In a quick pivot that projects to result in 700 new jobs and a capital investment of nearly $58 million, Gov. Ralph Northam announced delivery van maker Morgan Olson LLC will move into the former Ikea facility and give “priority consideration” to the Ikea workers who are losing their jobs.
“These are the kind of jobs that allow people to stay in their hometown ... these are the kind of jobs that help build a community,” Northam said during a Friday-morning news conference at the Institute for Advanced Learning and Research while flanked by community and state officials and company leaders.
After Ikea announced mid- summer they would close their plant by the end of this year, resulting in the loss of 300 jobs, state and local officials began investigating potential suitors for the 925,000-square-foot facility at Cane Creek, just inside the border of Pittsylvania County.
The region competed against locations in Kentucky, North Carolina and Ohio for Morgan Olson’s attention, according to a news release from the governor’s office.
“It’s a pretty facility ... it’s a perfect blank canvas,” said John Poindexter, CEO of J.B. Poindexter & Co., Inc, the Houston-based company that owns Morgan Olson LLC, headquartered in Sturgis, Michigan.
The company, which produces delivery vans for such clients as FedEx and UPS, plans to have its operation here fully operational by next June or July.
Poindexter said the capital investments — as well as the new hires — will come in two phases. The first, which begins now with the purchase of necessary equipment, will involve about $40 million of capital investment and 300 jobs to get the operation rolling.
Once those goals are met, the second installment of capital investment and hiring would begin to bring the company up to their announced goals.
An incentive package, which includes a variety of grants and tax rebates, among other things, from the state, localities and the Virginia Tobacco Commission, will be worth about $18 million spread over 10 years, Poindexter said.
The Virginia Economic Development Partnership (VEDP), Pittsylvania County, the city of Danville, the General Assembly’s Major Employment and Investment (MEI) Project Approval Commission and the Southern Virginia Regional Alliance all worked together to secure the project for Virginia, according to the governor’s office.
If Morgan Olson achieves its performance goals of jobs and capital investments, the company will become eligible for an MEI custom performance grant of $7 million, while the Virginia Tobacco Commission authorized a grant of nearly $1.2 million.
From the state, Morgan Olson will be eligible to receive benefits from the Virginia Enterprise Zone program — a program administered by the Virginia Department of Housing and Community Development that offers incentive grants for job creation and property investment.
The company also will be eligible for exemptions on both sales and use taxes for the manufacturing equipment that it buys.
For every full-time job created above a threshold of 25 or 50, the company will be eligible for a $1,000 income tax credit through the Virginia Major Business Facility Job Tax Credit.
Poindexter described the incentive package as “very generous and attractive.”
Neither Matt Rowe or Telly Tucker — the Economic Development Directors for Pittsylvania County and Danville, respectively — could be reached for comment on this story for information about the terms of the performance agreement or the total breakdown of the incentives.
Poindexter said the jobs provided will be typical manufacturing jobs — such as welders, mechanics and assemblers — with competitive wages, but he could not speak to the exact wage range yet.
If they fulfill the projected 700 jobs, Morgan Olson LLC would become the largest private employer in the county, said Bob Warren, Pittsylvania County Supervisor and vice-chairman of the Danville-Pittsylvania Regional Industrial Facility Authority (RIFA).
Company President and CEO Mike Ownbey said that Morgan Olson LLC was producing 2,000 vehicles annually when he first started at the company but now they are producing 20,000 and looking to grow that number even more.
During its time in the Cane Creek facility, Ikea employed hundreds and invested tens of millions of dollars into the region. Since their announcement to move elsewhere, local officials have been complimentary of the way they have handled their exit.
“They were a big advocate ... they went the extra mile to assist with this project,” Warren said of Ikea.
Especially in the wake of losing Ikea, officials were excited about the effect Morgan LLC is projected to make on the region.
“This is a huge win, not only for Danville and Pittsylvania county, but for our entire region,” said Del. Danny Marshall, R-Danville, who is a member of the Virginia Tobacco Commission.
Ayers reports for the Register & Bee. Reach him at (434) 791-7981.