Explanation
BACKGROUND: Columbus City Council (Council), by Ordinance No. 1110-2004, passed June 28, 2004, authorized the City to enter into an Enterprise Zone Agreement (the Agreement) with Evans, Mechwart, Hambleton & Tilton, Inc. (Enterprise) and Wishbone Partners, LLC (Landlord) for a tax abatement of seventy-five percent (75%) for a period of ten (10) years in consideration of a $10M investment in real property improvements by Landlord, a $1.7M investment in personal property, the relocation and retention of 329 permanent full-time jobs, and the creation of 85 permanent full-time jobs by Enterprise related to a new 100,000 square foot facility to be constructed on portions of parcel numbers 010-220116 and 010-242023 on New Albany Road Columbus, Ohio and within the Columbus North Enterprise Zone. The Agreement was made and entered into to be effective August 19, 2005 (EZA# 393-05-01) and was subsequently authorized by Council to be amended for the first time by Ordinance 0614-2009, passed on May 11, 2009, effective January 1, 2009 that eliminated any and all language from the Agreement that pertained to personal property investment.
The 2009 Columbus Tax Incentive Review Council (TIRC) reviewed the Evans, Mechwart, Hambleton & Tilton, Inc. and Wishbone Partners, LLC Enterprise Zone project on August 18, 2009, 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 low payroll situation, (2) discuss likely job creation goals in light of the economy, and (3) amend agreement if need be to reflect revised job numbers. City has met with Enterprise on a number of occasions since the TIRC and each of the three points above have been discussed. Both City and Enterprise have been compliant with the requests of the TIRC. This legislation seeks to authorize amendment of the Agreement to amend the job creation and job retention requirements as set forth in the Agreement, removing specific requirements for the creation and retention of jobs and replacing that with maintaining an overall job level of 235 jobs with a commensurate overall payroll of $18,270,000, and allowing the jobs and payroll of any tenants located at the facility to be counted towards these amended job and payroll commitments. It is anticipated that the company will be able to maintain good compliance in future years with the revised overall job level requirement. The terms of the real property tax abatement is not modified by this amendment and is expected to run through 2016.
This legislation is presented as an emergency measure in order for this amendment to be legislated prior to the 2010 TIRC.
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 Evans, Mechwart, Hambleton & Tilton, Inc. and Wishbone Partners, LLC; and to declare an emergency.
Body
WHEREAS, the Columbus City Council approved the Enterprise Zone Agreement with Evans, Mechwart, Hambleton & Tilton, Inc. and Wishbone Partners, LLC (the "EZA") on June 28, 2004 by Ordinance No. 1110-2004 and entered into effective August 19, 2005; and
WHEREAS, the EZA grants Evans, Mechwart, Hambleton & Tilton, Inc. and Wishbone Partners, LLC a 75%/10-Year abatement on real and personal property investment; and
WHEREAS, the EZA requires Evans, Mechwart, Hambleton & Tilton, Inc. and Wishbone Partners, LLC to invest $10M in real property improvements, $19.5M in personal property, create 85 new full-time jobs, and relocate and retain 329 full-time jobs at a new facility on New Albany Road; and
WHEREAS, the EZA with Evans, Mechwart, Hambleton & Tilton, Inc. and Wishbone Partners, LLC was subsequently authorized by Columbus City Council to be amended for the first time by Ordinance 0614-2009, passed on May 11, 2009, effective January 1, 2009 that eliminated any and all language from the Agreement that pertained to personal property investment; and
WHEREAS, the Tax Incentive Review Council (the "TIRC") met on August 18, 2009 and it was reported then that the project had met the real and personal property investment goals of the EZA but job retention and job creation had fallen short, with 0 jobs created and 273 jobs retained, as of December 31, 2008, compared to the job creation goal of 85 and job retention goal of 329; and
WHEREAS, the TIRC recommended that the EZA be continued and that City send Evans, Mechwart, Hambleton & Tilton, Inc. (Enterprise) a job creation warning letter and request a meeting with Enterprise to (1) discuss the low payroll situation, (2) discuss likely job creation goals in light of the economy, and (3) amend agreement if need be to reflect revised job numbers; and
WHEREAS, an analysis of the Report Year 2009 Annual Report submitted to the City by Enterprise during the most recent reporting cycle indicated that again the project had met the investment goals of the EZA but job retention and job creation continued to be low, with 0 jobs created and 245 jobs retained; and
WHEREAS, as the City and Enterprise have been compliant with the recommendations of the TIRC, the City desires to amend the job creation and retention requirements of the EZA; 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 this amendment to be legislated prior to the 2010 TIRC, 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 Evans, Mechwart, Hambleton & Tilton, Inc. and Wishbone Partners, LLC Enterprise Zone Agreement (EZA) to amend the job creation and job retention requirements as set forth in the EZA, removing specific requirements for the creation and retention of jobs and replacing that with maintaining an overall job level of 235 jobs with a commensurate overall payroll of $18,270,000, and allowing the jobs and payroll of any tenants located at the facility to be counted towards these amended job and payroll commitments.
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.