Andros’ investments fail to generate the $500,000 in new revenue by 2018, the county will pay the required match and the firm will be obligated to repay any amount not covered by new revenue.

The county had a similar agreement with Mercury Paper approved years ago that called for the company to create a certain number of jobs within a set amount of time. However, the Board of Supervisors recently approved a request by Mercury Paper to extend the deadline to make good on the company’s promise to create the number of jobs required. Mercury Paper indicated that the economic downturn stifled expansion and the company likely would not create the number of jobs required by the deadline.

The agreement with Andros allows the board to extend the term if the company needs more time to create the jobs it promises, Davis explained. The agreement also includes a “clawback” clause that lets the board pull back the incentive.

Andros and state officials announced the plans in April to expand its Shenandoah County facility over the next three years to include additional production and warehouse space and equipment to increase apple-processing capacity. The company expects to create 160 new jobs through the expansion. The Virginia Economic Development Partnership worked with the county to secure the project.

Gov. Terry McAuliffe approved a $400,000 grant from the Governor’s Opportunity Fund to assist Shenandoah County with the project. McAuliffe also approved a $600,000 performance-based grant from the Virginia Investment Partnership program. The company will receive a $100,000 grant from the Governor’s Agriculture and Forestry Industries Development Fund through the Virginia Department of Agriculture and Consumer Services.

The board also voted unanimously to approve a grant performance agreement and a local implementation agreement with Small Fry Inc., also known as Route 11 Potato Chips. The county and the Industrial Development Authority are parties to the agreements.

The business plans to make a $1.2 million investment in its facility expected to create 13 new jobs and $586,000 in Virginia-grown product, Ferguson said. The county agrees to provide a $50,000 matching grant to the state to be given to the manufacturer over the next four years. The county can expect to cover the expense with additional tax revenue generated from the business’ expansion.

Also at the meeting, the board:
• Approved a request for a special entertainment permit for the annual Germanfest in Toms Brook on Sept. 12. It will be hosted by the Shenandoah Germanic Heritage Museum on the Hottel-Keller property at 11523 Back Road.
• Approved a request from Dagwood LLC to rezone property at 16467 Old Valley Pike, Edinburg, near Taylortown Road, from residential to business use for the purposes of operating a showroom and warehouse to market and sell flooring and carpeting. The Planning Commission recommended the board approve the request. Dagwood owners plan to move their business from the current site on Old Valley Pike near Landfill Road to the existing structure at 16467 Old Valley Pike.
• Approved a request to hold a rabies clinic at the Shenandoah County Animal Shelter. The shelter will hold the clinic from 10 a.m. to noon on Oct. 3.

Contact staff writer Alex Bridges at 540-465-5137 ext. 125, or abridges@nvdaily.com