Explanation
BACKGROUND: The need exists to enter into an Enterprise Zone Agreement with ADS Alliance Data Systems, Inc. and Duke Realty Corporation, and a Jobs Creation Tax Credit Agreement with ADS Alliance Data Systems, Inc., and Ohio Enterprise Zone law (O.R.C. Section 5709.61 et seq.) and Jobs Creation Tax Credit law (O.R.C. Section 718.15) require the City to enter into a Council-approved agreements with the participating companies.
Duke Realty Corporation proposes to build a 200,000 square foot office building that ADS Alliance Data Systems, Inc. will occupy under a net lease arrangement with Duke Realty Corporation. The project will be located on Stelzer Road in the Easton area in Columbus' North Enterprise Zone. The project will include an investment of $24,700,000. Included in this investment will be $23,650,000 in real property improvements, $250,000 in machinery & equipment, $750,000 in furniture & fixtures and $50,000 in stand alone computers. ADS Alliance Data Systems, Inc. will relocate and retain 529 full-time permanent employees, which will be new to Columbus, with an annual payroll of $40 million and create 54 full-time permanent jobs with an annual payroll of $2.7 million. Columbus will revenue share with the Columbus Public Schools under O.R.C. Section 5709.82. The 529 jobs will be relocated from the City of Gahanna, which has been notified of the proposed relocation. The Ohio Department of Development, pursuant to O.R.C. Section 5709.633 (B), has waived the relocation restrictions.
The Department of Development recommends a 100%/10 year tax abatement on real property improvements, machinery & equipment, furniture & fixtures and stand-alone computers, contingent on prior approval by the Columbus Public Schools. The Department also recommends a 65%/15 year Jobs Creation Tax Credit.
The Columbus Public School District has been advised of the project and will approve the Enterprise Zone tax abatement prior to this Council's approval of the ordinance.
Emergency action is requested by City Council to facilitate construction time schedules.
FISCAL IMPACT: No funding is required for this legislation.
Title
To authorize the Director of Development to enter into an Enterprise Zone Agreement with ADS Alliance Data Systems, Inc. and Duke Realty Corporation for a tax abatement of 100% for a period of ten years and to also enter into a Jobs Creation Tax Credit Agreement with ADS Alliance Data Systems, Inc. for 65% for a period of 15 years; and to declare an emergency.
Body
WHEREAS, by Ordinance No. 0427-03 passed March 31, 2003, the City designated the North Enterprise Zone as an "urban jobs and enterprise zone" pursuant to Chapter 5709 of the Ohio Revised Code and declared that incentives for businesses offered by such zones will enhance efforts to promote the viable and diverse economic activity necessary for rejuvenation of the zone; and
WHEREAS, effective January 8, 2004, the Director of Development of the State of Ohio determined that the aforementioned area designated by the City contains the characteristics set forth in Section 5709.61(A)-(3) of the Ohio Revised Code, and certified said area as an "Enterprise Zone" under Chapter 5709 of the Ohio Revised Code; 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, the Ohio Department of Development has offered ADS Alliance Data Systems, Inc. a 60%/7 year Jobs Creation Tax Credit; and
WHEREAS, Duke Realty Corporation plans to build a new office building of approximately 200,000 square feet which ADS Alliance Data Systems, Inc. will occupy under a net lease arrangement; and
WHEREAS, ADS Alliance Data Systems, Inc. and Duke Realty Corporation agree to invest approximately $24,700,000 in real property improvements and personal property within the City; and
WHEREAS, ADS Alliance Data Systems, Inc. agrees to relocate and retain 529 full-time permanent jobs, which will be new to Columbus, and create 54 new full time permanent jobs; and
WHEREAS, pursuant to ORC 5709.633-(B), the Ohio Department of Development waived the relocation restriction of ORC Section 5709.633 (A), effective July, 2006; and
WHEREAS, the Columbus Public Schools by resolution of its Board of Education has approved the proposed Enterprise Zone tax abatement and waived all notices for this project based on its understanding that the City will revenue share with the Columbus Public Schools for this project under ORC 5709.82(D) in an amount equal to any property taxes that would have been payable to the Columbus Public Schools if the project investment had been made but that investment not subject to the proposed Enterprise Zone tax abatement; and
WHEREAS, an emergency exists in the usual daily operation of the Department of Development in that it is immediately necessary to enter into contract with ADS Alliance Data Systems, Inc. and Duke Realty Corporation all for the preservation of the public health, peace, property and safety, NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1. That the Director of Development is hereby authorized to enter into an Enterprise Zone Agreement with ADS Alliance Data Systems, Inc. and Duke Realty Corporation, contingent on prior approval by the Columbus Public Schools, and to provide therewith an exemption of one hundred percent (100%) on real property improvements, machinery & equipment, furniture & fixtures and stand-alone computers for a term of ten (10) taxable years, and also enter into a Jobs Creation Tax Credit Agreement with ADS Alliance Data Systems, Inc. and to provide therewith a tax credit of sixty-five percent (65%) for a term of fifteen (15) years in association with the project's proposed $24,700,000 investment, job retention and creation.
Section 2. That the City of Columbus Enterprise Zone Agreement shall be signed by ADS Alliance Data Systems, Inc. and Duke Realty Corporation within ninety (90) days of passage of this ordinance, and the Jobs Creation Tax Credit Agreement with ADS Alliance Data Systems, Inc. shall be signed within ninety 90 days of passage of this ordinance, or this ordinance and the abatement authorized herein are null and void.
Section 3. 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.