Explanation
BACKGROUND: Columbus City Council, by Ordinance No. 1356-2004, passed July 21, 2004, authorized the City to enter into an Enterprise Zone Agreement (the Agreement) with Unico Alloys and Metals (Enterprise) for a tax abatement of sixty percent (60%) for a period of six (6) years in consideration of a $400,000 investment in real property improvements, a $1.2 million investment in personal property, the retention of 26 permanent full-time jobs, and the creation of 14 permanent full-time jobs related to the relocation and expansion from their previous location at 1555 Joyce Avenue to 1177 Joyce Avenue, both located in Columbus, Ohio and within the City of Columbus Enterprise Zone. The Agreement was made and entered into to be effective August 2, 2005 (EZA# 023-05-08) and was subsequently authorized by Council to be amended for the first time by Ordinance Number 1025-2006, passed June 19, 2006, effective July 17, 2006, to modify the tax exemption window and was again subsequently authorized by Council to be amended for the second time by Ordinance Number 0614-2009, passed on May 11, 2009, effective January 1, 2009 that eliminated any and all language from the Agreement that pertained to personal property investment.
Following the most recent tax abatement reporting period which ended December 31, 2009 it was brought to the attention of the City by Enterprise that Enterprise had to the best of their knowledge not received any benefit from the tax abatement. Upon consultation with the office of the Franklin County Auditor it was confirmed that there would be no benefit to Enterprise as there was no increase in real property valuation from the project but that there was some possible personal property tax benefit for tax year 2008. Additionally, although Enterprise had filed their Form DTE-24 (the application for the abatement) in 2007, the abatement had yet to be granted by the State of Ohio. Subsequently, Enterprise provided a letter dated February 22, 2010 to the office of the Franklin County Auditor formally requesting the withdrawal of the DTE Form 24, Auditor's Application 07-4-E which the County Auditor subsequently forwarded to the Ohio Department of Development. This legislation is to formally dissolve the Agreement.
As of the most recent Tax Incentive Review Council (TIRC) review on August 18, 2009, Enterprise had exceeded their real property investment goal of $400,000 with a reported $5.89 million investment (1,474% attainment), had exceeded their personal property investment goal of $1.2 million with a reported $15.59 million investment (1,300% attainment), had exceeded their job retention goal of 26 jobs with a reported 29 jobs (112% attainment), and had exceeded their end-of-2008 interim new job creation goal of 9 jobs with a reported 13 new jobs (144% attainment). Enterprise has fulfilled the investment, job retention, and job creation terms of their Agreement but based on the valuation of these investments have not and will not in the future have the ability to receive any benefit from maintaining the Agreement.
If the Agreement is dissolved, 2008 will have been the final tax year for any possible incentives and the City will not seek repayment of the exempted taxes from prior years as there have not been any taxes exempted. Enterprise has received no tax abatement benefit as a result of this project.
This legislation is presented as an emergency measure in order for the dissolution to be in effect prior to the 2010 TIRC.
FISCAL IMPACT: No funding is required for this legislation.
Title
To dissolve the Enterprise Zone Agreement with Unico Alloys and Metals; to direct the Director of the Department of Development to notify as necessary the local and state tax authorities; and to declare an emergency.
Body
WHEREAS, Columbus City Council (Council) approved an Enterprise Zone Agreement (EZA) with Unico Alloys and Metals (Enterprise) by Ordinance Number 1356-2004 on July 21, 2004, entered into and effective August 2, 2005 (EZA# 023-05-08); and
WHEREAS, the EZA grants Enterprise a 60%/6-Year abatement on real and personal property investment; and
WHEREAS, the EZA requires Enterprise to invest $400,000 in real property improvements, $1.2 million in personal property, create 14 new full-time jobs, and retain 26 full-time jobs at its 1177 Joyce Avenue facility; and
WHEREAS, the EZA was subsequently authorized by Council to be amended for the first time by Ordinance Number 1025-2006, passed June 19, 2006, effective July 17, 2006, and was again subsequently authorized by Council to be amended for the second time by Ordinance Number 0614-2009, passed on May 11, 2009, effective January 1, 2009; and
WHEREAS, Enterprise has fulfilled the real and personal property investment terms and the job retention and creation terms of their EZA but based on the valuation of these investments have not and will not in the future have the ability to receive any benefit from maintaining the EZA; and
WHEREAS, Enterprise has requested that the EZA be dissolved; and
WHEREAS, the City concurs with the request and desires to dissolve the EZA and end the possibility of Enterprise receiving tax incentives as a result of this project as of December 31, 2008; and
WHEREAS, an emergency exists in the usual daily operation of the Department of Development, in that it is immediately necessary to take action on these agreements in order for the respective dissolutions to be in effect prior to the 2010 TIRC, all for the preservation of the public health, property, safety and welfare; NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1. That Columbus City Council hereby dissolves the Unico Alloys and Metals Enterprise Zone Agreement as of December 31, 2008, with 2008 as the final tax year for the exemptions.
Section 2. That the Director of Development is hereby directed to notify the necessary local and state agencies of any changes to the Unico Alloys and Metals Enterprise Zone Agreement.
Section 3. For the reasons stated in the preamble hereto, which is made a part hereof, this Ordinance is declared to be an emergency measure and shall take effect and be in force from and after its passage and approval by the Mayor, or ten (10) days after passage if the Mayor neither approves nor vetoes this Ordinance.