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File #: 2395-2012    Version: 1
Type: Ordinance Status: Passed
File created: 10/25/2012 In control: Development Committee
On agenda: 11/5/2012 Final action: 11/8/2012
Title: To authorize the Director of Development to amend the Enterprise Zone Agreement with Retail Ventures, Inc. and three of its subsidiaries to remove Value City Department Stores, Inc., Shonac Corporation and Retail Ventures Services, Inc. as parties to the Agreement to be replaced by DSW Inc. as a party to the Agreement; and to declare an emergency.
Explanation
BACKGROUND: Columbus City Council, by Ordinance 2237-03, passed October 6, 2003, authorized the City of Columbus to enter into an Enterprise Zone Agreement (Agreement) with Value City Department Stores, Inc. and Northland Associates LLC for a tax abatement of seventy-five percent (75%) for a period of ten (10) years in consideration of a proposed total investment of approximately $19,100,000 comprised of $2,000,000 in land acquisition, $14,600,000 in real property improvements, $2,000,000 in machinery and equipment and $500,000 in new furniture and fixtures; the retention of 548 full-time jobs and the creation of 110 new full-time positions with an associated annual payroll of approximately $6,080,000 related to the renovation of the 300,000 square foot former Northland Mall Lazarus Store, the parcel number at that time being 010-103735 (subsequently renumbered to 010-270389) with an address of 1649 Morse Road, Columbus, Ohio 43229, within the City of Columbus Enterprise Zone (Zone #023) and within the Columbus City School District.  This authorizing ordinance was subsequently amended to instead authorize an Enterprise Zone Agreement with Retail Ventures, Inc. and three of its subsidiaries including Value City Department Stores, Inc., Shonac Corporation and Retail Ventures Services, Inc. (Collectively the "Retail Ventures Entities") and Northland Associates LLC by Ordinance 0053-2004, adopted January 12, 2004. The Agreement was made and entered into to be effective February 4, 2004 (EZA #023-04-01).
Due to economic conditions there was no investment in personal property nor were 548 full-time jobs retained nor were 110 new full-time positions created; however 2 (two) new jobs were created by Retail Ventures Entities, more than the $14.6 million in real property investment called for in the Agreement was made and the renovated 300,000 square foot facility was sublet to the State of Ohio to which the State of Ohio subsequently relocated and retained 790 jobs with an estimated payroll of $22 million. Based on this, Council, by Ordinance 0507-2006, passed July 24, 2006, authorized the Director of Development to amend the Agreement for the first time to reflect a change in investment from $19 million to $16.6 million, to change the creation of 110 full-time positions to the creation of 2 full-time positions and to change the retention of 548 full-time jobs to the retention of 790 jobs from the State of Ohio, with this first amendment made and entered into effective December 20, 2006.
In a letter from the Vice President of Tax, DSW Inc., received by the City on October 12, 2012, several corporate changes were outlined and changes to the parties to the Agreement were requested.  In February 2005 the name of Shonac Corporation was changed to DSW Inc., and on May 11, 2011 Retail Ventures, Inc. (RVI) and DSW Inc. (DSW) completed a merger with RVI becoming a wholly owned subsidiary of DSW.  Resultantly, DSW has requested that all reference to Retail Ventures Entities be removed from the Agreement and replaced with DSW Inc., leaving the City, DSW Inc., and Northland Associates LLC as parties to the Agreement.
This legislation to amend the Agreement for the second time is requested to be considered as an emergency in order to remove Retail Ventures, Inc., Value City Department Stores, Inc., Shonac Corporation and Retail Ventures Services, Inc. as parties to the Agreement to be replaced by DSW Inc. so that the amendment might be fully executed prior to the end of calendar year 2012 and all reporting agencies be notified before the start of the annual reporting cycle for Report Year 2012.
FISCAL IMPACT: No funding is required for this legislation.
 
Title
To authorize the Director of Development to amend the Enterprise Zone Agreement with Retail Ventures, Inc. and three of its subsidiaries to remove Value City Department Stores, Inc., Shonac Corporation and Retail Ventures Services, Inc. as parties to the Agreement to be replaced by DSW Inc. as a party to the Agreement; and to declare an emergency.
 
Body
WHEREAS, the City of Columbus entered into an Enterprise Zone Agreement (the "EZA") with Retail Ventures, Inc., Value City Department Stores, Inc., Shonac Corporation, Retail Ventures Services, Inc. and Northland Associates LLC, approved by Columbus City Council on October 6, 2003 by Ordinance 2237-03 and on January 12, 2004 by Ordinance 0053-2004, effective February 4, 2004; and
WHEREAS, the EZA granted a 75%/10-Year abatement on real property improvements and personal property investment; and
WHEREAS, the EZA committed Retail Ventures, Inc., Value City Department Stores, Inc., Shonac Corporation, Retail Ventures Services, Inc. and Northland Associates LLC to an investment of $19,100,000 in personal property and real property improvements, the retention of 548 full-time jobs and the creation of 110 new full-time positions related to the renovation of the former 300,000 square foot Northland Mall Lazarus located at 1649 Morse Road, in Columbus, Ohio and within the City of Columbus Enterprise Zone; and
WHEREAS, the EZA was subsequently authorized by Council to reflect a change in investment from $19 million to $16.6 million, to change the creation of 110 full-time positions to the creation of 2 full-time positions and to change the retention of 548 full-time jobs to the retention of 790 jobs from the State of Ohio, with this first amendment made and entered into effective December 20, 2006; and
WHEREAS, a letter from the Vice President of Tax, DSW Inc. received by the City on October 12, 2012 related that the name of Shonac Corporation had been changed to DSW Inc., and that Retail Ventures, Inc. and DSW Inc. had merged with the result being Retail Ventures, Inc. becoming a wholly owned subsidiary of DSW Inc.  Based on this a request was made that Retail Ventures, Inc., Value City Department Stores, Inc., Shonac Corporation and Retail Ventures Services, Inc. be removed from the EZA to be replaced by DSW Inc., leaving the City, DSW Inc., and Northland Associates LLC as parties to the EZA; and
WHEREAS, an amendment is needed to remove Retail Ventures, Inc., Value City Department Stores, Inc., Shonac Corporation and Retail Ventures Services, Inc. as parties to the EZA and to add DSW Inc. as a party to the EZA; 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 Enterprise Zone Agreement with Retail Ventures, Inc., Value City Department Stores, Inc., Shonac Corporation, Retail Ventures Services, Inc. and Northland Associates LLC for the purpose of removing Retail Ventures, Inc., Value City Department Stores, Inc., Shonac Corporation and Retail Ventures Services, Inc. as parties to the Enterprise Zone Agreement and to add DSW Inc. as a party to the Enterprise Zone Agreement, 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 the Department of Development is hereby authorized to amend the Enterprise Zone Agreement with Retail Ventures, Inc., Value City Department Stores, Inc., Shonac Corporation, Retail Ventures Services, Inc. & Northland Associates LLC to remove Retail Ventures, Inc., Value City Department Stores, Inc., Shonac Corporation and Retail Ventures Services, Inc. as parties to the Enterprise Zone Agreement and to add DSW Inc. as a party to the Enterprise Zone Agreement.
Section 2.      That the amendment to the City of Columbus Enterprise Zone Agreement be signed by DSW Inc. and Northland Associates 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.