Mebane’s city council acted last week to offer incentives packages to three existing companies that have plans to expand their operations in the city.
The largest, for Morinaga, maker of Hi-Chew candies, is on the Orange County side of the city. Meanwhile, the city also agreed to provide two smaller amounts as a match in hopes of helping one Alamance County company get a state-funded building reuse grant and ponying up its share of the match for another where the company has been awarded such a building reuse grant.
Morinaga America Foods
Morinaga’s expansion was announced last month. The company announced plans to build a $136 million expansion of its existing facility at 4391 Wilson Road in Mebane, which fronts I-85/40, doubling both the size of its plant and the number of employees, adding 204 more. Morinaga’s existing manufacturing facility is located inside Mebane’s city limits, just over the Alamance County line in western Orange County.
Morinaga’s planned expansion will double its footprint in Mebane – from the original 100,000-square foot manufacturing plan, to 200,000 square feet by 2027 – at its existing 21-acre property along Wilson Road.
Noriyuki Nishikawa, the president and CEO of Morinaga America Foods headquartered at the plant in Mebane, told Mebane’s city council that the company enjoyed U.S. sales of $137 million last year. In Japan, he said the company’s Hi-Chew brand is the best-selling candy in the country.
[Story continues below photos.]
Nishikawa said the company has appreciated the “reliability of the workforce” in Mebane, its only U.S. production facility, and enjoys “bringing joy to our customers” through its products.
The expansion is estimated to lead to the creation of an additional 204 jobs, at an average salary of $48,912 annually or average hourly pay of $23.52, by 2030, company officials said last month. The new jobs associated with Morinaga’s forthcoming expansion will be full-time and offer healthcare and other benefits, officials said at a press conference at the time of the announcement.
Mebane’s city council unanimously agreed to the incentives package of about $1.1 million – $576,999 in cash grants distributed annually after investment and employment benchmarks are achieved and a maximum waiver of the city’s building permit and inspections fees of $500,000.
With an estimated $31.6 million property tax valuation in 2023, Morinaga is on track to become one of the top manufacturing taxpayers in Orange County.
Morinaga initially invested $48 million to build its existing manufacturing facility in Mebane, where it currently employs more than 200 people, according to Mebane city officials.
Morinaga America Foods will receive a state performance-based grant of $100,000 to help fund the expansion, contingent on a matching investment of $115.4 million by the company, as well as local government support, Gov. Roy Cooper said last month.
Recipients of those grants through the One North Carolina Fund receive no money upfront and must meet job creation and capital investment targets in order to receive any grant payments, according to the North Carolina Department of Commerce, which administers the grants.
Other components of the state’s incentives plan are said to total about $6.7 million, as follows:
- Sales tax exemption for machinery and equipment purchases ($5.9 million)
- N. C. Community College training support ($306,000)
- U.S. Department of Labor’s Federal Bonding Program to assist in the hiring of “at-risk” job seekers ($255,000)
- Work Opportunity Tax Credit ($146,400)
- On-The-Job (OJT) training ($50,000)
In addition to Mebane’s incentives, Orange County is expected to act during September on its own incentives package (the commissioner board there takes off July and August).
Orange County’s history on local incentives has generally followed a formula where new and expanding industries have received a “performance-based” grant for up to the first five to six years of operation, and, at a dollar value of up to 75 percent of the “net new” property tax valuation created by a company’s new capital investment.
While Orange County calculates its formula for incentives differently from Mebane, the cash grant amount is often quite similar – not counting the city’s waiver of permit and inspections fees.
Both Mebane and Orange County typically include, as does the state, a performance agreement, which include claw back provisions, and other protections for the local governments, in the event that the expansion either falls through or falls short of the expected results.
The city’s (and state’s) calculation for its incentives is also based on a lower total investment ($115. 4 million) than the $136 million announced by the company.
In addition to its fruity Hi-Chew candy, Morinaga manufactures over 40 product lines and ranks similar to the Kellogg Company in retail sales.
Sandvik
The council also agreed to support a much-smaller project for the Sandvik Coromant Corporation, that is also near I-85/40 but on the Alamance County side of Mebane.
[Story continues below photo.]
The company, which came to Mebane in 1980 and is one of the oldest industrial tenants in the city, engineers and manufactures high-tech metal cutting tools. In 2020, the company moved its U.S. headquarters to Mebane, according to Tom Humphrey, the company’s controller, who made the presentation to the city council.
The company asked the city of Mebane to provide matching local funds that would supplement a state grant the company is seeking to upgrade its facility in Mebane. Sandvik has had a significant portion of its facility, apparently as much as 9,300 square feet, about 10 percent, which has been largely unused except for storage.
Plans are now to apply for a state grant for “building reuse,” an incentives program of usually smaller proportions but which also entail a “match” of sorts from a municipal government.
The city was asked to provide $7,250 for its match of the state building reuse grant, which the city council unanimously endorsed.
The company is applying for $145,000 from the state.
Sandvik says it will create 18 new full-time jobs paying an average wage of $62,777. The company is considering new investment in real property for a total investment of almost $1.3 million and personal property investment $800,000 that is not part of the building reuse grant application local match.
The state-funded building reuse grant program is administered by the North Carolina Department of Commerce.
The grants can be used for: renovation of vacant buildings; renovations or expansions of buildings occupied by an existing company that hopes to expand in a current location; and healthcare-related expansions, renovations, or construction.
To be eligible, companies seeking to renovate or expand an existing building must have operated in the state for at least 12 months prior to applying for a building reuse grant; meet a state “weekly wage standard”; and satisfy various other criteria, according to the state commerce department.
Lotus Bakeries
The city council also agreed to a budget amendment, for $25,000, which is the city’s portion of a previously-approved match for a building reuse grant submitted by Lotus Bakeries, 2010 Park Center Drive.
[Story continues below photo.]
The council had agreed in 2021 to the company’s request to put up the money, in hopes that the company would get a $475,000 state building reuse grant. The city’s portion is the 5 percent match required to obtain the state grant – for a total grant of $500,000.
The company’s plans were announced at the time to invest $60 million in its existing plant, which would add 86 new jobs.
