Explanation
BACKGROUND: The need exists to enter into a Municipal Jobs Creation Tax Credit Agreement with e-Play, LLC (e-Play). The Ohio Jobs Creation Tax Credit law (O.R.C. Section 718.158) requires the City to enter into a Council-approved agreement between the City and participating companies.
Founded in 2005, e-Play focuses on the manufacture, distribution, and technological support of their kiosk-based DVD vending equipment. Currently in the infancy of its expansion, the company has been in the planning and developing stages of its business. Using patent-protected technology e-Play's machines are able to deliver recently released and cataloged DVD movies via freshly burned DVDs to customers in less than 30 seconds. e-Play promotes this system as a compact entertainment store (the kiosk has a 3 foot x 3 foot footprint) ultimately allowing a business to offer a choice to customers of over 1,000 titles. e-Play machines will be located in drug stores, gas stations, restaurants, big box retailers and other similar locations. Current central Ohio kiosk locations include four Meijer stores, two Wendy's restaurants, and at Port Columbus in Terminals A. B, and C.
Due to business expansion, the company is proposing to relocate their operations from their current 12,000 square foot facility in Prospect, Ohio to a more efficient 13,000 square foot space at 1177 Olentangy River Road in Columbus. This facility will allow for future company growth.
The project will result in a total capital investment of $11,600,000, the retention and relocation of 17 full-time and 11 part-time employees, and the creation of 119 new full time permanent positions.
The Department of Development recommends a 65%/8 year Jobs Creation Tax Credit.
This legislation is presented as an emergency in order to allow e-Play, LLC to begin investing and creating jobs as quickly as possible.
FISCAL IMPACT: No funding is required for this legislation.
Title
To authorize the Director of the Department of Development to enter into an agreement with e-Play, LLC for a Jobs Creation Tax Credit of 65% for a period of 8 years in consideration of the company's total capital investment of $11,600,000, the retention and relocation of 17 full-time and 11 part-time employees and the creation of 119 new full time permanent positions; and to declare an emergency.
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 tax or income tax, which tax credits are provided to create new jobs in the State of Ohio; and
WHEREAS, the Ohio Department of Development approved a 45%/5 year Jobs Creation Tax Credit for e-Play, LLC; 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 Jobs Creation Tax Credit, e-Play, LLC will expand into Columbus, relocate 17 (seventeen) full-time and 11 (eleven) part-time jobs with an annual payroll of $816,000.00, create 119 (one-hundred nineteen) new full time permanent jobs with an annual payroll of $5,872,214.40, invest $11,600,000 in machinery and equipment; and
WHEREAS, receiving these tax credits from the State and the City is a critical factor in e-Play, LLC's decision to go forward with the project in the City of Columbus; and
WHEREAS, an emergency exists in the usual daily operation of the Department of Development in that it is immediately necessary to enter into an agreement with e-Play, LLC in order to allow it to begin investing and creating jobs as quickly as possible, all for the preservation of public health, peace, property and safety; 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 credit is a critical factor in the decision by e-Play, LLC 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 an 8-year, 65% Jobs Creation Tax Credit Agreement with e-Play, LLC.
Section 4. That the City of Columbus Jobs Creation Tax Credit Agreement be signed by e-Play, LLC within 90 days of passage of this ordinance, or the credit, authorized herein is null and void.
Section 5. 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.