Explanation
BACKGROUND: Columbus City Council (“COUNCIL”), by Ordinance No. 2038-2020, passed November 15, 2020, authorized the City of Columbus (“CITY”) to enter into an Enterprise Zone Agreement (the “AGREEMENT”) with Agler Joint Venture, LLC (hereinafter “ENTERPRISE”) for a tax abatement of seventy-five percent (75%) for a period of ten (10) years in consideration of the company’s investment of approximately $13,500,000 in real property improvements and the creation of fifteen (15) net new full-time permanent positions with a total payroll of approximately $750,000. The ordinance was subsequently amended pursuant to Ordinance No. 1065-2021, passed May 10, 2021, COUNCIL which authorized that Section 3 of Ordinance No. 2038-2020 be amended to revise the 90-day window needed to execute AGREEMENT to 90 days after passage of Ordinance No. 1065-2021. The project involved the construction of an approximately 240,000 square foot speculative industrial facility at 3101 Agler Road, Columbus, Ohio 43218, parcel numbers 010-103721, 010-108654, 010-137514, 010-137519, 010-137520, and 010-137521 (“PROJECT SITE”) located within the Columbus City School District and within the Columbus Enterprise Zone, (hereinafter referred to as the “PROJECT”). The AGREEMENT was made and entered into effective May 17, 2021 with the PROJECT expected to begin approximately March 2021, with all real property improvements expected to be completed by approximately December 2021 and with the abatement to commence no later than 2022 nor extend beyond 2031 (Agreement No. 023-21-03).
In a letter received by the CITY on behalf of the ENTERPRISE dated December 14, 2021 and through ensuing correspondence, it was confirmed that Midwest Industrial Agler Road Owner, LLC will acquire ownership of the PROJECT SITE from Agler Joint Venture, LLC with the sale, closing and transferring of title scheduled for February 2022. Due diligence has been undertaken by the CITY in that Midwest Industrial Agler Road Owner, LLC has agreed to fully assume the terms and commitments of the ENTERPRISE pursuant to the AGREEMENT, has submitted an updated Economic Development Incentive Application, the five-hundred dollars ($500.00) Amendment Fee and that this application and all other pertinent information has been reviewed and vetted.
Following the successful sale and recorded transfer of ownership, this legislation is to authorize the Director of the Department of Development to amend the AGREEMENT for the first time for Assignment & Assumption to remove Agler Joint Venture, LLC as ENTERPRISE and party to the AGREEMENT and to be replaced with Midwest Industrial Agler Road Owner, LLC as ENTERPRISE and party to the AGREEMENT, whereby Midwest Industrial Agler Road Owner, LLC will assume the terms and commitments of the AGREEMENT.
This legislation is being presented as an emergency measure in order for this amendment to be legislated in as expedient a manner as possible so that this amendment to the AGREEMENT might be fully executed with the proper property owner, which will allow the ENTERPRISE to remain in compliance and receive any future tax savings from the proposed abatement.
FISCAL IMPACT: No funding is required for this legislation.
Title
To authorize the Director of the Department of Development to amend the Enterprise Zone Agreement for a the first time for Assignment & Assumption with Agler Joint Venture, LLC, to remove Agler Joint Venture, LLC as ENTERPRISE and party to the AGREEMENT and to be replaced with Midwest Industrial Agler Road Owner, LLC as ENTERPRISE and party to the AGREEMENT and to declare an emergency.
Body
WHEREAS, the City of Columbus (“CITY”) entered into an Enterprise Zone Agreement (the “AGREEMENT”) with Agler Joint Venture, LLC (hereafter referred to as “ENTERPRISE”), approved by Columbus City Council (“COUNCIL”) on November 16, 2020 by Ordinance No. 2038-2020; and
WHEREAS, pursuant to Ordinance No. 1065-2021, passed May 10, 2021, COUNCIL authorized that Section 3 of Ordinance No. 2038-2020 be amended to revise the 90-day period needed to execute the AGREEMENT to 90 days after passage of Ordinance No. 1065-2021; and
WHEREAS, the AGREEMENT granted a 75%/10-Year abatement on real property improvements; and
WHEREAS, the incentive was granted in consideration of company’s investment of approximately $13,500,000 in real property improvements and the creation of fifteen (15) net new full-time permanent positions with a total payroll of approximately $750,000. The project involved the construction of an approximately 240,000 square foot speculative industrial facility at 3101 Agler Road, Columbus, Ohio 43218, parcel numbers 010-103721, 010-108654, 010-137514, 010-137519, 010-137520, and 010-137521 (the “PROJECT SITE”) located within the Columbus City School District and within the Columbus Enterprise Zone, (hereinafter referred to as the “PROJECT”); and
WHEREAS, paragraph fourteen within Section 6 (Program Compliance) of the AGREEMENT states that the “AGREEMENT is not transferable or assignable without the express, written, approval of the CITY” and paragraph fifteen of that same section states that “any requested amendment…to any of the terms of the AGREEMENT…shall require the payment to the CITY by the ENTERPRISE of an AMENDMENT FEE in the amount of five-hundred dollars ($500.00);” and
WHEREAS, in a letter received by the CITY on behalf of the ENTERPRISE dated December 17, 2021 and through ensuing correspondence, it was confirmed that Midwest Industrial Agler Road Owner, LLC will acquire ownership of the PROJECT SITE from Agler Joint Venture, LLC with the sale, transferring of title and ownership scheduled in February 2022; and
WHEREAS, due diligence has been undertaken by the CITY in that Midwest Industrial Agler Road Owner, LLC has agreed to fully assume the terms and commitments of the ENTERPRISE pursuant to the AGREEMENT, has submitted an updated Economic Development Incentive Application, the five-hundred dollars ($500.00) Amendment Fee and that this application and all other pertinent information has been reviewed and vetted; and
WHEREAS, a first amendment to the AGREEMENT is now needed for Assignment & Assumption to remove Agler Joint Venture, LLC as ENTERPRISE and party to the AGREEMENT and to be replaced with Midwest Industrial Agler Road Owner, LLC as ENTERPRISE and party to the AGREEMENT; 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 for Assignment & Assumption to the AGREEMENT with Agler Joint Venture, LLC for the purpose of removing Agler Joint Venture, LLC as ENTERPRISE and party to the AGREEMENT to be replaced by Midwest Industrial Agler Road Owner, LLC as ENTERPRISE and party to the 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 Council of Columbus finds that the enterprise submitting this proposal is qualified by financial responsibility and business experience to create and preserve employment opportunities in the zone and improve the economic climate of the municipal corporation.
SECTION 2. Contingent on the successful sale and transfer of ownership of title, the Director of the Department of Development is hereby authorized to amend the Enterprise Zone Agreement for Assignment & Assumption with Agler Joint Venture, LLC to remove Agler Joint Venture, LLC as ENTERPRISE and party to the AGREEMENT to be replaced by Midwest Industrial Agler Road Owner, LLC as ENTERPRISE and party to the AGREEMENT, Agler Joint Venture, LLC will assume the terms and commitments of the AGREEMENT.
SECTION 3. That this FIRST AMENDMENT for Assignment & Assumption to the City of Columbus Enterprise Zone Agreement be signed by Midwest Industrial Agler Road Owner, LLC within ninety (90) days of passage of this ordinance, or this ordinance and the incentive authorized herein shall be null and void.
SECTION 4. 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.