Explanation
BACKGROUND: The need exists to enter into a Jobs Creation Tax Credit Agreement with Action Group, Inc. The Ohio Tax Credit Legislation (Section 718.08 of the Ohio Revised Code) authorizing such agreements became effective January 14, 1993 and requires the City to enter a Council-approved agreement between the City and a participating company.
Action Group Inc. provides short-term delivery demands for precision metal, wood, plastic and glass store fixtures, electronic enclosures, chassis, cabinets and other items needed in the industrial, commercial, institutional and architectural marketplace. Action Group, Inc. plans to purchase $1,300,000 in machinery and equipment to accommodate expansion. The project will include an investment of $1,385,000, retention of 69 (sixty-nine) full-time jobs and the creation of 25 (twenty-five) full-time jobs. The project site is located at 411 Reynoldsburg-New Albany Road. The principal party is Frank Denutte, owner.
The Department of Development recommends a 60%/6 year jobs creation tax credit.
FISCAL IMPACT: No funding is required for this legislation.
Title
To authorize the Director of Development to enter into an agreement with Action Group, Inc. for a Jobs Creation Tax Credit of 60% for a period of six years in consideration of a proposed $1,385,000 investment, the retention of 69 new full-time jobs and the creation of 25 new full-time jobs.
Body
WHEREAS, pursuant to Section 122.17 of the Ohio Revised Code, the State of Ohio is authorized to establish the Tax Credit Authority and to execute agreements with taxpayers of the State of Ohio for the purpose of granting these taxpayers job creation tax credits against their corporate franchise or income tax, which tax credits are provided to create new jobs in the State of Ohio; and
WHEREAS, the State of Ohio Tax Credit Authority granted Action Group, Inc. a 40% 5 year Jobs Creation Tax Credit on June 26, 2006; and
WHEREAS, pursuant to Section 718.08 of the Ohio Revised Code (the "City Act") a municipal corporation is authorized to grant local income tax credits to taxpayers who have received tax credits from the State; and
WHEREAS, the granting of the tax credit by the City for the proposed expansion project by Action Group, Inc. will create 25 (twenty-five) full-time permanent jobs and increase opportunities for employment and strengthen the economy of the city; and
WHEREAS, receiving these tax credits from the State and the City is a critical factor in Action Group, Inc.'s decision to go forward with the project; and
WHEREAS, Action Group, Inc. plans to invest $1,300,000 in new machinery and equipment to accommodate expansion; and
WHEREAS, the expansion will add approximately $1,385,000 in investment within the City; and
WHEREAS, the City desires to enter into such a binding, formal agreement in order to foster economic growth; NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1. That the City hereby finds and determines that the project will (1) create jobs in the State and City; (2) the project is economically sound and will benefit the people of the State and City by increasing opportunities for employment and strengthening the economy of the State and City; and (3) receiving the aforementioned tax credits is a critical factor in the decision by Action Group, Inc. to go forward with the project.
Section 2. That the City Council hereby finds and determines that the project meets all the requirements of the City Act.
Section 3. That the Director of the Department of Development is hereby authorized and directed to enter into and execute a 6-year, 60% Jobs Creation Tax Credit Agreement with Action Group, Inc.
Section 4. That the ordinance shall take effect and be in force from and after the earliest period allowed by law.