HomeMy WebLinkAbout20110580 1861 - 2011
OFFICE OF BOARD OF COMMISSIONERS
PHONE: 970-336-7204 FAX: 970-352-0242
915 10Th STREET
W E LI ID___-C I U N T Y P.O. BOX 758
GREELEY, COLORADO 80632
February 18,2011
Mark Seymour
Vice President,Tax
Hexcel Corporation
281 Tresser Boulevard
Stamford, CT 06901
Re: Personal Property Tax Rebate
Dear Mr. Seymour:
As you are aware, Weld County does not currently have a Personal Property Tax incentive agreement in place with
Hexcel Corporation. These agreements are typically entered into as economic incentive for companies to invest in
personal property and to create, and/or retain jobs for Weld County citizens. These agreements contain provisions
indicating a rebate to the taxpayer shall only be made to the extent revenues are available,and are approved by the Board
of County Commissioners in each of the ten years of the agreements.
We appreciate the confusion your company experienced in developing an agreement with Weld County. It is unfortunate
this happened. However, the Board of County Commissioners has decided to suspend doing any tax incentive
agreements with firms until the County's assessed valuation and property tax revenues stabilize. Once this occurs,the
Board will re-evaluate,on a year-to-year basis,whether it will participate in incentive agreements and under what terms,
including one with Hexcel Corporation.
The Board of County Commissioners regrets having to take this action,but in light of the budgetary challenges faced by
Weld County and our fiduciary responsibility to all Weld County taxpayers,we feel that we do not have a choice. While
there are unique circumstances concerning your request, we trust that you will understand our position on this matter.
If you have any questions or with to discuss, please feel free to call me at (970) 336-7204 or email me at
bkirlcmeyer@co.weld.co.us.
Sincerely,
BOARD OF COUNTY COMMISSIONERS
arbara Kirkmeyer, Chair
cc: Monica Mika
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February 7, 2011
VIA FEDERAL EXPRESS
Mr. Douglas Rademacher, Chair
Board of County Commissioners of Weld County
915 Tenth Street
P.O. Box 758
Greeley, Colorado 80632
RE: Hexcel Corporation
Personal Property Tax Rebate
Dear Mr. Rademacher,
We are writing on behalf of Hexcel Corporation(located at 31815 Great Western Drive,
Windsor, Colorado 80550)to request acceptance to the personal property tax incentive rebate
program available under Colorado Senate bill #90-118 and Senate Bill #94-182.
Background:
Hexcel Corporation, together with its subsidiaries, engages in the development, manufacture, and
marketing of composites for use in the commercial aerospace, space and defense, and industrial
applications.
It operates in two segments, Composite Materials and Engineered Products. The Composite
Materials segment manufactures and markets carbon fibers, fabrics and specialty reinforcements,
prepregs, structural adhesives,honeycomb, composite panels,molding compounds,polyurethane
systems, and laminates. These products have applications in military and commercial aircraft,
wind turbine blades, recreational products, and other industrial applications.
The Engineered Products segment manufactures and markets composite structures and precision
machined honeycomb parts for use in the aerospace industry. The company's products are also
used in various end applications, including space launch vehicles and satellites, automotive,
bikes, skis, and various other industrial applications. Hexcel Corporation sells and markets its
products directly, as well as through independent distributors and manufacturer representatives.
Weld County Personal Property Rebate Incentive Program February 7, 2011
It sells its products in the United States, France, Austria, the United Kingdom, and
internationally. The company was founded in 1946 and is based in Stamford, Connecticut.
Windsor, Colorado Facility:
Hexcel Corporation ("Hexcel") is establishing a technologically advanced manufacturing facility
in Windsor, Colorado. The facility will produce high-performance composite materials that will
be molded into wind turbine blades by Vestas Blades America, Inc. ("Vestas"), creating
specified advanced energy property.
Annually, Hexcel's entire production of composites will be used to manufacture blades for 2,000
three megawatt wind turbines, allowing for production of 6,000 megawatts of wind-generated
electricity.
The ongoing technical challenge for the wind power industry is the development of blades that
produce more torque, enabling greater energy generation. Hexcel's epoxy resin pre-impregnated
and semi-impregnated glass and carbon fiber composites will assist the industry in meeting this
challenge.
• Hexcel's composites enable increasingly complex blade configurations, creating
increased energy generation capacity and more efficient and cost-competitive wind
power. Blade design will continue to advance with the use of Hexcel's composites,
providing opportunities for new and improving technology.
• Hexcel's composites offer remarkable rigidity and strength,but are lighter than
competitive materials. As a result,blades using Hexcel's composites can be longer
(enabling more energy generation per turbine) without concern of blade deflection into
supporting towers, which could cause destruction.
The first production line at Hexcel's facility was completed in June 2009,with $8.8 million in
qualifying capital investments. The facility began shipping composite materials to Vestas's
Windsor, Colorado blade manufacturing facility in August 2009. Installation of a second
production line at the facility began in November 2009 and was operational in March 2010;
qualifying capital investments are estimated at $9.1 million. Installation of a third production
line is scheduled to begin June 2011 and be operational October 2011, at an estimated cost of
$6.8 million in qualifying capital investments. Placing all three of the facility's production lines
into service will result in estimated $24.7 million in qualifying capital investments.
During the construction period, 89 direct construction jobs were created. Hexcel has created 60
jobs at the operational level as a result of this facility, for a total of 149. These jobs include a host
of construction functions to perform excavation, install concrete, steel, drywall, and flooring,
machinists for a variety of technical specialties, plumbing, electrical, and project managers. The
operational phase includes highly-skilled technicians, managers, and project line operators. It is
expected that the Operational Phase jobs numbers are a floor, as the growth in wind energy and
projected domestic and international expansion of wind turbines is expected to increase demand
for wind turbine blades and Hexcel's advanced technology for the production of those blades.
Weld County Personal Property Rebate Incentive Program February 7, 2011
Early in 2009, Hexcel participated in discussion with Ms. Cathy L. Schulte, Senior Vice
President of the Upstate Colorado Economic Development regarding various incentives for
locating our business in Weld County. Among the incentives discussed were the personal
property tax rebate program. As a result of these discussions, Hexcel was provided with a
proposal of incentives and project parameters (see attached) . The incentive program was one of
many strong motivators to place this operation in Weld County and continues to be an important
contributor to its long term viability in the current economy.
However, due to the fact that the person responsible for the filing the rebate application was
transferred out of the U.S. later that year to work on another assignment, the Expanded Business
Facilities Credit application was not filed with the County and we inadvertently missed the filing
deadline. Since all of the eligibility requirements for acceptance into the program were met we
would appreciate your consideration for acceptance into the program. Therefore, we are
attaching all the documents necessary for the application and respectfully request that you
consider our filing for acceptance in the rebate program.
It may be beneficial for both parties to arrange a meeting to discuss our plans for our Windsor
plant in more detail. Once you have had a chance to review these materials please contact me to
discuss the possibility of an in-person meeting at either of our locations. I can be reached
directly at(203)-352-6845.
We appreciate your consideration in this matter very much and look forward to the opportunity
of doing business in Weld County.
Sincerely
4ea4fS114
Mark Seymour
Vice President, Tax
Hexcel Corporation
281 Tresser Boulevard
Stamford, CT 06901
Cc:
Ms. Monica Daniels-Mika
Director of Administrative Services
Weld County
915 10th Street
Greeley, CO 80631
INCENTIVE PACKAGE SUMMARY
Fiberglass Manufacturer-Broe Lead
November, 2007
Great Western Industrial Park- Lot 21
The incentives summarized below are estimates based on the attached project specifications and
assumptions. All proposed incentives are subject to final government approvals Additional
information and summary calculations for each of the below programs is attached.
Windsor 8,Weld County Cost Incentive
Development Costs/Incentives:
City Development Costs(fees/taxes) $192,887
Economic Development Incentive(fee/tax waiver) N/A
Personal Property Tax Rebate:
Property tax due on new equipment(10 years)
Property tax rebate from Windsor, Weld County $2,924,191
$371,267
Colorado
Colorado First Customized Job Training Funds(45) $36,000
(Est. @$800/new job created)
State Performance Incentive Grant $112,500
(Est. @$2,500/new job)
TOTAL ESTIMATED INCENTIVE PACKAGE VALUE $519,767
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Fiberglass Manufacturer- Broe Lead
ESTIMATED Colorado Job Creation Performance Incentive Fund (PIF)
October, 2006
Based on the attached project assumptions and assumption that the proposed program changes
will be approved by the legislature and go into effect 7/2008, we have estimated the PIF that this
company could reasonable earn once qualifing new jobs have been retained for 12 months at an
qualifying wage rate. See the Job Creation Performance Incentive Fund application for detailed
eligibility information and information on calculating the grant award. Awards are subject to final
Estimated Incentive Calculation:
Urban Location (min 10 new new FTE) Hire Date for Eligible Jobs (Month/Year)
Weld- Windsor July-December, 2008
#of Eligible or Net New Jobs 45
Eligible Annual Average Wage Rate $75,000
County Annual Average Wage Rate $35,144-2006 Annual Average-All Industries
Average Wage Rate% 213.40%
$ Incentive/Eligible Job $2,500
Estimated Eligible Incentive $112,500
Note: We assumed that the 45 new jobs would be created from July-December, 2008 at a facility-
wide annual average wage of$75,000/yr. Wage rates qualify for the Enhanced Incentive program.
•
PROJECT PARAMETERS
Fiber Glass/Composite Manufacturer—Broe Lead
Description: New fiber glass/composite manufacturing facility—Vestas Supplier
NAICS Code:
Total Investment: $18.6 million
Building: Size: 50,000 sq. ft. —Phase I (Phase 2—additional 50,000 sf- 2-3 years out)
Investment: $2 million ($40/sq. ft.)
Electrical Requirements: On-Site adequate
Water Requirements: Potable—%"tap size—nothing used in the manufacturing
Sewer Requirements: Potable waste stream only
Gas Requirements: On-Site adequate
Land: 9.5 acres; to be annexed/zoned as part of Great Western Industrial Park—(Lot 21)
Investment: $1.65 million
Equipment: $15 million-new equipment—Phase 1 (Phase 2—additional $15 million)
Employment: 45 FTE Phase 1 (Phase 2—additional 30 FTE)
Est. Production Wage-$16-25.00/hr. average+benefits
Est. Facility-wide annual average wage-$75,000 (includes management)
Benefits are estimated at %of wage
Does company pay at least 50%of employee health premium-Yes
Training Cost/Employee-
Time Frame: Construction Start: ASAP
Operational: 4QT/08
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Town of Windsor
Economic Development Incentive Guidelines
In an effort to encourage high quality, primary or basic sector investment and job creation, the Town of
Windsor has established the following incentive guidelines.
Eligibility Requirements
The incentives described below shall be available, on a case-by-case basis, to new or expanding
primary/basic sector businesses engaged in manufacturing, distribution, research and development or
other business types that export more than 50% of their goods/services outside of the State of Colorado.
In addition, to be eligible for incentive consideration the business must:
1. Make a minimum investment of$500,000 in plant and/or equipment during the calendar year in
which application is made for incentives.
2. Create/retain "qualifying"jobs with an overall average annual wage rate that is at least 125%
higher than the overall Weld County average annual wage rate of all industries. The business
must also offer an employee health plan where the employer pays at least 80%.
3. Provide company information in order to run the"Insight Colorado"version of the national
Arthur Anderson Impact Model. This model estimates the total economic benefits(including
direct revenues, costs and multiplier effects) to the community and the incentive payback period.
To be eligible for incentives, the payback period must be within 5 years.
4. Provide on-going company information for monitoring purposes. Upon incentive approval by the
Windsor Town Council, the company will be required to enter into an agreement with the Town
of Windsor guaranteeing that mutually agreed to investment/jobs will be created within a specific
period of time. If the company is unable to reach guaranteed levels, the Town of Windsor will
have the ability to recover incentive payments on either or full or pro-rated basis.
Incentives
Development Fees
1. The following fees may be waived: raw water charge, water/sewer tap fees, storm drainage fee,
transportation impact fee and the administrative portion of the building permit fee.
2. Fees waived cannot exceed fees required.
3. Contracted building permit fees are not eligible for waiver.
4. The Town of Windsor reserves the right to provide relief of infrastructure requirements on a
case-by-case basis, and will actively apply for federal and state grant/loan dollars to encourage
high quality investment and job creation as appropriate.
SB-182 Personal Property Tax Rebate
1. Up to one half(50%) of the qualifying new personal property tax received by the Town of
Windsor may be rebated back to a qualifying company, on a case-by-case basis, for up to ten
(10) years if:
a. The new/expanding business meets Town of Windsor eligibility criteria.
b. The new/expanding business qualifies as a "New Business Facility"defined by the state as:
"a new or expanded facility that is employed by the taxpayer in the operation of a revenue
producing enterprise."There are two ways an existing company can qualify as a new
business facility. 1) Undertake an expansion that exceeds $1 million; or if less, 2) 100% of its
investment in the original facility prior to expansion.
c. State enabling legislation is in effect.
4/07
PERSONAL PROPERTY TAX INCENTIVE
SUMMARY
Senate Bills 118 and 182 enable counties and municipalities, on a case-by-case basis, to negotiate a
rebate or credit of up to 50% of the jurisdiction's levy on new taxable personal property used in
connection with the operation of a qualifying new or expanded primary sector business facility. The State
of Colorado limits this incentive to ten years.
Weld County and the City of Greeley have each adopted resolutions stating their willingness to negotiate
appropriate personal property tax refunds to businesses that qualify under state/local guidelines. Other
Weld towns will consider this incentive on a case-by-case basis.
HISTORY
This legislation was originally created to provide relief from personal property tax for primary employers
making large investments in manufacturing equipment in Colorado. Because these investments are
subject to personal property tax levels that may be higher than that of other types of companies in
Colorado, primary sector employers were being hurt and Colorado was losing high quality jobs. This
program is designed to reduce (not eliminate) the personal property tax burden of a qualifying new or
expanding company. The demonstrated and expected results of the program are to encourage more
manufacturing investment in Colorado.
TAXPAYER ELIGIBILITY REQUIREMENTS
• The taxpayer must qualify as a "New Business Facility"defined as: a new or expanded facility that is
employed by the taxpayer in the operation of a revenue producing enterprise. There are two ways an
existing company can qualify as a new business facility, as referenced by C.R.S. 30-11-123: 1)
undertaking an expansion that exceeds $1 million; or if less, 2) 100% of its investment in the original
facility prior to expansion.
• An eligible new or expanding business shall invest a minimum of $lmillion in new depreciable
personal property during the calendar year in which application is made for the incentive payment.
• The new/expanding business shall not include any corporate reorganization, sale of an existing
business, or resumption of business activities unless new investment is created.
• Eligible taxable personal property must be located at or within such"new Business Facility"or directly
attributable to the expansion of an existing business facility, and used in connection with such facility
for the current property tax year.
• An eligible new/expanding business shall derive at least 50% of its principal source of gross annual
income from the sale of products or services consumed outside of Weld County either directly or
indirectly. The intent of this guideline is to assist firms engaged in manufacturing, processing,
research 84,development, and provision of externally directed services.
• An eligible new or expanding business shall not derive more than 25% of its gross annual income
from direct retail sales or other internally directed sales.
For additional information contact'
Upstate Colorado Economic Development• 970-356-4565. www.upstatecolorado.org
8/06
•
Colorado F�
i ' „
Thrt
Office of Economic Development 's" - - et t
and International Trade - _- -
Colorado FIRST/ Existing Industry Customized Job Training
nr M . 4,.. ,
e'satriz,r71,5,77-nsimaral,;742;;;zi 'LT
All grant applications for The mission of Colorado customized job training programs is to provide job-training grants to companies
both programs must meet that are locating or expanding in Colorado. Through the job training programs, Colorado invests in its
the following criteria: labor force. The program will increase transferable job skills that support both the company's economic
Maximum grant award of competitiveness by re-training its workers in new skills, while enhancing the workers'resumes and long-
$800.00 per employee term employment opportunities.
Grant funded training must be
for permanent,fun-time,non- Colorado First Customized Job Training Program
seasonal,non-retail positions This program provides financial assistance and helps individual businesses to design specialized training
in the state of Colorado, through a cooperative effort with the Colorado Community College and occupational Education System.
which have significant career Group training for small business with similar needs is available. The grant may provide:
opportunities and require
substantive instruction
• Instructors wages
Grants will only be awarded • Curriculum Development
to companies that mthet a
reshold'
• Thepurchase of consumable training supplies
sustainable wage threshold: • PP
in urban areas,employers
must pay an average wage of Colorado Existing Industry Job Training Program
at least86.50/hour,average This program provides assistance to established Colorado businesses in order to:
wages in rural areas must be
at least 87.00/hour
• Remain competitive
All grant-funded training must • Adapt to new technology
be customized to meet the • Prevent layoffs
company's specific needs
Applicant companies must Key Facts about the Colorado First and Existing Industry Job Training Program
pay for a minimum of 40%of • These training programs will receive$2.7 million in funding for the 2007-2008 program year
the total training costs • Colorado First grant applications are reviewed on a rolling basis throughout the fiscal year
A financial evaluation of the • Existing Industry Grant applications are reviewed in a competitive process by the administering
applicant company's agencies three per fiscal year
required • Grant funded training must occur within the fiscal year that funds are awarded
An on-site visit of the **The program fiscal years runs July 1st until June 300 of the preceding year.
applicant company is
required To apply for a job-training grant or locate a Community College or area vocational school, visit
http://www.cccs.edu/FindCollege.html.
If your company is planning to expand or relocate to Colorado, please contact the Colorado Office of
Economic Development directly at 303-892-3840.
To download information and application forms from the Community Colleges Web site,go to
www.cccs.edu/workforce/trainingfunds.html.
To list or search job openings,contact the Colorado Workforce Centers at www.coworkforce.com/EMP/
Contact:Pete J.Roskop,Job Training Program Director,1625 Broadway,Suite 2700, Denver,CO 80202
Phone:303-892-3840 Email:peter.roskop@state.co.us Web site:www.AdvanceColorado.com
Colorado '"
Office of Economic Development
and International Trade }
y.
1
Job Creation Performance Incentive Fund
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Purpose:
The Job Creation Performance Incentive Fund(PIF)provides a performance-based incentive payment to qualifying
companies that have created net new jobs paying above average wages. The program is designed to support and encourage
new business development, business expansions and relocations that have generated new jobs throughout the state.
Funding Source:
Three million dollars will be available annually to fund this program.*
The State's Role:
The Colorado Office of Economic Development and International Trade(OEDIT)provides administrative support for the
Colorado Economic Development Commission(EDC). The EDC has oversight authority for this program. The OEDIT's
Business Finance Staff will facilitate the application review/disbursement process generally within 60 days after receipt of an
application.
Requirements:
After maintaining new jobs for one year,an employer has 90 days from the last day of the month in which the jobs were filled
to submit an incentive application. The first month in which an application may be submitted is January 2007(for jobs created
in January 2006). Incentives will be awarded to applicants in the order in which the EDC receives complete,accurate and
eligible applications(first come,first serve)until all program funds have been expended. Any eligible applications that are
received after funds have been expended will be placed first in line until new funding is available.
Employers located in a rural area must hire at least five new full-time jobs within one calendar month and employers located in
an urban area must hire at least 10 new full-time jobs within one calendar month. Businesses with multiple locations within
Colorado may combine locations to meet the minimum job creation requirements as long as all jobs are hired within the same
month. If one or more of the locations are located in an urban area,the minimum job creation requirement is 10 new full-time
jobs.
Eligible new jobs(net new jobs)are those jobs that are in addition to the three year full-time employee average(from the
preceding three years)and can only be counted one time.
If a business is affiliated with a parent company or subsidiary that is also located in Colorado,the net new jobs must be in
addition to a three year average of all Colorado Affiliated entities. In addition, if a business has multiple locations,the net
new jobs must be in addition to a three year average of all Colorado locations.
The employer must maintain all of the new jobs for at least one year in order to claim the incentive.
*An amount equal to 15%of each annual allocation will be used by the Commission to award performance-based incentives to employers who open a
business or expand or relocate an existing business from an out-of-state location and create new jobs in an enterprise zone that is not within the counties
of Denver,Boulder,Douglas,Arapahoe,Jefferson or Broomfield.
Incentive:
The following chart shows the incentive levels—based on the new employees'average wage rate for the last 12 months when
compared to the county average wage rate(based on information provided by the Department of Labor and Employment).
Average Wage $Incentive/Net
Rate% New Job
<110% $0
110%-114% $1,000
115%-119% $1,250
120%or> $1,500
Process:
Businesses should review the State's Web Site for specific requirements and application instructions.
Information on this program will be located under Business Finance at www.AdvanceColorado.com,
After maintaining new jobs for one year,an employer has 90 days from the last day of the month in which the jobs were filled to
submit an incentive application
The OEDIT Business Finance Staff will facilitate application review/disbursement process generally within 60 days after receipt of
application.
A business can submit multiple applications as long as they meet the program requirements.
Businesses already receiving an incentive from the EDC may not receive an incentive from this program for the same net new
jobs.
For further information,please contact:
Colorado Office of Economic Development and International Trade
Business Finance Division
Shela Tatro or Alice Kotrlik
1625 Broadway, Suite 2700
• Denver, Colorado 80202
(303) 892-3840
(303)892-3848 fax
1-800-659-2656 TDD
Shela.Tatro@state.co.us
Alice.Kotrlikstate.co.us
1625 Broadway,Suite 2700 Denver,CO 80202 Phone:303-892-3840 Web site:www.AdvanceColorado.com
•
Colorado
(Mace of Economic Development ":" *ate
and Internattonal trade
s
,
Enhanced Incentive Program
r,
Purpose:
The Enhanced Incentive Program(EIP)provides an additional performance-based incentive payment to companies that have
qualified under the State's Job Creation Performance Incentive Fund(PIF)and have created new jobs paying at higher than
average wages.The program is designed to support highly desirable and high-impact job creation opportunities.
Funding Source:
This program will utilize existing Colorado Economic Development Commission(EDC)funds.
The State's Role:
The Colorado Office of Economic Devdopment and Intemational Trade(OEDIT)provides administrative support for the EDC. The EDC
has oversight authority for this program. The OEDIT's Business Finance Staff will facilitate the application
review/disbursement process generally within 60 days after receipt of an application.
Requirements:
Applicants must first be eligible for the PIF Program in order to be eligible for the EIP. Incentives will be awarded to applicants
in the order in which the EDC received complete,accurate and eligible applications(first come,first serve)until all program
funds have been expended. The EDC reserves the right to vary from the criteria as necessary and appropriate.
Incentive:
The following chart shows the incentive levels—based on the new employees'average wage rate for the last 12 months when
compared to the county average wage rate(based on information provided by the Dept.of Labor and Employment).
Rural Urban
%of %of
County °
$ ty
Av OOH a Incentive/Job AvqWage Incentive/Job
110% $1,000 110% $1,000
PIF 115% $1,250 PIF 115% $1,250
120% $1,500 120% $1,500
125% $2,500 150% $2,000
Enhanced 135% $2,750 Enhanced 180% $2,250
150%or> $3,000 175%ors $2,500
Process:
Upon receipt of a PIF application,the OEDIT Business Finance Staff will determine if an applicant is eligible for enhanced
incentives.
Businesses should review the State's Web Site for specific requirements and application instructions. Information on this program
will be located under Business Finance at www.AdvanceColorado.com.
For further information,please contact:
Colorado Office of Economic Development
and International Trade
Shela Tatro or Alice Kotrlik
1625 Broadway,Suite 2700
Denver,Colorado 80202
303-892-3840
303-892-3848 fa<
1-800-659-2656 TDD
Shela.Tatroarstate.co.us
Alice.Koblik@state.co.us
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