Explanation
BACKGROUND: The need exists to amend the City of Columbus Jobs Growth Incentive Agreement (“AGREEMENT”) between the City of Columbus (“CITY”) and Nationwide Children’s Hospital Inc. and its affiliated entities, including but not limited to, Pediatric Academic Association, (collectively referred to as Nationwide Children’s Hospital, and hereinafter referred to as “GRANTEE”). Columbus City Council (“COUNCIL”), by Ordinance No. 3112-2015 (the, “ORIGINAL ORDINANCE”), passed on December 14, 2015, authorized the Director of the Department of Development to enter into an AGREEMENT with the GRANTEE for an annual cash payment equal to thirty percent (30%) of the City of Columbus income tax withheld on the Columbus payroll of new employees at the PROJECT SITE, for a term up to fifteen (15) years. The ORIGINAL ORDINANCE was amended by COUNCIL on July 31, 2017, Ordinance Number 2049-2017, for the purposes of revising the 90-day period needed to execute the AGREEMENT. The incentive was granted in consideration of GRANTEE’s total proposed investment of approximately $189 million, which included renovations of an existing facility that consists of approximately 60,000 square feet, construction of a 6-story community ambulatory center on the corner of Grant and Livingston Avenues, construction of a 6-story office facility on the SE corner of Parson and Livingston Avenues that consists of approximately 120,000 square feet, construction of a 2-story central energy plant that consists of approximately 30,000 square feet, construction of interior roadways, a small park, and a clinical building with an adjoining parking garage. In addition, the GRANTEE proposed to retain 11,948 full-time permanent positions with an annual payroll of approximately $584,217,791.00 and the creation 1,500 net new full-time permanent positions with an associated estimated annual payroll of approximately $75 million (the “PROJECT”) at 700 Children’s Drive, Columbus, Ohio 43205 and the surrounding areas mentioned in the aforementioned paragraph (the “PROJECT SITE”). The AGREEMENT was made and entered into effective October 16, 2017.
The GRANTEE also drafted a community strategic plan as stated in the Memorandum of Understanding, (MOU). In accordance with the MOU, the GRANTEE proposed to invest approximately $5.75 million in community development, which included the following: $2.8 million to the City’s Infant Mortality efforts over no more than five (5) years and $2.2 million toward FutureReady Columbus over no more than five (5) years after the approval of the strategic plan was approved for the entity; and $750,000.00 was proposed for housing development within the Healthy Neighborhoods, Healthy Families Zone, with special attention to the Southside.
In a meeting between the City of Columbus, Department of Development (“Economic Development”) and GRANTEE on March 20, 2025, and through additional correspondence, the GRANTEE confirmed that additional investments will be made at the PROJECT SITE. The GRANTEE is proposing to invest approximately $1.27 billion in a 5-project intensive care expansion project which includes the following: (i) construction of a new 14-story 900,000 square foot Acute Care facility, (ii) construction of a new 45,000 square foot energy plant, (iii) a 10,000 square foot loading dock extension, (iv) construction of a new 170 space underground parking garage, and (v) renovation of the Ann Wolf Inpatient facility consisting of approximately 40,000 square feet. Additionally, the GRANTEE proposes to create 7,500 net new full-time permanent positions over a 15-year extension period. These net new jobs will include a mixture of job categories including: allied health services, management and executive positions, nursing, physicians, professional staff, research and support positions, with an average salary of over $67,000.00 per employee as of report year 2024. As a result, the GRANTEE is requesting the AGREEMENT be amended to extend the incentive term from “January 1, 2017 through December 31, 2031” to January 1, 2017 through December 31, 2039” and to revise the annual incentive caps listed in the AGREEMENT.
As a result of the proposed aforementioned expansion project, Economic Development has offered to extend the incentive term of the AGREEMENT by fifteen (15) years beginning with calendar year 2025, and to revise the annual incentive caps from “$1.5 million for the first (8) years and $2.0 million for the last seven (7) years, and not to exceed a total of $15 million over the incentive term” to “capped annually at $3.0 million for first five (5) years of the extension term and $3.5 million for the last ten (10) years of the extension term beginning with calendar 2025. The GRANTEE has accepted the revised incentive offer by Economic Development, and now therefore, an amendment to the AGREEMENT is now required.
This legislation is to authorize the Director of the Department of Development to amend the AGREEMENT for the first time to (i) revise the incentive term of the AGREEMENT, and (ii) to revise the annual incentive caps listed in 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 Nationwide Children’s Hospital Inc. and its affiliated entities, including but not limited to, Pediatric Academic Association (i) to extend the incentive term and (ii) to revise the annual incentive caps in the agreement. ($0.00)
Body
WHEREAS, the City of Columbus (“CITY”) entered into a Jobs Growth Incentive Agreement (“AGREEMENT”) with Nationwide Children’s Hospital Inc. and its affiliated entities, including but not limited to, Pediatric Academic Association, (collectively referred to as Nationwide Children’s Hospital, and hereinafter referred to as “GRANTEE”) and was approved by Columbus City Council (“COUNCIL”) on December 14, 2015, by Ordinance Number 3112-2015 (the “ORIGINAL ORDINANCE”). The ORIGINAL ORDINANCE was amended by COUNCIL on July 31, 2017, Ordinance Number 2049-2017, for the purposes of revising the 90-day period needed to execute the AGREEMENT. The AGREEMENT having been made and entered into effective October 16, 2017; and
WHEREAS, the AGREEMENT granted a financial incentive based on an amount equal to thirty percent (30%) of the City of Columbus income tax withheld on the Columbus payroll of new employees at the end of each calendar year, for a term up to fifteen (15) consecutive years; and
WHEREAS, the GRANTEE committed to invest a total project cost of approximately $189 million dollars, which included renovations of an existing facility that consists of approximately 60,000 square feet, construction of a 6-story community ambulatory center on the corner of Grant and Livingston Avenues, construction of a 6-story office facility on the SE corner of Parson and Livingston Avenues consisting of approximately 120,000 square feet, construction of a 2-story central energy plant consisting of approximately 30,000 square feet, construction of interior roadways, a small park, and a clinical building with an adjoining parking garage; and
WHEREAS, the GRANTEE committed to retain 11,948 full-time permanent positions with an annual payroll of approximately $584,217,791.00 and create 1,500 net new full-time permanent positions with an associated estimated annual payroll of approximately $75 million (the “PROJECT”) at 700 Children’s Drive, Columbus, Ohio 4305 and the surrounding areas mentioned in the aforementioned paragraph (the “PROJECT SITE”); and
WHEREAS, the GRANTEE also drafted a community strategic plan as stated in the Memorandum of Understanding, (MOU). In accordance with the MOU, the GRANTEE proposed to invest approximately $5.75 million in community development, which included the following: $2.8 million to the City’s Infant Mortality efforts over no more than five (5) years and $2.2 million toward FutureReady Columbus over no more than five (5) years after the approval of the strategic plan was approved for the entity; and $750,000.00 was proposed for housing development within the Healthy Neighborhoods, Healthy Families Zone, with special attention to the Southside; and
WHEREAS, in a meeting between the City of Columbus, Department of Development (“Economic Development”) and GRANTEE on March 20, 2025, and through additional correspondence, the GRANTEE proposed to make additional investments at the PROJECT SITE. The GRANTEE is proposing to invest approximately $1.27 billion in a 5-project intensive care expansion project which includes the following: (i) construction of a new 14-story 900,000 square foot Acute Care facility, (ii) construction of a new 45,000 square foot energy plant, (iii) a 10,000 square foot loading dock extension, (iv) construction of a new 170 space underground parking garage, and (v) renovation of the Ann Wolf Inpatient facility consisting of approximately 40,000 square feet. Additionally, the GRANTEE proposes to create 7,500 net new full-time permanent positions over a 15-year extension period. These net new jobs will include a mixture of job categories: allied health services, management and executive, nursing, physicians, professional staff, research and support, with an average salary of over $67,000.00 per employee as of report year 2024; and
WHEREAS, as a result of the proposed aforementioned expansion project, Economic Development has offered to extend the incentive term of the AGREEMENT by fifteen (15) years beginning with calendar year 2025, and revise the annual incentive caps to $3.0 million for first five (5) years of the extension term and $3.5 million for the last ten (10) years of the extension term. The GRANTEE has accepted the revised incentive terms, and now therefore, an amendment to the AGREEMENT is now required; and
WHEREAS, a First Amendment to the AGREEMENT is now needed for the purposes of (i) to revise the incentive term of the AGREEMENT from to begin “January 1, 2024 through December 31, 2031” to begin “January 1, 2017 through December 31, 2039” and (ii) to revise the annual incentive caps from “$1.5 million for the first (8) years and $2.0 million for the last seven (7) years, and not to exceed a total of $15 million over the incentive term” to “capped annually at $3.0 million for the first five (5) years of the incentive extension term and $3.5 million for the last ten (10) years of the incentive extension term in 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 annual reporting; and NOW THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
SECTION 1. That the Columbus City Council finds that the GRANTEE 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 Section 2 (Columbus Jobs Growth Incentive) of the City of Columbus Jobs Growth Incentive Agreement with Nationwide Children’s Hospital Inc. and its affiliated entities, including but not limited to, Pediatric Academic Association to revise the incentive term from commencing “January 1, 2017 through December 31, 2031” to commence “January 1, 2017 through December 31, 2039”.
SECTION 3. That the Director of the Department of Development is hereby authorized to amend Section 2 (Columbus Jobs Growth Incentive) of the City of Columbus Jobs Growth Incentive Agreement with Nationwide Children’s Hospital Inc. and its affiliated entities, including but not limited to, Pediatric Academic Association to revise the annual incentive cap from “$1.5 million for the first (8) years and $2.0 million for the last seven (7) years, and not to exceed a total of $15 million over the incentive term” to “capped annually at $3.0 million for the first five (5) years of the incentive extension and $3.5 million for the last ten (10) years of the incentive extension term.
SECTION 4. That the remaining terms of the Jobs Growth Incentive Agreement remain in full effect relative to the Ordinance.
SECTION 5. That Nationwide Children’s Hospital Inc. and its affiliated entities, including but not limited to, Pediatric Academic Association, sign the First Amendment to the City of Columbus Jobs Growth Incentive within ninety (90) days of passage of this ordinance, or this ordinance and the credit herein shall be null and void.
SECTION 6. That this ordinance shall take effect and be in force from and after the earliest period allowed by law.