Washington’s City Council, during its meeting Monday, authorized the mayor to sign grant documents related to expansion of the idX Impressions facility on Spring Road.

The council also adopted a grant project ordinance related to the project. One council member raised the issue of a “clawback” if the expansion does not create a specific number of new jobs. The city has been involved with several grants that have clawback provisions, which means the source of the grant receives a prorated refund if a project does not create the number of jobs specified in the grant agreement.

The Impressions project’s estimated cost is $1.14 million. The grant is in the amount of $500,000 (50 jobs at $10,000 per job). Grant terms require the city to provide a 5-percent match to the project. The city’s sale of the building to idX in April 2014 satisfies that requirement, according to a city document.

The bulk of the project funding comes from a N.C. Rural Infrastructure Authority’s building reuse grant. According to the document, idX Impressions plans to expand its operations and work force during the next several years, adding full-time 50 jobs to a baseline of an existing 109 jobs. An office area that has been unused for 15 years would be renovated and used for expanding the facility’s office space, according to the document.

The project will expand the facility by 25,000 square feet. It will include a training center and showroom. More than half of the new jobs will be in the manufacturing section.

Councilman Doug Mercer raised a question about the jobs creation.

“In going through that document, it indicates that 50 jobs will be created. I know we’ve had discussions in the past that those jobs created before the signing of this document would not count. Is that still the case?” Mercer asked.

“That is my understanding, that any jobs created prior to that are not counted. So, they understand what the baseline is,” City Manager Brian Alligood said.

“The other question I have is there is a document in here that says if there is any refund or clawback that the owner would be responsible for that. Are we satisfied that that document is strong enough to get that clawback from the owner?” Mercer said.

“I think we’re confident that the document … and the promissory note will hold that entity, that owner, that entity to that requirement,” Alligood said.

“The owner of the property … has a contractual obligation to pay any amount that’s required to be reimbursed to the (N.C.) Department of Commerce. It’s a contractual obligation. Hypothetically speaking, the city could be responsible for a clawback. That type of hypothetic is very extraneous. There are a series of events that would have to occur that are very remote, but that could happen,” City Attorney Franz Holscher said.

With similar projects in the past, the city protected itself from clawbacks by requiring the beneficiary of such a grant to provide the city with a signed promissory note in the amount equal to the grant awarded to that business. This protects the city should a business default on its agreement to create and/or retain jobs.