For seven months, the Effingham County Industrial Development Authority has wooed perhaps its biggest prospect ever. It appears its efforts are about to pay off in a big way.
The IDA approved a memorandum of understanding at a special called meeting Thursday with Project Supreme. The identity of the prospect remains cloaked in confidentiality, but it is believed to be a foreign company that will make Effingham its U.S. headquarters.
“It’s a tremendous deal for us,” IDA Chairman Martin Wilkins said. “It’s far and away the largest economic development project this county has ever had. It’s one of the largest the state has seen.”
“It’s been a long, drawn-out battle,” IDA Chief Executive Officer John Henry said, adding his congratulations to the board members for approving the deal and their work on it. “This is a tremendous deal. This is a big project.”
The prospect is expected to have a huge impact on the local economy and employ 600 people within eight years. The total investment by the company is expected to be $106 million. It will occupy approximately 55 acres of the IDA’s industrial park along Highway 21. Project Supreme is scheduled to have 283 employees at the site by end of 2009.
IDA officials will be in Atlanta on Monday morning to formalize the agreement with Project Supreme’s executives and state leaders, who are expected to include Gov. Sonny Perdue.
“We’re excited about it,” Wilkins said, “and excited a company of their magnitude is considering us.”
Included in the deal is a 20-year property tax abatement for the project, which will have a payment in lieu of taxes agreement with the board of education. There also will be Freeport and sales tax exemptions.
“These tax incentives are already in place for any company wanting to do business in the state of Georgia,” IDA member Rose Harvey said.
Harvey questioned what the county’s investment in the project would net taxpayers, given the property tax abatement.
“It is the job of this group to create jobs for the county,” she said. “The question I have is how is this going to benefit the taxpayers of this county? My brain is not plugging into those numbers to my satisfaction.”
Henry said the projections of the local economic impact, known as LOCI, put the rate of return on the county’s investment at 215 percent.
As part of the deal, the IDA is expected to spend $1.5 million and also waive the water and sewer impact fees for the project. Those fees are estimated to be from $180,000-$200,000. The total amount of support, including the fair market value of the land, is about $4.87 million, according to Henry.
“That’s not just land,” he said. “That’s land and out of pocket expenses.”
Included in the memorandum of understanding are performance, job and investment levels the company must meet.
Should the company not meet those requirements, the IDA has what are known as clawbacks and can either take the land back or put it on a schedule to be on the property tax digest.
Some of the IDA’s obligations include extending the rail spur for the company. But the lines for water, sewer, gas and power are already in. The infrastructure and the location of the site helped sway Project Supreme.
“It’s ready to go,” Wilkins said of the site. “And that’s what gave us an advantage over some of our competitors.
There’s something to be said for the folks who had the foresight to invest in that infrastructure. That has been a big advantage for us.”
The original search included 10 states and was whittled down to four and then pared down to two. There were four communities in those two states vying for Project Supreme, including one of Effingham’s neighboring counties.
“The field was cut down to communities in Georgia and one in South Carolina that had much more, four times as much, in incentives to offer,” Henry said. “But we had the site.”
Effingham’s per capita income and its low unemployment rate actually can work against the county. As a Tier 4 county, it can only provide $1,250 in tax credits for each job created. Its nearby competitor, a Tier 1 county, can offer nearly $4,000 in tax credits for each job created.
Henry said the deal, once the company’s name is made public, will become national and even international news.
“We expect the press to be in here next week, giving the county a lot of positive publicity,” he said.
Wilkins also expressed appreciation for the work of the county commissioners and the Effingham board of education.
“It’s been a joint effort to bring this about,” he said.
IDA board members approved a memorandum of understanding with “Project Supreme” on Thursday. The company, once it approves the deal, is expected to make its home in the Effingham Industrial Park on Highway 21 its U.S. headquarters.
Jobs to be created:
• 283 by end of 2009
• 400 by end of 2012
• 600 by end of 2015
Total investment, including facility, machinery and equipment: $106 million