Explanation
BACKGROUND: This legislation accepts the Columbus Tax Incentive Review Council's recommendation made August 30, 2004 regarding the Amerigraph LLC Enterprise Zone Agreement (EZA).
Columbus City Council authorized the EZA on January 22, 2001 by Ordinance 6-01, which granted a 40%/5-year tax abatement on new M & E (2001-2005). Amerigraph LLC ("Amerigraph") agreed to invest $7,150,000, of which $7 million was for new M & E and $150,000 for leasehold improvements, and to retain 16 jobs and create 40 new jobs with $1,664,000 in annual payroll for the new jobs. The project site is in the Hilliard School District on the west side of Columbus. Amerigraph reported that by the end of 2003 it had invested $6.5 million ($6.3 million in M & E), retained 16 jobs and created 76 new jobs, with a 2003 payroll of $2.4 million for the new jobs. At its August 12, 2004 meeting, the Columbus Tax Incentive Review Council (TIRC) recommended the abatement be continued, provided that City staff obtains clarification to explain a discrepancy in the information about the company's personal property investment.
On August 25, 2004, the Columbus Dispatch reported that Amerigraph plans to move out of Columbus and relocate to Gahanna, to a site that offers 100%/10-year tax abatement. Following this news, the TIRC Chair called an emergency meeting to revisit the earlier (August 12th) recommendation on Amerigraph. The TIRC met August 30th with Amerigraph representatives in attendance. The relocation to Gahanna is anticipated to occur in for the First Quarter of 2005, which is prior to when the tax abatement from Columbus expires (December 31, 2005). Following statements by the Amerigraph attendees, and discussion by TIRC members, the TIRC voted to recommend that the City dissolve the EZA, cancel the exemptions and require repayment of the taxes that had been exempted under the EZA.
Emergency action is requested to meet the new deadline under State law for City Council vote on TIRC recommendations.
FISCAL IMPACT: No funding is required for this legislation.
Title
To accept the recommendation of the Columbus Tax Incentive Review Council with respect to the Amerigraph LLC Enterprise Zone Agreement and to authorize the Director of the Department of Development to notify Amerigraph that its Enterprise Zone Agreement with the City of Columbus is dissolved and the tax exemptions cancelled, and that the City is requiring repayment of the amount of taxes that would have been payable had the property not been exempted from taxation under the Agreement approved by Columbus City Council; and to declare an emergency.
Body
WHEREAS, the City of Columbus grants property tax abatements to business enterprises in return for the jobs and investment they create and maintain in Columbus during the term of the abatement; and
WHEREAS, the Columbus City Council authorized an Enterprise Zone Agreement with Amerigraph LLC
("Amerigraph") on January 22, 2001 by Ordinance 6-01; and
WHEREAS, the Enterprise Zone Agreement that the City entered into with Amerigraph, dated effective
March 8, 2001, granted Amerigraph a 40% tax abatement on new M & E for a period of five (5) years; and
WHEREAS, Amerigraph agreed to invest $7 million in new M & E and $150,000 in real property improvements
and to acquire and maintain the investment at the project site; and
WHEREAS, Amerigraph also agreed to retain 16 jobs and create 40 new jobs and to locate and maintain the
employment at the project site; and
WHEREAS, the project site under the Amerigraph Enterprise Zone Agreement is 3736 Paragon Road in
Columbus; and
WHEREAS, the tax abatement Columbus granted saved Amerigraph approximately $49,536 in personal property
tax payments in 2002-2004; and
WHEREAS, Amerigraph has confirmed that it intends to relocate its jobs and assets from the Columbus Enterprise
Zone to a site in Gahanna where a 10-year/100% CRA tax abatement is available; and
WHEREAS, Amerigraph intends to relocate in the First Quarter of 2005, which is before expiration of the tax
abatement the company accepted from Columbus and in return for which agreed to maintain jobs and investment
in Columbus; and
WHEREAS, the Columbus Tax Incentive Review Council (TIRC) voted on August 30, 2004 to recommend that the
City dissolve the EZA and require repayment of the taxes that had been exempted under the EZA; and
WHEREAS, the City concurs with this recommendation of the TIRC; and
WHEREAS, an emergency exists in the usual daily operation of the Department of Development in that it is
immediately necessary to obtain City Council's vote in order to meet the new deadline under State law for voting
on the TIRC recommendations, thereby preserving the public health, peace, prosperity, safety and welfare;
NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1. That the recommendation of the Columbus Tax Incentive Review Council with regard to the Amerigraph
LLC Enterprise Zone Agreement is accepted and that the Agreement is hereby dissolved and the tax exemptions
cancelled, that Amerigraph LLC be required to repay the amount of taxes that would have been payable had the
property not been exempted from taxation under the Enterprise Zone Agreement and that the Director of the
Department of Development notify Amerigraph LLC and, as necessary, the appropriate local and state authorities.
Section 2. That for the reasons stated in the preamble hereto, this ordinance is hereby declared to be an emergency
and shall take effect and be in force from and after its passage and approval by the Mayor or ten days if the Mayor
neither approves nor vetoes the same.