Agenda 03/08/2016 Item #16F 3 3/8/2016 16.F.3.
EXECUTIVE SUMMARY
Recommendation to approve an agreement between Collier County and Arthrex under the
Capital Investment for Diversification Incentive ("CID") Program providing a grant in the
amount of $572,970 in support of Arthrex's planned 161,000 square foot medical device
manufacturing facility expansion project at Ave Maria.
OBJECTIVE: To obtain Board approval of an economic incentive agreement between the County and
Arthrex supporting the expansion of the advanced medical device manufacturing activities occurring at
the company's facilities at Ave Maria.
CONSIDERATIONS: Arthrex is planning construction of a 161,000 square foot addition to its medical
device manufacturing facility at Ave Maria. The planned expansion is consistent with the County's
economic development goals for job creation and capital investment in Targeted Industries in Collier
County. The estimated capital investment for this expansion project is $15M with 350 new permanent
jobs projected. The agreement stipulates that Arthrex pay the required impact fees related to the project
and that the County provides a grant award in equal installments over four years equivalent in value to
the amount of impact fees paid. The agreement is contingent upon the company's continual operation of
the facility as a medical device manufacturing facility, remaining current on all local taxes, and
documenting the employer's payment of at least 50 percent of its manufacturing facility employee's cost
of health care coverage. Structured as a performance-based capital investment inducement (compliance
is required before payment), this agreement ensures the County's exposure and risk is minimized.
This expansion project is located within the Ave Maria Innovation Zone established by the Board on
June 9, 2015. To avoid potential "stacking" of financial incentives for a specific application, the Capital
Investment for Diversification Incentive program (CID) contains a provision that excludes a project
from eligibility if it is geographically located within an Innovation Zone. However, the Ave Maria
Innovation Zone is in its preliminary phase and is not in a financial position to incentivize the Arthrex
expansion. In order to eliminate this unanticipated conflict, the Board must waive the prohibition
against this particular CID award in the Ave Maria Innovation Zone.
FISCAL IMPACT: The maximum cost to the County for this inducement grant is $572,970. The
incentive will be paid over four years ($143,243 annually) for this Targeted Industry Economic
Development Project. Funding for this incentive payment is subject to annual budget appropriation by
the Board. The first annual payment will be programmed in the Economic Development budget cost
center(001-138763)no sooner than the FY 17 budget.
GROWTH MANAGEMENT IMPACT: The recommended action supports the goals and objectives of
the Economic Development Element of the adopted Collier County Growth Management Plan.
LEGAL CONSIDERATIONS: This item has been reviewed by the County Attorney, and subject to
Board approval of the waiver referenced herein, is approved as to form and legality. This item requires
majority vote for approval. -JAK
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RECOMMENDATION: Recommendation to approve an agreement between Collier County and
Arthrex under the Capital Investment for Diversification Incentive ("CID") Program providing a grant in
the amount of $572,970 to support of Arthrex's planned 161,000 square foot addition to its medical
device manufacturing facility at Ave Maria and the waiver of the applicable provision of the CID
program as outlined in the executive summary.
Prepared by: Jace Kentner, Interim Director, Office of Business & Economic Development
Attachment: Agreement with Arthrex
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COLLIER COUNTY
Board of County Commissioners
Item Number: 16.16.F.16.F.3.
Item Summary: Recommendation to approve an agreement between Collier County and
Arthrex under the Capital Investment for Diversification Incentive ("CID") Program providing a
grant in support of Arthrex's planned 161,000 square foot medical device manufacturing facility
expansion project at Ave Maria.
Meeting Date: 3/8/2016
Prepared By
Approved By
Name: KlatzkowJeff
Title: County Attorney,
Date: 2/29/2016 7:56:36 AM
Name: FinnEd
Title: Management/Budget Analyst, Senior, Office of Management&Budget
Date: 2/29/2016 9:30:19 AM
Name: CasalanguidaNick
Title: Deputy County Manager, County Managers Office
Date: 2/29/2016 12:14:23 PM
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Prepared by:
Jeffrey A.Klatzkow
County Attorney
3299 Tamiami Trail East,Suite 800
Naples,FL 34112
CAPITAL INVESTMENT FOR DIVERSIFICATION INCENTIVE PROGRAM
AGREEMENT
This Agreement for Capital Investment For Diversification Incentive ("CID") Program
(hereinafter referred to as "Agreement") is entered into this 8th day of March, 2016, by and
between Collier County, a political subdivision of the State of Florida, through its Board of
County Commissioners (hereinafter referred to as the "County"), and Arthrex, Inc. and Arthrex
Manufacturing, Inc. (hereinafter jointly referred to as "Arthrex").
RECITALS:
WHEREAS, Collier County enjoys broad Home Rule Powers, which include the
authority to enter into agreements to enhance economic development within the County; and
WHEREAS, Florida Statute Sec. 125.045 expressly provides that "The governing body
of a county may expend public funds to attract and retain business enterprises, and the use of
public funds toward the achievement of such economic development goals constitutes a public
purpose. The provisions of this chapter which confer powers and duties on the governing body of
a county, including any powers not specifically prohibited by law which can be exercised by the
governing body of a county, must be liberally construed in order to effectively carry out the
purposes of this section;" and further that "it constitutes a public purpose to expend public funds
for economic development activities, including, but not limited to, developing or improving local
infrastructure, issuing bonds to finance or refinance the cost of capital projects for industrial or
manufacturing plants, leasing or conveying real property, and making grants to private
enterprises for the expansion of businesses existing in the community or the attraction of new
businesses to the community;" and
WHEREAS, Collier County created the Capital Investment For Diversification Incentive
("CID") Program on March 24, 2015, the objective of which is to advance Collier County's
economy by encouraging development of facilities, space and suitable land for targeted
businesses; and
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WHEREAS, Arthrex has proposed a project consisting of the planning, designing,
development, construction and equipping of a 161,000 square foot addition to its manufacturing
facility built on real property in Collier County, Florida, which is owned or controlled by
Arthrex. The project's operation and directly related employment will be in support of and
complimentary with a prior Collier County Job Creation Incentive Agreement with Arthrex for
the existing operation at Ave Maria which consists of approximately 150 total jobs and over
198,000 square feet of high tech medical device manufacturing consistent with NAICS 339113;
and
WHEREAS, Arthrex estimates that this Project will require it to expend approximately
$15 million in Capital Improvements with 350 new permanent jobs projected; and
WHEREAS, the Board expressly finds that the opening of this facility and development
of the project will result in substantial economic benefits to the County, including but not limited
to the creation of high wage jobs and a net increase to the County's tax base; and
WHEREAS, Collier County estimates that the Impact Fee Liability associated with the
project is estimated at up to $572,969.80 and finds that this amount has been pre-paid; and
WHEREAS, Collier County finds it is in the public interest to facilitate the growth of
Arthrex's Targeted Industry Business expansion as defined in F.S. 288.106 in Collier County and
provide support of Arthrex, with a grant in an amount equal to the value of the Impact Fee
Liability as provided by the CID Program.
NOW, THEREFORE, in consideration of the foregoing Recitals, and other good and
valuable consideration, the receipt and sufficiency of which is hereby mutually acknowledged,
the Parties agree as follows:
1. The foregoing Recitals are true and correct and are incorporated by reference
herein.
2. The Board hereby agrees to enroll Arthrex into the CIDS Program, a copy of
which is attached and incorporated into this Agreement.
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3. Collier County agrees to assist Arthrex with this Project by reimbursing Arthrex ,
the full amount of the Impact Fees incurred from this Project. Payment shall be in four equal
annual installments, subject to annual appropriation, in accordance with the CIDS Program.
4. Any failure by Arthrex to meet the terms and conditions of the CID Program will
be considered a substantial breach of this Agreement. Upon such breach, the County's repayment
requirement will automatically terminate, and neither party shall have any further obligation to
the other with respect to the matters set forth in this Agreement.
Legal Matters
5. Except as otherwise provided herein, this Agreement shall only be amended by
mutual written consent of the parties hereto or by their successors in interest.
6. This Agreement constitutes the entire agreement between the parties with respect
to the matters set forth herein and supersedes and takes the place of any and all previous
representations, undertakings, and agreements between the parties relating to this transaction.
This Agreement does not constitute a lien on the property, and cannot be assigned or transferred
by Arthrex without the prior written consent from the County. Nothing contained herein shall be
deemed or construed to create between or among any of the parties any joint venture or
partnership nor otherwise grant to one another the right, authority or power to bind any other
party hereto to any agreement whatsoever.
IN WITNESS WHEREOF, the Parties have executed this Agreement on the date and
year first above written.
Attest:
DWIGHT E. BROCK, Clerk BOARD OF COUNTY COMMISSIONERS
COLLIER COUNTY, FLORIDA
By: By:
, Deputy Clerk Chairman Donna Fiala,
District 1 Commissioner
Approved as to form and legality:
Jeffrey A. Klatzkow, County Attorney
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AS TO ARTHREX, INC., ARTHREX MANUFACTURING, INC.,
Signed, sealed and
Delivered in the presence of:
By:
Signature John Schmieding, Secretary, Arthrex, Inc.
and Registered Agent, Arthrex Manufacturing, Inc.
Printed Name
Signature
Printed Name
STATE OF FLORIDA
COUNTY OF COLLIER
The foregoing Agreement was acknowledged before me this day of March, 2016,
by John Schmieding, Secretary of Arthrex, Inc. and Registered Agent Arthrex Manufacturing,
Inc., who is personally known to me or has produced as proof of
identity.
[NOTARIAL SEAL]
Signature of Person Taking Acknowledgment
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Attachment A
CAPITAL INVESTMENT FOR DIVERSIFICATION INCENTIVE (CIDS) PROGRAM
DESC12IPTION & OVERVIEW
The Capital Investment for Diversification Incentive(CID)Program is a proposal to advance Collier County's
economy by encouraging development of facilities, space and suitable land for targeted businesses thereby
enhancing the competitiveness in our economic development efforts. The program will provide qualified
applicants an inducement equivalent to the payment made for EMS, Government Building,Jail,Law
Enforcement, and Road impact fees on business space for target industries in Collier County. Eligibility is
limited to new buildings or grey shell space within an existing building,that has yet to be issued a final end
user certificate of occupancy that is utilized for targeted businesses as identified in the State of Florida Qualified
Target Industry List(Attachment B)). The objective of this program is to support a business climate in Collier
County by encouraging an adequate supply of suitable space and land that is competitively positioned to foster
target businesses and the quality jobs they create. In the long term,the County's ability to attract desirable jobs
will be reliant on the extent landowners and developers include suitable sites and space for clean industry,
advanced manufacturing and large single tenant office users in their real estate portfolios. In sum, opportunities
for diversified economic development could be limited without an adequate inventory of real estate options for
targeted business. The CID program supports and encourages the capital investment to diversifying the
economic base.
Capital Investment for Diversification Incentive Program
Collier County will offer qualifying applicant's eligibility to the CID Incentive as a inducement grant providing
a benefit equivalent of up to 100%of the value of the EMS, Government Building,Jail,Law Enforcement, and
Road impact fees actually assessed and remitted for business space directly housing the occupancy of a target
industry business. The CID Incentive will provide four equal annual installments of the Grant amount
commencing with the first anniversary of the issuance of the Certificate of Occupancy for the facility, and will
continue each year thereafter until the full grant amount is paid, conditioned and contingent upon the operation
of the facility as a Targeted Industry (defined as Attachment B)as evidenced by a certified County approved
method or in substitution, an equivalent Targeted Industry Business operation acceptable to the County and the
project remaining current on all local tax liabilities. Payments are contingent_on employer offering and
demonstrating the provision at least 50 percent of the employee's cost of health care coverage. Each CID
Incentive Grant applicant/agreement will be approved by the BCC and funding will be subject to annual
appropriations of the County. Further,the proposed program rules herein provides for a maximum amount of
annual grant funding such that the estimated aggregate annual amount of CID program funding will not exceed
$500,000 annually unless authorized by the BCC. Project eligibility for the CID Incentive Grant will be
discrete and mutually exclusive of any other locally based Collier economic development financial incentives.
The Grant will not be applicable within a geographic area utilizing Innovation Zone participation. CID
Incentive Grants projects will be eligible for Collier's local match participation with the State's Qualified Target
Industry Tax Refund Program(QTI). The CID Incentive Grant is only eligible for properties or facilities with
an application submittal prior to issuance of the Certificate of Occupancy.
General Program Requirements
A project must result in sustained occupancy by a Targeted Industry Business and must agree to the Collier Aottit
specific requirements as a condition for eligibility in Collier County's Capital Investment for Diversification
Program Incentive. The BCC must approve all applicants; and administration of the Program will be conducted
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Attachment A
Only official forms and procedures are deemed sufficient for
by the County Manager or designated staff.
application to this program. A summary of qualifications includes but is not limited to:
• "Target industry business"means a corporate headquarters business or any business that is engaged in one of the
target industries as identified in the State of Florida Qualified Target Industry List(Attachment B)
• Impact Fees are prepaid,and grant is reimbursed over four equal annual installments,initial payment occurs one
year from Certificate of Occupancy,and certification and payment cycles continuing annually until such time the
Grant is complete or the project loses eligibility due to failure to comply with program requirements. Payments
are contingent on employer offering and demonstrating the provision at least 50 percent of the employee's cost of
health care coverage.
• Project eligibility will be subject and conditioned on the County's annual appropriation limit of$500,000 for the
CID Incentive Project total annual payments.
• Project eligibility for simultaneous participation in the State QTI program is permitted,but prohibited in
conjunction with other County local economic development incentive programs.
• Applicant must notify Collier County of intent to apply to the County's Capital Investment for Diversification
Incentive before Collier County approves the local match contribution to that project's State QTI application and
in all cases the CIDS application must be approved by the BCC prior to issuance of the project's final end user
certificate of occupancy.
Program Name., Capital Investment for Diversification Incentive
Grant(Four Year Disbursement)
"Awaid,.Madetohom Developers, Landlords or Business Owners
Wage Requi einent ;i Wage is Not a Specific Requirement, Eligibility is
Limited to Occupancy of a Targeted Industry as
Defined by State of Florida, and New Capital
Investment for Space to House that Targeted Industry.
Targeted Industries are restricted to Quality Jobs with
Commensurate Wages.
Number of Jobs Required Number of Jobs is Not a Specific Requirement,
Eligibility is Limited to Occupancy of a Targeted
Industry as Defined by State of Florida, and
Operations and Related Jobs are Required.
Cap tal Investme it eq irement ;` _ ` > New Capital Investment Scaled to Amount of Space to
House a Targeted Industry.
Expan a le for Later Year obs° '` „y „ ;ti tx Not Linked to Jobs but New Capital Investment
Available o E `ting.Ih�u ry Yes, New Capital Investment for Targeted Industries is
Required
Available to New Industry Yes, New Capital Investment for Targeted Industries is
Required.
Available for,Retention Yes, New Capital Investment for Targeted Industries is
Required.
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Attachment A
Amount of,Award Benefit Equivalent of up to 100% of the Value of the
# � �� ,� , � � r �� < ',' EMS, Government Building, Jail, Law Enforcement,
`�' , F s 1�� .
Business Space Directly Related to the Oc upancy of
' � �� � � � � the Target Industry Business
a ou ` cited le :, ' , , #` ` ; „ 1 Paid in Installments over Four(4)years Subject to
'4� :' �+ s jar "#x ✓ '" 1.
;alc)1 � .4 f , � <�. �� 4, Confirmation of Compliance, Beginning One Year After
� � -= Certificate of Occupancy is Issued.
`Sp 'i�.d seof u'iii ,6 t ` ' 4 �' None
,.{ ° 1.,� 1. " i, 'w'" ` f. i, fi sM.. ,max
Lo l ' o R ®cif"d . , ; Yes- 100% paid by the County
"Buts ``' e' iv z ��'� � " t x Yes New Construction or Never Occupied Space Yet
, ;�, , � � ' to Receive an Final End User Certificate of Occupancy.
) 1g•l4ln'�dt s i si ess 4ctivities., ' � ; Industries defined as Qualified Targeted Industries by
f. b 4 4, Enterprise Florida Inc.
>Inelig le icti � �* � Any retail activities, elect. utility company, or
� r '�� � t �:,. ,a«�yasr,aye -r� � } � � 5
t :F` : 3 phosphate minerals severance, mining or
r rk
processing or operationsolid .
DistressedArea Exception NIA
Contact Jace Kentner, Collier County Business & Economic
Development Office (239) 252-4040.
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