Explanation
BACKGROUND: The need exists to enter into a Job Creation Tax Credit Agreement with Midwest Motor Supply Co., dba Kimball Midwest. The Ohio Tax Credit law (Section 718.15 of the Ohio Revised Code) requires the City to enter into Council-approved agreements between the City and participating companies.
In business since 1923, Midwest Motor Supply Co. is a major force in the industrial maintenance aftermarket. The company's product offering includes fasteners, hoses and fittings, drill bits, chemicals, electrical connectors and shop supplies.
PEDC Property Management, Inc. is proposing to expand the existing 226,000 square-foot facility, currently occupied by Midwest Motor Supply Co. as part of a lease arrangement, located at 4800 Roberts Rd., Columbus, Ohio 43228 (parcel numbers: 560-193791, 560-193792, 560-273578, and 560-273579) by approximately 163,000 square feet to meet the needs of Midwest Motor Supply Co. The Roberts Rd. location serves as Midwest Motor Supply Co.'s corporate office and largest distribution center. Additional distribution centers are located in Grand Prairie (Dallas), Texas and Reno, Nevada. The four owners of PEDC Property Management, Inc. also own Midwest Motor Supply Co.
Midwest Motor Supply Co. will retain 307 full-time permanent positions with an associated annual payroll of approximately $18,161,000 and create 60 new full-time permanent positions with an associated new annual payroll of approximately $2,248,800.
PEDC Property Management, Inc. will invest approximately $7,800,000 in real property improvements related to new building construction and Midwest Motor Supply Co. will invest approximately $775,000 related to the acquisition of machinery and equipment, furniture and fixtures, and stand-alone computers.
The Department of Development recommends a Job Creation Tax Credit equal to fifty percent (50%) of the amount of new employee's city income tax withholdings for a term of five (5) years.
FISCAL IMPACT: No funding is required for this legislation.
Title
To authorize the Director of the Department of Development to enter into a Job Creation Tax Credit Agreement with Midwest Motor Supply Co., dba Kimball Midwest, equal to fifty percent (50%) of the amount of new employee's city income tax withholdings for a term of five (5) years in association with the retention of 307 full-time permanent positions and the creation of 60 new full-time permanent positions. (AMENDED BY ORD. 1711-2014 PASSED 7/21/2014)
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 tax payers job creation tax credits against their corporate franchise tax or income tax, which tax credits are provided to create new jobs in the State Of Ohio; and
WHEREAS, the Ohio Development Services Agency and JobsOhio have offered Midwest Motor Supply Co. a 40%/6 year Jobs Creation Tax Credit; and
WHEREAS, pursuant to Section 718.15 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, contingent on the City granting a Job Creation Tax Credit, Midwest Motor Supply Co., dba Kimball Midwest, will retain 307 full-time permanent positions with an associated annual payroll of approximately $18,161,000 and create 60 new full-time permanent positions with an associated new annual payroll of approximately $2,248,800; thereby increasing job opportunities and strengthening the economy of the City; and
WHEREAS, Midwest Motor Supply Co. has indicated that receiving these tax credits from the State and the City is crucial to their decision to advance the aforementioned expansion in Columbus; and
WHEREAS, the City desires to increase employment opportunities and encourage the creation of new jobs in the City in order to improve the overall economic climate of the City and its citizens; and
WHEREAS, the City desires to enter into such a binding formal agreement in order to foster economic growth for the preservation of the public health, property, safety and welfare; NOW THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1. That 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 incentive is a critical factor in the decision by Midwest Motor Supply Co. to expand the Roberts Rd. facility.
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 Job Creation Tax Credit Agreement with Midwest Motor Supply Co., dba Kimball Midwest, equal to fifty percent (50%) of the amount of new employee's city income tax withholdings for a term of five (5) years in association with the retention of 307 full-time permanent positions with an associated annual payroll of approximately $18,161,000 and the creation of 60 new full-time permanent positions with an associated new annual payroll of approximately $2,248,800.
Section 4. That the City of Columbus Job Creation Tax Credit Agreement shall be signed by Midwest Motor Supply Co. within ninety (90) days of passage of this ordinance or this ordinance and the credit authorized herein shall be null and void.
Section 5. That this ordinance shall take effect and be in force from and after the earliest period allowed by law.