Details emerge as Gildan considers new plants in Rowan, Davie
SALISBURY — Gildan Yarns is considering building two 500,000-square-foot textile plants that would bring hundreds of jobs to Rowan and Davie counties, according to RowanWorks.
Rowan and Davie are competing against communities in South Carolina for the plants, part of Gildan’s planned $200 million expansion in the Southeast.
RowanWorks Economic Development Commission outlined the potential economic impact of the Rowan plant in an analysis completed Friday for Rowan County commissioners.
Gildan plans to ask Rowan commissioners to donate 26 acres of vacant, county-owned land for the new plant, as well as requesting a tax grant incentive. The company also is asking for incentives from Davie County, as well as the state.
Montreal-based Gildan already has a $43 million yarn-spinning plant under construction in the former PGT Windows building at 2121 Heilig Road in Salisbury, expected to create 200 jobs in the next six months. The land the company wants Rowan to donate is behind the former PGT building.
After PGT shocked local officials in 2010 by pulling out of Rowan County three years into a five-year incentive agreement, commissioners toughened up their incentive policy and added a clawback provision that requires companies to pay back grants if they leave early.
While Gildan is operating in PGT’s old plant, the T-shirt and underwear maker is playing by the new incentive rules. The company would have two separate incentive agreements, including the free land, if the second deal goes through as proposed.
Details of the Davie project were not available this weekend, but in Rowan, the proposed $130 million plant would create 184 jobs, with an additional 39 spin-off jobs supported by the company’s activities. At full employment in Rowan, total income from jobs at the second plant, as well as spin-off jobs, would be about $8 million.
The roughly 26 acres of land Gildan wants is spread across two parcels. The company would combine acreage from its current site with Rowan County’s land to create a new parcel deeded separately from its current facility.
Gildan Yarns purchased the PGT building in January 2013. The site was originally part of a 175-acre tract bought by Rowan County in 1949. About 61 acres of the original site was combined with adjoining county-owned property in 1996 and sold to Draftex Inc. as part of an incentive package to lure the automotive parts manufacturer to Rowan.
The remaining 114 acres of county-owned land are undeveloped.
The second county-owned tract Gildan wants measures nearly five acres and was acquired in 1996 from James and Judith Powell as part of a larger transaction. The Powells sold 12 acres to Rowan for $84,500.
Tax value of the desired land is between $12,376 and $22,960 per acre, but the market value of the land is $11,400 per acre, according to an appraisal by Loftis Companies.
“This land is vacant, with no other plans for its development currently in place,” RowanWorks Executive Director Robert Van Geons wrote to commissioners. “The property is generating no income for Rowan County.
“By utilizing (state grant) funds, Rowan County could provide the necessary infrastructure to this site at a greatly reduced cost. These infrastructure improvements would also significantly increase the value of the remaining 93 acres of county-owned land.”
All the parcels being considered for the Gildan expansion are within Granite Quarry’s extraterritorial jurisdiction. The proposed project would require permitting through the town of Granite Quarry for zoning compliance, as well as erosion and sedimentation control.
In November 2012, county commissioners agreed to award incentives to Gildan (then called CanAm Yarns) to help convince the company to establish the ring-spinning operation in the PGT building. That incentive agreement will pay the company 75 percent of the new property tax revenue generated by the project over six years.
As part of that project, Gildan so far has hired 30 people and spent more than $10 million toward the $43 million renovation of the PGT building. The company intends to hire 170 more employees in the next six months, Van Geons said.
Gildan is installing production machinery and expects to begin production in January.
The 184 additional jobs at the second plant would pay an average wage of $32,279 per year. The average pay would be $15.52 per hour, lower than the average wage in Rowan County, which is $19.02.
However, Van Geons said, that wage is higher than the average wage for similar positions in the region, $12.53 an hour. Gildan also offers a benefits package that includes health insurance, life insurance and a 401K.
The project would increase the county’s tax base by about $130 million.
The second plant would require a new road and water-line extension, Van Geons said. Details include:
• Due to substantial truck and employee traffic, the site would need a new industrial road off of Heilig Road. This pavement road would be 2,900 foot long and 36 feet wide.
• The project would require extension of a 10-inch water line about 4,500 feet down Heilig Road along the new road.
The road and water-line extension would cost about $2.1 million. Van Geons said preliminary meetings with state officials indicate that money likely will be available to help pay for the improvements if the project moves forward.
Rowan County would have to apply for the grants and put up no more than $50,000 as a local match, he said.
To win the state grants, Gildan Yarns would have to meet certain employment goals. Similarly, Rowan County does not pay incentives until a company has met investment and hiring goals. If investment or employment fall short, the company gets less money as an incentive.
Gildan is requesting 75 percent of the new tax property revenue the company would generate for seven years. Commissioners will hold a public hearing on the incentives Oct. 7.
Gildan expects most of the construction, equipment installation and infrastructure improvements to be complete by December 2015, Van Geons said.
If the deal goes through and tax rates stay the same, Van Geons projected the following outcomes:
• During the construction year, Gildan’s second plant would generate $498,000 of new revenue for Rowan County and $62,000 of new revenue for the South Salisbury Fire Department. No incentive grant would be given during the construction year.
• During each year of the proposed seven-year incentive agreement, the proposed plant would generate $809,250 of new revenue annually for Rowan County. The county would keep $202,312 and pay the company an incentive grant of $606,938.
• During the seven years, Rowan County would collect about $5.7 million in revenue and pay incentive grants totaling about $4.2 million. The county would keep $1.4 million of revenue during the incentive term.
• Over 10 years, Rowan County would collect an estimated $7.8 million, pay about $4,248,560 in grants and keep about $3.5 million of new revenue.
• After the construction year, the Gildan plant would generate $100,750 of new revenue annually for the South Salisbury Fire District, and the fire district would collect about $968,750 of new revenue over 10 years.
If Gildan left during the incentive period, the company would have to pay back the cash grants to Rowan County. However, Gildan would not have to give back the land because the company, or another owner, would continue to pay property taxes on the 500,000-square-foot plant, Van Geons said.
Jobs in the second plant would include 103 semi-skilled positions, 56 skills, nine management, eight technical and eight unskilled.
People can apply for jobs with Gildan on the company’s website, www.gildan.com. The only Salisbury job currently posted on the website is a plant manager position for the former PGT building. Additional postings are expected as the plant ramps up.
In his 28-page economic impact study, Van Geons makes a pitch for county commissioners to approve Gildan’s second round of incentives.
“We have the opportunity to actively support a company that has a long and valued history in its industry, as well as reduce the county’s excess land inventory,” he wrote. “If approved, news of this project will resonate positively with companies connected to these operations, both locally and beyond.
“Highlighting successful public-private partnerships, especially in these difficult economic times, will increase Rowan County’s reputation as a business friendly community.”
Contact reporter Emily Ford at 704-797-4264.