Explanation
BACKGROUND: This legislation authorizes the Director of Development to dissolve the Community Reinvestment Area (CRA) Agreement with United HealthCare Services, Inc. (UHC) and end the exemptions effective the end of 2004. The property would be fully taxable for 2005 (payable 2006). Columbus City Council approved the CRA Agreement by Resolution No. 109X-98, adopted July 27, 1998. The CRA Agreement provided UHC with a 70%/10-year abatement on real property improvements (2000-2009). UHC's commitment was to invest $23.8 million for the construction of a 4-story Class A office building at 9200 Worthington Road (Polaris), to retain 332 jobs and create 208 jobs by the end of 2008. As of December 2003, UHC had completed the $23.8 million investment, but job retention had fallen to 292 and no new jobs had been created. UHC has sub-let unused space in the facility and the Columbus Tax Incentive Review Council (TIRC) recommended on August 12, 2004 that UHC agree to an amendment allowing the tenant jobs and payroll to be counted towards the Agreement's job goal and to move up the deadline for job creation to December 2006. The TIRC recognized that UHC was still in compliance since the deadline for the job creation is December 2008.
Due to unexpected economic and market conditions, job growth that UHC projected in 1998 has not occurred and is not anticipated to occur. UHC has determined that it would not be feasible for the company to obtain from tenants the type of annual information on jobs and payroll the City needs for school revenue sharing and for compliance reviews. UHC has respectfully requested the City to dissolve its CRA Agreement, making 2004 the final year for abatement and without applying clawback. The property would be fully taxable in 2005 (payable in 2006). UHC is appreciative of the City's support and assistance and hopes the positive relationship continues. The City agrees with the course of action UHC has requested and wishes to dissolve the CRA Agreement with 2004 as the final year for abatement and without clawback or penalty. This legislation is presented as an emergency measure in order to meet the new deadline under State law for City Council vote on TIRC recommendations.
FISCAL IMPACT: No funding is required for this legislation.
Title
To authorize the Director of the Department of Development to dissolve the United HealthCare Services CRA Agreement and make 2004 the final year for abatement, with no clawback or penalty applied; and to declare an emergency.
Body
WHEREAS, the Columbus City Council approved a Community Reinvestment Area (CRA) Agreement with United
HealthCare Services, Inc. (UHC) by Resolution No. 109X-98, adopted July 27, 1998; and
WHEREAS, the CRA Agreement provided UHC a 70%/10-year abatement on real property improvements and required
UHC to make an investment of $23.8 million in real property improvements, to retain 332 jobs and to create 208 jobs by
the end of 2008; and
WHEREAS, UHC had met the investment goal as of December 2003 but the TIRC noted lack of progress towards the
job creation and retention goals; and
Whereas, the Columbus Tax Incentive Review Council (TIRC) voted on August 12, 2004 to recommend that the
City work with UHC on amending the CRA Agreement so that the tenant jobs and payroll could be counted and to
move up the job creation deadline to December 2006; and
WHEREAS, UHC anticipates not being able to create the required number of jobs and also not being able to obtain
the necessary job and payroll information from its tenants and has requested the City to dissolve the CRA Agreement,
to end the tax exemptions at the end of 2004 and to not seek clawback or penalty; and
WHEREAS, the City agrees with the course of action UHC has requested; and
WHEREAS, an emergency exists in the usual daily operation of the Department of Development in that it is immediately
necessary to obtain City Council's vote in order to meet the new deadline under State law for voting on the TIRC
recommendations, thereby preserving the public health, peace, prosperity, 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 dissolve the dissolve the
Community Reinvestment Area Agreement with United HealthCare Services, Inc., to cancel the tax exemptions as of
the end of 2004, to not seek a clawback or penalty and to notify as necessary the local and state authorities.
Section 2. That for the reasons stated in the preamble thereto, which is made a part hereof, this Ordinance is declared
to be an emergency measure and shall be in force from and after its passage and approval by the Mayor, or ten days
after passage if the Mayor neither approves nor vetoes the same.