Explanation
BACKGROUND: The Tax Incentive Review Council (the "TIRC") recommended on August 25, 2006 to dissolve the Enterprise Zone Agreement with Hood Dialysis, LLC (the "EZA") unless the delinquent real property taxes are paid by October 31, 2006 and the job creation goal (30 jobs) is met by October 31, 2006. The City concurs with the recommendations of the TIRC that the EZA be dissolved if the above conditions are not met, except that if the facility is leased or sold the Development Director is authorized to amend the EZA if (1) the delinquent real property taxes are paid in full by October 31, 2006, and (2) the new operator or owner agrees by October 31, 2006 to be added to the EZA, and (3) the new operator or owner agrees to create, by June 30, 2007, the 30 jobs called for in the EZA.
If the EZA is dissolved, 2006 will be the final tax year for the exemptions and the City will not seek repayment of the exempted taxes from prior years.
Columbus City Council approved the EZA by Ordinance 0835-02 adopted on June 10, 2002. The tax incentive was 50% on real property improvements and personal property for five taxable years (2004-2008). Hood Dialysis agreed to invest $1,650,000 in real and personal property, to build a new facility for dialysis services at 2360 CityGate Dr., and create thirty (30) new full-time jobs with an annual payroll of approximately $1,365,800.
Hood Dialysis built the new facility, is providing dialysis services at the site and has met its investment goal in real and personal property. As of August 2006, however, Hood dialysis had created only 15 jobs (50% attainment) and in 2005 generated an annual payroll of only $542,652 (40% attainment).
The owner of Hood Dialysis died within the past year and the new owner, a family member, is attempting to either sell or lease the facility to a company that would continue to provide dialysis services at the project site.
This legislation is presented as an emergency measure in order to meet the deadline under state law for City Council to vote on TIRC recommendations.
FISCAL IMPACT: No funding is required for this legislation.
Title
To dissolve the Enterprise Zone Agreement with Hood Dialysis, LLC if the company does not pay delinquent real property taxes and satisfy its job creation requirement by October 31, 2006, or to amend the Enterprise Zone Agreement if by October 31, 2006 the property is leased or purchased by another company that agrees to create by June 30, 2007 the 30 jobs called for in the Enterprise Zone Agreement; to direct the Director of the Department of Development to notify as necessary the local and state tax authorities; and to declare an emergency.
Body
WHEREAS, Columbus City Council approved an Enterprise Zone Agreement with Hood Dialysis, LLC (the "EZA") by Ordinance No. 0835-02 on June 10, 2002; and
WHEREAS, the EZA grants Hood Dialysis, LLC ("Hood Dialysis") a 50%/ 5 year abatement real and personal property abatement; and
WHEREAS, the EZA requires Hood Dialysis to invest $1,650,000 in real and personal property and create thirty (30) new full-time jobs at its 2360 CityGate Drive facility; and
WHEREAS, Hood Dialysis has not met the job creation requirements in the EZA and is delinquent in its real property tax payment; and
WHEREAS, the Columbus Tax Incentive Review Council (the "TIRC") recommended that the EZA be dissolved unless Hood Dialysis pays its delinquent taxes by October 31, 2006 and meets the EZA job creation requirement by October 31, 2006; and
WHEREAS, the City concurs with the TIRC recommendation and desires to dissolve the EZA and end the tax abatement as of December 31, 2006 unless Hood Dialysis meets the EZA job creation requirement and pays its delinquent taxes by October 31, 2006, provided, however that if the facility is leased or sold the City desires to amend and continue the EZA as an alternative to dissolving the EZA, if (1) the delinquent real property taxes are paid in full by October 31, 2006, and (2) the new operator or owner agrees by October 31, 2006 to be added to the EZA, and (3) the new operator or owner agrees to create, by June 30, 2007, the 30 jobs called for in the EZA; 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, thereby preserving the public health, property, safety and welfare; NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1. That Columbus City Council hereby dissolves the Hood Dialysis, LLC Enterprise Zone Agreement (the "EZA") as of December 31, 2006, with 2006 as the final tax year for the exemptions, unless the delinquent real property taxes are paid by October 31, 2006 and 30 full-time permanent jobs are created by October 31, 2006, provided, however, that if the facility is leased or sold the Development Director is authorized to amend and continue the EZA as an alternative to dissolving the EZA, if the following conditions are met (1) the delinquent real property taxes are paid in full by October 31, 2006, and (2) the new operator or owner agrees by October 31, 2006 to be added to the EZA, and (3) the new operator or owner agrees to create, by June 30, 2007, the 30 jobs called for in the EZA.
Section 2. That the Director of Development is hereby directed to notify the necessary local and state agencies of any changes to the Hood Dialysis, LLC Enterprise Zone Agreement.
Section 3. 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.