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Galax won out over two other areas in Albany Industries’ search to expand its business, said Galax City Manager Keith Barker.
Albany Industries, an upholstered furniture manufacturer based in New Albany, Miss., recently announced that it plans to expand into the vacant B.C. Vaughan facility in Galax, creating 335 jobs over the next three years.
This is a $2.5 million investment.
The B.C. Vaughan facility on Creek View Road in Galax was part of Vaughan Furniture Co. It has been vacant since 2008, when the company closed its last manufacturing plant in Galax.
Albany Industries, seeking to expand its product into the Northeast, had looked into 25 localities before narrowing its search down to the top three choices for a new facility — South Boston, Galax and Pilot Mountain, N.C., ranked in that order.
“When we put together incentives and discussed the cost of the facility and the cost of operation, it brought Galax to the forefront,” said Barker.
Barker said Galax also stood out over South Boston because of its proximity to the interstate.
“The fact that we responded in a timely manner, they saw our desire to work with them,” said Barker. “It got their attention.”
Albany Industries had ranked South Boston in the top spot due to the size of the facility up for sale there — 450,000 square feet.
B.C. Vaughan is 300,000 square feet.
Early this year, Albany Industries came to Galax with a real estate agent to look at B.C. Vaughan before meeting with city staff. This was a few weeks before the company notified Galax of the possibility of expanding to the area.
In May, Barker and Tom Elliott of Virginia’s aCorridor, which works with local governments in Southwest Virginia to enhance economic development programs, drove to North Carolina to meet with the president of Albany Industries, Richie McLarty, to provide information about the workforce of Galax, such as unemployment rates and average wages.
The company wanted to know that, if it expanded to Galax, “they would be able to hire a viable workforce,” said Barker. “I told them about the Virginia Tobacco Commission, that would be able to [provide incentives to] companies coming to a specific area.”
The aCorridor acts as a conduit to partnerships such as the tobacco commission and helps to develop incentive packages. Elliott worked with Barker to draw up an incentive package.
Barker contacted Sen. Roscoe Reynolds (D-Martinsville), a member of the Virginia Tobacco Commission board, and Del. Bill Carrico (R-Grayson County), who also provided support in obtaining $680,000 from the Tobacco Region Opportunity Fund.
“They tried to make sure that we have the best funding package we could get,” said Barker.
A Governor’s Opportunity Fund of $300,000 began to come together when Barker met with Lt. Gov. Bill Bolling in August. Bolling and other representatives provided assistance that allowed the incentive packages to come through much quicker, said Barker.
That took Galax to the top of Albany’s list.
“Bill Bolling then reached out personally to the vice president of the company to urge them to come to Virginia,” said Barker. “All of these things played a role in the final decisions.”
The city will provide an incentive of $251,000, based on $750 per employee hired and a minimum investment of $2.5 million beyond the purchase of the facility. Also, the city will provide $900 per month for a year to provide training space at the Crossroads Institute.
These incentive packages are not limited, said Barker, meaning that funds can be used for a number of investments into the company.
Also, Galax will submit an application to the Virginia Department of Transportation for $350,000 to create a paved driveway to replace the graveled road entrance at B.C. Vaughan.
Training funds of $500 per employee will be provided through the Virginia Job Investment Programs.
“Hopefully, bringing this company here raises awareness of what Galax has to offer,” said Barker.
The city manager said this is the biggest job expansion he has seen in Galax in 20 years or more. Results Galax brought 225 jobs and other companies have brought 50 to 100 jobs.
“The company has been expanding for the last couple of years,” said Barker. “They have already generated enough [business] in the Northeast to have commitment orders. They’re not worried about not having enough orders, but having too many.”
Terry Treadaway, vice president of Albany Industries, told The Gazette that the plan is to get the plant running in December.
Projected employment is 100 employees for the first year, 150 additional employees for the second year and an additional 85 employees for the third year, Treadaway said. The average salary will be just over $24,000, plus benefits.
Albany Industries was founded in 1995 and production began with 15 employees in a 10,000-square-foot building. Since then, the company has grown to an operation employing more than 450 people in a modern 500,000-square-foot manufacturing facility.
Treadaway said the company has held its own throughout the economic downturn. The company has two plants in Mississippi and one in Florida, with a total of 622 workers.