Explanation
BACKGROUND: The 2009 Columbus Tax Incentive Review Council (TIRC) reviewed the status of the Enterprise Zone Agreement (EZA) between the City of Columbus and Core Molding Technologies, Inc. (Enterprise) on August 19, 2009, and recommended that the City should request from Enterprise a written plan regarding the attainment of the job creation and retention goals as set forth in the EZA. Additionally, the TIRC recommended that the City should request an itemized breakdown of the reported real property improvements related to the project. Following a series of meetings between the City and representatives of Enterprise, a letter was received by the City sent by Enterprise requesting that the EZA between the City and Enterprise (EZA# 023-06-01) be dissolved. The City concurs with this request.
Columbus City Council approved the EZA by Ordinance Number 0198-2006, adopted February 27, 2006. The EZA was entered into effective May 18, 2006 and granted a 75%/10-Year abatement on real property improvements and personal property investment with a commitment of $1.02 million in real property improvements, $2.51million in personal property investment, the creation of 52 new permanent full-time jobs by December 31, 2009, and the retention of 380 permanent full-time jobs related to the expansion of approximately 20,000 square feet at their facility located on parcel number 570-105330 at 800 Manor Park Drive within the City of Columbus Enterprise Zone.
Additionally, the City of Columbus entered into a 60%/7-Year Jobs Creation Tax Credit (JCTC) Agreement with Enterprise effective May 18, 2006, approved by Ordinance No. 0198-2006, adopted February 27, 2006.
If the EZA and JCTC are dissolved, 2008 will have been the final tax year for the incentives and the City will not seek repayment of the exempted or credited taxes from prior years.
As of the TIRC review on August 19, 2009, Enterprise had exceeded their real property investment goal with a reported $1.92 million investment, had exceeded their personal property investment goal with a reported $2.71 million investment, had met their job retention goal of 380 jobs, but was deficient in the interim end-of-2008 new job creation goal of 32 with a reported 8 new jobs being created as a result of the project. As per the most recent reporting period ending December 31, 2009, retained jobs were reported to be 297, 78% of the goal, and new jobs were reported to be zero. Enterprise has fulfilled the investment terms of their EZA thus far but market conditions have resulted in the inability to maintain and expand employment at this facility as per the EZA and the JCTC Agreements.
This legislation is presented as an emergency measure in order for the respective dissolutions 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 and Jobs Creation Tax Credit Agreement with Core Molding Technologies, Inc.; 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 approved an Enterprise Zone Agreement ("EZA") and a Jobs Creation Tax Credit ("JCTC") with Core Molding Technologies, Inc. ("Enterprise") by Ordinance No. 0198-2006 on February 27, 2006; and
WHEREAS, the EZA grants Enterprise a 75%/10-Year abatement on real and personal property investment and the JCTC Agreement grants a 60%/7-Year JCTC; and
WHEREAS, the EZA requires Enterprise to invest $1.02 million in real property improvements, $2.51 million in personal property, create 52 new full-time jobs, and retain 380 full-time jobs at its 800 Manor Park Drive facility; and
WHEREAS, the JCTC Agreement requires Enterprise to create 52 new jobs and retain 380 jobs and the JCTC grants Enterprise a non-refundable tax credit in an amount of sixty percent (60%) of the new municipal income tax revenues generated by new jobs at the project site, for seven (7) years; and
WHEREAS, Enterprise has fulfilled the real and personal property investment terms and the job retention terms of their EZA as well as the job retention terms of the JCTC thus far but market conditions have resulted in the inability to expand employment at this facility as per the respective agreements; and
WHEREAS, Enterprise has requested that both the EZA and JCTC Agreements be dissolved; and
WHEREAS, the City concurs with the request and desires to dissolve the EZA and the JCTC Agreement and end the tax incentives 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 Core Molding Technologies, Inc. Enterprise Zone Agreement as of December 31, 2008, with 2008 as the final tax year for the exemptions.
Section 2. That Columbus City Council hereby dissolves the Core Molding Technologies, Inc. Jobs Creation Tax Credit Agreement as of December 31, 2008, with 2008 as the final tax year for the incentive.
Section 3. That the Director of Development is hereby directed to notify the necessary local and state agencies of any changes to the Core Molding Technologies, Inc. Enterprise Zone and Jobs Creation Tax Credit Agreements.
Section 4. 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.