Economic Development Authority Meeting   9/21/2021

We have a quorum.

So let's go ahead and get started here.

Can you see that Mr.

Yeah, no, it's definitely shorter.

Notwithstanding any provision of the EDA bylaws to the contrary as permitted under Virginia Code 2.2-3708.2A3 Albemarle County's continuity of government ordinance and declaration of a local state of emergency,

and the EDA resolution of April 21, 2020.

We are holding this meeting by real time electronic means with no authority member physically present at a single central location.

This is because the pandemic's catastrophic nature makes it impracticable or unsafe to assemble in a single location.

All authority members are participating electronically.

All authority members will identify themselves and state their general physical location during the roll call, which we will hold next.

This meeting is being recorded and will be uploaded to the county's website.

The public has real time audio visual access to this meeting over Zoom and real time audio access over telephone, both as provided in the lawfully posted meeting notice.

The public is invited to offer live comment during the public comment period.

I don't know, no idea.

It's a relatively new phrase.

I can do that.

Director Imhoff Present in Albemarle County Director McNaughton Present, Troy, Virginia Let's see, and Supervisor McKeel Present in the notable Magisterial District of Jack Jewett Alrighty, that's everyone, Mr.

So next is matters from the public.

We do not currently have anybody signed up.

Let me ask the audience if there's anybody that would like to speak.

Please indicate by raising your hand.

All right.

Then let's move on to the approval of the minutes.

I had one comment that I think may be a typo on page six.

There is a reference to a RIF grant.

And I think maybe that should be something else.

Oh, maybe it is a RIF grant that I didn't remember.

No, sir.

That stands for Regional Innovation Fund.

OK. All right.

Reading is fundamental.

That's right.

I have two corrections.

I don't know what page they're on, but I was referring

about projects in Scottsville, not Scottsdale.

And I think in that same area, we refer to the EDO, and I think it was meant to be the EDA.

Well, that makes a lot more sense.

I didn't remember a discussion about Scottsdale, but I thought maybe.

All right.

I'll move.

Oh, I'll second that.

George got that.

All right.

Moved and seconded.

All in favor?

Aye.

Aye.

All right.

The minutes are approved.

Financial report.

Sure.

We began the fiscal year on 7-1-21 with a cash balance of $731,824.25.

That's $731,824.25.

Since the beginning of the fiscal year, we have expended $25,675.675 for legal expenses.

and $25,000 for the CIC incentive grant.

We've also spent $3,000 of pass-through funds of Egypt incentive for Afton Scientific, leaving us with a cash balance of $703,374.25.

Funds committed but not expended yet total $156,400.

Any questions on the financial report?

All right.

Thanks, Dave.

So on to new business.

The first item on the new business is a discussion on the building reuse grant.

Yeah, thank you, Mr.

Chair.

This item is not for any action before the authority this evening.

Staff just wanted to have a discussion ahead of our joint meeting with the Board of Supervisors next month in October.

This is a potential tool that we could add to our tool belt at the last EDA joint meeting that we had with the board.

Some of you may remember, we established for the first time some of the tools and policies that we've been using since that meeting, which was in June of 2019.

And those policies have served us well.

They've been mainly matching grant policies for state grants, the Commonwealth Opportunity Fund, the Virginia Jobs Investment Program, the AFIT grants.

And then we also adopted a tool known as an ENABLE grant, which we've had success with.

So the next tool we're looking at is something called a Building Reuse Grant.

This is something that Roger had a lot of success with in North Carolina and that various localities have some form of.

But just very quickly and very broadly, we wanted to have a discussion that wasn't too deep in the weeds, but just identified any if there were any non-starters from the authority.

We have run into a consistent problem in our community where expanding businesses have difficulty finding space to grow, especially affordable space to grow.

This typically starts with Jennifer.

Jennifer doing such an excellent job with our business retention and expansion program to connect existing businesses with resources and they make the decision to grow and they need to have a space to grow and they're unable to find them.

And so some recent examples that may come to mind for the authority of companies that have left the county like like Co-construct moving into the city, or even companies that have left our region entirely, Babylon Farms moving to Richmond,

The four companies that we'll talk about in closed session tonight, Poma, Cardinal, Gadget, and Packit, they all experienced this problem to one degree or another.

And there are also four other companies that we're working, that our office is working with currently, that are running into this issue.

And so to help solve this problem of,

of finding space and particularly space that's affordable.

A building reuse grant would take primary businesses, which for those of you probably remember in Project Enable, those are businesses that get more than half of their income from outside the region.

For those businesses that are in targeted industries, if they want to occupy space that's been vacant for at least six months, this grant would rebate up to 50% of those capital costs after a lease is signed and improvements are made.

This would be capital expenditures, not furniture fixtures and equipment.

So things that wouldn't be able to leave the space if the company was to move on.

There's significant policy support for a program like this in the comp plan and project enable and the climate action plan.

Adaptively reusing buildings is a significant strategy for the county in a number of different fronts.

If we were to move forward with this grant, it would be through existing budget resources that our office has, and we would be in charge of managing it.

There's currently no established stream of revenue to fund economic development services.

It's been funded year over year through various opportunities.

So that is something that we would have to think about further.

But I want to run through one example before getting feedback from the authorities.

So very creatively we call this project example.

This is a let's say a manufacturer that's looking for 10,000 square feet of industrial space.

What we most often see is that a company will hire a broker and that broker will identify different options for them.

Albemarle County typically is the most expensive option that the company is considering and usually that's double or more of the other options that a company is considering and oftentimes the space that they find

Not only is it just more expensive generally, but it also requires a significant amount of upfit to make it suitable for their purpose.

So in this example, we're identifying that the space in Albemarle would be $17 a square foot and need $100,000 of investment for the company.

And so with the building reuse grant, our office would be able to assist with up to $50,000 of those costs to make the space in Albemarle more attractive, more feasible for the company.

And so in this case, that would be for improvements to a loading dock, improving the HVAC system, electrical system.

Those are the typical kinds of investments that

You might see covered by a grant like this.

Not covered are going to be things like computer hardware, landscaping, furnishings inside the building, those types of things.

This would be electrical, plumbing, drywall, significant capital expenditures required to locate.

With that sort of background and example in mind, we just want to know if the authority has any non-starters with a program like this.

And we'd love to receive your feedback, questions, suggestions.

Hey, J.T., it's Steve.

I don't have an objection.

I just have a question.

Yeah, absolutely.

This example was taken from, it's sort of an amalgamation of several different projects we've worked on.

I mentioned the four that we'll discuss in closed session.

We may be able to talk about some of the specifics for those, but I would say the numbers in this example

You know, County C might be like an Augusta County or City of Waynesboro.

County B, for example, could be like a like a Fluvanna or a Greene County.

Well, no, I mean, I'm just thinking 17,000 square foot is pretty good.

Yeah.

And I'm speaking of, you know, I'm thinking of industrial space and needing significant work.

So, you know, probably, you know, a lower class space for like a manufacturer.

Yeah, and Steve, and to your point, Class A office space in Albemarle County has been running for Class A, $30 to $32 a square foot.

And for example, the code building's gonna be $40 a square foot.

Roger, are those,

Means or Medians?

Those were, I'm going to call them benchmarks.

That was Peter Jefferson Place and the North Fork Discovery Park.

That's about what they're going for, a classic office space in those two locations.

And the code building is obviously $40 a square foot.

The further out you move, generally the further out you move from downtown, the less the cost becomes.

For example, Morris Creek, which is on the Broadway corridor, they're proposing it's going to be around $26 to $27 per square foot.

The Barnes Lumber Project, which has yet to come to fruition, but we're a partner and I know the developer is projecting 20 to 22 dollars a square foot.

Yeah, understanding that, I'm not sure how I would frame this query, but one of the new phenomenon we're seeing in commercial real estate is that

with places that have significant vacancy periods in which you might expect lease rates to begin to soften.

We're not seeing the kind of softening for a number of interesting but increasingly common reasons, a part of which has to do with the ability to borrow against certain

types of business and historical rent values, lease values, et cetera.

Would it be possible given the geographic variation, given the variation in the class of space to institute some kind of a requirement that you would to be eligible for this grant?

Your the prevailing lease rate would could be no higher than some kind of a median.

Roger might be able to speak to how it worked in North Carolina.

Yeah, that's a little squishy.

In other words, I think what I'm

All right, getting at here is if you just say fair market value, that sort of opens it up to, I think, a lot of negotiating space.

Whereas if we're offering a significant grant that is truly an incentive, perhaps we can use this to make the market, not just react to it.

That is kind of force, subtle.

But if this becomes a substantial program,

Yeah.

I think we might have to admit that such a target might be difficult to find in a perfect form, given geographic variation and the way in which you grade classes of property.

So it would have to be imperfect.

But maybe in this case, the perfect is the enemy of the good.

Yeah, I'm just thinking through what you're saying I completely understand the concept and the model you're proposing Director Shreve, I think the difficulty is that all properties are not the same and you know it'd be like applying, you know,

Try to determine the value of a car.

What's the you know, what's the rate for a car without knowing all the details and bells and whistles that go into it?

And particularly for this kind of space, it's going we're going to see a lot of idiosyncratic properties that.

Yeah, I just I think it's worth exploring to some extent to see if we have any leverage here.

Dave or Director Shreve, would it be okay if we floated that concept, socialized it?

What we will do I'll say is we'll socialize that concept with others both internally and externally and have some feedback prepared for October if you say this is something you'd like to discuss with the board.

That's why I raised the issue here because I think it will require

A little bit of thought, and again, I don't think we could invent a perfect measure for this or barometer, but I think we might be able to come up with something that's good and useful.

Yeah, I'm not sure if J.T.

got into all the ways it's consistent with the comp plan, you know, maintaining the development area, adapt to reuse for the climate action plan, as well as removing barriers for project enable.

So there's some real pluses to this for sure.

I agree with that.

I think it's a really good idea.

I guess the one question that occurred to me as

Looking at this is this is obviously aimed at a potential tenant to space.

Is there a way to, you know, do something similar to get space into the condition that we want it to be so it would be available to tenants along the lines of some of the other things we've talked about with new space.

J.T., can you go back a slide and cover the six month portion?

So it could be an owner coming to you saying, I want to read this has been empty for six months.

I want to make this into flex space or something like that.

That's correct.

And if they don't put a primary business on their primary business in there, they forfeit or they'll be responsible for.

All right, any other questions or comments?

No, just very supportive.

Thank you for pulling this together.

Yeah, I think it's a great idea.

OK, so next on the agenda is the director's report.

Well, certainly.

I just wanted to report that last month we, or thereabouts, we re-instituted our business retention and expansion program.

Last month alone, Jennifer visited nine businesses.

As you may recall,

We have a goal of four visits per month.

She doubled the target.

There is a high demand in October.

You'll learn about the results of that.

Also, we'll let you know that this is going to be, although it'll be a succinct update on what we've been doing, it's not without consequence.

Albemarle County was shortlisted for a significant and complex economic development project.

After staff ensured the project was consistent with the comprehensive plan project and the ABLE, it did not conflict with county goals or strategic plans.

This exciting project required collaboration amongst the Virginia Economic Development Partnership, the University of Virginia, Dominion Power, Rappahannock Electric, Albemarle County Service Authority, Charlottesville Gas,

VDOT, the county exec's office, the board of supervisor, and the company ourself.

So the EDA team and many of the partner agencies I just mentioned spent the latter part of August and early September focused on ensuring the county could accommodate this significant project.

We presented this information to the company in Richmond recently and expect to know more about our status and application in November.

So big news there for our county.

Yeah, a longstanding goal of the economic development efforts of the county have been to just simply wrap our arms around our existing inventory of commercial and industrial land in the county.

Just to get a baseline for setting goals and directing policy and what sorts of grants should we be pursuing and activities that would maximize our site readiness efforts.

We haven't had a sufficient land inventory of commercial industrial space or land.

in many years.

And so we're actively working with Kimley-Horn right now as a part of their work to support the update to the comprehensive plan.

The first thing they're doing is focusing on these economic development goals.

And so their analysis will include not only a simple inventory of that commercial and industrial land, but some ranking of its quality along economic development parameters.

So what's its attractiveness in terms of proximity to infrastructure or attractiveness with its proximity to amenities?

to give us a sense of our goal is to have a diversity of product for economic development projects.

You know, where do we have a sufficient supply of industrial space?

Where do we not have enough product likewise for things like the Class A office?

that we were discussing earlier.

So we're really excited to be working with the consultant, particularly at this early stage.

I think the overall timeframe for the updates of the comp plan extends for quite some time, but this economic development portion is occurring at the front end.

So we're hopeful to have more information to share fairly soon for the EDA and board.

No, sir.

Mr. Chairman, that concludes our report.

Kat?

Yeah, with the land inventory, will you be capturing places that are maybe like underutilized at this point, like underdeveloped?

I expect the inventory will absolutely identify those spaces that are ripe for redevelopment.

This is Diantha.

I just want to thank you.

Makes my heart sing to think about that we're getting back to this land inventory that I've talked about, you know, and we've talked about for a good while.

So great news.

Thank you.

All right, if there are no further questions, then we'll move on to the next item on the agenda, which is the closed session.

So we have our, all right, I'll make the closed session motion.

I move that the Albemarle County Economic Development Authority go into a closed meeting as authorized by the Virginia Freedom of Information Act.

Section 2.2-3711A of the Code of Virginia under subsection 5 and 6 to discuss and consider the expansion of four existing Albemarle County businesses, projects Packet, Coma, Cardinal, and Gadget,

where no previous announcement has been made of their interest in expanding their facilities in Albemarle County where the investment of the public funds to support such expansions involved bargaining and if made public initially would adversely affect the financial interests of the EDA and Albemarle County and subsection 7 and 8 to discuss and consider consultation with legal counsel and briefings by staff members pertaining to probable litigation in one matter involving a breach of contract

where such discussions in open meeting would adversely affect the negotiating or litigating posture of the authority and require the provision of legal advice.

Is there a second?

I'll second.

All right.

There's a second.

Aye.

Aye.

Aye.

Any opposed?

No.

All right.

Where's our link?

Is it in the chat or are we?

Just popped in.

All right.

Thank you, Jennifer.

The link is in the chat.

OK.

I clicked it.

It might ask you to accept it or to move.

What is zoomatopia?

I like it.

Right, that's his backyard.

If you're in the county office building this time of year, it's I think in the fall or as fall approaches, and then as winter turns into spring, the crows get real active.

So they're flying back and forth.

A murder of crows, and they are just having

It's like post-convention activities.

Yeah, so I will be leaving soon.

Yeah, we're missing some folks, aren't we?

Perhaps right after the vote is taken, I can depart.

I believe they're in the attending rooms.

OK.

Glad to see everybody.

I had to switch over to my headset.

I don't know if anybody could hear, but the whatever band is playing at the amphitheater is doing their sound check right now.

And it was really loud.

Melissa Etheridge.

That's where I'm leaving.

We have a fundraiser associated with that tonight.

Oh, nice.

All right.

So I move that the EDA certified by recorded vote that to the best of each director's knowledge, only public business matters lawfully exempted from the open meeting requirements of the Virginia Freedom of Information Act and identified in the motion authorizing the closed meeting were heard, discussed or considered in the closed meeting.

Here we go.

Director Ray Aye Director Shreve Aye Director Munson Aye Director Imhoff Aye Director McNaughton Aye

All right, so I believe we have a motion, which I will read.

So I move the EDA to accept installment notes from Used Guys LLC in satisfaction of amounts due under the Governor's AFID Fund Performance Agreement dated July 2015 and the Economic Opportunity Fund Performance Agreement dated July 2015.

Materially and substantially the same as the attached drafts and to authorize the chair to sign such installments notes, each requiring $225 payments every other month, $450 total starting and being due February 2020 and ending with a final

with final payments due in April and June 2025, if not prepaid in advance without penalty, and both notes providing an interest-free grace period through 2022 with an interest of 4% per year being added thereafter.

The chair's authorization is contingent upon the county attorney approving the installment notes as to form.

Is there a second?

I'll second.

All right, so is there any discussion on the installment notes?

Okay, since there's no discussion, we will vote.

I can do it real quick and I'll check it.

Let's see.

Director Long.

Aye.

Director Ray.

Aye.

Director Munson.

Aye.

And Director McNaughton.

Motion carries.

Thank you.

All right, so on to unfinished business.

The joint meeting on October 19th.

Oh, well, this is just a reminder of some of the planned agenda items that we'll discuss with the board at the joint meeting.

Okay, any questions?

Okay.

I'd just be curious what would be under the, when you say update the memorandum of understanding, I'm just new enough that I don't probably understand the memorandum of understanding, so

Sure, I'll do my best.

And please weigh in, J.T.

and Doug, as I believe this MOU was created prior to my arrival here.

But there was a memorandum of understanding created by the Board of Supervisors and the Economic Development Authority

which basically said that the EDA would check with the Board of Supervisors before taking any substantive actions, certainly stay out of the rural areas in terms of any activity.

And then there's just some other language that limits the scope of the EDA's authority without the Board's consent.

There was some, while it's not necessarily listed in that particular MOU in a way that's completely understandable, there may be concerns about the EDA having property ownership.

We'd like to clarify that to see if the EDA can own property and perhaps creating a revenue stream.

So that would certainly be part of a conversation we would have with the Lord.

I was just going to say there was also a call to action included in that original adoption that said once we had project enabled, we would revisit the MOU.

So this is just following the existing MOU's guidance.

Yes.

Anything, any other matters?

I know one matter that I promised to do is to welcome Ashley to the economic development team.

Welcome.

Welcome.

Any other matters?

All right.

Hearing none, I guess we will adjourn and the next meeting will be the joint meeting, and that's at our normal time.

So 4 p.m., correct?

Yes.

All right.