Explanation
BACKGROUND:
The City of Columbus currently has an excessive amount of vacant office space in our downtown market. This high vacancy rate is having a negative impact on all business activity downtown and throughout the city. Lifestyle Communities, Ltd. is currently exploring downtown Columbus as a potential site for their relocation. They anticipate bringing 238 positions (74 new, 164 retained) downtown. This new job creation is estimated to generate $6,300,000 of payroll and an additional $126,000 annually in City income tax revenue in 2008. Expected job growth is 137 additional new jobs through 2013. Thus the Downtown Development Office recommends granting a financial incentive to Lifestyle Communities, Ltd based on the future growth of this employment base not only to retain these jobs in Columbus but also relocate them to Downtown of an amount equal to 50% of the new payroll taxes paid each year for five (5) years with the incentive extended for an additional three (3) years if total full-time employment by Lifestyle Communities reaches 306 at the end of calendar year 2012, for a total of eight (8) years.
Emergency action is requested in order to allow Lifestyle Communities, Ltd. to make a decision on the proposed relocation 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 an incentive agreement based on payroll growth with Lifestyle Communities Ltd.; and to declare an emergency.
Body
WHEREAS, the City desires to increase employment opportunities and encourage establishment of new jobs in the City in order to improve the overall economic climate of the City and its citizens; and
WHEREAS, Lifestyle Communities, Ltd. is a leader in real estate development in Central Ohio and a prominent member of our business community and we desire to attract their corporate to headquarters Downtown; and
WHEREAS, the Department of Development has received a completed incentive application for the from Lifestyle Communities, Ltd.; and
WHEREAS, Lifestyle Communities, Ltd. estimates that it will create 74 new jobs and retain 164 jobs at a new building to be constructed at 230 West St (in the Arena District) with a projected payroll of $6.3 million generating estimated City of Columbus income tax revenue of $126,000 annually; and
WHEREAS, an emergency exists in the usual daily operation of the Department of Development, is that it is immediately necessary to enter into an incentive agreement with Lifestyle Communities, Ltd. in order to preserve the public peace, health, property, 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 enter into a financial incentive agreement with Lifestyle Communities, Ltd for an annual cash payment equal to 50% of the total income tax withholding for the new positions located in downtown Columbus for a term of five (5) years based on the estimated addition of 74 new jobs and 164 retained at 230 West St. in the Arena District.
The incentive will be extended for an additional three (3) years if total full-time employment by Lifestyle Communities reaches 306 at the end of calendar year 2012, for a total of eight (8) years.
Section 2. This employment at Lifestyle Communities, Ltd. is the result of retaining 164 jobs and creating 74 new jobs at the Downtown site as defined in Columbus City Code Title 33 Section 3359.03 downtown district boundary.
Section 3. The proposed 15-year lease at 230 West St. in the Arena District will qualify Lifestyle Communities, Ltd. for a five (5) year incentive term with a three (3) year performance-based extension. The term beginning in calendar year 2008, with the incentive payment made in the first quarter of the following year based on actual City of Columbus income tax withholding paid by employees for the preceding year.
Section 4. There exists the possibility of additional investment in streetscape improvement. This project may be eligible for funding out of the Downtown Streetscape subject to meeting the public right-of-way improvement criteria, pending availability of funds, and future legislation.
Section 5. Each year of the term of the agreement with Lifestyle Communities, Ltd. that a payment is due, the City's obligation to pay the incentive is expressly contingent upon the passing 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 6. That for reasons stated in the preamble hereto, which is hereby made a part hereof, this ordinance is 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.