Explanation
BACKGROUND: The need exists to enter into a Job Creation Tax Credit and a Jobs Growth Incentive Agreement with Citi Fund Services Ohio, Inc. (Citi Fund). The Ohio Tax Credit Legislation (Section 718.15 of the Ohio Revised Code) authorizing such agreements became effective January 14, 1993 and requires the City to execute a Council-approved agreement between the City and a participating company.
Citi Fund Services Ohio, Inc. is a privately-owned company that was incorporated in 1988 and based in Columbus, Ohio. The company offers fund services, which include administration and accounting, transfer agency and shareholder services, compliance and regulatory support, and marketing and distribution solutions. The company, using its fund services platform, supports separately managed accounts, college savings plans, registered hedge funds, and variable annuity and variable life insurance products. It operates offshore platforms located in Dublin, London, Luxembourg, and Guernsey. Citi Fund was formerly known as BISYS Fund Services Ohio, Inc. and changed its name to Citi Fund Services Ohio, Inc. in August 2007. Citi Fund operates as a subsidiary of Citi Investor Services, Inc.
The company is proposing to expand its current facility by adding new lines of business from other Citi Fund locations by investing approximately $2.8 million to renovate and expand its corporate facility located at 3435 Stelzer Road Columbus, Ohio. The company will retain 715 full-time permanent employees and create 300 new full-time permanent positions.
The State has approved a Jobs Creation Tax Credit of 60% for 7 years for Citi Fund.
FISCAL IMPACT: No funding is required for this legislation.
Title
To authorize the Director of the Department of Development to enter into a Job Creation Tax Credit Agreement of 65% for a period of six years and a Jobs Growth Incentive Agreement of 25% for a period of five years with Citi Fund Services Ohio, Inc. in consideration of the company's investment of $2.8 million in leasehold improvements and personal property, the retention of 715 jobs and the creation of 300 new permanent full-time positions. (AMENDED BY ORD. 0803-2011 PASSED 6/6/2011)
Body
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 tax payers job creation tax credits against their corporate franchise tax or income tax, which tax credits are provided to create new jobs in the State of Ohio; and
WHEREAS, the Ohio Department of Development approved a 60%/7-year Job Creation Tax Credit on December 7, 2010 for Citi Fund; and
WHEREAS, pursuant to Section 718.15 of the Ohio Revised Code (the "City Act") a municipal corporation is authorized to grant local income tax credits to taxpayers who have received tax credits from the State; and
WHEREAS, contingent on the City granting a Job Creation Tax Credit and a Jobs Growth Incentive, Citi Fund will expand its corporate headquarters located at 3435 Stelzer Road Columbus, Ohio, retain 715 jobs and create 300 new permanent full-time positions, with a total annual payroll of approximately $60.2 million, will make a fixed-asset investment of approximately $2.8 million including, $2.25 million in new machinery and equipment, and $610,000 in renovation and leasehold improvements and increase job opportunities and strengthen the economy of the city; and
WHEREAS, receiving these tax credits from the State and the City is a critical factor in Citi Fund's decision to go forward with the project in Columbus; and
WHEREAS, the City desires to increase employment opportunities and encourage the creation of new jobs in the City in order to improve the overall economic climate of the City and its citizens; and
WHEREAS, the Department of Development has received completed applications for a Job Creation Tax Credit and a Jobs Growth Incentive from Citi Fund; and
WHEREAS, Citi Fund has indicated that a Jobs Growth Incentive and a Jobs Creation Tax Credit is crucial to its decision to locate the aforementioned expansion and retention in Columbus; and
WHEREAS, the City of Columbus desires to facilitate Citi Fund's future growth at the project site; NOW THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1. That the City hereby finds and determines that the project will (1) create jobs in the State and City; (2) the project is economically sound and will benefit the people of the State and City by increasing opportunities for employment and strengthening the economy of the State and City; and (3) receiving the aforementioned tax credits is a critical factor in the decision by Citi Fund Services Ohio, Inc. to go forward with the project.
Section 2. That the City Council hereby finds and determines that the project meets all the requirements of the City Act.
Section 3. That the Director of the Department of Development is hereby authorized and directed to enter into and execute a Job Creation Tax Credit of sixty-five percent (65%) for a period of eight (6) years and a Jobs Growth Incentive equal to twenty five (25%) of the amount of personal income tax withheld on new employees for a term of five (5) years with Citi Fund Services Ohio, Inc.
Section 4. Each year of the Jobs Growth Incentive's term with Citi Fund Services Ohio, Inc. the City's obligation to pay the incentive is expressly contingent upon the passage 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 5. That the City of Columbus Job Creation Tax Credit Agreement and the Jobs Growth Incentive Agreement is signed by Citi Fund Services Ohio, Inc. within 90 days of passage of this ordinance, or this ordinance and the credit herein shall be null and void.
Section 6. That this ordinance shall take effect and be in force from and after the earliest period allowed by law.