TO: Mayor and Members of City Council
THRU: Douglas J. Hewett, ICMA-CM, City Manager
FROM: Robert Van Geons, FCEDC President & CEO
DATE: May 28, 2024
RE:
Title
Public Hearing on Project Aero
end
COUNCIL DISTRICT(S):
Council District(s)
N/A
b
Relationship To Strategic Plan:
Goal II - Responsive city government supporting a diverse & viable economy (Project Aero would create 300 jobs paying an average annual wage of $120,000, growing to 450 employees through a subsequent phase. This project would inject more than $36 million in annual payroll into our community. The positive impact this company would have on our local economy cannot be overstated.
Goal IV - City is a desirable place to live, work, & recreate (Project Aero would create a significant number of jobs paying well above the County’s average annual wage, with a lowest starting salary expected to be $85,000. This would allow for more Fayetteville and Cumberland County residents to secure higher paying jobs, resulting in an improved quality of life.
Executive Summary:
Project Aero is considering Fayetteville and Cumberland County for its Integrated Titanium mill and purpose-built Titanium processing center. The project is also assessing other sites in multiple states. Incentives have been requested from the City and County to reaffirm our commitment to Project Aero and demonstrate that our community is the right location for this project, and a public hearing has been called to approve or deny those incentives.
Background:
This Transformational Project would create up to 450 jobs in Fayetteville an Cumberland County. The average salary for these jobs is projected at $120,000, exceeding the County average by 150%. Capital investment in phase one is expected to be $895 million, exceeding $1 billion in the project’s second phase.
Project Aero is considering a 200+ acre site for its operations, located near the Goodyear Tire and Rubber facility along the R.J. Corman Rail Line. It is approximately 3/4 mile from the Cape Fear River. While not currently in the City, the site would be annexed by the City of Fayetteville. Signalization at the intersection of Highway 401 and Bethune Drive, along with road widening and turn lane additions, have been requested by the NCDOT to alleviate traffic concerns.
Approximately 75% of the titanium used in this plant will be remnants from production operations which will be combined with previously unused titanium (referred to as “sponge”) to make Project Aero’s products.
Titanium is recognized by the U.S. Department of Interior as one of the 35 mineral commodities that are vital to the U.S. economic and national security. Titanium is used in aerospace, military, medical, and consumer sectors. This project aligns with the State of North Carolina’s economic goal of propelling the aerospace industry to new frontiers.
The plant, classified as a Minor Air Permit Facility, will follow all state and federal environmental regulations. Process cooling water is expected to be the plant’s only discharge. It would be sent directly into PWC’s sewer system for reclamation.
Project Aero is requesting Tiered cash incentives, granted annually from the City of Fayetteville and Cumberland County over 20 years when the following benchmarks are met:
• 65% cash incentive
• Tax value of the project exceeds $350 million with
• At least 200 full-time employees making an average annual salary of at least $120,000
• 75% cash incentive
• Tax value of the project exceeds $500 million with
• At least 300 full-time employees making an average annual salary of at least $120,000
• 85% cash incentive
• Tax value of the project exceeds $1 billion with
• At least 400 full-time employees making an average annual salary of at least $120,000
Additionally, the project is requesting up to $535,000 each from the City and County towards water and sewer infrastructure.
The City and County will acquire and transfer ownership of 120 acres located at 557 Bethune Drive, Fayetteville, NC 28311.This property would be annexed into the City of Fayetteville. Once terms are finalized, this acquisition and transfer would be subject to a separate public hearing.
The Cumberland County Commissioners met on Monday, May 20th, 2024, and unanimously approved a similar request.
Issues/Analysis:
If successfully secured, the City of Fayetteville and Cumberland County would benefit from the tax revenue generated by the facility, economic activity stimulated by its construction, and wages paid to the employees.
Project Aero is expected to generate an estimated $96 million in City Tax Revenue over a twenty-year period. Net revenue, after cash incentives are paid, is expected to exceed $20 million.
The community is primed to meet the project’s workforce needs. Our local educational institutions, including FTCC, Fayetteville State University, and Methodist University, have programs in place to produce workforce talent that is well-prepared for critical aerospace roles in engineering, software development, cybersecurity, artificial intelligence, electromechanics, and more.
Budget Impact:
Project Aero will positively benefit the City’s tax base, generating an average of $1 million in new net tax revenue annually. The project will create a significant investment in real estate and equipment in the City of Fayetteville, with a phase one capital investment expected to be $895 million. Phase two’s capital investment is expected to include an additional $300 million. The project will also pay more than $36 million per year in annual wages.
Options:
Option 1: Approve the tiered incentives as presented.
Option 2: Approve an alternate incentive package.
Option 3: Deny the request for incentives to support Project Aero.
Recommended Action:
We are respectfully requesting that the City of Fayetteville approve the 20-year performance-based grant as outlined for Project Aero, as well as the conceptual purchase of property as advertised (the land purchase will require an additional public hearing once surveyed). We also ask that you authorize staff to execute the documents necessary to secure grants for utilities and other incentives.
Attachments:
None.