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County council discusses preliminary framework of "Project L"

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By Chris Sardelli

 An unnamed company has the potential to bring significant investment and jobs to the county, though the exact nature of the company is still unknown.

During its May 19 meeting, Lancaster County Council discussed the preliminary framework for a fee agreement between the county and the company, which is currently only known publicly by the code name “Project L.” The specifics of what the company manufactures or where it would be located were not discussed. 

As part of its fee agreement process, council first considered an inducement resolution which  would formally demonstrate the county’s commitment to enter into a fee agreement with the company. The resolution also provided the general terms of the fee agreement, which includes a provision for special source revenue credits.

County Administrator Steve Willis referred council to the fee-in-lieu of tax (FILOT) arrangement which requires of the company an investment period of five years and an investment of at least $69 million. 

“It’s going to be a fairly substantial investment,” Willis said. 

The agreement also states that FILOT payments will be based on an assessment ratio of 6 percent, though that could be reduced to 4 percent if the company invests $150 million and creates 125 new full-time jobs before the end of the investment period. 

Listening to the details of the resolution, Councilman Bob Bundy asked if the county would be required to credit the company any money if the assessment ratio were ever lowered. County Attorney Frannie Heizer said no, the assessment ratio would not be retroactive and would only apply moving forward. 

Also included in the resolution is a special source revenue credit (SSRC) which would equal 50 percent of the FILOT payments due for the first 10 years of each phase of the project.

Unique to the agreement, Willis told council, were references to clawback obligations from a previous agreement between the company and county from 2008. Clawback provisions generally require a company either meet its investment and job requirements or repay the credits they received. 

“If we move forward, there will be a forgiveness for clawbacks from a 2008 agreement. The company did meet state standards and this would replace that earlier agreement,” Willis said. 

It is unknown what type of agreement had been considered by county officials in 2008. 

Council then approved the resolution by a vote of 6-0. Councilman Steve Harper was not present at the meeting. 

With the resolution approved, council later considered first reading of an ordinance regarding the FILOT and SSRC for Project L. Council also approved that ordinance by a vote of 6-0, with Harper absent from the vote. 

Despite the approval, Willis said there are still plenty of “blanks to be filled in” within the agreement, including cost-benefit numbers and specifics about what the company manufactures. 

Council is tentatively scheduled to consider second reading of the FILOT and SSRC ordinance during its June 9 meeting.