Explanation
BACKGROUND: Columbus City Council, by Ordinance 2032-2011, passed December 12, 2011 authorized the Director of the Department of Development to enter into an Enterprise Zone Agreement (Agreement) with Tarrier Foods Corp. and Tarrier Holdings, Inc. (hereinafter "Enterprise") for a tax abatement of seventy-five percent (75%) for a period of ten (10) years in consideration of a proposed investment of approximately $3 million for building acquisition, $3 million for building renovations, $200,000 in machinery and equipment, the retention of 33 full-time employees with an annual payroll of approximately $1.26 million, and the creation of 17 new permanent full-time positions with an annual payroll of approximately $436,800 related to the acquisition and renovation of a 152,800 square foot facility on Parcel Number 560-233421 at 2700 International Street, Columbus, OH 43228 (The Project Site), in Columbus, Ohio, within the City of Columbus Enterprise Zone (Zone #023) and within the Hilliard City School District. The Agreement was made and entered into to be effective January 25, 2012 (EZA #023-12-01) with the term of the abatement not to commence after 2013 nor extend beyond 2021. The Agreement was subsequently authorized to be amended for the first time to amend the exemption window by Ordinance No. 0995-2013, passed on April 29, 2013, to remove the language regarding the expected real property exemption commencement and completion dates reading "no real property exemption shall commence after 2013 nor extend beyond 2021" to be replaced with "no real property exemption shall commence after 2013 nor extend beyond 2022." The First Amendment was made and entered into to be effective January 25, 2012.
For Report Year 2012, the first reporting year for Enterprise, only the $1,000 annual monitoring fee was submitted and no annual report was received, which placed the project in a state of non-compliance as per the terms of the Agreement. This information was presented at the 2013 Columbus Tax Incentive Review Council (the TIRC) held on August 22, 2013. The recommendation of the TIRC was to send a letter to Enterprise via Certified Mail requesting full reporting within 30 days of receipt of the letter and if full reporting was not made then the Agreement should be dissolved. The certified letter was sent on September 3, 2013 and was received by Enterprise on September 5, 2013. Enterprise contacted the City by telephone on September 23, 2013 indicating that they would comply with the TIRC request and requested that new reporting materials be provided. A new set of reporting materials were sent to Enterprise by email the same day. Enterprise again contacted the City by telephone on November 14, 2013 indicating that they wanted to dissolve the Agreement. It was requested that Enterprise submit a formal letter detailing this request. Such a letter was never received.
With the 2013 annual reporting cycle beginning January 2014, Enterprise was extended one final opportunity to comply with the TIRC recommendation and report fully for Report Year 2012 and Report Year 2013 or submit a letter requesting dissolution. The annual reporting deadline was March 31, 2014 and neither full submission nor letter was received from Enterprise. It should be noted that no application for the abatement has been filed and Enterprise has received no forgone tax benefit.
This legislation is presented as an emergency measure in order for this dissolution to be legislated in the most expedient manner as possible so that this dissolution of the Agreement can be reported to the necessary local and state agencies and to the 2014 Tax Incentive Review Council.
FISCAL IMPACT: No funding is required for this legislation.
Title
To dissolve the Enterprise Zone Agreement with Tarrier Foods Corp. and Tarrier Holdings, Inc.; 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, the Columbus City Council approved the Enterprise Zone Agreement with Tarrier Foods Corp. and Tarrier Holdings, Inc. (Agreement) on December 12, 2011 by Ordinance 2032-2011 and entered into effective January 25, 2012 (EZA #023-12-01); and
WHEREAS, the Agreement granted Enterprise a 75%/10-Year abatement on real property improvements with the term of the abatement not to commence after 2013 nor extend beyond 2021; and
WHEREAS, the Agreement committed Enterprise to an investment of $3 million in real property improvements the retention of 33 full-time employees with an annual payroll of approximately $1.26 million, and the creation of 17 new permanent full-time positions with an annual payroll of approximately $436,800 related to the acquisition and renovation of a 152,800 square foot facility on Parcel Number 560-233421 at 2700 International Street, Columbus, OH 43228 (The Project Site), in Columbus, Ohio, within the City of Columbus Enterprise Zone (Zone #023) and within the Hilliard City School District; and
WHEREAS, the Agreement was subsequently authorized to be amended for the first time to amend the exemption window by Ordinance 0995-2013, passed on April 29, 2013, to remove the language regarding the expected real property exemption commencement and completion dates reading "no real property exemption shall commence after 2013 nor extend beyond 2021" to be replaced with "no real property exemption shall commence after 2013 nor extend beyond 2022," with this First Amendment being made and entered into to be effective January 25, 2012; and
WHEREAS, for Report Year 2012, the first reporting year for Enterprise, only the $1,000 annual monitoring fee was submitted and no annual report was received, which placed the project in a state of non-compliance as per the terms of the Agreement; and
WHEREAS, this information was presented at the 2013 Columbus Tax Incentive Review Council (the TIRC) held on August 22, 2013; and
WHEREAS, the recommendation of the TIRC was to send a letter to Enterprise via Certified Mail requesting full reporting within 30 days of receipt of the letter and if full reporting was not made then the Agreement should be dissolved; the certified letter was sent on September 3, 2013 and was received by Enterprise on September 5, 2013; and
WHEREAS, Enterprise contacted the City by telephone on September 23, 2013 indicating that they would comply with the TIRC request and requested that new reporting materials be provided and new set of reporting materials were sent to Enterprise by email the same day; and
WHEREAS, Enterprise again contacted the City by telephone on November 14, 2013 indicating that they wanted to dissolve the Agreement where it was requested that Enterprise submit a formal letter detailing this request but such a letter was never received; and
WHEREAS, with the 2013 annual reporting cycle beginning January 2014, Enterprise was extended one final opportunity to comply with the TIRC recommendation and report fully for Report Year 2012 and Report Year 2013 or submit a letter requesting dissolution; the annual reporting deadline was March 31, 2014 and neither full submission nor letter was received from Enterprise; and
WHEREAS, it should be noted that no application for the abatement has been filed and Enterprise has received no forgone tax benefit; and
WHEREAS, the recommendation of the TIRC was to dissolve the Agreement should compliance not be made with the TIRC recommendation; 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 this agreement in order for this dissolution to be legislated following the end of 2014 reporting cycle so that the dissolution of the Agreement can be reported to the necessary local and state agencies and to the 2014 Tax Incentive Review Council, all to preserve 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 Tarrier Foods Corp. and Tarrier Holdings, Inc. Enterprise Zone Agreement (Agreement Number 023-12-01) which was to apply a 75%/10-year real property tax abatement to parcel number 560-233421 within the City of Columbus Enterprise Zone as of December 31, 2012, noting that no application for the abatement has been filed and that no forgone tax benefit has been received.
SECTION 2. That the Director of Development is hereby directed to notify the necessary local and state agencies of any changes to the Tarrier Foods Corp. and Tarrier Holdings, Inc. 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.