Explanation
BACKGROUND: Columbus City Council (“COUNCIL”), by Ordinance No. 2086-2022, passed July 25, 2022, authorized the City of Columbus (“CITY”) to enter into an Enterprise Zone Agreement (the “AGREEMENT”) with Becknell Industrial dba BI Developer LLC (hereinafter, referred to as “ENTERPRISE”), for a real property tax abatement of seventy-five percent (75%) for a period of ten (10) consecutive years in consideration of a proposed total capital investment of approximately $37,000,000.00 in real property improvements to construct a Class A proactive industrial facility consisting of approximately 527,023 square-feet at 5811 Gender Road Columbus, Ohio 43110, parcel numbers: 010-224901 and 010-260326 (collectively, and hereinafter referred to as the “ORIGINAL PARCEL”), within the Columbus Southeast Enterprise Zone (the “PROJECT SITE”). Additionally, the ENTERPRISE committed to creating 50 net new full-time permanent positions with an estimated associated payroll of approximately $1,528,800.00 at the PROJECT SITE. The AGREEMENT was made and entered into effective October 14, 2022, with the PROJECT expected to begin approximately November 2022, with all real property improvements expected to be completed by approximately July 2023 and with the abatement to commence no later than 2024 nor extend beyond 2033 (Agreement No. 392-22-01).
As of this date, there has not been a filing of the DTE-24 with the Franklin County Auditor. There also has not been a Final Determination from the Ohio Department of Taxation, and so no forgone tax benefit has yet been received.
Paragraph fourteen within Section 8 (Program Compliance) of the AGREEMENT states that the “AGREEMENT is not transferable or assignable without the express, written, approval of the CITY” and paragraph fifteen of that same section states that “any requested amendment…to any of the terms of the AGREEMENT…shall require the payment to the CITY by the ENTERPRISE of an AMENDMENT FEE in the amount of five-hundred dollars ($500.00).”
In a letter from Harrington Law on behalf of the ENTERPRISE dated December 21, 2022, received by the CITY and through ensuing correspondence, confirmed that Canal Winchester Owner, LLC had acquired ownership of a portion of the PROJECT SITE following an assignment of the purchase and sale agreement for the PROJECT SITE from ENTERPRISE to its affiliate, Canal Winchester Owner, LLC on November 9, 2022, with the transfer having been recorded at the County’s Auditor’s office on November 16, 2022. In addition, the PROJECT SITE has been revised to be Parcel Number 010-308800 (split from the ORIGINAL PARCEL) containing approximately 42.296 +/- acres of land. The legal description, per the Franklin County Auditor, is listed as Winchester Pike R21 T11 S24 42.296 +/- acres with the current street address of 6085 Winchester Pike, Columbus, Ohio 43110. This street address may or may not change upon PROJECT completion.
Due diligence has been undertaken by the CITY in that Canal Winchester Owner, LLC has agreed to fully assume the terms and commitments of the ENTERPRISE pursuant to the AGREEMENT, has submitted an updated Economic Development Incentive Application, has submitted the five-hundred dollars ($500.00) Amendment Fee, and that this application and all other pertinent information has been reviewed and vetted by the Department of Development.
This legislation is to authorize the Director of the Department of Development to amend the AGREEMENT for the first time for Assignment & Assumption to (1) remove Becknell Industrial dba BI Developer, LLC as ENTERPRISE and party to the AGREEMENT and to be replaced with Canal Winchester Owner, LLC as ENTERPRISE and party to the AGREEMENT, where by Canal Winchester Owner, LLC will assume the terms and commitments of the AGREEMENT and will receive the benefits derived therefrom; (2) revise the description of the PROJECT SITE, and (3) revise the notice information related to ENTERPRISE within Section 8 of the AGREEMENT.
This legislation is presented as 30-day legislation.
FISCAL IMPACT: No funding is required for this legislation.
Title
To authorize the Director of the Department of Development to amend the Enterprise Zone Agreement for the first time with Becknell Industrial dba BI Developer, LLC to remove Becknell Industrial dba BI Developer, LLC, as the Enterprise and replace it with Canal Winchester Owner LLC,; to make Canal Winchester Owner LLC a party to the Enterprise Zone Agreement; to redefine the Project Site; and revise the notice information in the Enterprise Zone Agreement.
Body
WHEREAS, the City of Columbus (“CITY”) entered into an Enterprise Zone Agreement (the “AGREEMENT”) with Becknell Industrial dba BI Developer LLC (“ENTERPRISE”), approved by Columbus City Council (“COUNCIL”) by Ordinance No. 2086-2022, passed July 25, 2022, with this AGREEMENT made and entered into effective October 14, 2022; and
WHEREAS, the AGREEMENT granted a 75%/10-Year abatement on real property improvements; and
WHEREAS, the incentive was granted in consideration of a proposed total capital investment of approximately $37,000,000.00 in real property improvements to construct a Class A proactive industrial facility consisting of approximately 527,023 square-feet at 5811 Gender Road Columbus, Ohio 43110, parcel numbers: 010-224901 and 010-260326 (collectively, and hereinafter referred to as the “ORIGINAL PARCELS”), within the Columbus Southeast Enterprise Zone (referred to as the “PROJECT SITE”). Additionally, the ENTERPRISE committed to creating 50 net new full-time permanent positions with an estimated associated payroll of approximately $1,528,800.00 at the PROJECT SITE. The AGREEMENT was made and entered into effective October 14, 2022 with the PROJECT expected to begin approximately in November 2022, with all real property improvements expected to be completed by approximately July 2023 and with the abatement to commence no later than 2024 nor extend beyond 2033 (Agreement No. 392-22-01); and
WHEREAS, paragraph fourteen within Section 8 (Program Compliance) of the AGREEMENT states that the “AGREEMENT is not transferable or assignable without the express, written, approval of the CITY” and paragraph fifteen of that same section states that “any requested amendment…to any of the terms of the AGREEMENT…shall require the payment to the CITY by the ENTERPRISE of an AMENDMENT FEE in the amount of five-hundred dollars ($500.00);” and
WHEREAS, in a letter from Harrington Law on behalf of the ENTERPRISE dated December 21, 2022, received by the CITY and through ensuing correspondence, confirmed that Canal Winchester Owner LLC had acquired ownership of a portion of the PROJECT SITE following an assignment of the purchase and sale agreement for the PROJECT SITE from ENTERPRISE to its affiliate, Canal Winchester Owner LLC on November 9, 2022, with the transfer having been recorded at the County’s Auditor’s office on November 16, 2022. In addition, the PROJECT SITE has been revised to be Parcel Number 010-308800 (split from the ORIGINAL PARCEL) containing approximately 42.296 +/- acres of land. The legal description, per the Franklin County Auditor, is listed as Winchester Pike R21 T11 S24 42.296 +/- acres with the current street address of 6085 Winchester Pike, Columbus, Ohio 43110. This street address may or may not change upon PROJECT completion; and
WHEREAS, due diligence has been undertaken by the CITY in that Canal Winchester Owner LLC has agreed to fully assume the terms and commitments of the ENTERPRISE pursuant to the AGREEMENT, has submitted an updated Economic Development Incentive Application, the five-hundred dollars ($500.00) Amendment Fee and that this application and all other pertinent information has been reviewed and vetted by the Department of Development; and
WHEREAS, a First Amendment to the AGREEMENT is now needed for Assignment & Assumption to remove Becknell Industrial dba BI Developer LLC as ENTERPRISE and party to the AGREEMENT and to be replaced with Canal Winchester Owner LLC as ENTERPRISE and party to the AGREEMENT, revise the description of the PROJECT SITE, and revise the notice information related to ENTERPRISE within Section 8 of the AGREEMENT; and
WHEREAS, the Director of the Department of Development of the CITY has investigated the Economic Development Application ("APPLICATION") of Canal Winchester Owner LLC and recommends approval on the basis that Canal Winchester Owner LLC, is qualified by financial responsibility and business experience to create and preserve employment opportunities in the Columbus Enterprise Zone and improve the economic climate of the CITY; and
WHEREAS, an amendment for Assignment & Assumption to the AGREEMENT will (1) remove Becknell Industrial dba BI Developer LLC as ENTERPRISE and be replaced by Canal Winchester Owner LLC as ENTERPRISE and party to the AGREEMENT, (2) determine that Canal Winchester Owner LLC will assume the terms and commitments of the AGREEMENT as ENTERPRISE, (3) revise the description of the PROJECT SITE, and (4) revise the notice information related to ENTERPRISE within Section 8 of the AGREEMENT; and NOW THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF COLUMBUS:
SECTION 1. That the Council of Columbus finds that the ENTERPRISE, Canal Winchester Owner LLC, who has submitted the APPLICATION to the Director of Development, is qualified by financial responsibility and business experience to create and preserve employment opportunities in the zone and improve the economic climate of the municipal corporation.
SECTION 2. That the Director of the Department of Development is authorized to amend the Enterprise Zone Agreement with Becknell Industrial dba BI Developer LLC (the AGREEMENT) to remove Becknell Industrial dba BI Developer LLC as ENTERPRISE to be replaced with Canal Winchester Owner LLC as ENTERPRISE whereby Canal Winchester Owner LLC will assume the terms and commitments of the AGREEMENT as ENTERPRISE and will receive the benefits derived therefrom.
SECTION 3. That the Director of the Department of Development is authorized to amend Section 1 (Establishment by Corporation) of the AGREEMENT to state that the PROJECT SITE is revised to be Parcel Number 010-308800 (split from the ORIGINAL PARCEL), containing approximately 42.296 +/- acres of land. The legal description, per the Franklin County Auditor, is listed as Winchester Pike R21 T11 S24 42.296 +/- acres with the current street address of 6085 Winchester Pike, Columbus, Ohio 43110, but that this street address may or may not change upon PROJECT completion.
SECTION 4. That the Director of the Department of Development is authorized to amend within Section 8 (Program Compliance) of the AGREEMENT, regarding the “if to the ENTERPRISE” section regarding written communication to Becknell Industrial dba BI Developer LLC, which shall now refer to Canal Winchester Owner LLC C/O Derek Hawkins.
SECTION 5. That this FIRST AMENDMENT for Assignment & Assumption to the City of Columbus Enterprise Zone Agreement be signed by Canal Winchester Owner LLC within ninety (90) days of passage of this ordinance, or this ordinance and the incentive authorized herein shall be null and void.
SECTION 6. That this Ordinance shall take effect and be in force from and after the earliest period allowed by law.