Jackson County Commissioners this week, like the city of Marianna last week, approved a Memorandum of Understanding (MOU) last week with its governmental counterpart and an undisclosed company code-named “Blue Sky” as the two governing bodies try to assure that the for-profit manufacturing and distribution outfit sets up shop here. It would be the first big business to open up in the Endeavor business hub being developed by the county.
The county’s approval, however, is subject to the agreement being amended to more clearly state what the average wage would be for rank-and-file employees of the business. Currently, the average stated wage is a figure calculated by including managerial salaries, which are typically higher. Commissioner Chuck Lockey called for the clarification, saying he thought the general public, and potential employees, should be presented a more realistic picture of salary expectations for the majority of workers.
The document does not disclose the type of manufacturing the company does, nor does it disclose other details of the business. Marianna leadership approved the agreement without disclosing the name or function of the company involved, and the county also kept it under wraps.
Some of those involved in the process say divulging the name at this stage could jeopardize key funding from the state that would help provide incentives to help make the deal a reality.
Described as non-binding at this point, the MOU sets out “expectations, requirements and obligations that may develop as the project moves forward in anticipation of developing binding agreements among the parties.”
The MOU also includes a schedule of development. It calls for the start of engineering and architectural design processes this month. In October of this year, the schedule indicates an expectation of a grant approval from EDA, and receipt of the grant agreement in December. The schedule anticipates bids being sought in January of 2020 for infrastructure and building tasks. Construction of those elements is expected to begin in March, 2020, and to be completed in October 2020, with move-in and start-up expected that month as well. By June 2021, job requirements are expected to have been fulfilled.
The MOU lists “intentions” of each party, including the anticipated average wage to be paid employees of the company, and the incentives being potentially offered.
The intentions are listed below, taken verbatim from the most recent draft of the agreement.
The intentions of the County:
1. The County will seek available State and Federal grant funds estimated at $4,000,000 for the purpose of constructing a building complex suitable to BLUE SKY for distribution and manufacturing. The County and City will seek an additional $1,900,000 in grant funds to provide necessary infrastructure for the building complex including a paved access roadway, parking lots, stormwater treatment, water, sewer and natural gas.
2. The building and supporting facilities’ design and size must be mutually agreeable to both the County and BLUE SKY and within the budget of available grant funds. The County desires to accommodate the needs of BLUE SKY but reserves the right to incorporate within the building complex, design features that will be make the building useable to future tenants should BLUE SKY not continue to occupy the building. For example, the building interior may have a minimum ceiling clear span of 30 ft.
3. The County will provide property for the building to be located on the Endeavor (Dozier) property north of SR 276 on Mashburn Road. A minimum of 10 acres will be provided and reserved to allow for future expansion by BLUE SKY. The County will need to obtain release of the current land lease from PRIDE.
4. The County will provide a monthly grant economic development incentive to assist BLUE SKY with initial start up cost for the first five years of operation. The incentive will begin monthly starting with the start date of operations by BLUE SKY. The incentive will be paid on a monthly basis. For the first 36 months of operation the County will pay $11,000 per month. Beginning with month 37 to 60, the County will pay $5,500 per month. Therefore, the annual sum of the monthly payments will total $132,000 per year for years one to three and $66,000 per year for years four and five. This results for a five year grand total of $528,000 for the first five years of operation. This incentive payment is subject to and conditioned upon BLUE SKY’s continuous operation and fulfillment of its obligations under this and other associated agreement. Should Blue Sky not meet the job commitment number the County will not be required to pay this incentive.
5. At any time in the future, the County will allow for BLUE SKY to purchase the building and associated parking areas and land at a price that satisfies all grant requirements and satisfies any direct cost the County may have incurred in the construction of the building and support facilities and compensates the County for the land at a price not to exceed $20,000 per acre.
Intentions of the City of Marianna:
1. The City will cooperate with the County and BLUE SKY in obtaining grant funds. Specifically, the City will apply for DEO Rural Infrastructure Funds for road, stormwater, water, sewer and natural gas extension to the building complex.
2. The City will waive, pay or rebate City business license fees for the first two years. To the extent practical, the City will reduce building permit fees and utility connection fees.
3. The City will provide a monthly grant economic development incentive to assist BLUE SKY with initial start up cost for the first five years of operation. The incentive will begin monthly starting with the start date of operations by BLUE SKY. The incentive will be paid on a monthly basis. For the first 36 months of operation the City will pay $1,000 per month. Beginning with month 37 to 60, the City will pay $500 per month. Therefore, the annual sum of the monthly payments will total $12,000 per year for years one to three and $6,000 per year for years four and five. This results in grand total of $48,000 for the first five years of operation. This incentive payment is subject to and conditioned upon BLUE SKY’s continuous operation and fulfilment of its obligations under this and other associated agreement. Should Blue Sky not meet the job commitment number the City will not be required to pay this incentive.
Intentions of BLUE SKY:
1. BLUE SKY will provide all information required for grant application submittals in a timely manner.
2. BLUE SKY will enter into the necessary binding commitments as required by the grants. The anticipated grants are Department of Economic Opportunity (DEO) CDBG-ED grant and Rural Infrastructure Fund (RIF) grant and US Economic Development Administration (EDA).
3. BLUE SKY will commit to creating a minimum of 58 jobs within 12 months of issuance of the building Certificate of Occupancy. 51% (30 jobs) of the 58 jobs must meet the grant requirements as jobs available to Low and Moderate Income (LMI) persons.
4. The CDBG-ED grant will require BLUE SKY to enter a binding agreement to create the required 58 jobs. BLUE SKY will be subject to a claw-back provision in the agreement. If BLUE SKY fails to create the 58 jobs within approximately two years, BLUE SKY will be required to pay back the State $35,000 for each job not created less than the 58 jobs.
5. After the issuance of the Certificate of Occupancy, BLUE SKY intends to create 100 jobs within 3 years and 200 jobs within 5 years.
6. BLUE SKY intends to invest $5,000,000 in capital equipment within 5 years.
7. BLUE SKY intends to pay an average hourly wage of $18.94/hr plus $4.13/hr in benefits for a total of $23.07/hr which includes full benefits which is 134% of the Jackson County average wage rate.
(Editor’s note: County Commissioners have asked that wage figure above be recalculated by removing managerial salaries from the mix to arrive at an average starting wage for the rank and file).
8. BLUE SKY will be required by the grant conditions of CDBG & EDA to pay the County fair market rent. Fair market rent on a net-net-net basis is estimated at $2.00 per sf which for a 50,000 sf building is $100,000 annually. As a triple net lease – BLUE SKY will be responsible for all cost including all taxes, insurance including building insurance, all building maintenance, all site maintenance and all utilities.
9. BLUE SKY will pay all City, County and School Board ad-valorem taxes estimated at: $11,000 for City, $31,000 for County and $24,000 for School Board giving a total of $66,000 per year. This is based upon a building taxable value of $4,000,000.