Explanation
BACKGROUND: The need exists to enter into a Jobs Creation Tax Credit Agreement with Ohio Valley Cable Services, Inc. (Ohio Valley Cable). The Ohio Tax Credit Legislation (Section 718.15 of the Ohio Revised Code) authorizing such agreements became effective January 14, 1993 and requires the City to enter a Council-approved agreement between the City and a participating company.
Ohio Valley Cable reconditions, repairs, sells and distributes fiber optic and digital cable equipment. The company began in 1999 and is currently headquartered in Westerville, Ohio. It started by repairing line equipment for cable companies. Increased demand allowed expansion into power supply, fiber transmission equipment and test equipment. The company has experienced 100% sales increases every year since its inception. Ohio Valley Cable's largest customers are Motorola and Scientific Atlanta. Due to its rapid growth, Ohio Valley Cable's existing facility no longer serves its needs and the company must move to a larger facility.
Ohio Valley Cable is proposing to lease 60,000 square feet of a facility located at 1030 Freeway Dr. North, previously occupied by the State Department of Taxation. Contingent on the City granting a Jobs Creation Tax Credit, Ohio Valley Cable Services, Inc. will relocate & retain 46 full-time positions with an annual payroll of $2.3 million (which will be new to Columbus) and create 25 full-time permanent jobs with an annual payroll of $780,000, investing $700,000 in new personal property and increasing job opportunities and strengthening the economy of the city.
This legislation is considered to be an emergency in order to allow Ohio Valley Cable Services, Inc. to make a decision on the location of their proposed relocation/expansion as quickly as possible.
FISCAL IMPACT: No funding is required for this legislation.
Title
To authorize the Director of Development to enter into an agreement with Ohio Valley Cable Services, Inc. for a Jobs Creation Tax Credit of 65% for a period of 8 years; and to declare an emergency.
Body
WHEREAS, pursuant to Section 122.17 of the Ohio Revised Code, the State of Ohio is authorized to establish the Tax Credit Authority and to execute agreements with taxpayers of the State of Ohio for the purpose of granting these taxpayers job creation tax credits against their corporate franchise tax or income tax, which tax credits are provided to create new jobs in the State of Ohio; and
WHEREAS, the Ohio Department of Development approved a 40%/5 year Jobs Creation Tax Credit on October 10, 2006 for Ohio Valley Cable Services, Inc.; and
WHEREAS, pursuant to Section 718.15 of the Ohio Revised Code (the "City Act") a municipal corporation is authorized to grant local income tax credits to taxpayers who have received tax credits from the State; and
WHEREAS, contingent on the City granting a Jobs Creation Tax Credit, Ohio Valley Cable Services, Inc. will relocate & retain 46 full-time positions with an annual payroll of $2.3 million (which will be new to Columbus) and create 25 full-time permanent jobs with an annual payroll of $780,000, investing $700,000 in new personal property and increasing job opportunities and strengthening the economy of the city; and
WHEREAS, receiving these tax credits from the State and the City is a critical factor in Ohio Valley Cable Services, Inc.'s decision to go forward with the project in the City of Columbus; and
WHEREAS, this legislation is considered to be an emergency in order to allow Ohio Valley Cable Services, Inc. to make a decision on the location of their proposed relocation/expansion as quickly as possible; and
WHEREAS, an emergency exists in the usual daily operation of the Columbus Department of Development in that it is immediately necessary to enter into an agreement with Ohio Valley Cable Services, Inc. for the preservation of public health, peace, property and safety; NOW THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1. That the City hereby finds and determines that the project will (1) create jobs in the State and City; (2) the project is economically sound and will benefit the people of the State and City by increasing opportunities for employment and strengthening the economy of the State and City; and (3) receiving the aforementioned tax credits is a critical factor in the decision by Ohio Valley Cable Services, Inc. to go forward with the project.
Section 2. That the City Council hereby finds and determines that the project meets all the requirements of the City Act.
Section 3. That the Director of the Department of Development is hereby authorized and directed to enter into and execute an 8-year, 65% Jobs Creation Tax Credit Agreement with Ohio Valley Cable Services, Inc.
Section 4. That the City of Columbus Jobs Creation Tax Credit Agreement be signed by Ohio Valley Cable Services, Inc. within 90 days of passage of this ordinance, or this ordinance and the credit herein shall be null and void.
Section 5. That for reasons stated in the preamble hereto, which is hereby made a part hereof, the ordinance is hereby 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 days after the passage if the Mayor neither approves nor vetoes the same.