open session agenda economic development authority...

EDA/IDA Board Meeting October 6, 2017

OPEN SESSION AGENDA

ECONOMIC DEVELOPMENT AUTHORITY (EDA) AND

INDUSTRIAL DEVELOPMENT AUTHORITY (IDA)

October 6, 2017 - 8:00 A.M.

Two City Center 11820 Fountain Way, Suite 301

Newport News, Virginia

1. Call to Order – Chair Minter

2. Port of Virginia Economic and Infrastructure Development Grant Program Presentation to Continental Automotive Systems – Mr. Diamonstein, Board of Commissioners, Port of Virginia and Mr. Lindsey, Manager, Human Relations, Continental Automotive Systems

3. Newport News Marriott at City Center

A. Conference Center Marketing 2016 Expense Review – Ms. Jones, Manager, Dixon Hughes Goodman, LLP

B. Conference Center 2016 Activity Review – Mr. Butcher, General Manager and Ms. Coyne, Director of Sales and Marketing

4. Ferguson Enterprises, Inc.’s Expansion Project in City Center at Oyster Point – Mrs. Kingston

A. Authorize that Certain Amendment to the Second Amended and Restated Development Agreement, dated as of February 21, 2005, between the EDA and Newport News Town Center, L.L.C., in Connection with the EDA’s Purchase of Development Rights Associated with the Planned Expansion by Ferguson Enterprises, Inc.

B. Authorize that Certain Expansion/Relocation Cost Reduction Enterprise Zone Incentive Agreement by and between the EDA and Ferguson Enterprises, Inc.

C. Authorize that Certain Agreement of Purchase and Sale of Commercial Real Estate by and between the EDA and Ferguson Enterprises, Inc.


D. Authorize that Certain Commonwealth’s Development Opportunity Fund Performance Agreement by and among the City of Newport News, Ferguson Enterprises, Inc. and the EDA

E. Authorize a Design Services Proposal and Contract from Saunders + Crouse Architects, LLC, for Design Services for the Fourth Public Parking Garage and Extension of Pearl Way in City Center at Oyster Point, and Funding, in an Amount Not to Exceed $563,440

F. Authorize a Scope of Services under City of Newport News Annual Services Contract #2017-2613-13 with McPherson Consulting, LLC for a Traffic Impact Analysis in Connection with the Fourth Public Parking Garage and Extension of Pearl Way in City Center at Oyster Point, and Funding, in an Amount Not to Exceed $92,000

5. Quarterly Hampton Roads Economic Development Alliance Report – Mr. Miller

6. Quarterly Workforce Development Report – Mr. James

7. Quarterly Business Retention Report – Mr. Johnson

[BREAK] 8. Secretary/Treasurer’s Report – Mrs. Kingston 9. Assistant Secretary’s Report – Ms. Croushore

10. Madison Government Affairs’ Consultant Report

11. Closed Session (Section 2.2-3711.A):

Real Estate (3) Prospective Business (5)


12. Reconvene Open Session (Section 2.2 – 3712 (D)) 13. Action(s) Coming Out of Closed Session 14. Committee Reports

Design Review Committee A. Committee Report – Ms. Aldrich B. Board Ratification Executive Committee A. Committee Report – Ms. Greene

Marketing Committee A. Committee Report – Ms. Aldrich

Revolving Loan Fund Committee A. Committee Report – Ms. Smith-Brown B. Board Ratification

15. Approval of Minutes of the Regular Meeting of September 1, 2017 16. Unfinished Business 17. New Business 18. Adjournment


Documents Provided:

A. Agenda Documents

1. Draft First Amendment to Second Amended and Restated Development Agreement Between EDA and Newport News Town Center, L.L.C. (To be Provided Under Separate Cover)

2. Draft Expansion/Relocation Cost Reduction Enterprise Zone Incentive Agreement By and Between the EDA and Ferguson Enterprises, Inc.

3. Draft Agreement of Purchase and Sale of Commercial Real Estate By and Between the EDA and Ferguson Enterprises, Inc. (To be Provided Under Separate Cover)

4. Draft Commonwealth’s Development Opportunity Fund Performance

Agreement By and Among the City of Newport News, Ferguson Enterprises Inc. and the EDA

5. Monthly Financial Report

6. Committee Meeting Schedule

7. Motion to Go Into Closed Session

8. September 1, 2017 Regular Meeting Minutes

P:\IDA\IDA17-18\Board Meetings\October 2017\Open Session Board Package\OPEN SESSION AGENDA - October 2017.docx

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EXPANSION/RELOCATION COST REDUCTION

ENTERPRISE ZONE INCENTIVE AGREEMENT

THIS EXPANSION/RELOCATION COST REDUCTION ENTERPRISE ZONE

INCENTIVE AGREEMENT (this “Agreement”) is made this ____ day of October, 2017, by and

between the ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF NEWPORT

NEWS, VIRGINIA, a political subdivision of the Commonwealth of Virginia (the "EDA") and

FERGUSON ENTERPRISES, INC., a Virginia corporation, together with its affiliates,

collectively hereinafter (“FEI”), authorized to do business in Virginia, (EDA and FEI

collectively referred to as the “Parties”).

WHEREAS, FEI has announced the expansion of certain operations in the City of

Newport News, Virginia (the “City”) to combine and grow its information technology and sales

support operations into a new campus in City Center at Oyster Point (the “Campus”) and the

creation of a significant number of new jobs, as outlined below, in the City; and

WHEREAS, EDA, in order to attract the FEI Project, as hereinafter defined, has offered

certain Enterprise Zone benefits to be further described below (the "Expansion/Relocation Cost

Reduction Enterprise Zone Incentive" or the "Incentive"); and

WHEREAS, FEI plans to invest approximately $68.4 million in new real estate

improvements at the Campus and approximately $14.4 million in new business personal property

at the Campus; FEI also plans to create approximately 350 new jobs in the City with salaries

averaging $45,000 annually (collectively, the “FEI Project”); and

WHEREAS, FEI will receive the Incentive based upon its projected employment

expansion, average wage and taxable investment due to the location of the FEI Project at the

Campus; and

WHEREAS, EDA and FEI both recognize that the EDA Grants and Initial EDA Grants,

as defined hereinafter, will be based upon the amount of taxes actually paid by FEI; and

WHEREAS, EDA and FEI have entered into an Agreement of Purchase and Sale of

Commercial Real Estate (the “Purchase Agreement”) dated October ____, 2017, and anticipate

entering into a Parking License Agreement (the “Parking Agreement”), further outlining the FEI

Project; and

WHEREAS, FEI has been awarded a Commonwealth’s Development Opportunity Fund

Grant in the amount of $2 million, the local match for which is being delivered through donated

land, further outlined and described in the Commonwealth’s Development Opportunity Fund

Performance Agreement and Purchase Agreement; and

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WHEREAS, EDA and FEI desire to set out the terms and conditions of the

Expansion/Relocation Cost Reduction Enterprise Zone Incentive.

NOW, THEREFORE, THIS AGREEMENT WITNESSETH: That for and in

consideration of the foregoing, EDA and FEI hereby agree as follows:

1. WAIVER OF PARKING AND INFRASTRUCTURE CONTRIBUTION AND

EDA GRANTS

A. Investment: As part of the FEI Project, FEI plans to construct and equip its

Campus through the improvement of real property and the purchase of business personal

property, the cost of which is anticipated to total $82.8 million, and plans to create approximately

350 new jobs in the City with salaries averaging $45,000 annually, collectively the “Investment.”

B. Waiver of Parking and Infrastructure Contribution: Through the Incentive

and to support the Investment, the EDA shall waive the parking and infrastructure contribution

required of property owners located in City Center at Oyster Point (the “Waiver”). Based upon

anticipated parking needs, the estimated value of the Waiver is $2.7 million. The Waiver is

further outlined and described in the Parking Agreement.

C. EDA Grants: Through the Incentive, the EDA shall grant to FEI an amount

equal to 50% of the taxes on the Net New Taxable Investment, as hereinafter defined, 50% of the

taxes on the real estate land value of the Campus, and 50% of any leasehold taxes levied on FEI

for parking spaces in City Center at Oyster Point, actually paid by FEI semi-annually to the City

(the "EDA Grants") during the course of the Grant Period, as hereinafter defined, and subject to

the terms outlined below. Unless mutually agreed otherwise, the Grant Period shall commence

on the first day of the first calendar year following the year during which FEI receives its final

certificate of occupancy for its first building at the Campus (the “EDA Grants Commencement

Year”).

Beginning with the date of acquisition of the real estate for the Campus by FEI and ending on the

last day of the calendar year immediately preceding the EDA Grants Commencement Year, FEI

shall also receive grants associated only with the taxes paid on the real estate land value of the

Campus (the “Initial EDA Grants”). Initial EDA Grants shall be in an amount equal to 50% of

the taxes paid on the real estate land value of the Campus.

D. Definitions:

(i) Taxable Investment means the total taxable value of the Campus

calculated in accordance with applicable codes and regulations, and all improvements therein,

and any of FEI’s business personal property, located at the Campus.

(ii) Net New Taxable Investment means the positive change in Taxable

Investment occurring from the date hereof through the end of the Grant Period, segregated into

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(a) real property improvement taxable assessment due to the construction or alteration of real

property improvements as measured against those real property improvement assessments in

effect on July 1, 2017, which, for the purposes of this Agreement, was $0, and (b) business

personal property assessments as measured against those assessments in effect on January 1,

2017, which was $0.

E. Grant Period: The Great Period (the “Grant Period”) shall commence on the first

day of the EDA Grants Commencement Year and shall end on the last day of the tenth calendar

year thereafter. The EDA Grants will be delivered in a series of 20 semi-annual grants over the

Grant Period. The Initial EDA Grant will be delivered in a series of semi-annual grants over the

period commencing on the date of the acquisition of the real estate for the Campus by FEI and

ending on the last day of the calendar year immediately preceding the EDA Grants

Commencement Year.

F. Other Conditions: As a condition of FEI receiving the EDA Grants and Initial

EDA Grants, all real estate taxes and assessments assessed by the City on all FEI properties in

Newport News and all taxes and assessments assessed by the City on the FEI machinery and

tools and business personal property, as well as any and all other taxes and fees owed to the City

by FEI, must be current, in good standing and not delinquent. If FEI is contesting any assessment

or levy by the City, then the EDA may delay delivery of any EDA Grant or Initial EDA Grant

until such matters between FEI and the City are resolved.

2. ENTERPRISE ZONE CRITERIA

A. Minimum Qualification Criteria: The “Minimum Qualification Criteria” to be

used in determining FEI’s eligibility for the Incentive for the Grant Period are as follows: (1) a

taxable capital investment by or on behalf of FEI at the Campus of at least $2,500,000 in real

property improvements, machinery and equipment and/or business personal property to be

measured by the cost of improvements to real estate and original cost of machinery and tools

property and/or business personal property newly taxed in the City at the Campus; and (2) the

creation of at least 25 new full time equivalent positions. The term "full time equivalent

positions" shall mean employees or contract workers of FEI in the City, working a minimum of

35 hours per week. The term “job” as used in this Agreement, above or below, shall have the

same meaning as “full time equivalent positions”. The Minimum Qualification Criteria must be

maintained through the Grant Period.

B. Calculating the Grant Amount: The mechanism by which the EDA Grants are

calculated is as follows: EDA will receive a grant from the City (the "City Grant") subject to

appropriation in approximately August and in February of the applicable year equal to the sum

of:

(i) 50% of the taxes on Net New Taxable Investment at the Campus paid to

the City by or for the benefit of FEI during each year of the Grant Period, and

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(ii) 50% of the real estate taxes on the land value of the Campus, paid to the

City by or for the benefit of FEI during each year of the Grant Period; and

(iii) 50% of the leasehold taxes on parking spaces in City Center at Oyster

Point paid to the City by or for the benefit of FEI during each year of the Grant Period.

In no case will more than 20 City Grants be made within the Grant Period. The City Grants will

be calculated and paid semi-annually.

In the case of the Initial EDA Grants, the City Grants shall be equal to 50% of the real estate

taxes on the land value of the Campus. The EDA Grants and Initial EDA Grants will be equal to

the City Grants paid in accordance with this Agreement.

C. Grant Delivery: Provided that FEI has paid to the City all applicable taxes and

assessments actually due in a timely manner, the EDA shall deliver the EDA Grants and Initial

EDA Grants to FEI no later than (i) July 31st of the applicable year for the first semi-annual

installment and (ii) the following January 31st for the second semi-annual installment.

D. Grant Adjustments: If after a payment of a semi-annual grant by the EDA to

FEI, the City adjusts the taxes or assessments of the Taxable Investment, the land value of the

Campus or leasehold taxes on parking spaces in City Center at Oyster Point, and issues a refund

to FEI of taxes and assessments paid by FEI on the Taxable Investment, land value of the

Campus or leasehold taxes on parking spaces in City Center at Oyster Point, FEI shall reimburse

the EDA 50% of the amount refunded by the City or by mutual agreement of the Parties 50% of

the amount refunded may be deducted by the EDA from subsequent grant payments.

3. GRANT TERMINATION

A. If FEI fails to meet the Minimum Qualification Criteria to receive the Incentive

by the December 31st immediately preceding the first year of the Grant Period and/or if FEI fails

to maintain the Minimum Qualification Criteria in each year of the Grant Period, this Agreement

shall terminate, unless extended by mutual agreement of the Parties.

B. This Agreement shall terminate on December 31 of the last year of the Grant

Period, unless the Parties have not resolved any claims or disputes arising from this Agreement,

in which case this Agreement shall be continued until any and all such disputes have been

resolved.

4. DISPUTE RESOLUTION

The Parties agree to resolve any claims or disputes arising from this Agreement through

mediation. The Parties shall share equally in the cost of such mediation. If mediation does not

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resolve the claim or dispute, then the Parties may negotiate a binding arbitration agreement or the

Parties may seek redress in the Circuit Court of the City of Newport News, Virginia.

5. NOTICES

Any notice required or permitted to be given hereunder shall be in writing and may be

given by personal delivery or by certified mail, return receipt requested, and if given personally

or by certified mail, shall be deemed made and sufficiently given if addressed to FEI or to EDA

at the address noted herein below, receipt deemed received four (4) days after certified mailing.

Either party may by notice to the other specify a different address for notice purposes. A copy of

all notices required or permitted to be given to EDA hereunder shall be concurrently transmitted

to such party or parties at such address as EDA may from time to time hereafter designate by

notice to FEI.

EDA: Economic Development Authority of the

City of Newport News, Virginia

ATTN: Secretary/Treasurer

c/o Department of Development

2400 Washington Avenue 3rd

Floor

Newport News, Virginia 23607

COPY TO: Raymond H. Suttle, Jr., Esquire

Conway H. Shield, III, Esquire

Jones, Blechman, Woltz & Kelly, P.C.

701 Town Center Drive, Suite 800


FEI: Ferguson Enterprises, Inc.

12500 Jefferson Avenue

Newport News, VA 23602

Attention: Carl Briener, Vice President - Facilities

COPY TO: Ferguson Enterprises, Inc.


Newport News, VA 23602

Attention: Steven D. Adcox, Esq.

6. MISCELLANEOUS

A. Entire Agreement; Amendments: This Agreement constitutes the entire

agreement among the Parties hereto as to the Incentive, and may not be amended or modified,

except in writing, signed by each of the Parties hereto. This Agreement shall be binding upon

and inure to the benefit of the Parties hereto and their respective permitted successors and

permitted assigns. FEI may not assign its rights and obligations under this Agreement without

the prior written consent of the EDA, such consent not to be unreasonably conditioned, delayed

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or withheld. Notwithstanding the foregoing, FEI shall be able to assign its rights and obligations

under this Agreement to any person or entity which controls, is controlled by, or is under

common control with FEI, or to any person or entity resulting from the merger or consolidation

with FEI, or to any person or entity which acquires all assets of FEI as a going concern of the

business that is being conducted on the Campus, provided that said assignee assumes, in full, the

obligations of FEI under this Agreement.

B. Governing Law; Venue: This Agreement is made, and is intended to be

performed, in the Commonwealth of Virginia and shall be construed and enforced by the laws of

the Commonwealth of Virginia. Jurisdiction and venue for any litigation arising out of or

involving this Agreement shall lie in the Circuit Court of the City of Newport News, Virginia,

and such litigation shall be brought only in such court.

C. Counterparts: This Agreement may be executed in one or more counterparts,

each of which shall be an original, and all of which together shall be one and the same

instrument.

D. Severability: If any provision of this Agreement is determined by a court of

competent jurisdiction to be unenforceable, then the remaining provisions of this Agreement

shall, in the discretion of the EDA, be voidable or interpreted as in effect as if such

unenforceable provisions were not included therein.

E. Enterprise Zone Updates: The EDA agrees to keep FEI informed of any

changes to state or local Enterprise Zone programs that may affect FEI.

F. Reporting: FEI shall provide, at its sole expense, to the EDA, detailed un-audited

verification, reasonably satisfactory to the EDA, of FEI’s progress toward and retention of the

Investment requirements. Such progress reports will be provided annually on April 1 and will

cover the prior January 1 – December 31 calendar year, beginning on April 1, 2019, and

continuing through the end of the Grant Period. The first report may include any capital

investment or job creation occurring on or after May 1, 2017. Following the submission of each

report, the EDA will have 30 days from the receipt of such report to make its determination if

FEI has met and maintained the Minimum Qualification Criteria and to notify FEI should grant

termination apply in accordance with Section 3(A).

7. DRAFTER

No party or parties to this Agreement shall be deemed to be the drafter of this Agreement,

and if this Agreement shall be construed by a court of law, such Court shall not construe any

portion of this Agreement deemed ambiguous against any party as the drafter.

[REMAINDER OF PAGE INTENTIONALLY BLANK; EXECUTION PAGE FOLLOWS]

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WITNESS the execution hereof on the day and year first above written.

ECONOMIC DEVELOPMENT AUTHORITY OF

THE CITY OF NEWPORT NEWS, VIRGINIA

By:____________________________________

C. Gary Minter, Chair

ATTEST:

By:_____________________________________

Florence G. Kingston, Secretary/Treasurer

Approved as to Form for the Economic

Development Authority of the


By:_____________________________________

Raymond H. Suttle, Jr., Esquire

Ferguson Enterprises, Inc.

A Virginia corporation

By:

Title:

its duly authorized signatory

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Ferguson COF Performance Agreement 1

I-1488754.3

COMMONWEALTH’S DEVELOPMENT OPPORTUNITY FUND

PERFORMANCE AGREEMENT

This PERFORMANCE AGREEMENT made and entered this ____ day of

__________, 2017, by and among the CITY OF NEWPORT NEWS, VIRGINIA (the

“Locality”), a political subdivision of the Commonwealth of Virginia (the “Commonwealth”),

FERGUSON ENTERPRISES, INC. (the “Company”), a Virginia corporation, and the

ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF NEWPORT NEWS,

VIRGINIA (the “Authority”), a political subdivision of the Commonwealth.

WITNESSETH:

WHEREAS, the Locality has been awarded a grant of and expects to receive $2,000,000

from the Commonwealth’s Development Opportunity Fund (a “COF Grant”) through the

Virginia Economic Development Partnership Authority (“VEDP”) for the purpose of inducing

the Company to construct and operate an office, sales and information technology facility in

City Center at Oyster Point in the Locality (the “Facility”), thereby making a significant Capital

Investment, and creating and Maintaining a significant number of New Jobs, as such capitalized

terms are hereinafter defined;

WHEREAS, the Locality is willing to provide the COF Grant funds to the Authority

with the expectation that the Authority will provide the funds to or for the use of the Company,

provided that the Company promises to meet certain criteria relating to Capital Investment and

New Jobs;

WHEREAS, the Locality, the Authority and the Company desire to set forth their

understanding and agreement as to the payout of the COF Grant, the use of the COF Grant

proceeds, the obligations of the Company regarding Capital Investment and New Jobs, and the

repayment by the Company of all or part of the COF Grant under certain circumstances;

WHEREAS, the construction and operation of the Facility will entail a capital

expenditure by or on behalf of the Company of approximately $82,800,000, of which

approximately $68,400,000 will be invested in the construction and up-fit of the building and

approximately $14,400,000 will be invested in furniture, fixtures and equipment;

WHEREAS, the construction, equipping and operation of the Facility will further entail

the creation and Maintenance of 434 New Jobs; and

WHEREAS, the stimulation of the additional tax revenue and economic activity to be

generated by the Capital Investment and New Jobs constitutes a valid public purpose for the

expenditure of public funds and is the animating purpose for the COF Grant:

NOW, THEREFORE, in consideration of the foregoing, the mutual benefits, promises

and undertakings of the parties to this Agreement, and other good and valuable consideration,


I-1488754.3

the receipt and sufficiency of which are hereby acknowledged, the parties covenant and agree as

follows.

Section 1. Definitions.

For the purposes of this Agreement, the following terms shall have the following

definitions:

“Capital Investment” means a capital expenditure by or on behalf of the Company in the

acquisition or improvement of real property (including buildings, fixtures and other

improvements thereon), tangible personal property, or both, at the Facility. The Capital

Investment must be in addition to the capital improvements at the Facility as of May 1, 2017.

“Maintain” means that the New Jobs will continue without interruption from the date of

creation through the Performance Date. Positions for the New Jobs will be treated as

Maintained during periods in which such positions are not filled due to (i) temporary reductions

in the Company’s employment levels (so long as there is active recruitment for open positions),

(ii) strikes, and (iii) other temporary work stoppages.

“New Job” means new permanent full-time employment at the Facility or elsewhere at

headquarters-related operations in the Locality or the City of Hampton, whether as an employee

of the Company or as an independent contractor or employee of an independent contractor of

the Company, for which the standard fringe benefits are provided for the employee by his or her

employer and for which, with respect to all New Jobs counted toward the employment goals

herein, the employee receives an average annual wage of at least $45,000. Each New Job must

be of an indefinite duration and require a minimum of either (i) 35 hours of an employee’s time

per week for the entire normal year of the Company’s operations, which “normal year” must

consist of at least 48 weeks, or (ii) 1,680 hours per year. Seasonal or temporary positions,

positions created when a job function is shifted from an existing location in the Commonwealth,

and positions with construction contractors, vendors, suppliers and similar multiplier or spin-off

jobs shall not qualify as New Jobs. The New Jobs must be in addition to the 2,011 full-time

jobs at headquarters-related operations in the Locality or the City of Hampton as of May 1,

2017.

“Performance Date” means January 1, 2022. If the Locality, in consultation with the

Authority and VEDP, deems that good faith and reasonable efforts have been made and are

being made by the Company to achieve the Targets, the Locality may request an extension of

the Performance Date by up to 15 months. Any extension of the Performance Date shall require

the prior approval of the Board of Directors of VEDP. If the Performance Date is extended, the

Locality shall send written notice of the extension to the Authority, the Company and VEDP

and the date to which the Performance Date has been extended shall be the “Performance Date”

for the purposes of this Agreement.

“Targets” means the Company’s obligations to make Capital Investments of at least

$82,800,000 and to create and Maintain at least 434 New Jobs, all as of the Performance Date.


I-1488754.3

“Virginia Code” means the Code of Virginia of 1950, as amended.

Section 2. Targets; Statutory Criteria.

(a) Targets: The Company will construct and operate the Facility in the Locality,

make a Capital Investment of at least $82,800,000, and create and Maintain at least 434 New

Jobs, all as of the Performance Date.

(b) Encouragement to Offer New Jobs to Residents of the Commonwealth: The

Locality and the Authority hereby strongly encourage the Company to ensure that at least 30%

of the New Jobs are offered to “Residents” of the Commonwealth, as defined in Virginia Code

Section 58.1-302. In pertinent part, that definition includes natural persons domiciled in

Virginia or natural persons who, for an aggregate of more than 183 days of the year, maintained

a place of abode within the Commonwealth, whether domiciled in the Commonwealth or not.

(c) Prevailing Wage; Unemployment and Poverty Rates: The average annual wage

of the New Jobs of at least $45,000 is less than the prevailing average annual wage in the

Locality of $51,227, but is more than 85% of that prevailing average annual wage ($43,543).

The Locality is a high-unemployment locality, with an unemployment rate for 2016, which is the

last year for which such data is available, of 5.1% as compared to the 2016 statewide

unemployment rate of 4.0%. The Locality is a high-poverty locality, with a poverty rate for

2015, which is the last year for which such data is available, of 16.8% as compared to the 2015

statewide poverty rate of 11.2%.

(d) Disclosure of Political Contributions: The Company acknowledges that the

name of the Company will be shared by VEDP with the Governor of Virginia, and any campaign

committee or political action committee associated with the Governor. The Company

acknowledges that within 18 months of the date of this Performance Agreement, the Governor,

his campaign committee, and his political action committee will submit to the Virginia Conflict

of Interest and Ethics Advisory Council a report listing any contribution, gift, or other item with

a value greater than $100 provided by the Company to the Governor, his campaign committee, or

his political action committee, respectively, during the period from the date of the Company’s

application for the COF Grant through the one-year period immediately after the date of this

Agreement.

Section 3. Disbursement of COF Grant.

(a) Disbursement of the COF Grant: By no later than January 1, 2019, the Locality

will request the disbursement to it of the COF Grant. If not so requested by the Locality by

January 1, 2019, this Agreement will terminate. The Locality and the Company will be

entitled to reapply for a COF Grant thereafter, based upon the terms, conditions and availability

of funds at that time.

The COF Grant in the amount of $2,000,000 will be paid to the Locality, upon its

request. Within 30 days of its receipt of the COF Grant proceeds, the Locality will disburse the

COF Grant proceeds to the Authority. Within 30 days of its receipt of the COF Grant proceeds,


I-1488754.3

the Authority will disburse the COF Grant proceeds to the Company as an inducement to the

Company to achieve the Targets.

(b) Use of the COF Grant Proceeds: The Company will use the COF Grant

proceeds for construction or build-out of a privately-owned building at the Facility, as permitted

by Section 2.2-115(D) of the Virginia Code.

Section 4. Break-Even Point; State and Local Incentives.

(a) State-Level Incentives: VEDP has estimated that the Commonwealth will reach

its “break-even point” by the Performance Date. The break-even point compares new revenues

realized as a result of the Capital Investment and New Jobs with the Commonwealth’s

expenditures on incentives, including but not limited to the COF Grant. With regard to the

Facility, the Commonwealth expects to provide incentives in the following amounts:

Category of Incentive: Total Amount

COF Grant $2,000,000

Virginia Jobs Investment Program (“VJIP”) (Estimated) 347,200

Enterprise Zone Real Property Improvement Grant (“EZRPIG”)

(Estimated)

200,000

Enterprise Zone Job Creation Grant (“EZJCG”) (Estimated) 1,251,200

The proceeds of the COF Grant shall be used for the purposes described in Section 3(b).

The VJIP grant proceeds shall be used by the Company to pay or reimburse itself for

recruitment and training costs. The proceeds of the EZRPIG and the EZJCG may be used by the

Company for any lawful purpose.

(b) Locality-Level Incentives: The Locality expects to provide the following

incentives, as matching grants or otherwise, for the Facility:

Category of Incentive: Total Amount

Direct Company Incentive:

Phase I Land Contribution $ 2,977,000

Waived Parking and Infrastructure Contribution 2,700,000

Enterprise Zone Expansion/Relocation Cost Reduction (ERCR)

Incentive Grants – 10 Years

4,800,000

Skybridge Connection(s) to Parking Garage 500,000

Dynamic Plaza, Landscaping, Public Art and Lighting

Contribution

500,000

Public Infrastructure:

City Center Parking Garage 25,500,000

Construction of Pearl Way Extended 700,000


I-1488754.3

If, by the Performance Date, the funds disbursed or committed to be disbursed by the

Authority to the Company total less than the $2,000,000 COF Grant local match requirement,

the Authority, subject to appropriation, will make an additional grant to the Company of the

difference at the Performance Date, so long as the Company has met its Targets. It is

acknowledged that the Phase I Land Contribution will satisfy the COF Grant local match

requirement.

The contribution of the Phase I Land, the Waived Parking and Infrastructure

Contribution, the Skybridge Connection(s) to Parking Garage, and the Dynamic Plaza,

Landscaping, Public Art and Lighting Contribution will reflect cost savings to the Company.

The City Center Parking Garage and the Construction of Pearl Way Extended will provide

additional capacity and enhance the parking and traffic system in City Center for the benefit of

the Company’s employees. The proceeds of the Locality’s ERCR may be used by the Company

for any lawful purpose.

Section 5. Repayment Obligation.

(a) If Statutory Minimum Eligibility Requirements are Not Met: Section 2.2-115 of

the Virginia Code requires that the Company make a Capital Investment of at least $1,500,000

and create and Maintain at least 15 New Jobs in order to be eligible for the COF Grant. Failure

by the Company to meet either of these statutory minimum eligibility requirements by the

Performance Date shall constitute a breach of this Agreement and the entire COF Grant must be

repaid by the Company to the Authority.

(b) Allocation of COF Proceeds: For purposes of repayment under subsection (c),

the COF Grant is to be allocated as 50% ($1,000,000) for the Company’s Capital Investment

Target, and 50% ($1,000,000) for the Company’s New Jobs Target.

(c) If Statutory Minimum Eligibility Requirements are Met: The provisions of this

subsection (c) shall become applicable only if the Company has met the statutory minimum

eligibility requirements set forth in subsection (a). If the Company has met at least 90% of

both of the Targets at the Performance Date, then and thereafter the Company is no longer

obligated to repay any portion the COF Grant. If the Company has not met at least 90% of

either or both of its Targets at the Performance Date, the Company shall repay to the Authority

that part of the COF Grant that is proportional to the Target or Targets for which there is a

shortfall. For example, if at the Performance Date, the Capital Investment is only $41,400,000

(reflecting achievement of 50% of the Capital Investment Target) and only 217 New Jobs have

been created and Maintained (reflecting achievement of 50% of the New Jobs Target), the

Company shall repay to the Authority 50% of the moneys allocated to the Capital Investment

Target ($500,000) and 50% of the moneys allocated to the New Jobs Target ($500,000). As a

further example, if at the Performance Date, the Capital Investment is $78,660,000 (reflecting

achievement of 95% of the Capital Investment Target) and only 260 New Jobs have been

created and Maintained (reflecting achievement of approximately 60% of the New Jobs Target),

the Company shall not be required to repay to the Authority any of the moneys allocated to the

Capital Investment Target, but will be required to repay 40% of the moneys allocated to the

New Jobs Target ($400,000).


I-1488754.3

(d) Determination of Inability to Comply: If the Locality or VEDP shall determine

at any time prior to the Performance Date (a “Determination Date”) that the Company is unable

or unwilling to meet and Maintain its Targets by and through the Performance Date, and if the

Locality, the Authority or VEDP shall have promptly notified the Company of such

determination, the Company must repay to the Authority all of the COF Grant proceeds

previously disbursed to the Company. In such event, the Authority will repay to VEDP all of

the COF Grant proceeds repaid to the Authority and all COF Grant proceeds not previously

disbursed to the Company. Such a determination will be based on such circumstances as a

filing by or on behalf of the Company under Chapter 7 of the U.S. Bankruptcy Code, the

liquidation of the Company, an abandonment of the Facility by the Company or other similar

significant event that demonstrates the Company will be unable or is unwilling to satisfy the

Targets for the COF Grant (in the latter case, only after the Company has been provided with

written notice of the event and sixty (60) days to provide the Authority, Locality and VEDP

with evidence, reasonably satisfactory to the Authority, Locality and VEDP, that Company is

able and willing to meet and maintain its Targets by and through the Performance Date).

(e) Repayment Dates: Such repayment shall be due from the Company to the

Authority within ninety days of the Performance Date or the Determination Date, as

applicable. Any moneys repaid by the Company to the Authority hereunder shall be repaid by

the Authority to the Locality and shall be repaid by the Locality promptly to VEDP for

redeposit into the Commonwealth’s Development Opportunity Fund. The Locality and the

Authority shall use their best efforts to recover such funds, including legal action for breach of

this Agreement. Neither the Locality nor the Authority shall have any responsibility for the

repayment of any sums payable by the Company hereunder unless said sums have been received

by the Authority from the Company.

Section 6. Company Reporting.

The Company shall provide, at the Company’s expense, detailed verification reasonably

satisfactory to the Locality, the Authority and VEDP of the Company’s progress on the Targets.

Such progress reports will be for the January 1 – December 31 calendar year and will be

provided annually, starting at April 1, 2019, and covering the prior calendar year. Further, the

Company shall provide such progress reports at such other times as the Locality, the Authority

or VEDP may reasonably require.

With each such progress report, the Company shall report to VEDP the amount paid by

the Company in the prior calendar year in Virginia corporate income tax. VEDP has represented

to the Company that it considers such information to be confidential proprietary information

that is exempt from public disclosure under the Virginia Freedom of Information Act and that

such information will be used by VEDP solely in calculating aggregate return on invested

capital analyses for purposes of gauging the overall effectiveness of economic development

incentives.

The Company hereby authorizes the Locality, including the Locality’s Commissioner of

the Revenue and Treasurer, to release to VEDP and the Authority the Company’s real estate tax,


I-1488754.3

business personal property tax and machinery and tools tax information. Such information shall

be marked and considered confidential and proprietary and shall be used by VEDP and the

Authority solely for verifying satisfaction of the Capital Investment Target. If the Locality, the

Office of the Commissioner of the Revenue or the Office of the Treasurer should require

additional documentation or consents from the Company to access such information, the

Company shall promptly provide, at the Company’s expense, such additional documentation or

consents as the Locality, the Authority or VEDP may reasonably request.

If requested by VEDP or the Authority, the Company shall provide to VEDP or the

Authority copies of the Company’s quarterly filings with the Virginia Employment Commission

covering the period from May 1, 2017, through the Performance Date.

Section 7. Notices.

Formal notices and communications between or among, VEDP, the Locality, the

Authority and the Company shall be given either by (i) personal service, (ii) delivery by a

reputable document delivery service that provides a receipt showing date and time of delivery,

or (iii) mailing utilizing a certified mail postage prepaid service of the United States Postal

Service that provides a receipt showing date and time of delivery, addressed as noted below.

Notices and communications sent in accordance with this Section 7 shall be deemed effective

upon receipt or refusal thereof. Notices and communications mailed shall be deemed effective

on the second business day following deposit in the United States mail. Such written notices and

communications shall be addressed to:

if to the Company, to: with a copy to:



Newport News, Virginia

Attention: Steven R. Adcox, Esq.




Attn: Carl Briener, Vice President - Facilities

if to the Locality, to: with a copy to:

City Of Newport News, Virginia

2400 Washington Avenue

10th Floor


Facsimile: 757.926.3503

Email: [email protected]

Attention: City Manager

City Of Newport News, Virginia


9th Floor


Facsimile: 757.926.8549


Attention: City Attorney


I-1488754.3

if to the Authority, to: with a copy to:

Economic Development Authority of the



3rd Floor


Facsimile: 757.926.3504


Attention: Secretary/Treasurer

Economic Development Authority of the


c/o Jones Blechman Woltz & Kelly

701 Town Center Drive, Suite 800


Facsimile: 757.873.8103


Attention: Counsel

if to VEDP, to: with a copy to:

Virginia Economic Development Partnership

One James Center, Suite 900

901 East Cary Street

Post Office Box 798 (zip: 23218-0798)

Richmond, Virginia 23219

Facsimile: 804.545.5611


Attention: President and CEO

Virginia Economic Development Partnership

One James Center, Suite 900

901 East Cary Street

Post Office Box 798 (zip: 23218-0798)

Richmond, Virginia 23219

Facsimile: 804.545.5611


Attention: General Counsel

Section 8. Miscellaneous.

(a) Entire Agreement; Amendments: This Agreement constitutes the entire

agreement among the parties hereto as to the COF Grant and may not be amended or modified,

except in writing, signed by each of the parties hereto and consented to by VEDP. This

Agreement shall be binding upon and inure to the benefit of the parties hereto and their

respective successors and assigns. The Company may not assign its rights and obligations

under this Agreement without the prior written consent of the Locality, the Authority and

VEDP.

(b) Governing Law; Venue: This Agreement is made, and is intended to be

performed, in the Commonwealth and shall be construed and enforced by the laws of the

Commonwealth. Jurisdiction and venue for any litigation arising out of or involving this

Agreement shall lie in the Circuit Court of the City of Newport News, and such litigation shall

be brought only in such court.

(c) Counterparts: This Agreement may be executed in one or more counterparts,

each of which shall be an original, and all of which together shall be one and the same

instrument.


I-1488754.3

(d) Severability: If any provision of this Agreement is determined to be

unenforceable, invalid or illegal, then the enforceability, validity and legality of the remaining

provisions will not in any way be affected or impaired, and such provision will be deemed to be

restated to reflect the original intentions of the parties as nearly as possible in accordance with

applicable law.

(e) Attorney’s Fees: Attorney’s fees shall be paid by the party incurring such fees.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]


I-1488754.3

IN WITNESS WHEREOF, the parties hereto have executed this Performance

Agreement as of the date first written above.

CITY OF NEWPORT NEWS,

VIRGINIA

By

Cynthia D. Rohlf, City Manager

Date: _______________, 2017

ATTEST:

By

Mabel Washington Jenkins, MMC, City Clerk

APPROVED AS TO FORM FOR THE

CITY OF NEWPORT NEWS, VIRGINIA

By

Collins L. Owens, Jr., City Attorney

ECONOMIC DEVELOPMENT

AUTHORITY OF THE CITY OF

NEWPORT NEWS, VIRGINIA

By


Date: _______________, 2017

ATTEST:

By

Florence G. Kingston, Secretary/Treasurer

APPROVED AS TO FORM FOR THE ECONOMIC

DEVELOPMENT AUTHORITY OF THE CITY OF

NEWPORT NEWS, VIRGINIA

By

Raymond H. Suttle, Jr., Esquire


I-1488754.3

FERGUSON ENTERPRISES, INC.

By

Name:

Title:

Date: _________________________

ECONOMIC/INDUSTRIAL DEVELOPMENT MANAGED FUNDS AND PROPERTIESSTATEMENT OF NET POSITION

SEPTEMBER 25, 2017

(Unaudited)

9/25/2017 8/23/2017 DIFFERENCE

ASSETS

Cash and Investments:

Cash 5,076,932$ 4,983,092$ 93,841$

Restricted Cash - ARC 303,185 515,888 (212,704)

Restricted Cash-Air Service 1,236,313 1,235,702 611

Restricted Cash-LTD Oyster Point 1,240,051 1,252,932 (12,881)

Restricted Cash-Animal Shelter Capital Reserve 50,000 - 50,000

Restricted Cash - Apprentice School Garage Maintenance Reserve 20,000 20,000 -

Restricted Cash-Newport News Capital, Micro Loan 461,296 458,461 2,835

Restricted Cash - CCOP & City Operations Center 4,198,627 4,107,284 91,343

Restricted Cash - Parking Fund 1,619,921 3,232,895 (1,612,974)

Restricted Cash - Rouse Tower 3,073,387 2,728,188 345,199

Restricted Cash - Tourism Zones Guaranty Account 1,520,399 1,517,610 2,789

Restricted Cash - Tourism Zones Performance Guaranty Grant Account 500,572 499,696 875

Restricted Cash - Coats & Clark Escrow 86,369 94,041 (7,673)

Restricted Cash - Brooks Crossing 25,328 25,282 46

Restricted Cash - FIG Grant 643,780 643,780 -

CCOP Garage Property Management Escrow 90,000 90,000 -

Total Cash 20,146,158 21,404,851 (1,258,693)$

Receivables:

Accounts, Notes & Grants 26,506 26,506 -

Note Receivable - Hotel Loan 4,105,115 4,105,115 -

Note Receivable - Land Loan 399,999 399,999 -

Notes Receivable - Newport News Capital Fund 1,108,348 1,112,330 (3,982)

Notes Receivable - New Market Tax Credit 4,619,345 4,619,345 -

Other Receivables 907,466 652,208 255,258

Total Receivables 11,166,779$ 10,915,503$ 251,276$

Construction in Progress: 8,963,617$ 13,385,278$ (4,421,660)$

Land Held For Lease or Resale:

Oakland Industrial Park 4,043,163$ 4,043,163$ -

Patrick Henry CommerCenter 1,897,080 1,897,080 -

Oyster Point 2,516,903 2,516,903 -

Chase - 1300 Marshall Avenue 1,105,938 1,105,938 -

Sears 399,943 399,943 -

Virginia Specialty Store Property 530,000 530,000 -

T E Williams 60,000 60,000 -

Brenner's Bakery 114,300 114,300 -

Downtown Engineering Ctr 753,600 753,600 -

Coats & Clark 676,882 676,882 -

Greek Church 75,000 75,000 -

Jefferson Center - Research & Tech 4,486,797 4,486,797 -

Diligence Drive 276,725 276,725 -

Clements - 75 Yorktown Road 492,068 492,068 -

Jefferson/Habersham 2,246,599 2,246,599 -

Port Warwick - Light Rail 1,036,640 1,036,640 -

Southeast Corridor 1,674,200 1,674,200$ -

Parking Fund Land 874,323 874,323 -

606 Morris Drive 74,900 74,900 -

Oriana Road 1,066,900 1,066,900 -

515 Ivy Road 21,112 21,112 -

Rouse Tower 1,164,800 1,164,800 -

2914 West Avenue 101,665 101,665 -

Upper Warwick Corridor 1,350,809 1,350,809 -

South Police Precinct 357,200 357,200 -

Sherwood 2,529,606 2,529,606 -

Apprentice School Garage 641,700 641,700 -

Total Land Held For Lease or Resale 30,568,852$ 30,568,852$ -$

Property and Equipment:

Shipyard/Sears Facility 13,484,037 13,484,037 -

Coats & Clark 1,884,237 1,884,237 -

Downtown Engineering Ctr Building 30,668,716 30,668,716 -

5th Oakland Shell (CITI) Building 5,436,903 5,436,903 -

Shipyard/VSS Facility 12,653,210 12,653,210 -

ARC Building 16,368,065 16,368,065 -

Greek Church Building 276,680 276,680 -

Merchant's Walk Garage 12,465,741 12,465,741 -

Conference Center 29,115,656 29,115,656 -

Fountain Way Garage 15,703,399 15,703,399 -

809 Omni Blvd 2,628,946 2,628,946 -

Mariner's Row Garage 16,787,034 16,787,034 -

Rouse Tower 20,383,665 20,383,665 -

Apprentice School Garage 12,174,759 12,174,759 -

South Police Precinct 6,257,667 6,257,667 -

Sherwood 5,305,259 5,305,259 -

Improvements Other than Buildings 19,232,150 14,496,355 4,735,795

Equipment 84,674 84,674 -

Accumulated Depreciation (63,108,373) (63,108,373) -

Total Property and Equipment 157,802,426$ 153,066,631$ 4,735,795$

Infrastructure

Merchant's Walk Garage Infrastructure 1,521,049$ 1,521,049$ -

Fountain Way Garage 1,022,450 1,022,450 -

Deferred Outflows of Resources

Deferred Charge - Debt Refunding 5,577,422 5,577,422$ -

Total Deferred Outflows of Resources 5,577,422$ 5,577,422$ -$

TOTAL ASSSETS AND DEFERRALS 236,768,756$ 237,462,038$ (693,282)$

LIABILITIES AND NET POSITION

Liabilities:

Trade Accounts Payable 5,592$ 148,828$ (143,236)$

Accrued Liabilities 87,431 103,949 (16,518)

Deferred Revenue - - -

Notes Payable and Due to City (ARC) 19,351,591 19,389,474 (37,883)

IDA/EDA Leased Project Bonds - All Projects 84,358,575 85,573,407 (1,214,833)

Total Liabilities 103,803,188$ 105,215,658$ (1,412,470)$

Net Position:

Invested in capital assets, net of related debt 79,846,152$ 75,512,977$ 4,333,175$

Restricted for:

Debt Service -$ -$ -$

Capital Projects 8,043,346 8,184,650$ (141,304)

Capital Loans 1,569,644 1,570,791$ (1,147)

Unrestricted 43,506,426 46,977,963$ (3,471,537)

Total Net Assets 132,965,567$ 132,246,380$ 719,187$

TOTAL LIABILITIES AND NET POSITION 236,768,756$ 237,462,038$ (693,282)$

P:\Audtshar\monthlyIDAfs2018\Financials.FY2018Sept 1 10/2/2017

ECONOMIC/INDUSTRIAL DEVELOPMENT FUNDSTATEMENT OF REVENUE AND EXPENSES FOR THE THREE MONTHS ENDED

SEPTEMBER 25, 2017

(Unaudited)

9/25/2017 9/25/2017 BUDGETCURRENT

MONTH YEAR TO DATE YEAR TO DATE FY 2018 BUDGET

Operating Revenues:

Sale of Property - -$ 169,988$ 679,951$

Miscellaneous Property Rental - Operating Leases 275,674 1,123,873 1,210,709 4,842,837

ARC Revenue 141,681 190,066 437,700 1,750,801

Regional Air Service Enhancement - Contributions from localities - - 42,334 169,337

Rent Income Rouse Towers 104,667 156,792 620,253 2,481,011

Parking Income 43,384 150,711 196,708 786,831

CCOP Revenue - Land Sales, Parking Contributions, Interest 5,453 22,343 56,098 224,391

E-Commerce Program Interfund Transfer - - - -

Total Operating Revenues 570,859$ 1,643,786$ 2,733,790$ 10,935,159$

Operating Expenses:

NNIDA Operating Expenses:

Board and Committee Compensation 1,350 3,750$ 5,000$ $20,000

City Development Department Reimbursement 9,583 19,167 23,750 95,000

Direct Salary Charges 29,793 76,535 109,727 438,906

Fringe Benefits 16,683 38,132 55,863 223,452

Contractual Services 92,726 127,296 285,556 1,142,225

Materials, Supplies, Meetings 4,797 7,780 15,169 60,675

Marketing and Promotion - 745 40,000 160,000

Reserve for Contingency - - - -

Total NNIDA Operating Expenses 154,932$ 273,406$ 535,065$ 2,140,258$

CCOP Facilities Operation and Maintenance 52,264 156,623 307,336 1,229,342

Rouse Towers Operating and Maintenance Expenses 97,963 116,463 354,264 1,417,055

Hospitality Marketing - - 75,000 300,000

Regional Air Service - - 27,108 108,431

Sherwood Operating and Maintenance - 5,615 - -

Contributed Land & 10% Commission on Sales - NN Green Foundation - - - -

Real Estate Commissions - - - -

Business Initiatives 15,000 41,072 12,500 50,000

Façade Improvement Grants - 60,186 37,500 150,000

Enterprise Zone Grant - - 439,157 1,756,629

Tourism Grants - - 210,771 843,082

Property Rental 85,133 246,131 261,680 1,046,720

ARC Expenses 71,685 111,430 247,790 991,161

DT Engineering Retail/City - - 34,078 136,311

Depreciation Expense - - 1,212,628 4,850,513

Bond Amortization Expense - - - -

Other, including financing fees - - - -

Total Operating Expenses 476,977$ 1,010,926$ 3,754,876$ 15,019,502$

Operating Income 93,882$ 632,860$ (1,021,086)$ (4,084,343)$

Non - Operating Revenues (Expenses):

Interest Earned 3,980 4,208$ 34,500$ 138,000$

Interest Earned - Mortgages 20,325 26,396 21,388 85,552

IRB Fees 121,284 121,684 18,750 75,000

Property Administrative Fees 6,157 18,471 60,525 242,099

Bond Interest Expense (256,300) (1,357,269) (751,934) (3,007,734)

Bond Issue Expense, Letter of Credit and Trustee Fees (250) (750) (1,781) (7,125)

Cost of Land Sold - - - -

Commonwealth Opportunity Fund - - - -

Land Option Revenue - - 2,500 10,000

Gain (Loss) on Fixed Assets - - - -

Miscellaneous Revenue (includes GOF's) 309,412 336,199 60,980 243,921

Non - Operating Expenses 204,608$ (851,060)$ (555,072)$ (2,220,287)$

Net Income (Loss) Before Operating Transfers 298,490$ (218,200)$ (1,576,158)$ (6,304,630)$

Transfers From Economic/Industrial Fund - - - -

Transfers To Economic/Industrial Fund - - - -

Transfers - In From City of Newport News - Enterprise Zone Grant - - 439,152 1,756,609

Transfers - In From City of Newport News - Air Service Fund - - 9,036 36,143

Transfers - In From City of Newport News - Tourism Grants - - 210,771 843,082

Transfers - In From City of Newport News 1,164,852 5,583,320 2,385,944 9,543,777

Net Income (Loss) 1,463,342$ 5,365,119$ 1,468,745$ 5,874,981$


ECONOMIC/INDUSTRIAL DEVELOPMENT FUNDSTATEMENT OF CASH FLOWS FOR THE THREE MONTH ENDED

SEPTEMBER 25, 2017

(Unaudited)

9/25/2017 9/25/2017

YEAR

MONTH TO DATE

Cash Flows From Operating Activities:

Receipts from customers $ 744,602 $ 1,728,521

Receipts from land sales, net of settlement charges - -

Payments to suppliers (598,618) (1,437,815)

Payments to employees (57,409) (137,584)

Other - -

Net cash provided by operating activities $ 88,574 $ 153,122

Cash Flows from Capital and Related Financing Activities:

Acquisition of capital assets $ (865,145) $ (1,012,593)

Proceeds from sale of property or equipment - -

Acquisition of land for lease or resale - (1,097,603)

Acquisition of land held for lease or resale - Transfer from city - -

Acquisition of property and equipment - -

Loss on sale of fixed assets - -

Improvements Other than Buildings - -

Proceeds from issuance of industrial revenue bonds and notes payable - -

Repayment and retirement of industrial revenue bonds (1,214,833) (5,221,797)

Repayment of bonds payable - -

Notes Payable and Due to City (ARC) (37,500) (304,167)

Bond Issuance Costs - -

Deferred Charge - Bond Refunding - -

Interest Paid (256,300) (1,357,269)

Payments of Governor's Opportunity Fund Grants - -

Other revenue and expenses, net 436,603 475,604

$ (1,937,176) $ (8,517,825)

Cash Flows From Investing Activities:

Interest Received $ 24,305 $ 30,605

Loan issued thru Newport News Capital Fund - -

Note Receivable Issued - -

Deferred Charge - Debt Refunding - -

Net Investment in Direct Financing activities - -

Net Cash provided by investing activities $ 24,305 $ 30,605

Cash Flows Provided by Non - Capital Financing Activities - Transfers from City

of Newport News $ 1,164,852 $ 5,583,320

Increase (decrease) in cash, restricted cash and cash equivalents (659,444) (2,750,778)

Cash and restricted cash and cash equivalents at beginning of year 20,805,602 22,896,936

Cash and restricted cash and cash equivalents at end of year $ 20,146,158 $ 20,146,158

Reconciliation of operating income (loss) to net cash used by operating activities:

Operating Income $ 93,882 $ 632,860

Adjustment to reconcile operating income to cash provided by operating activities:

Depreciation - -

Gain on land sold - -

Proceeds from land sales - -

Amortization - -

Changes in assets and liabilities:

Accounts, notes and grants - 18,204

Note Receivable - Hotel Loan - -

Note receivable - Land Loan - -

Notes receivable - Newport News Capital Fund 3,982 14,327

Notes Receivable - New Market Tax Credit - -

Other receivables 169,761 52,205

Prepaid Expenses - Other - -

Accrued Payable (143,236) (468,466)

Accrued Liabilities (35,815) (96,008)

Net cash provided by operating activities $ 88,574 $ 153,122

ÿ

Forgiveness of note payable deed of trust $ - $ -


ECONOMIC/INDUSTRIAL DEVELOPMENT AUTHORITIES

FY 2018 PROJECT DEBT AND MORTGAGE RECEIVABLE BALANCES

9/25/2017 8/23/2017 DIFFERENCE

Industrial Development Authority

CITI Series Bond A - Bank of America 1,585,918 1,608,238 (22,321)

CITI Series Bond B - Bank of America 326,014 330,766 (4,752)

Apprentice School Garage - Towne Bank 9,769,228 10,746,152 (976,924)

Total - IDA 11,681,160$ 12,685,156$ (1,003,997)$

Economic Development Authority

Shipyard/Sears - Bank of America 1,203,281 1,292,832 (89,551)

Shipyard/VSS - Bank of America 1,092,190 1,173,475 (81,285)

DT Engineering Bldg - Series B - Wells Fargo 10,955,000 10,955,000 -

DT Engineering Bldg - Refunded Series A - Wells Fargo 2,440,000 2,480,000 (40,000)

Merchant's Walk Garage - SunTrust 3,576,000 3,576,000 -

Refunding Bonds Series 2012A 25,390,000 25,390,000 -

Refunding Bonds Series 2012B 21,110,000 21,110,000 -

Add Bonds Premium 2,979,849 2,979,849 -

Refunding GO Bonds 2015 3,660,000 3,660,000 -

Add Bonds Premium 271,095 271,095 -

Total - EDA 72,677,415$ 72,888,251$ (210,836)$

TOTAL - ALL PROJECTS 84,358,575$ 85,573,407$ (1,214,833)$

Notes Payable and Due To

809 Omni Blvd - Bank of America 1,462,500 1,500,000 (37,500)$

Towne Bank Note A 4,736,667 4,736,667 -

Towne Bank Note B 2,996,667 2,996,667 -

ARC - Due to City 10,155,757 10,156,140 (383)

TOTAL - NOTES PAYABLE AND DUE TO 19,351,591$ 19,389,474$ (37,883)$

Newport News Capital Fund

Coastal Forms 26,254 26,254 -

Martin's Custom Designs 32,404 33,122 (718)

Bryant Equipment 120,622 122,450 (1,828)

CCOP Thimble Shoals One 500,000 500,000 -

Eagle Land II 429,068 430,504 (1,436)

1,108,348$ 1,112,330$ (3,982)$


ECONOMIC/INDUSTRIAL DEVELOPMENT AUTHORITIES

FY 2018 CONSTRUCTION IN PROGRESS

9/25/2017 8/23/2017 DIFFERENCE

Construction in Progress

Patrick Henry Parkway 2,072,536.75 1,222,537 850,000

Canon Expansion - Infrastructure 4,745,310 4,745,310 -

City Center Third Garage 325,609 325,609 -

Liebherr Expansion 1,596,525 1,545,298 51,227

Tech Center 223,637 223,637 -

Southeast Grocery Store Parking Field and Infrastructure - 2,560,679 (2,560,679)

ARC HVAC & Roof Improvements - 2,762,208 (2,762,208)

Total Construction in Progress 8,963,617$ 13,385,278$ (4,421,660)$


P:\IDA\IDA17-18\Board Meetings\October 2017\Committee Schedule 10.06.2017.docx

EDA/IDA COMMITTEE SCHEDULE

(All meetings to be held in the EDA/IDA Board Room unless otherwise noted.)

MONTHLY

Design Review Thursday 10/19/17 8:00 a.m. Executive Tuesday 10/17/17 12:00 p.m. Marketing Thursday 10/19/17 10:30 a.m. Revolving Loan Fund Wednesday 10/25/17 12:30 p.m.

QUARTERLY (January, April, July, October)

Conference Center Wednesday 10/11/17 8:00 a.m. (Marriott) South Newport News Tuesday 01/02/18 4:00 p.m.

(City Hall, 3rd Floor)

P:\IDA\IDA17-18\Board Meetings\October 2017\Motion Going into Closed Session 10.06.2017.docx

MOTION FOR CLOSED MEETING - ROLL CALL VOTE

This is a motion for the Authority to go into a closed meeting pursuant to VA Code Section

§2.2-3711.A: Real Estate (3), Prospective Business (5), for the following purposes and

subjects:

(3) Discussion or consideration of the acquisition of real property for a public purpose

or of the disposition of publicly held real property where discussion in an open

meeting would adversely affect the bargaining position or negotiating strategy of

the public body, the subject of which is proposed property dispositions located in

the northern, central and southern sections of the City; and

(5) Discussion concerning a prospective business or industry or the expansion of an

existing business or industry where no previous announcement has been made of

the business or industry’s interest in locating or expanding its facilities in the

community, the subject of which is an unannounced expansion of an existing

business located in the southern section of the City.

MOTION AFTER OPEN MEETING IS RECONVENED REQUIRES ROLL CALL VOTE

This is a motion to certify pursuant to VA Code Section §2.2-3712(D) that to the best of

each member’s knowledge:

(D) (i) only public business matters lawfully exempted from open meeting requirements

under this chapter; and

(ii) only such public business matters as were identified in the motion by which the

closed meeting was convened were heard, discussed or considered in the meeting

by the public body.

MINUTES OF THE REGULAR MEETING OF THE

ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF NEWPORT NEWS,

VIRGINIA AND THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE

CITY OF NEWPORT NEWS, VIRGINIA

Mr. Minter called the meeting to order at 8:00 a.m. on Friday, September 1, 2017, in the

EDA/IDA Board Room at Two City Center, 11820 Fountain Way, Suite 301, Newport News,

Virginia.

Those members present were:


Cassandra P. Greene, Vice Chair

Mary Aldrich

Alonzo R. Bell, Jr.

Jennifer Smith-Brown

Cynthia D. Rohlf, City Manager, ex-officio

Florence G. Kingston, Secretary/Treasurer, ex-officio

Absent:

Cary B. Epes, Excused

Jeffrey Verhoef, Excused

Legal Counsel:

Raymond H. Suttle, Jr.

Staff:

Kearston Milburn, Recording Secretary

Cherry Croushore, Assistant Secretary

Also present:

Doreen Kopacz, Port Development Administrator

Collins Owens, City Attorney

Robert Pealo, Senior Assistant City Attorney

Jerri Wilson, Management & Legislative Program Analyst, City Manager’s Office

EDA/IDA Board Meeting September 1, 2017 Page 2

Mr. Minter opened the meeting by welcoming everyone.

Seafood Industrial Park West Bulkhead Project Presentation

Mr. Minter called on Ms. Kopacz for the Seafood Industrial Park West Bulkhead Project

Presentation. Ms. Kopacz provided a powerpoint presentation, describing how the Virginia

Port Authority’s FY2016 Commonwealth Port Fund Grant award of $638,292, coupled with

$617,299 of City funds, was used to refurbish the Seafood Industrial Park’s (SIP’s) aging

and damaged West Bulkhead. Ms. Kopacz explained that 1,376 linear feet of old, damaged,

and unsafe wooden fender commercial mooring along the west side of the SIP had been

completely replaced with new concrete pilings, raised to compensate for higher water levels,

and fitted with other features to improve its safety, security, and overall appearance. Ms.

Kopacz stated that these improvements added capacity and had already gained high praise

from the local seafood businesses. Ms. Kopacz informed the Board that SIP had been

selected by the Virginia Port Authority to receive FY2018 Grant funding in the amount of

$404,627 for a new project to include refurbishment and modifications to the Outer Harbor

Pier and Dolphins.

Mr. Minter asked if there were any questions for Ms. Kopacz and there were none. Mr.

Minter thanked Ms. Kopacz for her report.

Secretary/Treasurer’s Report

Mr. Minter asked for the Secretary/Treasurer’s Report. Mrs. Kingston congratulated Marc

Rodgers, who was awarded an MBA on August 27th from William and Mary. Mrs. Kingston

stated that Marc had completed William and Mary’s 18-month Executive MBA Program.

She commended his ambition and effort to further his education and professional

development.

Mrs. Kingston stated she was excited about the recent groundbreaking for Building One @

Tech Center. She extended appreciation to those who were able to attend the event. Mrs.

Kingston stated that, Karen Jackson, Virginia’s Secretary of Technology, had shared

comments at the event, noting Building One @ Tech Center represented the first step in

creating the newest technology and innovation center in the Commonwealth – one that will

attract new, high-growth businesses and young, talented workers to Newport News. Mrs.

Kingston told the Board that she looked forward to the continued development of Tech

Center Research Park and the possibilities for collaboration it would bring to the City. She

thanked staff for the many hours spent in preparation for this important event.


Mrs. Kingston said that she was pleased to report that the annual Newport News State of

the City luncheon would be held on Tuesday, October 3rd at noon at the Marriott. She

stated that this year’s theme was “Building Our Future, One Block at a Time”. Mrs. Kingston

noted that the EDA would again serve as a table sponsor for the event and that Board

Members should inform Kearston if they would like to attend.

Mrs. Kingston advised that also on Tuesday, October 3rd, the Department of Development

would be sponsoring a small business seminar featuring Marc Willson, Retail/Restaurant

Consultant for the Virginia Small Business Development Center. She stated Mr. Willson had

conducted seminars several times in Newport News and the emphasis of his visit this time

would be helping small retailers prepare for the Christmas holiday shopping season. She

noted that Staff would publicize the seminar through our business Constant Contact list and

through our various business resource partners. She recognized our local Small Business

Development Center, headed by Jim Carroll, who had helped to facilitate and coordinate Mr.

Willson’s visits.

Mrs. Kingston informed the Board that the Monthly Financial Statements were in their

packages, noting a few highlights and offering to answer questions. There were no

questions.

Mrs. Kingston offered the City Manager an opportunity to comment. Ms. Rohlf expressed

her excitement for the annual Newport News State of the City luncheon and encouraged

Board Members to participate.

Ms. Rohlf stated that a Federal Notice of Funding Availability for $130,000,000 had recently

posted for which participants in the Choice Neighborhoods Initiative (CNI) could apply. Ms.

Rohlf explained that she was pleased that this additional funding was going to be available

for CNI, particularly at the federal level, and advised that the City would be putting together

an application to request $30,000,000 of the available implementation grant funds. She

noted that in terms of timing, this would be an accelerated approach to seeking

implementation funding, as the City is still completing its Transformation Plan under the CNI

planning grant previously awarded, but that she felt the City would develop a very

competitive application. Ms. Rohlf noted that the application due date of November 22nd

would provide a tight timeframe for submission, but that staff was working diligently to meet

the deadline. Ms. Rohlf also stated that the EDA’s collaborative role would be significant in

the application process. Mr. Minter asked Ms. Rohlf how long it would take for HUD to notify

applicants of an award for the implementation grant, and Ms. Rohlf responded that in the

past it has taken approximately 5-6 months for a decision to be made.


Ms. Rohlf concluded her comments by thanking Mrs. Kingston and her staff for being in the

forefront of some important efforts, not only for the City, but regionally as well.

Mr. Minter asked if there were any questions for Mrs. Kingston or Ms. Rohlf, and there were

none.

Assistant Secretary’s Report

Mr. Minter asked for the Assistant Secretary’s Report. Ms. Croushore advised the Board

that the Committee Meeting Schedule was in their package and noted relevant details.

Madison Government Affairs Consultant Report

Mr. Minter advised the Board that the Madison Government Affairs Report was in written

format and asked if there were any comments or questions. There were none.

At 8:26 a.m., Ms. Greene moved for the Authority to go into a closed meeting pursuant to

VA Code Section §2.2-3711.A: Real Estate (3), Prospective Business (5), for the following

purposes and subjects: (3) Discussion or consideration of the acquisition of real property for

a public purpose or of the disposition of publicly held real property where discussion in an

open meeting would adversely affect the bargaining position or negotiating strategy of the

public body, the subject of which is proposed property dispositions located in the central

section of the City; and (5) Discussion concerning a prospective business or industry or the

expansion of an existing business or industry where no previous announcement has been

made of the business or industry’s interest in locating or expanding its facilities in the

community, the subject of which is an unannounced expansion of an existing business

located in the southern section of the City and unannounced prospective businesses

interested in locating in the central section of the City. Mr. Bell seconded the motion which

passed unanimously on a roll call vote.

At 9:05 a.m., the EDA/IDA Board returned to open session following a certification motion by

Ms. Greene, in accordance with VA Code Section §2.2-3712(D) that to the best of each

member’s knowledge: (D) (i) only public business matters lawfully exempted from open

meeting requirements under this chapter; and (ii) only such public business matters as were

identified in the motion by which the closed meeting was convened were heard, discussed

or considered in the meeting by the public body. Ms. Aldrich seconded the motion, which

passed unanimously on a roll call vote.


Committee Chair’s Reports

Mr. Minter called for the Committee Reports. Ms. Aldrich presented the Design Review

Committee Report, which passed unanimously on a roll call vote. Ms. Greene presented the

Executive Committee Report, which passed unanimously on a roll call vote. Ms. Aldrich

presented the Marketing Committee Report, which passed unanimously on a roll call vote.

Ms. Smith-Brown presented the Revolving Loan Fund Committee Report, which passed

unanimously on a roll call vote.

Approval of Minutes of the Regular Meeting of August 4, 2017

Mr. Minter asked for a motion that the Minutes of the Regular Meeting of August 4, 2017 be

approved. Mr. Bell so moved and Ms. Smith-Brown seconded the motion, which passed

unanimously on a roll call vote.

Unfinished Business

Mr. Minter asked for any unfinished business. There was none.

New Business

Mr. Minter asked for any new business. There was none.

There being no further business to come before the Board, Mr. Minter adjourned the

meeting at 9:17 a.m.

_________________________________

Florence G. Kingston

Secretary/Treasurer

P:\IDA\IDA17-18\Board Meetings\September 2017\FINAL Approved Minutes September 1 2017 Board Meeting.docx