Isle of Wight reduces incentives for Keurig after $36M shortfall

June 22--Isle of Wight County is reducing some of its financial incentives for Keurig Green Mountain Coffee Roasters by 20 percent after the company spent $36 million less than it pledged to on capital investments during a four-year time frame.

In 2012, the company and the county entered into an economic development agreement that guaranteed incentive grants for Keurig ranging from discounts on machinery and tools and real estate taxes to $500 grants for each full-time position created. The company said it would spend $180 million on new capital and create 800 new full-time jobs by Dec. 31, 2016.

The company has created 550 jobs and spent $144 million in capital investments, according to county spokesman Don Robertson.

"The investment represents about 80 percent of what they said they were going to do, and they created about 68 percent of the anticipated jobs," Robertson said by email Wednesday. "Keurig Green Mountain was very proactive in contacting us as well as the state about it."

Keurig Green Mountain did not respond to a request for comment.

The facility is on 32 acres on Old Mill Road in Windsor.

Under the 2012 agreement, the county agreed reduce the machinery and tools tax rate for the company from the 2012 rate of 95 cents per $100 of assessed valuation to 70 cents.

And it offered rebates that could have effectively lowered that to 21 cents per $100 through 2021.

An amendment to the 2012 agreement, approved last week by the Board of Supervisors, reduces a portion of the machinery and tools tax rebates by 20 percent. That leaves the company with a machinery and tools tax rate of 27 cents per $100 through 2021.

The 2012 agreement also included an annual rebate of 70 percent of any increase in real estate taxes the company pays each year through 2021. The amendment approved by the supervisors cuts that rebate to 56 percent of any increase in real estate taxes.

Also included in the 2012 agreement was an Enterprise Zone job grant of $500 for each new full-time position the company creates. This amounts to $275,000 for the 550 positions the company has created but would have been $400,000 if all 800 positions had been created by December.

The original agreement estimated the total value of the incentives at $7.9 million.

In 2011, then-Gov. Bob McDonnell committed $4 million to the company from the Governor's Opportunity Fund. Robertson said the company returned $1.24 million of the grant to the state in December.

"They are still hiring and still planning on increased capital investment in the Windsor facility," Robertson said. "We are confident they will ultimately achieve the original goals."

Smith can be reached by phone at 757-510-1663.

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