Explanation
Background: The need exists to enter into an Enterprise Zone and Jobs Creation Tax Credit Agreement with General Products Corporation. Ohio Enterprise Zone law (O.R.C. Section 5709.62) and Jobs Creation Tax Credit law (O.R.C. Section 718.08) requires the City to enter into a Council-approved agreement with a participating company.
General Products Corporation established in 1922, is a precision machine business serving the North American light and heavy vehicle marketplace. General Products operates facilities in Indiana, Michigan and Kentucky.
The company is proposing to invest $6.7 million to start a manufacturing location in 125,000 square feet at its 3985 Groves Road facility. The investment will include $300,000 in real property improvements, $6 million in machinery & equipment, $30,0000 in furniture & fixture, $5,000 in computers and $450,000 in inventory. The company will create 80 (eighty) new jobs at the project site. The project site is located in the City's Southeast Enterprise Zone.
The Columbus Department of Development is proposing a 10-year, 75% (percent) real and personal property abatement under the City's Enterprise Zone Program and a 10-year, 60% (percent) Jobs Creation Tax Credit.
This legislation is requested to be considered as an emergency in order to allow General Products Corporation time to make a decision on the location of the proposed project as quickly as possible.
Fiscal Impact: No funding is required for this legislation.
Title
To authorize the Director of the Department of Development to enter into a 10 year/75% Enterprise Zone Agreement on real and personal property and a 60%/10 year Jobs Creation Tax Credit Agreement with General Products Corporation; and to declare an emergency.
Body
WHEREAS, the City has established the Southeast Enterprise Zone pursuant to Section 5709.61 to 5709.632 of the Ohio Revised Code ("O.R.C."), which has been certified by the Director of the Department of the State of Ohio as required by the O.R.C.; and
WHEREAS, General Products Corporation, has submitted a proposal to the City as required by, but not limited to, Section 5709.631, O. R. C. including all of the information required by Section 5709.631; and
WHEREAS, pursuant to Section 122.17 of the Ohio Revised Code, the State of Ohio is authorized to establish the Tax Credit Authority and to execute agreements with taxpayers of the State of Ohio for the purpose of granting these taxpayers job creation tax credits against their corporate franchise or income tax, which tax credits are provided to create new jobs in the State of Ohio; and
WHEREAS, legislative approval the Jobs Creation Tax Credit is contingent upon a Jobs Creation Tax Credit being granted by the State of Ohio; and
WHEREAS, pursuant to Section 718.08 of the Ohio Revised Code a municipal corporation is authorized to grant local income tax credits to taxpayers who have received tax credits from the State; and
WHEREAS, General Products Corporation proposes to invest $6.7 million, including $300,000 in real property improvements, $6 million in machinery & equipment, $30,000 in furniture & fixture, $5,000 in computers and $450,000 in inventory and to create 80 new jobs, and is located within the City's Southeast Enterprise Zone and is qualified for consideration of both Enterprise Zone and Jobs Creation Tax Credit incentives; and
WHEREAS, General Products Corporation has indicated that tax incentives are crucial to its decision to locate the aforementioned project at the Columbus site; and
WHEREAS, the Columbus Department of Development has reviewed the General Products Corporation's application for tax incentives and has determined that General Products Corporation has the financial ability to undertake the proposed project in Columbus, and
WHEREAS, it is required by law to enter into a formal, binding agreement in order to provide and obtain both Enterprise Zone and Jobs Creation Tax Credit tax incentives in the State and City; and
WHEREAS, the City desires to enter into such agreements with General Products Corporation to foster economic growth; and
WHEREAS, an emergency exists in the usual daily operation of the Columbus Department of Development in that it is immediately necessary to enter into an agreements with General Products Corporation 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 the Department of Development be and is hereby authorized to enter into an Enterprise Zone Agreement and Jobs Creation Tax Credit Agreement with General Products Corporation and to provide therewith an exemption of 75% on the value of real property improvements and personal property investments for a term of ten (10) taxable years and a 60% Jobs Creation Tax Credit, for a term of ten (10) taxable years, in association with General Products Corporation's proposed expansion investment of $6.7 million in real and personal property and the creation of 80 jobs.
Section 2. That the City of Columbus Enterprise Zone Agreement and the Jobs Creation Tax Credit Agreement, shall be signed by General Products Corporation within ninety (90) days of passage of this ordinance, or this ordinance and the abatements and credits 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 passage if the Mayor neither approves nor vetoes the same.