Explanation
BACKGROUND: Columbus City Council (Council), by Ordinance No. 2991-1998, passed November 16, 1998, authorized the City to enter into an Enterprise Zone Agreement (the Agreement) with Brooks Beverage Management, Inc. (Enterprise) for a tax abatement of fifty percent (50%) for a period of ten (10) years in consideration of a $9,510,000 investment in real property improvements, a $16,340,000 investment in personal property, and the retention of 275 jobs and the creation of 115 new, permanent, full-time jobs by Enterprise related to a 300,000 square foot addition to their facility at 950 Steltzer Road in Columbus, Ohio and within the City of Columbus Enterprise Zone. The Agreement was made and entered into to be effective December 29, 1998 (EZA# 023-98-07).
This Agreement was subsequently authorized by Council to be amended for the first time to amend the exemption window by Ordinance No. 1159-00, passed June 5, 2000; and that this Agreement was subsequently authorized by Council to be amended for the second time to amend the number of full-time jobs to be created from 115 to 69 and to again amend the exemption window by Ordinance No. 2509-2003, passed December 8, 2003; and that this Agreement was subsequently authorized by Council to be amended for the third time in 2004 to again amend the exemption window, by Ordinance No. 0270-2004, passed February 23, 2004; and that this Agreement was subsequently authorized by Council to be amended for the fourth time to change the name of Enterprise from Brooks Beverage Management, Inc. to Beverage Management, Inc., to add DP Columbus Portfolio LP as the Owner of the real property, and to amend the investment amounts and investment time-frame by Ordinance No. 0784-2006, passed April 24, 2006; and that this Agreement was subsequently authorized by Council to be amended for the fifth time to remove any and all language pertaining to personal property investment and tax abatements related to this personal property investment from the Agreement by Ordinance No. 0614-2009, passed May 11, 2009.
The 2010 Columbus Tax Incentive Review Council (TIRC) reviewed the Beverage Management, Inc. & DP Columbus Portfolio LP Enterprise Zone project on August 19, 2010, and recommended that the Agreement be continued and that City send Enterprise a job creation warning letter and request a meeting with Enterprise to (1) discuss the job situation, (2) discuss likely job retention goals in light of the nature of employment needs, and (3) amend Agreement if need be to reflect revised job numbers. Both City and Enterprise have been compliant with the requests of the TIRC. There also exists a need to change the name of Beverage Management, Inc. to American Bottling Company. This legislation seeks to authorize amendment of the Agreement to change the name of Beverage Management, Inc. to American Bottling Company and to amend the job creation requirement as set forth in the Agreement, to maintain a created job level of 50 jobs with a commensurate new job payroll of $1.9 million. It is anticipated that the company will be able to maintain good compliance in future years with the revised new job level requirement. The terms of the property tax abatement are not modified by this amendment and it is expected to run through 2014.
This legislation is presented as an emergency measure in order for this amendment to be legislated prior to the end of 2010 so that this amendment to the Agreement can be reported to the necessary local and state agencies prior to the end of calendar year 2010.
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 with Beverage Management, Inc. & DP Columbus Portfolio LP, and to declare an emergency.
Body
WHEREAS, the Columbus City Council (Council) approved the Enterprise Zone Agreement with Brooks Beverage Management, Inc. (the "EZA") on November 16, 1998 by Ordinance No. 2991-1998 and entered into effective December 29, 1998; and
WHEREAS, the EZA was subsequently authorized by Council to be amended for the first time to amend the exemption window by Ordinance No. 1159-00, passed June 5, 2000; and that this EZA was subsequently authorized by Council to be amended for the second time to amend the number of full-time jobs to be created and to again amend the exemption window by Ordinance No. 2509-2003, passed December 8, 2003; and that this EZA was subsequently authorized by Council to be amended for the third time to again amend the exemption window by Ordinance No. 0784-2006, passed April 24, 2006; and that this EZA was subsequently authorized by Council to be amended for the fourth time to change the name of Enterprise from Brooks Beverage Management, Inc. to Beverage Management, Inc., to add DP Columbus Portfolio LP as the Owner of the real property, and to amend the investment amounts and investment time-frame by Ordinance No. 0784-2006, passed April 24, 2006; and that this EZA was subsequently authorized by Council to be amended for the fifth time to remove any and all language pertaining to personal property investment and tax abatements related to this personal property investment from the EZA by Ordinance No. 0614-2009, passed May 11, 2009.
WHEREAS, the EZA currently grants Beverage Management, Inc. & DP Columbus Portfolio LP a 50%/10-Year abatement on real property investment; and
WHEREAS, the EZA requires an investment of $9,510,000 in real property improvements, the retention of 275 permanent full-time jobs, and the creation of 69 permanent full-time jobs at their now expanded facility at 950 Steltzer Road; and
WHEREAS, the Tax Incentive Review Council (the "TIRC") met on August 19, 2010 and it was reported then that the project had met the real property investment goals and the job retention goal of the EZA but job creation had fallen short, with 43 jobs created as of December 31, 2009, compared to the job creation goal of 69; and
WHEREAS, the TIRC recommended that the EZA be continued and that City send Enterprise a job creation warning letter and request a meeting with Enterprise to (1) discuss the job situation, (2) discuss likely job retention goals in light of the nature of employment needs, and (3) amend Agreement if need be to reflect revised job numbers; and
WHEREAS, as the City and Enterprise have been compliant with the recommendations of the TIRC, the City desires to amend the job creation retention requirements of the EZA as well as to change the name of Enterprise from Beverage Management, Inc. to American Bottling Company; 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 this agreement in order for this amendment to be legislated prior to the end of 2010 so that this amendment to the Agreement can be reported to the necessary local and state agencies prior to the end of calendar year 2010, and to preserve the public health, property, 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 amend the Beverage Management, Inc. & DP Columbus Portfolio LP Enterprise Zone Agreement (EZA) to amend the job creation requirement as set forth in the EZA, to maintain a created job level of 50 jobs with a commensurate new job payroll of $1.96 million and to change the name of Beverage Management, Inc. to American Bottling Company.
Section 2. 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.