Staff requests the Board of Supervisors provide guidance regarding the terms and conditions as proposed and a request for a new Economic Development Performance Agreement (“Agreement”) for Print Mail Communications (“PMC”) as recommended by the Economic Development Authority (EDA). A new agreement is recommended by the EDA with terms providing BPOL reimbursement for ten (10) additional years beginning in 2018, capped at $416,000 for a total of 15 years of BPOL reimbursement.

Staff requests the Board’s approval to terminate the initial agreement and replace it with a new agreement that includes additional terms and conditions as recommended by the EDA.

The initial Agreement induced the relocation of PMC, a direct mail business, to Spotsylvania County in 2013, to occupy and lease an existing building. That initial Agreement between PMC and the EDA provided the following:

1. Reimbursement of BPOL up to $208,000 for a period of 10 years (2023) and reimbursement of permit fees up to $10,000.
2.  At the end of the first five years (2018) the company would either need to purchase or continue with a sublease for an additional 5 years. The company approached the EDA indicating they planned to purchase the existing building and requested to increase the years and capped amount of the BPOL reimbursement.
3.  On June 28, 2018, the EDA approved the company’s request for increased BPOL and term. A “new” Agreement would extend a BPOL reimbursement for 10 additional years and double the original capped BPOL reimbursement up to $416,000 through 2028. The initial Agreement would end as of 2018 and a new agreement would start for a total of 15 years of BPOL reimbursement.
4. To date, the company has been reimbursed under the initial agreement $140,000 through tax year 2018. Based on the annual average reimbursement, the company would be eligible for reimbursement up through Tax Year 7 (2020) before hitting the $208,000 cap.

Initial Agreement         $208,000 Capped 10 years (2013-2023)

BPOL Reimbursed      -$140,000 through 2018 (5 years)

Remaining                   $ 68,000 through 2023                                  

New Agreement          $416,000 Capped @ $41,600/year for 10 years (2018-2028)

ROI:                                       

            New Tangible Personal Property Tax             $220,150

            New Real Estate Tax Projected                      $  18,000

            New BPOL Projected                                     $  45,000

                                    Total                                        $284,275

BPOL Tax Rebate capped at $416,000 for up to 10 years and not to                                                  exceed $41,600 annually                                            

Leased Building Purchased July 1, 2018 for  $7,150,000

2019 Building and Land Assessment:            $7,198,500

Average Annual Salaries $30k with 200 full time employees

In 2018 49 team members earned more than $49K per year

PMC has demonstrated Satisfactory Performance Agreement Compliance and all taxes are current

New Equipment Investment to date of $2.5 million.

The initial Agreement would remain in place until the cap is reached (estimated 2020) in the amount of $208,000.