Explanation
BACKGROUND: This legislation authorizes the Director of the Department of Development to amend the Community Reinvestment Area Agreement with Schmidt Development LLC to require that at least seventy-five percent (75%) of the combined jobs commitment for created and retained jobs is attained by December 31, 2007, or one (1) year of the tax abatement will be eliminated. The combined jobs commitment is 275 jobs and seventy-five percent (75%) of that number is 206 jobs. If one (1) year of the tax abatement were eliminated, the final year for the real property tax exemptions would be 2010. This amendment reflects the recommendation made by the Tax Incentive Review Council (the "TIRC") on August 21, 2007.
Columbus City Council approved the Schmidt Development LLC Community Reinvestment Area Agreement on July 10, 2000 by Ord. No. 1661-00, the Agreement became effective September 27, 2000 and City Council subsequently approved an amendment to the Agreement on October 16, 2006 by Ord. No. 1789-06. The Schmidt Development LLC Community Reinvestment Area Agreement as amended in 2006 (the "CRA Agreement") provides a 50%/10-year tax abatement on real property improvements (2002-2011). The CRA Agreement requires $13,446,000 to be invested in real property improvements and for 210 jobs to be retained and 65 jobs to be created. The combined commitment of created and retained jobs is thus 275 jobs. The project site is known as the Market Exchange District and is located along several blocks of E. Main Street, just west of the I-71 underpass. Currently buildings on four different parcels are receiving real property tax abatement under the CRA Agreement. The annual amount of tax savings is estimated to be $62,318.
Project investment is satisfactory, albeit slightly low at $12,964,000 (96% of goal). The jobs goal has not been attained, however. As of August 2007, we have been able to verify only 157 jobs in the tax-abated buildings based on the job & payroll documentation we have been provided. We believe there are considerably more businesses and jobs at the project site than the numbers evidenced in the job & payroll information we have received. Under the CRA Agreement it is the responsibility of Schmidt Development LLC to provide the City with annual information on jobs & payroll. The City relies on this information to comply with reporting obligations to the Ohio Department of Development and income tax revenue sharing obligations to the Columbus City School District. Obtaining adequate job & payroll information from this project has been a problem for several years. Under this amendment, if at least 206 jobs (75% of 275 jobs) are not retained and/or created by December 31, 2007, as substantiated by jobs & payroll information, one (1) year of the tax abatement will be eliminated.
FISCAL IMPACT: No funding is required for this legislation.
Title
To authorize the Director of the Department of Development to amend the Community Reinvestment Area Agreement with Schmidt Development LLC to require that at least 75% of the combined jobs commitment for created and retained jobs is attained by December 31, 2007, or one (1) year of the tax abatement will be eliminated; and to declare an emergency.
Body
WHEREAS, the Columbus City Council approved the Schmidt Development LLC Community Reinvestment Area Agreement on July 10, 2000 by Ord. No. 1661-00, the Agreement became effective September 27, 2000 and City Council subsequently approved an amendment to the Agreement on October 16, 2006 by Ord. No. 1789-06; and
WHEREAS, the Schmidt Development LLC Community Reinvestment Area Agreement as amended in 2006 (the "CRA Agreement") provides for a 50%/10-year tax abatement on real property improvements (2002-2011) and requires $13,446,000 to be invested in real property improvements and for 210 jobs to be retained and 65 jobs to be created; and
WHEREAS, project investment is satisfactory, however the jobs goal has not been attained, as only 157 jobs and the corresponding payroll can be substantiated by reporting information provided to the City; and
WHEREAS, the Tax Incentive Review Council (the "TIRC") recommended that the CRA Agreement be amended to require that at least seventy-five percent (75%) of the combined jobs commitment for created and retained jobs must be attained by December 31, 2007, or else one (1) year of the tax abatement will be eliminated, with 2010 becoming the final year for the real property tax exemptions; and
WHEREAS, the City concurs with the TIRC's recommendation and desires to amend the CRA Agreement 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. To authorize the Director of the Department of Development to amend the Community Reinvestment Area Agreement with Schmidt Development LLC to require that at least seventy-five percent (75%) of the jobs commitment for created and retained jobs must be attained by December 31, 2007, or else one (1) year of the tax abatement will be eliminated, and 2010 will become the final year for the real property tax exemptions.
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.