Isle of Wight reduces incentives to Keurig Green Mountain

Published 10:19 am Wednesday, June 28, 2017

Isle of Wight County will reduce its economic development incentive grant to Keurig Green Mountain Coffee Inc. by approximately 20 percent come July 1, following the company’s disclosure that it would not be able to meet the total capital investment and number of new jobs required in the original agreement.

The company, which opened its facility just outside of Windsor in 2011, signed the original performance agreement with the county in January 2012, which authorized the county to issue annual cash payments totaling approximately $7.9 million over 10 years to Keurig Green Mountain in the form of an economic development incentive grant. In exchange, the company agreed to spend $180 million in net new capital investment and create 800 net new full-time jobs at an average annual salary of at least $39,220 per year by Dec. 31, 2016.

The EDIG specifies that the county’s cash payments to Keurig were to be made in the form of a 45 percent discount on machinery and tools taxes over 10 years, beginning Jan. 1, 2012, and a 70 percent discount on real estate tax, also over a 10-year period.

“By August 2016, it was obvious to KGM that they were not going to make their stated goals,” said Tom Elder Jr., the county’s economic development director. “They did, however, create significant investment of $144 million.”

He added that they also created approximately 550 of the 800 jobs they had initially expected to be able to offer.

“They were very proactive in contacting us, as well as the state, about it and returned $1.24 million, their pre-rata share of the GOF (Governor’s Opportunity Fund, now called the Commonwealth Opportunity Fund) grant to the state in December of 2016,” he said. “They are still hiring and plan on increased investment. I am confident they will ultimately achieve their goals. It’s just not in the timeline stated in the performance agreement. They also have plans to double the size of the facility.”

The amendment to the original performance agreement remains unsigned. However, Elder said that both parties are satisfied with the changes and that KGM likes being in Isle of Wight.

“They have been a wonderful corporate citizen, give back to the community with a great deal of volunteer work and have still created a quite sizable investment and employed a significant number of people.”

The remaining components of the original agreement, which included an additional 25 percent enterprise zone machinery and tools tax discount and a one-time enterprise zone job grant in the amount of $500 per net new full-time position created for the first 20 jobs added prior to Dec. 31, 2016 for a maximum of $10,000, will remain in effect.