Explanation
BACKGROUND: The need exists to amend the Columbus Enterprise Zone Agreement with Jana Holdings, LLC and Acorn Distributors, Inc. (collectively and hereinafter referred to as “ENTERPRISE”). Columbus City Council (“COUNCIL”), by Ordinance No. 0089-2017, passed February 27, 2017, authorized the City of Columbus (“CITY”) to enter into an Enterprise Zone Agreement (the “AGREEMENT”) with Jana Holdings, LLC (owner) and Acorn Distributors, Inc. (tenant) for a tax abatement of seventy-five percent (75%) for a period of ten (10) consecutive years in consideration of a total investment of approximately $4,800,000.00, which included $4,500,000.00 for real property improvements and $300,000.00 in machinery and equipment, furniture and fixtures, and computers to construct a 100,000-square-foot facility (the “PROJECT”) on a vacant parcel at Crosswind Drive, Columbus, Ohio 43228, parcel number 570-210752 (the “PROJECT SITE”), within the Columbus City School District and within the City of Columbus Enterprise Zone. Additionally, the ENTERPRISE committed to create twelve (12) new full-time permanent positions with an estimated annual payroll of approximately $540,000.00 and retain forty-two (42) full-time permanent positions with an annual payroll of approximately $2,100,000.00 at the PROJECT SITE. The AGREEMENT was made and entered into effective May 17, 2017 with PROJECT expected to begin first quarter of 2017, with all real property improvements expected to be completed approximately by December 2018, and that no real property exemption shall commence after January 1, 2019 nor extend beyond December 31, 2028 (Agreement No. 023-17-06).
In the 2024 Tax Incentive Review Council (“TIRC”) it was recommended to amend the AGREEMENT to reduce the job creation from twelve (12) new full-time permanent positions to six (6) new full-time permanent positions, on the condition that the ENTERPRISE was able to create six new full-time jobs. If the ENTERPRISE was unable to create the six jobs, it would be recommended the agreement would be terminated due to project non-compliance. Because the ENTERPRISE created the six jobs in report year 2025, legislation is needed to implement the recommendations of the 2024 TIRC. The ENTERPRISE has retained forty-two (42) full-time permanent positions at the PROJECT SITE with an associated annual payroll of approximately $4,000,000.00 and has created six (6) new full-time permanent positions with an associated new annual payroll of approximately $340,000.00. Additionally, the ENTERPRISE invested a total capital expenditure of $6,287,063.00, which exceeded the initial proposed investment.
This legislation is to authorize the Director of the Department of Development to amend the AGREEMENT for the first time to reduce the net new job creation commitment from twelve (12) full-time permanent positions to six (6) new full-time permanent positions.
This legislation is presented as 30-day legislation.
FISCAL IMPACT: No funding is required for this legislation.
Title
To authorize the Director of Department of Development to amend an Enterprise Zone Agreement with Jana Holdings, LLC and Acorn Distributors, Inc. for the first time to reduce the new job commitment from twelve (12) new full-time permanent positions to six (6) new full-time permanent positions in response to the TIRC recommendations. ($0.00)
Body
WHEREAS, the City of Columbus (“CITY”) entered into an Enterprise Zone Agreement (the “AGREEMENT”) with Jana Holdings, LLC and Acorn Distributors, Inc. (collectively and hereinafter referred to as (“ENTERPRISE”), and approved by Columbus City Council (“COUNCIL”) on February 27, 2017 by Ordinance No. 0089-2017 with this AGREEMENT made and entered into effective May 17, 2017 (Agreement No. 023-17-06); and
WHEREAS, the AGREEMENT granted a 75%/10-Year abatement on real property improvements; and
WHEREAS, the incentive was granted in consideration of a total capital investment of approximately $4,800,000.00, which included $4,500,000.00 in real property improvements and $300,000.00 in machinery, equipment, computer, furniture and fixtures to construct a new 100,000 square-foot office and warehouse distribution facility (the “PROJECT”) on a vacant parcel at Crosswind Drive Columbus, Ohio 43228, parcel number: 570-210752-00 (the “PROJECT SITE”); and
WHEREAS, the ENTERPRISE committed to create twelve (12) new full-time permanent positions with an estimated annual payroll of approximately $540,000.00 and retain forty-two (42) existing full-time permanent positions with an annual payroll of approximately $2,100,000.00 at the aforementioned PROJECT SITE; and
WHEREAS, the Columbus City Council passed the 2024 Tax Incentive Review Council (“TIRC”) recommendations, Ordinance Number 0250X-2024 dated October 21, 2024 which stated that the jobs requirement of the ENTERPRISE is to be reduced from twelve (12) full-time permanent positions to six (6) new full-time permanent positions. It specified that if these jobs are not created, the AGREEMENT will be terminated due to project non-compliance; and
WHEREAS, the ENTERPRISE has retained forty-two (42) full-time permanent positions with an associated annual payroll of approximately $4,000,000.00 and has created six (6) new full-time permanent positions with an associated new annual payroll of approximately $340,000.00. Additionally, the ENTERPRISE invested a total capital expenditure of approximately $6,287,063.00, whereby, the ENTERPRISE has complied with the recommendations of the TIRC; and
WHEREAS, it has become necessary in the usual daily operation a First Amendment to the City of Columbus Enterprise Zone Agreement is now required to (1) revise the net new job creation commitment in Section 2 of the AGREEMENT from twelve (12) full-time permanent positions to six (6) full-time permanent positions and (2) reduce the new employees anticipated annual payroll from $540,000.00 to $340,000.00; and NOW THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
SECTION 1. That the Council of the City of Columbus finds that the ENTERPISE submitting this proposal is qualified by financial responsibility and business experience to create and preserve employment opportunities in the zone and improve the economic climate of the municipal corporation.
SECTION 2. That the Director of Department of Development is hereby authorized to amend Section 2 (Employment and Payroll) of the City of Columbus Enterprise Zone Agreement with Jana Holdings, LLC and Acorn Distributors, Inc. to replace “TENANT shall create 12 new full-time jobs” with “TENANT shall create 6 new full-time jobs” and replace “new employees will result in approximately $540,000.00 of additional annual payroll for TENANT” with “new employees will result in approximately $340,000.00 of additional annual payroll for TENANT.”
SECTION 3. That this FIRST AMENDMENT to the City of Columbus Enterprise Zone Agreement shall be signed by Jana Holdings, LLC and Acorn Distributors, Inc. within ninety (90) days of passage of this ordinance or this ordinance and the abatement authorized herein shall be null and void.
SECTION 4. That this ordinance shall take effect and be in force from and after the earliest period allowed by law.