Explanation
BACKGROUND: The Tax Incentive Review Council (TIRC) recommended on August 25, 2006, that the City dissolve the Enterprise Zone Agreement with Commodity Logistics and CIVFI-OH1BO1, LLC, with 2005 as the final tax year of abatement and no recovery of tax saving from tax years prior to 2005. Commodity Logistics has been unable to achieve its job creation requirements pursuant to the Enterprise Zone Agreement. The City concurs with the TIRC recommendation.
Columbus City Council approved an Enterprise Zone Agreement with Commodity Logistics (tenant), Commodity One, LLC, and CalEast Industrial Investors, LLC (property owners), by Ord. No. 36-00, adopted January 10, 2000. City Council approved an amendment of the Enterprise Zone Agreement to assign the interests of the original property owners to a new property owner, CIVFI-OH1BO1, LLC, by Ord. No. 1920-2003, on July 28, 2003. Commodity Logistics is a third party logistics firm. The project site is the company's headquarters location at 1500 Commodity Boulevard in the Rickenbacker area. The Enterprise Zone Agreement grants a 60%/ 7-yr real property tax abatement (2001-2007), while the tenant and property owners agreed to construct a 500,000 square foot building, to invest $8.5 million in real property investment, $500,000 in a rail extension, $850,000 in personal property investment, and to create 200 full-time jobs with an approximate payroll of $3.24 million. On December 8, 2003, City Council approved Ord. No. 2653-2003, to grant Commodity Logistics two additional years to meet the job creation goal. The new deadline was set at December 31, 2005.
The project has exceeded its real property investment goal, has met most of the personal property investment goal but has been unable to meet the job creation goal. As of December 31, 2005, Commodity Logistics had only 44 jobs at the project site (goal is 200 jobs), with an annual payroll of $2.3 million. The project had been making progress with job creation, with 71 jobs as of December 2004, but in 2005 the company lost over 60% of its business with the loss of its largest customer. This loss has resulted in a decrease of 500 full-time employees company-wide.
This legislation is presented as an emergency measure in order to meet the deadline under state law for City Council to vote on TIRC recommendations.
FISCAL IMPACT: No funding is required for this legislation.
Title
To dissolve the Commodity Logistics and CIVFI-OH1BO1, LLC Enterprise Zone Agreement and direct the Director of the Department of Development to notify as necessary the local and state tax authorities; and to declare an emergency.
Body
WHEREAS, Columbus City Council approved an Enterprise Zone Agreement with Commodity Logistics, Commodity One, LLC, and CalEast Industrial Investors, LLC by Ord. No. 36-00, adopted January 10, 2000 and amended the Agreement by Ord. No. 1920-2003, on July 28, 2003, to assign the interests of the original property owners to a new property owner, CIVFI-OH1BO1, LLC; and
WHEREAS, the Enterprise Zone Agreement with Commodity Logistics and CIVFI-OH1BO1, LLC (the "EZA") grants a 60%/7 year tax abatement on real property improvements and requires an investment of $8.5 million in real property, $500,000 in rail construction, $850,000 in personal property, and the creation of 200 jobs; and
WHEREAS, Columbus City Council authorized an amendment to the EZA by Ord. No. 2653-2003, to grant a two-year extension to complete the job creation with the resulting deadline being December 31, 2005; and
WHEREAS, Commodity Logistics exceeded its investment requirements, but created only 44 jobs as of December 31, 2005; and
WHEREAS, the Tax Incentive Review Council (the "TIRC") recommended that the City dissolve the EZA, with 2005 as the final tax year for the tax exemptions, without requesting the payment of exempted amounts from tax years prior to 2005; and
WHEREAS, the City concurs with the TIRC recommendation and desires to dissolve the EZA,
with 2005 as the final tax year for the tax exemptions, without requesting the payment of exempted amounts from tax years prior to 2005; 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 the TIRC's recommendations to comply with the sixty (60) day deadline for City Council action imposed by imposed by R.C. Section 5709.85, all for the preservation of the public health, property, safety and welfare; NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1. That Columbus City Council hereby dissolves the Enterprise Zone Agreement with Commodity Logistics and CIVFI-OH1BO1, LLC, with tax year 2005 as the final year for the tax exemptions and without requesting the payment of exempted amounts from tax years prior to 2005, and authorizes the Director of Development to notify as necessary the state and local authorities.
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.