Explanation
BACKGROUND: The need exists to enter into an Enterprise Zone Agreement with Crafts Americana Group, Inc. (Crafts Americana). The Ohio Enterprise Zone law O.R.C. Section 5709.62 (C) requires the City to enter into a Council-approved agreement between the City and participating companies.
Crafts Americana began operations in 1975 as a supplier of decorative paint supplies. Today, the company has three divisions: The Artist's Club Division that distributes decorative paint supplies; the Connecting Threads Division that distributes quilting supplies; and Knit Picks Division that distributes knitting supplies.
Crafts Americana currently employs approximately 90 people and operates out of a 50,000 square foot corporate office building in Vancouver, Washington and a 30,000 square foot distribution center in Grove City, Ohio.
Due to business expansion, the company is proposing to relocate their distribution operation currently located in a leased facility at 2235 Southwest Boulevard Suite D, Grove City, Ohio 43123 to a new 60,000 square foot facility to be built on Bolton Field Street (on 5.772 acres of 10.1595 acre parcel 570-154754-00) in Columbus. Crafts Americana is working towards LEED Certification for their new facility. Their corporate headquarters will remain in Vancouver, Washington.
The Department of Development recommends a 75%/10 year Enterprise Zone tax abatement on real property improvements and a 75%/2 year Enterprise Zone tax abatement on personal property under the City's Enterprise Zone Program.
This legislation is presented as an emergency in order to allow Crafts Americana to begin investing and creating jobs as quickly as possible.
The South-Western City School District has been advised of this project.
FISCAL IMPACT: No funding is required for this legislation.
Title
To authorize the Director of the Department of Development to enter into an agreement with Crafts Americana Group, Inc. for a real estate tax abatement of 75% for a period of ten years and a personal property tax abatement of 75% for a period of two years; and to declare an emergency.
Body
WHEREAS, the Columbus City Council authorized the designation of the Enterprise Zone by legislation, Ordinance Number 779-85, dated April 22, 1985; and subsequently amended the Zone by Ordinance Nos. 2722-85 in 1986; 2080-89 in 1989; 1949-92, 2609-92 and 2249-92 in 1992; 1079-94 and 1228-94 in 1994; 2196-95 and 2817-95 in 1995; 533-99 in 1999; 1785-00 in 2000; 1464-02 in 2002; and 225-03 in 2003; and
WHEREAS, the Director of the Development Department of the State of Ohio determined that the Columbus Enterprise Zone as amended by the aforementioned Ordinances continued to contain the characteristics set forth in Section 5709.61(A) of the Ohio Revised and recertified said Zone in 1986, December 20, 1989, September 28, 1992, October 22, 1992, December 17, 1992, May 31, 1994, June 24, 1994, June 16, 1995, October 5, 1995, December 19, 1995, April 1, 1999, September 25, 2000, January 27, 2003 and most recently on August 19, 2003 as an "urban jobs and enterprise zone" under Chapter 5709 of the Ohio Revised Code; and
WHEREAS, Crafts Americana Group, Inc. plans to relocate their distribution operation currently located in Grove City, Ohio to a new 60,000 square foot facility to be constructed on Bolton Field Street in Columbus; and
WHEREAS, The Crafts Americana Group, Inc. agrees to invest approximately $2,400,000 in real property improvements within the City and invest approximately $1,520,000 in personal property (machinery & equipment, furniture & fixtures, stand-alone computers, and inventory) within the city; and
WHEREAS, Crafts Americana Group, Inc. agrees to retain and relocate 12 (twelve) full-time permanent jobs, 6 (six) part-time permanent jobs, and create 9 (nine) new full time and 6(six) part-time permanent jobs; and
WHEREAS, Crafts Americana Group, Inc. has indicated that tax incentives are crucial to its decision to locate the aforementioned expansion at the Columbus site; and
WHEREAS, it is required by law to enter into a formal, binding agreement in order to provide an Enterprise Zone incentive in the State and City; and
WHEREAS, the City desires to enter into such agreement with Crafts Americana Group, Inc. to foster economic growth; and
WHEREAS, an emergency exists in the usual daily operations of the Department of Development in that it is immediately necessary to enter into contract with Crafts Americana Group, Inc. to provide for Crafts Americana Group, Inc. the ability to move forward with their project so as to allow for the project to break ground in the first quarter of 2007, and for the preservation of public health, peace, property and safety, NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1. That the Director of Development is hereby authorized to enter into an Enterprise Zone Agreement with Crafts Americana Group, Inc., and to provide therewith an exemption of seventy-five percent (75%) on real property improvements for a term of ten (10) tax years and an exemption of seventy-five percent (75%) on personal property investments for a term of two (2) taxable years, in association with the project's proposed $3,920,000 investment and job retention and creation.
Section 2. That the City of Columbus Enterprise Zone Agreement be signed by Crafts Americana Group, Inc. within ninety (90) days of passage of this ordinance, or this ordinance and the abatements authorized herein are null and void.
Section 3. 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.