Explanation
BACKGROUND: Columbus City Council (COUNCIL), by Ordinance No. 1349-2013, passed June 17, 2013, authorized the City of Columbus (CITY) to enter into an Enterprise Zone Agreement (the AGREEMENT) with Columbus Equipment Company (ENTERPRISE) for a tax abatement of seventy-five percent (75%) for a period of ten (10) years in consideration of an approximate $2 million investment in real property improvements, the retention of 74 existing full-time jobs and the creation of two (2) full-time permanent positions with an annual payroll of approximately $80,000 related to the renovation of an approximately 16,000 square foot vacant commercial building located at 2325 Performance Way, Columbus, OH 43207, parcel number 010-102565, within the Columbus City School District and within the City of Columbus Enterprise Zone. The AGREEMENT was made and entered into effective August 12, 2013 (EZA #023-13-04). The AGREEMENT stated that construction on the improvements (the PROJECT) was expected to begin July, 2013 and that all real property improvements were expected to be completed by December 2014 and that no real property exemption was to commence after 2015 nor extend beyond 2024.
As per the Program Compliance Section of the AGREEMENT (Section 6, Paragraph 7), ENTERPRISE filed a DTE Form 24 (DTE) with the Franklin County Auditor (AUDITOR) which was received by the AUDITOR on December 20, 2016. The AUDITOR completed the “County Auditor’s Finding” section of the DTE and filed the DTE with the Ohio Department of Taxation (TAXATION) on December 27, 2016. TAXATION issued their FINAL DETERMINATION on the DTE to ENTERPRISE on November 20, 2017, a copy of which was filed with the AUDITOR on November 30, 2017, which in turn provided a copy of the FINAL DETERMINATION to the CITY on December 4, 2017. The FINAL DETERMINATION indicated that the applicant (Columbus Equipment Company) was not the owner of the property as title to the property is in the name of CEC Real Estate Performance, LLC and that applicant did not have standing to file for tax exemption on the property and that TAXATION did not have jurisdiction to consider the DTE and thus the DTE was dismissed. The FINAL DETERMINATION stated that notice would be sent to the AUDITOR and that there would be a sixty (60) day appeal period prescribed by Section 5717.02 of the Ohio Revised Code.
A letter from ENTERPRISE to the Board of Tax Appeals was provided to the CITY by ENTERPRISE on December 11, 2017 indicating that the original intent of the AGREEMENT was to be between the CITY and Columbus Equipment Company as Enterprise and CEC Real Estate Performance, LLC as the Owner; the letter also requested that the AGREEMENT be amendment to reflect this original intent.
This legislation is to authorize the Director of Development to amend the AGREEMENT for the first time to state that the AGREEMENT was to be made and entered into between the CITY and Columbus Equipment Company (ENTERPRISE) and CEC Real Estate Performance, LLC (OWNER).
This legislation is being presented as an emergency measure in order for this amendment to be legislated in as expedient manner as possible so that this amendment to the AGREEMENT can be executed and transmitted to TAXATION prior to the end of the sixty (60) day appeal period, that OWNER can correctly re-file the DTE also prior to the end of the sixty (60) day appeal period, and to ensure that ENTERPRISE remains in compliance with all other aspects of the AGREEMENT.
FISCAL IMPACT: No funding is required for this legislation.
Title
To authorize the Director of Development to amend the Enterprise Zone Agreement with Columbus Equipment Company for the first time to state that the Agreement was to be made and entered into between the City and Columbus Equipment Company and CEC Real Estate Performance, LLC; and to declare an emergency.
Body
WHEREAS, the City of Columbus (CITY) entered into an Enterprise Zone Agreement (the “AGREEMENT”) with Columbus Equipment Company (ENTERPRISE), approved by Columbus City Council (COUNCIL) on June 17, 2013 by Ordinance No. 1349-2013 with this AGREEMENT made and entered into effective August 12, 2013; and
WHEREAS, the AGREEMENT granted a 75%/10-Year abatement on real property improvements; and
WHEREAS, the incentive was granted in consideration of an approximate $2 million investment in real property improvements, the retention of 74 existing full-time jobs and the creation of two (2) full-time permanent positions with an annual payroll of approximately $80,000 related to the renovation of an approximately 16,000 square foot vacant commercial building located at 2325 Performance Way, Columbus, OH 43207, parcel number 010-102565, within the Columbus City School District and within the City of Columbus Enterprise Zone; and
WHEREAS, the AGREEMENT stated that construction on the improvements (the PROJECT) was expected to begin July, 2013 and that all real property improvements were expected to be completed by December 2014 and that no real property exemption was to commence after 2015 nor extend beyond 2024; and
WHEREAS, as per the Program Compliance Section of the AGREEMENT (Section 6, Paragraph 7), ENTERPRISE filed a DTE Form 24 (DTE) with the Franklin County Auditor (AUDITOR) which was received by the AUDITOR on December 20, 2016; and
WHEREAS, the AUDITOR completed the “County Auditor’s Finding” section of the DTE and filed the DTE with the Ohio Department of Taxation (TAXATION) on December 27, 2016; and
WHEREAS, TAXATION issued their FINAL DETERMINATION on the DTE to ENTERPRISE on November 20, 2017, a copy of which was filed with the AUDITOR on November 30, 2017, which in turn provided a copy of the FINAL DETERMINATION to the CITY on December 4, 2017; and
WHEREAS, the FINAL DETERMINATION indicated that the applicant (Columbus Equipment Company) was not the owner of the property as title to the property is in the name of CEC Real Estate Performance, LLC and that applicant did not have standing to file for tax exemption on the property and that TAXATION did not have jurisdiction to consider the DTE and thus the DTE was dismissed; and
WHEREAS, the FINAL DETERMINATION stated that notice would be sent to the AUDITOR and that there would be a sixty (60) day appeal period prescribed by Section 5717.02 of the Ohio Revised Code; and
WHEREAS, a letter from ENTERPRISE to the Board of Tax Appeals was provided to the CITY by ENTERPRISE on December 11, 2017 indicating that the original intent of the AGREEMENT was to be between the CITY and Columbus Equipment Company as Enterprise and CEC Real Estate Performance, LLC as the Owner; the letter also requested that the AGREEMENT be amendment to reflect this original intent; and
WHEREAS, an amendment is needed to state that the AGREEMENT was to be made and entered into between the CITY, Columbus Equipment Company (ENTERPRISE) and CEC Real Estate Performance, LLC (OWNER); and
WHEREAS, an emergency exists in the usual daily operation of the Columbus Department of Development in that it is immediately necessary to seek an amendment to the AGREEMENT with Columbus Equipment Company to state that the AGREEMENT is made and entered into between the CITY and Columbus Equipment Company (ENTERPRISE) and CEC Real Estate Performance, LLC (OWNER); thereby preserving the public health, peace, property and safety; NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
SECTION 1. That the Director of Development is hereby authorized to amend the Enterprise Zone Agreement with Columbus Equipment Company to state that the AGREEMENT is made and entered into between the CITY, Columbus Equipment Company (ENTERPRISE) and CEC Real Estate Performance, LLC (OWNER).
SECTION 2. That this FIRST AMENDMENT to the City of Columbus Enterprise Zone Agreement be signed by Columbus Equipment Company and CEC Real Estate Performance, LLC within ninety (90) days of passage of this ordinance, or this ordinance and the incentive authorized herein shall be null and void.
SECTION 3. That for reasons stated in the preamble hereto, which is hereby made a part hereof, the ordinance is hereby 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 days after the passage if the Mayor neither approves nor vetoes the same.