BreakDown: “Hey, Norhurst? It’s Payback Time.”

August 6th will be a very important night for Danville City Council. I’m expecting them to recognize me for spending my birthday night covering their meeting. Heh. Seriously, we’ve already done a BreakDown on what’s going to happen about the Confederate flag issue. But wait, there’s more! Council will approve the repayment agreement between Norhurst and the Tobacco Commission.

Let’s do a BreakDown of exactly how we can hang the official Job Bust title on Norhurst.

First, let’s look at the original agreement between Norhurst and the Tobacco Commission.

There’s two parts of the performance agreement. The first is for jobs, and the second is for capital investments. Let’s start with a Big Board of observations about the Jobs part…

• The rules of the deal said that Norhurst had to come up with 108 local jobs with a quarterly payroll of at least $1,798,200.
• When we do the math on that, that means that the average job at Norhurst would have had to have an annual salary of $66,600 if the company hit the base number of 108 jobs.
• In another article, SouthsideCentral went over the lies that Tim Norton told to Register & Bee reporter Vicky Morrison. One of the big ones was that Norhurst was red-lined from hiring people within a 120-mile radius of Danville. That was a clear lie.
• As far as any documentation shows, Norhurst has missed that 108 jobs number by um well… 108. Yep, they’ve got 0. The Big Squadoosh.

There’s no question about it, and Norhurst has already admitted it… they’ve failed on the job creation numbers. Since Jobs are half of the performance agreements, that means Norhurst has to pay back half on the money. Now let’s roll in another Big Board to BreakDown the Capital Investments half of the agreement.

• On this part of the Tobacco Commission deal, Norhurst had to put $2,200,000 into things that would be subject to Danville’s taxation levies. Real estate, business property… those sort of things.
• Tim Norton bought the former Dan River Executive Building for $718,000 in September 2012, then put it in the company’s name six weeks later.
• The current property tax assessment for that property is $1,103,000. Here’s a look at the past assessments on the building.

I’m not sure where the Tobacco Commission is getting their $2,200,000 agreement number from, but they’ve agreed that the Capital Investment half of the deal is good enough that they’re not asking for that part back. So be it.

That means that Norhurst has to pay back half of their Tobacco Commission grant (1/2 of $625,000 is $312,500), and they’re getting the four easy payment plan option with no interest. Norhurst has already made the first annual payment of $78,125 and they’ll have to make the next three payments. If they fail to do so, the city “cosigned the loan” so it will be on Danville. I believe that won’t be a problem. Norhurst sold part of the Dan River Mills parking lot that came with the property back to Danville’s Industrial Development Authority for $400,000, so cash flow shouldn’t be a problem. That being said, Danville City Council still has to approve the repayment agreement since they’re liable for the payment if Norhurst doesn’t cough up the annual cash.

Let’s wrap this up by looking at the official repayment agreement that Danville City Council will approve on Thursday…

The one interesting thing that I see in this document is that Norhurst’s official correspondence address isn’t their office building on Memorial Drive. It’s Tim Norton’s home address of 944 Main Street. Go figure.

Norhurst met their capital investment part of their agreement, but they failed to hire 108 people like they promised. The city shouldn’t have to repay any of the Tobacco Commission grant out of the taxpayers’ pockets. Technically, Norhurst isn’t a complete Job Bust. But when I combine the half-failure of their agreement with Tim Norton’s deliberate unchecked lies about what’s been going on, I’m calling Norhurst a Job Bust anyway.

Three years after the groundbreaking ceremony, I’m betting all of these smiles have faded away.