Explanation
BACKGROUND:
This legislation authorizes an amendment to the City's existing Enterprise Zone Agreement (EZA) with Brooks Beverage Management, Inc. The amendment will accomplish three purposes. First, the amendment will clarify that the correct name of the enterprise is Beverage Management, Inc. and not Brooks Beverage Management, Inc. Second, the amendment will add to the EZA the new owner of the real property, DP Columbus Portfolio LP, which acquired the property in 2004. The amendment will reflect the City's consent to the assignment of the real property exemptions to DP Columbus Portfolio LP. Under the lease arrangement with DP Columbus Portfolio LP, Beverage Management, Inc. will continue to benefit from the tax exemptions consistent with the original intent of the EZA. Third, the amendment will allow the project's investment period to extend through December 31, 2004 and will clarify that the investment in machinery & equipment completed by this date is eligible for the tax exemptions and acknowledge that the eligible investment is higher than originally anticipated.
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 (EZA) between the City and Brooks Beverage Management, Inc. to acknowledge that the enterprise's correct name is Beverage Management, Inc.; to make the new owner of the real property a party to the EZA; to consent to the transfer and assignment of the real property exemptions to the new owner; to extend the investment period for the machinery & equipment investment to be eligible for exemptions under the EZA; and to declare an emergency.
Body
WHEREAS, the Columbus City Council authorized an Enterprise Zone Agreement (EZA) with Brooks Beverage Management, Inc. on November 16, 1998 by Ordinance No. 2991-98, and subsequently authorized amendments of the EZA on June 5, 2000 by Ordinance 1159-00 and on December 8, 2003 by Ordinance 2509-2003; and
WHEREAS, the City entered into the EZA with Brooks Beverage Management, Inc. effective December 29, 1998 and the EZA, as amended, grants Brooks Beverage Management, Inc. a 50%/10 yr abatement on real property improvements (tax years 2005-2014) and a 50%/10 yr abatement on new machinery & equipment (tax years 2001-2010) while Brooks Beverage Management, Inc. committed to invest approximately $25,850,000, including $14.9 million for new machinery & equipment, to retain 275 jobs and to create 69 new jobs; and
WHEREAS, the amount of investment in real and personal property has been satisfactorily made and the job retention and creation were at satisfactory levels as of December 2005; and
WHEREAS, Brooks Beverage Management, Inc. is not the correct name of the enterprise and the City desires to amend the EZA to reflect the correct name, which is Beverage Management, Inc. ("Beverage Management"); and
WHEREAS, DP Columbus Portfolio LP acquired the project's real property in 2004 and has requested the City's consent to be assigned the real property exemptions under the EZA, and the City desires to give this consent provided DP Columbus Portfolio LP becomes a party to the EZA; and
WHEREAS, an unanticipated problem with a wetlands permit prevented the real property improvements (new warehouse) from not being completed until the end of 2004 and this resulted in delays in acquisition of some of the machinery & equipment and to higher costs than originally estimated; and
WHEREAS, the City attempted to make adjustments for the project delays with an EZA amendment dated March 18, 2004 which shifted the begin/end years for the real and personal property tax abatements but did not specifically address the investment period for the personal property or the value to the personal property investment; and
WHEREAS, the total project investment through the end of 2004, when construction of the new warehouse was complete, was higher than originally anticipated, totaling approximately $38 million, including $21.7 million in new machinery & equipment; and
WHEREAS, the City desires to extend the project's investment period to December 31, 2004 and to clarify that the investment in machinery & equipment completed by this date is eligible for the tax exemptions and to acknowledge that the investment is higher than originally anticipated; and
WHEREAS, an emergency exists in the usual daily operation of the Department of Development in that it is immediately necessary to amend the EZA so that Beverage Management can clarify its personal property tax exemption status with the Ohio Department of Development as soon as possible, all for the immediate preservation of the public health, peace, safety and welfare; NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1. That the Director of the Department of Development is hereby authorized to amend the Enterprise Zone Agreement (EZA) between the City and Brooks Beverage Management, Inc. to reflect that this enterprise's correct name is Beverage Management, Inc.; to add DP Columbus Portfolio LP to the EZA as the new owner of the real property and consent to the transfer and assignment of the real property exemptions to DP Columbus Portfolio LP; and to extend the project's investment period to December 31, 2004 and clarify that the investment in machinery & equipment completed by this date is eligible for the tax exemptions despite the investment being higher than originally anticipated.
Section 2. 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 passage is the Mayor neither approves or vetoes the same.