Explanation
BACKGROUND: The Department of Development is proposing to enter into a Columbus Downtown Office Incentive Agreement with State Automobile Mutual Insurance Company (State Auto) equal to fifty percent (50%) of the amount of City withholding tax withheld on new employees for a term of five (5) years. The company will invest approximately $350,000 in new furniture and fixtures, retain 809 full-time jobs and create 46 new full-time permanent positions.
State Auto is proposing to expand its corporate headquarters in the Downtown Business District by entering into a 7-year lease agreement on vacant office spaces consisting of approximately 54,000 square feet located at 175 S. Third Street and to assist in the expansion of its corporate offices located at 518 E. Broad Street. State Auto is proposing to relocate 159 employees from the Smith Brothers Hardware building and move 100 existing employees from its corporate headquarters (at 518 E. Broad Street) to accommodate the company's overall strategic expansion goals. These employees will occupy the vacant office spaces located at 175 S. Third Street. The expansion will allow State Auto to consolidate their operation from other locations in Cleveland, Cincinnati, South Dakota, Texas, Connecticut and Iowa while opening up space for new full-time permanent positions. Based on this estimate, State Auto would qualify for the Columbus Downtown Office Incentive of an amount equal to fifty percent (50%) of the amount of City withholding tax withheld on new positions or $233,500 over a term of five (5) years. The Development Department recommends granting the Columbus Downtown Office Incentive program to State Auto.
FISCAL IMPACT: No funding is required for this legislation.
Title
To authorize the Director of the Department of Development to enter into a Columbus Downtown Office Incentive Agreement with State Auto Mutual Insurance Company as provided in Columbus City Council Resolution Number 0088X-2007, adopted June 4, 2007.
Body
WHEREAS, the City desires to increase employment opportunities and encourage establishment of new jobs in the City in order to improve the overall economic climate of the City and its citizens; and
WHEREAS, Resolution Number 0088X-2007, adopted June 4, 2007, authorized the Department of Development to establish the Columbus Downtown Office Incentive program as amended; and
WHEREAS, the Department of Development has received a completed application for the Columbus Downtown Office Incentive program from State Auto; and
WHEREAS, State Auto has indicated that a Downtown Office Incentive is crucial to its decision to locate the aforementioned corporate headquarters in Columbus; and
WHEREAS, the City of Columbus desires to facilitate State Auto's future growth at the project sites by the creation of new jobs; and
WHEREAS, State Auto is proposing to expand its operations within the Downtown Business District by entering into a 7-year lease agreement and to create 46 new full-time permanent positions located at 175 S. Third Street and 518 E. Broad Street,Columbus, Ohio, with an estimated annual payroll of $3.73 million generating an estimated new City of Columbus income tax revenue of approximately $93,300 annually; NOW THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1. To authorize the Director of Development to enter into a Columbus Downtown Office Incentive Agreement, pursuant to Columbus City Council Resolution Number 0088X-2007, for an annual cash payment equal to fifty percent (50%) of the amount of City withholding tax withheld on new employees for a term of five (5) years on the estimated job creation of 46 new full-time permanent positions at 175 S. Third Street and 518 E. Broad Street of Columbus, Ohio 43215.
Section 2. As provided in the program guidelines, leasing of the project site qualifies State Auto for a five (5) year incentive term. The term beginning in calendar year 2012, with the incentive payment made in the second quarter of the following year based on actual City of Columbus income tax withholding paid by the new positions for the preceding year.
Section 3. Each year of the term of the agreement with State Auto that a payment is due, the City's obligation to pay the incentive is expressly contingent upon the passing of an ordinance appropriating and authorizing the expenditure of monies sufficient to make such payment and the certification of the City Auditor pursuant to Section 159 of the Columbus City Charter.
Section 4. That the City of Columbus Downtown Office Incentive Agreement is signed by State Auto within 90 days of passage of this ordinance, or this ordinance and credits 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.