Explanation
BACKGROUND: The need exists to amend the City of Columbus Jobs Growth Incentive Agreement (“AGREEMENT”) between the City of Columbus (“CITY”) and Slalom, LLC (“GRANTEE”). Columbus City Council (“COUNCIL”), by Ordinance No. 1190-2020, passed on June 15, 2020, authorized the Director of the Department of Development to enter into an AGREEMENT with the GRANTEE for an annual cash payment equal to (i) twenty-five percent (25%) of the City of Columbus income tax withheld on the Columbus payroll of new employees and (ii) thirty percent (30%) of the City of Columbus income tax withheld on the Columbus payroll of those employees who are also City of Columbus residents at the end of each calendar year, for a term up to five (5) years. The GRANTEE committed to invest a total project investment of approximately $547,000, which included $120,000 in computers, $263,000 in furniture and fixtures, and $164,000 in leasehold improvements to establish new operations at 4111 Worth Avenue, Columbus, Ohio 43219, parcel number 010-298349 the “PROJECT SITE”). Additionally, the GRANTEE committed to retain 19 full-time positions with an estimated payroll of approximately $3,288,000 and create 85 net new full-time permanent positions with an estimated annual payroll of approximately $12,157,000.00 at the proposed PROJECT SITE. The AGREEMENT was made and entered into effective February 21, 2021.
Paragraph four within Section 13 (Miscellaneous) of the AGREEMENT states, “No amendment of modification shall be effective unless in writing and signed by both parties to this agreement. Any requested amendment or modification to any of the terms of the AGREEMENT made to the CITY by the GRANTEE shall require the payment to the CITY by the GRANTEE of an AMENDMENT FEE in the amount of two-hundred fifty dollars ($250.00).”
In a letter received by the CITY from the GRANTEE dated September 21, 2023, and through additional correspondence, it was confirmed that the GRANTEE changed its name from Slalom, LLC to Slalom, Inc. of Delaware (Slalom, Inc.), effective January 1, 2023. Slalom, LLC, a limited liability company (“LLC”) organized under the laws of the State of Colorado, converted under state law from a Colorado LLC company to a C-corporation to better support global expansion, minimize company taxes, and offer stock as a more traditional investment to their employee investors worldwide. Additionally, the GRANTEE request that the PROJECT SITE be updated to reflect the GRANTEE’s current site location. Due to the onset of the COVID-19 pandemic, the company decided to remain and expand operations at its current location of 375 N. Front Street, Columbus, Ohio 43215, parcel number 010-259880 instead of its relocating and expanding operation to 4111 Worth Avenue, Columbus, Ohio 43219, parcel number 010-298349, the proposed PROJECT SITE listed in the AGREEMENT. As a result, the GRANTEE is requesting the AGREEMENT be amended to (1) change the company’s name from Slalom, LLC to Slalom, Inc. of Delaware (Slalom, Inc.) and (2) change the PROJECT SITE address from 4111 Worth Avenue, Columbus, Ohio 43219, parcel number 010-298349 to 375 N. Front Street, Columbus, Ohio 43215, parcel number 010-259880.
The legislation authorizes the Director of the Department of Development to amend the AGREEMENT for the first time to (i) remove Slalom, LLC as GRANTEE and to be replaced with Slalom, Inc. of Delaware (Slalom, Inc.), (ii) to revise the PROJECT SITE from 4111 Worth Avenue, Columbus, Ohio 43219, parcel number 010-298349 to 375 N. Front Street, Columbus, Ohio 43215, parcel number 010-259880, and (iii) to revise the notice information related to the GRANTEE within Section 13-C of the AGREEMENT.
This legislation is presented as 30-day legislation.
FISCAL IMPACT:
No funding is required for this legislation.
Title
To authorize the Director of the Department of Development to amend the City of Columbus Jobs Growth Incentive AGREEMENT with Slalom, LLC for the purpose of (1) to remove Slalom, LLC as the GRANTEE and to be replaced with Slalom, Inc. of Delaware (Slalom, Inc.), as GRANTEE, (2) to revise the PROJECT SITE, and (3) to revise the notice information related to the GRANTEE within Section 13-C of the AGREEMENT.
Body
WHEREAS, the City of Columbus (“CITY”) entered into a Jobs Growth Incentive Agreement (“AGREEMENT”) with Slalom, LLC (“GRANTEE”) and was approved by Columbus City Council (“COUNCIL”) on June 15, 2020, by Ordinance Number 1190-2020 with this AGREEMENT having been made and entered into effective February 17, 2021; and
WHEREAS, the AGREEMENT granted a financial incentive based on an amount equal to (i) twenty-five percent (25%) of the City of Columbus income tax withheld on the Columbus payroll of new employees and (ii) thirty percent (30%) of the City of Columbus income tax withheld on the Columbus payroll of those employees who are also City of Columbus residents at the end of each calendar year, for a term up to five (5) consecutive years; and
WHEREAS, the GRANTEE committed to invest a total project investment of approximately $547,000.00, which included $120,000.00 in computers, $263,000.00 in furniture and fixtures, and $164,000.00 in leasehold improvements to establish new operations at 4111 Worth Avenue, Columbus, Ohio 43219, parcel number 010-298349 (the “PROJECT SITE”); and
WHEREAS, additionally, the GRANTEE committed to retain 19 full-time positions with an estimated payroll of approximately $3,288,000.00 and create 85 net new full-time permanent positions with an estimated annual payroll of approximately $12,157,000.00 at the proposed PROJECT SITE; and
WHEREAS, paragraph four within Section 13 (Miscellaneous) of the AGREEMENT states that “No amendment of modification shall be effective unless in writing and signed by both parties to this agreement. Any requested amendment or modification to any of the terms of the AGREEMENT made to the CITY by the GRANTEE shall require the payment to the CITY by the GRANTEE of an AMENDMENT FEE in the amount of two-hundred fifty dollars ($250.00)”; and
WHEREAS, in a letter received by the CITY from the GRANTEE dated September 21, 2023, and through additional correspondence, it was confirmed that the GRANTEE changed its name from Slalom, LLC to Slalom, Inc. of Delaware (Slalom, Inc.) effective January 1, 2023. Slalom, LLC, a limited liability company (“LLC”) organized under the laws of the State of Colorado, converted under state law from a Colorado LLC company to a C-corporation to better support its global expansion, minimize company taxes, and offer stock as a more traditional investment to their employee investors worldwide; and
WHEREAS, additionally, the GRANTEE is requesting the PROJECT SITE as proposed in the AGREEMENT be updated to reflect the GRANTEE’s current location. After returning to in-person work from the COVID-19 pandemic, the company decided to remain and expand operations at its current location of 375 N. Front Street, Columbus, Ohio 43215, parcel number 010-259880 instead of expanding and relocating the operation to 4111 Worth Avenue, Columbus, Ohio 43219, parcel number 010-298349, the proposed PROJECT SITE listed in the AGREEMENT; and
WHEREAS, as a result, the GRANTEE is requesting the AGREEMENT be amended to (1) change the company’s name from Slalom, LLC to Slalom, Inc. of Delaware (Slalom, Inc.) and (2) change the PROJECT SITE in the AGREEMENT from 4111 Worth Avenue, Columbus, Ohio 43219, parcel number 010-298349 to 375 N. Front Street, Columbus, Ohio 43215, parcel number 010-259880; and
WHEREAS, a First Amendment to the AGREEMENT is now needed for the purposes of (1) to remove Slalom, LLC as the GRANTEE and party to the AGREEMENT and to be replaced with Slalom, Inc. of Delaware (Slalom, Inc.), (2) to revise the PROJECT SITE, and (3) to revise the notice information related to the GRANTEE within Section 13-C of the AGREEMENT; and
WHEREAS, the City of Columbus desires to facilitate the future growth of the GRANTEE at the PROJECT SITE and capture all net new employees as required by the incentive and annual reporting; 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 enterprise 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 the Department of Development is hereby authorized to amend the City of Columbus Jobs Growth Incentive Agreement with Slalom, LLC to remove Slalom, LLC as GRANTEE and party to the AGREEMENT to be replaced by Slalom, Inc. of Delaware (Slalom, Inc.), as GRANTEE and party to the AGREEMENT, whereby Slalom, Inc. of Delaware (Slalom, Inc.) will assume the terms and commitments of the AGREEMENT as GRANTEE.
SECTION 3. That the Director of the Department of Development is hereby authorized to amend within Section 13-C (Notices) of the AGREEMENT, the “if to the GRANTEE” section regarding written communication to Slalom, Inc. C/O Evan Moe, Tax Manager.
SECTION 4. That the Director of the Department of Development is hereby authorized to amend the AGREEMENT to state that PROJECT SITE is revised to be Parcel No. 010-259880 with a mailing address of 375 N. Front Street, Columbus, Ohio 43215.
SECTION 5. That the remaining terms of the Jobs Growth Incentive Agreement remain in full effect relative to the Ordinance.
SECTION 6. That the FIRST AMENDMENT to the City of Columbus Jobs Growth Incentive Agreement be signed Slalom, Inc. of Delaware (Slalom, Inc.) within 90 days of passage of this ordinance, or this ordinance and the credit herein shall be null and void.
SECTION 7. That this Ordinance shall take effect and be in force from and after the earliest period allowed by law.