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HomeMy WebLinkAbout1999-02-22 99-98 ORDERMte: February 221999 Item No. oo-oa Ite i/Subject: Designating Jordan's Meats Municipal Development District and Tax Increment Financing District and Adopting a Development Program for the District Responsible Department: Community and Fconomic Development This Resolve would approve not increment financing to assist Jordan's Meats in establishing a deli meat slicing and packaging operation at its 216 Thatcher Street location in Bangor. It authorizes the designation of Tax Increment Financing Distrito, a Development Program for the District, and a Credit EdmnCemmt Agreement with Jordan's. Under the Development Program for the District, Jordan's would invest $130,000 in real estate improvements and $2,000,000 in new machinery and equipment before April 1, 2001. The City would for twenty years return half of all new taxes paid by Jordan's on it investment in property improvements and new machinery and equipment made prior to Aprill,2001. Jmdsa'spmjects54newjobswillbecreated. Tommain eligible for a bill 50%reimburrement on new taxes paid, Jordan's will have to maintain a minimum of 35 jobs. (See attached Memo) i) .. IkeSmaent Head' Manager's Commeate: jZ ,Ma..m Q �y,p,pagadi/ City Manager Associated Informadow lh/ pu,uw&e,rC -- a rr .-•• Finance Legal Review: iY -City Solicitor Iotradueed Far: Passage First Reeding RHttrel Page l of 9"t, assiped to Councilor vaidanis February 22, 1999 _ CITY OF BANGOR Dealing Jordan's Meats Municipal Development District and (TITLE.)¢SDIU¢.._...._...._..............._.._................_.._..._...."............._.................._. Tax Increment Financing District and Adopting a Development Program for the District ByW city Council of de Oily ofBaµm RBBOLVBD. THAT, the City of Bangor, Maine hereby designates the "Jordan's Meats Municipal Development District and Tax Increment Financing District" and adopts the Development Program for the District as on file in the City Clerk's office, pursuant to the following terms and provisions: I. That, under and pursuant to the provisions of Title 30-A, Chapter 207 of the Maine Revised Statutes, as amended, the development program and financial plan endued "Jordan's Meats Mumupal Development District and Tax Increment Financing District" as presented to this meeting, a copy of which is hereby incorporated herein by reference and as part of the minutes to this meeting, is hereby approved as the Development Program for the District and for the reasons set forth therein, the City fills and determines that: desigmeon ofthe District and pursuit of the Development Program will make a contribution of the economic growth or well-being of the City ad to the betterment of the health, welfare or safety of its inhabitants, mcludmg employment opportunities, broadened and improved tax base and economic stimulus, constituting a good and valid public purpose and any adverse economic effect on any existing business is outweighed by the contribution made by the District and the Development Program to the economic growth or well-being of the City and the betterment of the health, welfare ant safety of its inhabitants and the City bother makes the other findings and determinations as sat font m said Development Program and the Exhibits thereto; and 2. Than, the area of the City of Bangor entitled Jordans Mems Municipal Development District and Tax Increment Financing District as more particularly described in said approved Development Program is hereby designated as "City of Bangor, Maine, Jordati s Meats Municipal Development Distant and Tax Increnant Financing District" ad such designation shall autoraazically become final and shall take full force and effect upon receipt by the City of approval of the District by the Maine Department of Economic & Community Development, without the requirevaat of any further action by the City, the City Council or any pay; and 3. That, the percentage of captured assessed value of said District to be rosined in accordance with the Development Program is hereby established as set forth in the Development forgone and Financial Plan; and 99-99 4. That, the CityMmiager is hereby authorized and directed, on behalf of the City of Bangor, Maine to execute ad submit to the Commissioner of Economic and Community Development far approval such applications and timber documentation as may be necessary or appropriate for final approval and establishment of the Jordan's Meats Municipal Development District and Tax Increment Financing District and its Development Program and Financial Phu; and pursuant to 30-A MRSA Section 5253; and the City Manager by, and hereby is, authorized mut empowered, at his discretion, from time to time, to make such technical revisions to the Development Program for the District as DECD or the City Manager deems reasonably necessary or convenient in order to facilitate the process for review and approval of the District by the Commissioner of the Department of Economic and Comrammy Development, so long as such revisions are not inconsistent with these resolutions or the basic structure and intent of the Development Program; and 5. The City Manager is hereby authorized and directed on behalf of the City of Bangor to execute and deliver, a Credit Enhancement Agreement substantially in the form attached to such Development Program and Financral Plan with such modificsfions thereto as the City Manager deems appropriate. I9 MW COUNCIL Pebnmry 22. 1999 Public Nearing Opened - No ane from the Tubllc came foreard Notion to close Pablic Nearing made and Seconded motion for Passage Made and Seconded Pa��edn 99-98 EE S OL VE Designating Jordan's Mesta Nuncipal Developmeat District sad Tax Increment Piumciog District and Mopting a Developneat Program for the District ea.e 99-98 MEMORANDUM February 12,1999 TO: Honorable Chair and Members of the City Council FR: Rod McKay, Director of Community & Economic Development RE: Jordan's Meats- Proposed Tax Increment Financing Program Jordan's Meas plans to establish a deli meat slicing and packaging operation at its 216 Thatcher Sheet property in Bangor. The new operation would provide a projected 54 new full timejobs with a projected $Imillion amual payroll. Jordan's would invest initially an estimated $130,000 in new real estate improvements and $1 million in machinery and equipment to establish two production lines, with another $1 million projected to he invested in machinery and equipment to establish two additional production lines prior to April 1, 2001. Jordan's has requested the City assist in its proposed new investment in Bangor in order to make the projected operational cons of a facility in Bangor more competitive with other potential locations. This would be accomplished by the Council designating a Municipal Development District and for Increment Financing District for Jordan's Meats and adopting a Development Program for the District providing for City reimbursement to Jordan's of 50% of new / incremental taxes paid to the City on its new investment A Council Order to that effect will be placed on the February 22 Council Agenda for your consideration. Last March Jordan's amounted it was consolidating its Maine meat processing operations for the retail and food service industries then taking place in its three Maine plains in Portland, Augusta atm Bangor. Less than 4 percent of the production was being done in the Bangor facility. The Bangor facility was closed and production was shifted to Portland and Augusta Twenty-eight Bangorjobs were lost. The reason for the closure stated by Jordan's at the time was that it bad in consolidate to be as con efficient as possible in order to effectively compete with other national food suppliers. Jordan's is now proposing a new operation in Bangor. High quality deli meats prepared in its Augusta and Portland plants would be transposed into the Bagger plant, sliced and packaged. The Bangor plant would ship over 90% of is production to out of state customers. Jordan's competes in an increasingly competitive market. The City's assistance provided through the Development Program is intended to help Jordan's be more con competitive and is essential to attracting this new development to the District. Jordan's Meas investment is important to the economy of the City and in the residents of the City. The City can assist Jordan's Meats by helping make the cost of the new facilities cost competitive. The new investment by Jordan's will expand the City's tax base and create new jobs, resulting in a public benefit. The proposed TIF assistance requires the creation of a Municipal Development District and Tax Increment Financing District consisting of property owned by Jordan's Meats 0 216 Thatcher 99-98 City council February 11, 1999 Page 2 Street in Bangor. The proposed Development Program and Financial Plan for the District provides for Jordan's to invest approximately $2,000,000 in the facility, resulting in the creation of approximately 40 m 50 new quality jobs in Bangor representing approximately $1,000,000 in additional annual payroll. The newjobs will represent gwhtyjobs with an attractive benefits package. Jordan's new investment in the District is anticipated to result in approximately $48,000 in annual new but revenues to the City. During the proposed 20 yew term of the District, 5W/ of the new incremental tax revenues will be bummed to Jordan's meats and 50% would be retained by the City. Thereafiw, all of the increment test revenues will be retained by the City. By providing for the reinvestment of pardon of the new or incremental not revenues created by Jordan's in the District, the City's tax base will w expanded and important new employment opportunities will be counsel ` Approval of the District and Development Pmgmm will not involve any risk to the City. No borrowing by the City will be required to support the project Existing tax revenues will not be affected in my way. The Program involves only new our revenues new tax revenue that will not be available to the City without the investment by Jordan's Meats. Your approval is recommended. Background (Provided by Jordan' Founded in 1927 by Emma and Joseph Jordan, Jordan's Meats bas enjoyed a 70 yew history of producing quality meat products, including Jordan's original signature natural casing franks. Through numerous acquisitions over the years, including its 1960 acquisition of C.H. Rice Company in Bangor, Jordan's hes developed an extensive portfolio of speciality meet brands, including Jordan's Earchsnw, Essem, Schultes Rice's Williams of Vermont, Healthy Trim, Tasty Bite, Ballpark Treat, and Perfectly Easy. Jordan'sismovaleadingpmeessorofpremium quality pmsliced deli meats, poultry and cheeses, processed bulk men products, award casing and skinless hot dogs, and fresh and cooked sausage. Jordan's heritage is one of providing the highest levels of quality and service to its testaments. That tradition combined with the strength of its national and regional brands and its commitment to innovation has resulted in exo-aordinwy growth of the Company. Jordan's bas established an outstanding customer base of 25 wholesalers and 26 supermarkct chains, including 8 of the top 10 and 17 of the top 20 U.S. supermarket chains with sales in 0150 States and m the U.S. military in Em qec. Jordan's proposes to invest approximately $2,000,000 in its Bangor fwility to serve its deli slice program. That program enables consumers to purchase pre-packaged sliced meati that are as fiesh as in thefill-serve deli with the convenience of not having m wait in that. Withavacuum- 99-98 City Council February, 11, 1999 Page 3 packaged, resealable bag, the consumer is provided with added convenience and freshness. The Bangor plant would ship over 90% of its production to out of stare customers. Accordingly, if Jordan's and its Bangor facility are to be successful, JoNan's most be able to compete nationally with major (in many cases multi -billion dollar) companies such as Hormel, Rosser, Sara Lee, Wilson, Swill-Ecbrich, and others. Those competitors, however, are located in States generally that have offered more substantial economic development incentives that are available in Maine as well as lower labor costs, lower transportation costs as a result of proximity to suppliers and customers and economies of scale found in Ing" companies. Jordan's is also faced with internal competition within its corporate structure. That competition is with affirated companies in other states such as Iowa that have excess capacity aml brat hope W be the site of company expansions. Those at Jordan's in Maine clearly would prefer that the Company be positioned economically m grow in the State of Maine st facilities such as the Brogue plant. Accordingly, approval of this Development Program is essential to enable Jordan's to remain cost competitive and an continue to expand. By helping Jordan's in expanding and remaining cost competitive, the Development Program will expand the City's tmc base and enhance the community and its economy by creating quarry new jobs and economic development. The existing Jordan's Meats project and related f ilities contumely pay over $35,000 in real estate tares to the City. The Capital Program is expected m generate approximately $48,000 annually (on average over 20 years) in additional tar revenues, a portion of which will be captured or retained m pay costs of the Caphal Program. The total Jokan's Mears' and affiliates' payroll in Bangor upon completion of the Capital Program will increase m over$1,000,000 annually. The project will have little or no impact on many City services such as schools and municipal services. BANGOR DAILY NEWS ,�Ba Mini 1�1 CITY UP ANKI BANGOR PUBLISHING COMPANY ® This is to certify the advertising 01 MAIN MEET �T _ 1J PO. Box 1918 IVUAY 22, rn'�vF BANGOR, MAINE 04402 1329 of:� y nrarae TELEPHONE MI -09080W FfQ 1. tj ly99 �I"Al A1% Purchasing Dept. ]jBJordav'e Meets Municipal Development Districts ll o Bangor, ME Affidavit of Publication Mini 1�1 CITY UP ANKI .BLS r� This is to certify the advertising rm MAIN AN AN 4 IVUAY 22, rn'�vF PAN0 " of:� y nrarae �I"Al A1% ]jBJordav'e Meets Municipal Development Districts ll o o -m mr wzM Ad TAI TL"ma.I'"�d TV Mlirork wee; publ'Lshed in the BANGOR DAB.Y NEWS u�ew`m �in�"en - amFeb. 12, 3999 - M vun WOMAN Ad111 Signed n'MVITM°im::°r:n.w.n':e".°r Mr �°,1�m m. a: Classified Advertising Manager Nancy 1. Golding two" A A the City own, wi mmWaNAMI Then personally appeared the above named (name of the officer All QNKNAJA PUAF6 An yr VAI AnAll ce AwPn° A who signed the deed, with her title), and aclmowledged the =VV u In ' a foregoing instrument to be her free act and deed in her FAVA"12, any said capacity and the free an and deed of said corporation. Before me, My <ommita y nts iNotay Public Pamela J. Tweedie