Explanation
The Tax Incentive Review Council (the "TIRC") recommended on August 25, 2006, that the City amend the Enterprise Agreement with the Columbus Urban Growth Corporation (the "EZA") by adding to the EZA a property owner and two anchor tenants, by clarifying what the job creation subtotals are for each of the two parcels granted exemptions under the EZA and for each of the two anchor tenants, and by providing for the option of eliminating a parcel from the EZA if at least 75% of the job creation requirement for that parcel is not attained by June 30, 2007.
The EZA was authorized by Columbus City Council Ord. No. 1100-00, adopted on May 15, 2000 and the EZA entered into effective August 2, 2000. City Council granted a 75%/10-yr abatement on real property improvements (2001-2010) and required $1.8 million to be invested in real property improvements and new construction and $260,000 to be invested in new personal property. The real property investment goal has been satisfied and City Council eliminated the personal property investment goal in November of 2004 following a TIRC recommendation. The project site is comprised of two parcels. The first parcel is at 1393 Cleveland Avenue, the Crosstown Building, on the south side Eleventh Avenue and the second parcel is at 1407 Cleveland Avenue, on the north side of Eleventh Avenue, opposite the Crosstown Building. Columbus Urban Growth Corporation (the "CUGC") still owns the Crosstown Building while the building at 1407 Cleveland Avenue was acquired in 2003 by WMM Partnership. Both parcels currently enjoy real property tax exemptions under the EZA but only CUGC is actually a party to the EZA. The EZA needs to be updated to add WMM Partnership as a party. The Crosstown Building is occupied by a variety of small tenants, with The Philippi group being the anchor tenant. The building at 1407 Cleveland Avenue was leased by a State Farm Insurance agency but this tenant left the facility in 2004, though continuing to pay the lease. Since 2004, the Crosstown Building has provided all the job creation for the project, though not a sufficient level for good compliance. As of December 31, 2005, 26 jobs had been created, or 63% of the goal. The owners of the vacant facility recently succeeded in securing the Columbus Metropolitan Housing Agency (CMHA) as a tenant. CMHA's primary facility is located next door to the west and is experiencing space shortage due to employment growth. An estimated 10 CMHA jobs will relocate to the vacant facility.
Amending the EZA as the TIRC recommends will extend the responsibility for creating jobs and retaining the tax abatement to WMM Partnership and to the two largest tenants, the Phillipi Group and CMHA.
FISCAL IMPACT: No funding is required for this legislation.
Title
To authorize the Director of the Department of Development to amend the Enterprise Agreement with the Columbus Urban Growth Corporation (the "EZA") to add a property owner and two anchor tenants, to clarify job creation requirements for the parcels and tenants and to provide for the option of eliminating a parcel from the EZA if at least 75% of the job creation requirement for the parcel is not attained by June 30, 2007; and to declare an emergency.
Body
WHEREAS, the Columbus City Council approved an Enterprise Zone Agreement with the Columbus Urban Growth Corporation (the "CUGC") by Ord. No. 1100-00, adopted on May 15, 2000, and the Enterprise Zone Agreement was executed on August 2, 2000 and amended by Ord. 1919-04, approved on Nov. 1, 2004 (the "EZA"); and
WHEREAS, the EZA provides for a 75%/10-yr abatement on real property improvements (2001-2010); and
WHEREAS, the EZA commits the CUGC to improve/construct two facilities and invest $1.8 million for additions and new construction; and
WHEREAS, the project has met the EZA's real property investment goal but is short of the job creation goal due to one of the parcels having a vacant building since 2004; and
WHEREAS, the Tax Incentive Review Council (the "TIRC") recommended on August 25, 2006, that the City amend the EZA by adding a property owner and two anchor tenants, by clarifying what the job creation subtotals are for each of the two parcels granted exemptions under the EZA and for each of the two anchor tenants, and by providing for the option of eliminating a parcel from the EZA if at least 75% of the job creation requirement for that parcel is not attained by June 30, 2007; and
WHEREAS, the City concurs with the TIRC's recommendation and desires to amend and restate the EZA accordingly; 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 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 authorized to amend and restate the Enterprise Agreement with the Columbus Urban Growth Corporation (the "EZA") to add a property owner and two anchor tenants, to clarify job creation requirements for each of the two parcels granted exemptions under the EZA and for each of the two anchor tenants, and to provide for the option of eliminating a parcel from the EZA if at least 75% of the job creation requirement for that parcel is not attained by June 30, 2007.
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.