CHARLESTON, W.Va. -- The West Virginia Development Office has assembled a package of incentives designed to help American Woodmark Corp. expand its kitchen cabinet manufacturing plant in Moorefield.
A memorandum of understanding between the development office and American Woodmark was released following Thursday's meeting of the West Virginia Economic Development Authority, the state's financing agency.
American Woodmark's incentive package has several parts. According to the memorandum, the company promises to:
* Make a minimum investment of $15.2 million within three years in its plant in the Robert C. Byrd Hardy County Industrial Park off Corridor H outside of Moorefield. The investment will include $12.6 million for equipment and $2.6 million for building and parking improvements.
* Create a minimum of 187 good-paying jobs with benefits, increasing employment from about 318 to no less than 505 -- a level that must be maintained for at least three years. The plant's annual payroll is forecast to grow from about $9.7 million to $15.4 million after the third year.
David Warner, executive director of the state Economic Development Authority, said the authority has received a $1.5 million loan from the West Virginia Infrastructure and Jobs Development Council to buy American Woodmark's $12.6 million worth of new equipment.
The authority will lease the equipment back to the company. Because the authority will own the equipment, American Woodmark will not have to pay any state personal property tax on it.
State property tax on $12.6 million would typically amount to about $170,000 a year.
Companies that get this kind of tax break often sign a payment-in-lieu-of-taxes, or PILOT, agreement with the county commission so there is some revenue to help pay for schools and essential services.
The Hardy County Commission passed a resolution in July that supported the project but didn't include a PILOT agreement.
Mallie Combs, executive director of the Hardy County Rural Development Authority, said the state already owns the real estate and equipment American Woodmark uses in Moorefield and the company is making a major investment.
Combs noted that Hardy County lost two other American Woodmark plants in recent years "and there was an opportunity to create 187 jobs. So what we all agreed to do is support the way it currently is."
Regarding the lack of a PILOT agreement, Mark Julian, director of the development office's business and industrial development division, said, "It's a local decision. They (county commissioners) have to decide what they're willing to do. It's entirely up to them.