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    Document Summary
    - Report Published -

    Report Document No. 41
    PUBLICATION YEAR 2015

    Document Title
    Annual Executive Summary of Interim Activity of the Tobacco Indemnification and Community Revitalization Commission - FY15: 07/01/14 - 01/13/15

    Author
    Tobacco Indemnification and Community Revitalization Commission

    Enabling Authority
    3.2-3102 (F.)

    Executive Summary
    FY14 Annual Report: http://www.tic.virginia.gov/pdfs/Annual%20Reports/2014%20Annual%20Report.pdf

    Executive Summary

    The Tobacco Indemnification and Community Revitalization Commission is a 31-member body created by the 1999 General Assembly. Its mission is the promotion of economic growth and development in tobacco-dependent communities, using proceeds of the national tobacco settlement.

    Mission

    “The Commission is established for the purposes of determining the appropriate recipients of moneys in the Tobacco Indemnification and Community Revitalization Fund and causing distribution of such moneys for the purposes provided in this chapter, including using moneys in the Fund to (i) provide payments to tobacco farmers as compensation for the adverse economic effects resulting from loss of investment in specialized tobacco equipment and barns and lost tobacco production opportunities associated with a decline in quota and (ii) revitalize tobacco dependent communities.” -- Section 3.2-3101, Code of Virginia

    Status of Indemnification of Tobacco Farmers

    The Commission compensates tobacco producers and quota owners for their losses due to the decline in tobacco quota from the 1995-98 average through 2002, the effective year of the federal tobacco quota buyout. The Commission has satisfied its statutory obligation to indemnify burley and flue-cured producers and quota owners. From its inception through the end of fiscal year 2012, the Commission has made available $309 million in addition to the $170 million from other sources for indemnifying losses.

    Status of Revitalization of Tobacco Dependent Communities

    Communities and citizens throughout the Southside and Southwest regions of Virginia continue to experience significant economic distress as a direct consequence of historical dependence on tobacco production, textile and furniture manufacturing and coal production. In today’s environment, where markets are largely global and employment is increasingly knowledge-based, the Commission seeks to accelerate regional transformation so that all residents enjoy expansive opportunities for education and employment, while communities benefit from economic diversification and enhanced prosperity.

    Revitalization is accomplished through eight grant programs that make awards to local governments, government entities, and non-profit organizations. The Commission prioritizes projects that maximize leveraging from applicants and other partner organizations, and gives preference to projects that have regional participation and generate the most significant economic outcomes – primarily measured in terms of new jobs, income and taxable private capital investment - for the residents, businesses and localities in the tobacco region.

    Investments Summary – Life to Date

    More than 2,700 grant applications received since 2000 – more than 1,800 grants awarded since 2000.

    Tobacco Commission Investments by Grant Program
    LTD as of 1/13/2015

    Grant Program: Agribusiness
    Net Award: $22,732,788

    Grant Program: Education
    Net Award: $145,513,971

    Grant Program: Megapark
    Net Award: $87,452,563

    Grant Program: R&D
    Net Award: $77,365,230

    Grant Program: Reserve Account
    Net Award: $38,645,758

    Grant Program: Southside Econ Dev
    Net Award: $207,263,419

    Grant Program: Southwest Econ Dev
    Net Award: $85,853,142

    Grant Program: Special Projects
    Net Award: $163,371,424

    Grant Program: Technology
    Net Award: $100,983,224

    Grant Program: TROF
    Net Award: $124,890,691

    TOTAL: $1,054,072,211

    Investment Results to Date

    • 16,000 new jobs committed by private employers since 2007;
    • $3.5 billion new capital investment committed by private employers since 2000;
    • 3,000 miles of broadband fiber built;
    • 80 industrial parks and mega-sites constructed and expanded;
    • 15,000 residents received financial aid at local community colleges;
    • 12,500 residents awarded GED credentials;
    • 8,000 students received scholarships for 4 year degrees;
    • $309 million made available to farmers for indemnification; and
    • 47,000 approved indemnification claims.

    Investments Summary – FY15 to Date

    Nearly 100 grant applications received in FY15 – more than 50 grants awarded in FY15

    Tobacco Commission Investments by Grant Program
    07/1/2014 - 1/13/2015

    Grant Program: Agribusiness
    Net Award: $665,709

    Grant Program: Education
    Net Award: $13,356,806

    Grant Program: R&D
    Net Award: $7,833,931

    Grant Program: Southside Econ Dev
    Net Award: $2,470,862

    Grant Program: Southwest Econ Dev
    Net Award: $4,171,000

    Grant Program: Special Projects
    Net Award: $1,646,825

    Grant Program: TROF
    Net Award: $21,140,000

    TOTAL: $50,619,424

    FY15 Commission investments in shovel-ready sites, workforce training and industry recruitment incentives (including $20.8 million of TROF funds in 21 projects) have resulted in commitments by private employers to create more than 2,900 new jobs and $330 million in capital investment.

    Meeting Summary

    Meetings are held three times per year (September 26, January 13, and May 21), during which grants proposals are reviewed and approved and policy changes are discussed and implemented. The following meetings have taken place FY15 to date:

    • Two Commission Meetings
    • One Mandatory COIA/FOIA Workshop for Commissioners
    • One New Commissioner Training
    • Two Executive Committee Meetings
    • One Agribusiness Committee Meeting
    • Two Southside Economic Development Committee Meetings
    • Two Southwest Economic Development Committee Meetings
    • One Education Committee Meeting
    • Three Research and Development Committee Meetings
    • Two Special Projects Committee Meetings
    • Two Tobacco Region Opportunity Fund Committee Meetings

    Advanced Manufacturing Centers of Excellence

    The Tobacco Commission partnered with the Commonwealth Center for Advanced Manufacturing (CCAM) to initiate a project to identify workforce training strategies that will enable the tobacco region to be competitive in attracting advanced manufacturers and megaprojects in targeted industries that include but are not limited to aerospace, automotive, and heavy machinery manufacturers. Based on recommendations in a 2013 report prepared for the Commission and CCAM by Boston Consulting Group, in 2014 the Commission initially funded three regional Centers of Excellence (CoEs) to provide mid-skill level training and certification for machinists, welders and industrial machinery mechanics. Though partnerships with community colleges, higher education centers, and local government entities, the CoE’s will serve a large geographic area and provide training programs for students to obtain industry recognized certifications, such as NIMS for machinists, AWS for welding, and Siemens and/or NIMS for industrial mechanics.

    Advanced Manufacturing Workforce Plan Full Report: http://www.tic.virginia.gov/pdfs/10%2029%2012%20%20-%20Adv%20Manufacturing%20Workforce%20Plan%20Final%20Report-vF.pdf

    Advanced Manufacturing Workforce Plan Presentation: http://www.tic.virginia.gov/pdfs/10%2029%2012%20-%20Adv%20Manufacturing%20workforce%20plan%20presentation.pdf

    Notable Projects Supported by Commission Investments

    Microsoft: Since 2010, the Commission awarded a total of $8.4 million in three Tobacco Region Opportunity Fund grants for Microsoft to establish and expand one of its most advanced data centers at Boydton Plank Road Industrial Park with an investment of nearly $1 billion in Mecklenburg County, the largest investment to date in Southern Virginia. Southern Virginia’s ability to provide a world-class data center location is due in part to grants from the Commission totaling nearly $4 million for the development of Boydton Plank Road Industrial Park and broadband infrastructure developed by the Mid-Atlantic Broadband Cooperative.

    IKEA: In 2006, the Commission awarded an $800,000 Tobacco Region Opportunity Fund grant for IKEA Industry, a furniture manufacturer and subsidiary of IKEA Group, to build its first North American manufacturing operation with an investment of $85.5 million and the creation of 300 new jobs. The 930,000 square-foot facility was built on 209 acres in Cane Creek Centre, a joint industrial park for the City of Danville and Pittsylvania County. The Commission has awarded grants totaling more than $9.4 million for the development of Cane Creek Centre. In addition, the Commission awarded Tobacco Region Opportunity Fund grants totaling more than $1.64 million for Com.40 Ltd, a supplier of mattresses and upholstered furniture for IKEA, to open a manufacturing facility in Danville with an investment of $36.3 million and the creation of 374 jobs.

    Tempur Sealy International, Inc.: Successfully operating and growing at Duffield Industrial Park for 13 years, the Commission has awarded $532,000 in Tobacco Region Opportunity Fund grants to support multiple expansions at the manufacturing facility with investments totaling $36.4 million and the creation of more than 212 jobs since 2002.

    Mid-Atlantic Broadband Cooperative: Established in 2004 to solve the rural telecommunications infrastructure challenge in Southern Virginia, today the Mid-Atlantic Broadband Cooperative (MBC) owns and operates more than 1,500 miles of fiber optic network in Southern Virginia as well as a long-haul fiber network. The Commission has awarded more than $58 million in grants to MBC to develop and expand its fiber optic network in Southern Virginia. MBC’s fiber-optic network has attracted numerous companies to the Southern Region, most notably the nearly $1 billion investment by Microsoft to establish and expand its data center campus located in Mecklenburg County.

    Bristol Virginia Utilities Optinet: Launched in 2001, Bristol Virginia Utilities OptiNet (BVU Optinet) is a nonprofit division of BVU that provides telecommunication services to approximately 11,500 customers in areas around Southwest Virginia. The Commission has awarded more than $35 million in grants to BVU to develop and expand its fiber optic network in Southwest Virginia.

    Post-Secondary Financial Aid: Recognizing that knowledge based jobs are the backbone of today’s economy, the Commission established a scholarship program for students from the Tobacco Region working to complete bachelor’s degree programs and began providing last dollar funding for students at local community colleges. To date the Commission has made available more than $92 million in support for post-secondary financial aid. More than 8,000 eligible residents from the Tobacco Region have received scholarships for bachelor’s degrees and more than 15,000 residents from the Tobacco Region have received financial aid at local community colleges.

    Other Notable Projects:

    • Amazon.com: In 2011, $850,000 TROF award for Amazon.Com to establish a 1.1 million square foot distribution center in Dinwiddie Commerce Park with a $50 million investment and the creation of nearly 400 new jobs.

    • Coalfield 4G Wireless: Awarded nearly $12.5 million in grants to the Virginia Coalfields Coalition to establish a 4G wireless network in seven counties in the far Southwest Region (Buchanan, Dickinson, Lee, Russell, Scott, Tazewell, and Wise).

    • R&D Innovation Centers: Developed 6 R&D Innovation Centers in the Tobacco Region with grant awards totaling nearly $56 million. The R&D Innovation Centers encourage collaboration between private scientists and investors, tobacco region localities and/or Virginia’s educational institutions to conduct research and development that will lead to commercialization in the region.

    • Megasites: More than $111 million awarded to assemble large, publicly-owned industrial sites that have the capacity and readiness to attract transformational job-creating and major capital investment projects. To date, eight strategically located megasites have been funded across the Tobacco Region to gain public control of these large properties, to design and construct infrastructure, and to grade the sites.

    • Crooked Road: $1.4 million awarded to support the development of the Crooked Road. The Crooked Road is Virginia’s Heritage Music Trail, a driving route through the Appalachian Mountains from the Blue Ridge to the Coalfields region, following U.S. Route 58. The trail connects major heritage music venues in the region such as the Blue Ridge Music Center, Birthplace of Country Music Alliance, and the Carter Family Fold.

    • Beef Builder and Commodity Storage: Nearly $7.4 million awarded for the regional beef builder and commodity storage initiatives. Both initiatives work to diversify the agribusiness sector, leverage private farm investment, and increase farm income throughout the Tobacco Region.

    • Indemnification: From its inception through the end of fiscal year 2012, the Commission has made available $309 million in addition to the $170 million from other sources for indemnifying losses to 37,000 farmers in the Tobacco Region.