Explanation
Background: The need exists to amend the Enterprise Zone Agreement (the "Agreement") between the City of Columbus and Grange Mutual Casualty Company ("Grange"). The Agreement was originally executed on November 22, 2005 and provided Grange with a 10 year, 75% exemption on the increase in the assessed value of real property at Grange's corporate headquarters located at 650 South Front Street. The Agreement was executed to support the remodeling of Grange's existing facilities, the construction of a 200,000 square foot office building and the construction of a 1,000 space parking space. The project would result in the creation of approximately 800 new jobs and the retention of approximately 775 existing jobs. Subsequent to the execution of the Agreement, Grange revised the investment estimates, determined that the parking garage would be constructed on parcels of real property that were not covered by the original Agreement and determined that approximately 15,000 square feet of office space would be constructed as part of the parking garage structure. As a result, it is necessary to amend the Agreement to account for these changes.
Fiscal Impact: No funding is necessary for this legislation.
Title
To authorize the Director of the Department of Development to enter into a first amendment to Ohio Enterprise Zone Agreement with Grange Mutual Casualty Company to amend the scope of the project and revise the description of the project site.
Body
WHEREAS, the City, by Ordinance No. 779-85 passed April 22, 1985 and amended 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 0225-03 in 2003, has designated the area specified in those ordinances as an "urban jobs and enterprise zone" pursuant to Ohio Revised Code ("R.C.") Chapter 5709 (the "Enterprise Zone") and declared that incentives for business offered by such zones will enhance efforts to promote the viable and diverse economic activity necessary for rejuvenation of the Enterprise Zone; and
WHEREAS, effective August 19, 2003, the Director of Development of the State of Ohio determined that the Enterprise Zone contains the characteristics set forth in R.C. Section 5709.61(A)(1) and certified the Enterprise Zone as an "enterprise zone" under R.C. Chapter 5709; and
WHEREAS, the enterprise zone was created in accordance with R.C. Sections 5709.61 through 5709.69 (the "Enterprise Zone Act"); and
WHEREAS, the Enterprise Zone Act has authorized municipalities to execute agreements with certain enterprises for the purposes of establishing, expanding, renovating or occupying facilities and hiring new employees and preserving jobs within said Enterprise Zone in exchange for specified local tax incentives granted by the City; and
WHEREAS, on November 22, 2005, Grange Mutual Casualty Company (the "Company") and the City entered into an Enterprise Zone Agreement (the "Original Agreement") pursuant to the Enterprise Zone Act to establish real property tax exemption in connection with the remodeling of the Company's existing corporate headquarters at a cost of between $3,000,000 and $4,000,000, the construction of an additional office building of approximately 200,000 square feet at a cost of between $39,100,000 and $45,100,000 and the construction of a 1,000 space parking garage at a cost of between $19,400,000 and $22,700,000 (collectively, the "Project") on the area described on Exhibit A to the Original Agreement (the "Original Project Site"); and
WHEREAS, the Company has revised the estimated costs of the improvements and revised the site for construction of the improvements, and the revised costs are (i) between $7,000,000 and $7,500,000 for the remodeling of the existing corporate headquarters; (ii) between $68,000,000 and $69,500,000 for the construction of the additional office building of approximately 238,500 gross square feet, which costs and building space include a data center at a cost of between $9,000,000 and $9,800,000; (iii) between $21,500,000 and $23,500,000 for the construction of a 1,050 space parking garage with approximately 15,000 square feet of office space; (iv) approximately $300,000 for related infrastructure improvements; and (v) between 4,000,000 and $4,500,000 for the acquisition of non-inventory personal property (collectively, the "Revised Project") which improvements are to be constructed on the area (the "Revised Project Site," which includes additional real property across Sycamore Street from the Original Project Site) described on Exhibit A-1 to the proposed First Amendment to Ohio Enterprise Zone Agreement (the "First Amendment"); and
WHEREAS, the Project is expected to enable the Company to create approximately 800 full-time, permanent job opportunities over the next 20 years with annual average compensation in today's dollars of approximately $100,000 per annum, including benefits; and
WHEREAS, pursuant to the Original Agreement, the City granted to the Company a 10 year, 75% tax exemption pursuant to R.C. Section 5709.62 for the increase in assessed valuation of real property constituting the Original Project Site; and
WHEREAS, subsequent to the execution of the Original Agreement, the Enterprise determined that it would not be constructing a parking garage on the Original Project Site, but would instead be constructing the Revised Project on the Revised Project Site, with the parking garage/office structure to be constructed on the additional property included in the Revised Project Site; and
WHEREAS, the Company and the City desire to enter into the First Amendment, thereby amending the Original Agreement, pursuant to which the City will grant to the Company a 10 year, 75% tax exemption pursuant to R.C. Section 5709.62 for the increase in assessed valuation of real property constituting the Revised Project Site in connection with the Revised Project, and pursuant to which the estimated completion date for the Revised Project will be extended; and
WHEREAS, the City desires to enter into the First Amendment in order to foster economic growth; and
WHEREAS, the Revised Project Site is located in the Columbus City School District (the "School District") and the board of education of the School District has been notified in accordance with R.C. Sections 5709.83 and 5709.62, or has waived such notice, and has been given a copy of the proposed First Amendment; NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1. Council finds that the Company is qualified by financial responsibility and business experience to create and preserve employment opportunities in the Enterprise Zone and to improve the economic climate of the City.
Section 2. In consideration of the Company's commitment to develop the Revised Project and thereby increase the costs and size of the Project as described in the Original Agreement, the Director of the Department of Development (the "Director") is hereby authorized to enter into the First Amendment with the Company to provide thereby an exemption of seventy-five percent (75%) on the increase in assessed value of real property at the Revised Project Site in Columbus, in connection with the Revised Project, for a period of ten (10) years, and to extend the estimated completion date for the Revised Project to December 31, 2009; and the Director is authorized and directed to take any further actions and execute and deliver any further agreements, certificates or documents necessary to accomplish the granting of the aforementioned Ohio Enterprise Zone incentives.
Section 3. That this ordinance shall take effect and be in force from and after the earliest period allowed by law.