Explanation
BACKGROUND:
This legislation authorizes the Director of Development to dissolve the existing Enterprise Zone Agreement between the City of Columbus and Crane Plastics Company Limited Partnership, TimberTech Limited, CPC Tooling Technologies LLS, Crane Plastics Siding LLC, Crane Blending Center LLC, Crane Plastics Manufacturing Ltd., and Crane Products, Ltd (hereinafter, collectively, "Crane"). Columbus City Council approved the EZA by Ord. No. 1194-97. The Enterprise Zone Agreement granted Crane a 50%/10-year abatement on real property improvements and new machinery, equipment and inventory (1999-2008). Crane committed to invest $7.9 million in real property improvements, $13.1 million in new machinery and equipment, $2.8 million in new inventory, to retain the existing 675 jobs and create 95 new jobs. Crane is located at 2141 Fairwood Avenue in the city's Southside.
Crane has invested more than twice as much in real and personal property as the Enterprise Zone Agreement requires. At the same time, the company has fallen short of the job creation and retention goals. In December 2005, Crane was satisfying 100% of its job retention requirement but had created only 21 new jobs. In view of changes in economic and business conditions since 1997, Council approved an amendment in 2004 that allowed Crane the leeway to count contract employees towards the job goal. However, Crane's custom extrusion business continues to experience slower growth that what the company had anticipated in 1997. Crane has concluded that attaining the job creation goal is highly unlikely and has requested the City to dissolve its Enterprise Zone Agreement, with tax year 2004 to be the final year of the abatement period. Thus, the final year of the tax exemptions would be for real estate taxes paid in calendar year 2005, but based on the value of real estate owned in 2004 and for personal property taxes paid in 2005, which are based on the December 2004 balance sheet. Crane will repay any real property taxes that were abated in calendar year 2006 and will file the 2006 Personal Property Tax Return without claiming the personal property abatement. The City agrees with the company's request to dissolve the Enterprise Zone Agreement and for 2004 to be the final year of the tax abatement period.
This legislation is presented as an emergency measure in order to notify as soon as possible the state and local tax authorities.
FISCAL IMPACT:
No funding is required for this legislation.
Title
To authorize the Director of the Department of Development to dissolve the Enterprise Zone Agreement with Crane and to notify the state and local tax authorities as necessary; and to declare an emergency.
Body
WHEREAS, Columbus City Council approved an Enterprise Zone Agreement with Crane Plastics by Ordinance No. 1194-97, passed May 12, 1997, amended the Agreement by Ordinance 917-00, passed April 17, 2000, to include seven of Crane's affiliated entities and further amended the Agreement by Ord. No. 1915-2004, passed November 1, 2004; and
WHEREAS, the Crane Enterprise Zone Agreement, as amended, granted Crane a 50%/10-year tax abatement on real and personal property and called for Crane to invest approximately $23.8 million in real and personal property, retain 675 existing jobs and create 95 new jobs with a minimum of 71 new jobs in 2005-2007 and in 2006-2008, measured as the 3-year average at the end of 2007 and again at the end of 2008, and allowed Crane to count temporary contract employed towards the job goal; and
WHEREAS, as of the end of 2005, Crane had invested more than twice as much in real and personal property as the Enterprise Zone Agreement requires, was satisfying 100% of the job retention goal but had created only 21 new job; and
WHEREAS, Crane now anticipates that it is highly unlikely to be able to satisfy the job creation goal of the Enterprise Zone Agreement, as amended, and has requested that the City dissolve the Enterprise Zone Agreement with tax year 2004 as the final year of tax abatement will repay any real property taxes that were abated in calendar 2006 and will file the 2006 Personal Property Tax return without claiming the personal property abatement; and
WHEREAS, Crane has made at least twice the real and personal property investment it agreed to in the Enterprise Zone Agreement, is providing employment opportunities in the Southside of Columbus to nearly 700 persons, and is striving to remain competitive in the plastics industry despite economic and business conditions; and
WHEREAS, the City is appreciative of the investment Crane has made and the many job opportunities Crane is providing and agrees with the course of action Crane has requested; and
WHEREAS, an emergency exists in the usual daily operation of the Department of Development in that it is immediately necessary to obtain City Council's vote in order to meet the new deadline under State law for voting on the TIRC recommendations, thereby preserving the public health, peace, prosperity, safety and welfare; NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1. That the Director of the Department of Development is hereby authorized to dissolve the Crane Enterprise Zone Agreement and to notify as necessary the state and local tax authorities, making tax year 2004 the final year of the abatement for real property (for real estate taxes paid in calendar year 2005 based on the 2004 values) and also for personal property (personal property taxes paid in 2005 based on the December 2004 balance sheet) and providing that Crane will repay any real property taxes that were abated in calendar year 2006 (for 2005 real property values) and will file the 2006 Personal Property Tax Return without claiming the personal property abatement.
Section 2. That for the reasons stated in the preamble thereto, which is made a part hereof, this Ordinance is declared to be an emergency measure and shall be in force from and after its passage and approval by the Mayor, or ten days after passage if the Mayor neither approves nor vetoes the same.