Explanation
BACKGROUND: This legislation authorizes the Director of Development to amend the existing Enterprise Zone Agreement (EZA) with Coca-Cola Fountain, Inc. Columbus City Council approved the EZA by Ordinance No. 1154-96 on May 20, 1996. The Columbus Tax Incentive Review Council (TIRC) recommended on November 13, 2003 that the City amend the EZA because the company was not able to achieve the machinery and equipment investment as well as the job creation/retention goals. The City concurs with the TIRC's recommendation.
The tax incentive, which was granted in 1996, is a 50%/5 year incentive with staggered investment.
After additional review and discussions with the company, the Development Department agrees that the EZA should be amended as follows: (1) reduce the machinery and equipment investment from $37 million to $25 million; (2) extend the allowable time of investment to 12/31/05 (the machinery and equipment investment was originally to have been completed by 2001. The machinery and equipment investment made in 2003-2005 is not eligible for the incentive); (3) eliminate the requirement for creating 10 new jobs and (4) reduce the job retention requirement from 138 jobs retained to 132 jobs retained. Coca-Cola Fountain, Inc. has not met the investment requirement for machinery and equipment and job creation because of the economic slowdown experienced by many manufacturing companies and the decrease of demand for their product in the travel and tourism industry. The job retention reduction reflects retirement and attrition.
FISCAL IMPACT: No funding is required for this legislation.
Title
To authorize the Director of Development to amend the existing Enterprise Zone Agreement (EZA) with Coca-Cola Fountain, Inc. and to reduce the requirement of machinery and equipment, extend the allowable time of investment, eliminate the requirement for job creation and reduce the job retention requirement; and to declare an emergency.
Body
WHEREAS, the Columbus City Council approved an Enterprise Zone Agreement (EZA) for Coca- Cola Fountain, Inc. on May, 20, 1996 by Ordinance No. 1154-96; and
WHEREAS, the Enterprise Zone Agreement (EZA) granted a 50%/5 year incentive on machinery and equipment with staggered investment; and
WHEREAS, the EZA required Coca-Cola Fountain, Inc. to invest $37.2 million in machinery and equipment by 2001, create 10 new jobs and retain 138 employees; and
WHEREAS, in its review of 2002 performance, the City's Tax Incentive Review Council determined that Coca-Cola Fountain, Inc. had not met the machinery and equipment investment requirement and the job creation/retention requirement as stipulated in the EZA and recommended that the EZA be amended; and
WHEREAS, the City has determined that Coca Cola Fountain, Inc. has not met the machinery and equipment investment requirement and the job creation/retention requirement as stipulated in the EZA because of the economic slowdown and the decrease in demand for the use of their product in the travel and tourism industry; and
WHEREAS, the EZA should be amended to reduce the machinery and equipment investment from $37.2 million to $25 million, extend the period of time to make the investment to 12/31/05, eliminate the requirement of creating 10 new jobs and reduce the requirement of job retention requirement from 138 job to 132 jobs; and
WHEREAS, the City concurs with the TIRC recommendations concerning Coca-Cola Fountain, Inc. to amend the EZA; and
WHEREAS, an emergency exists in the usual daily operation of the City of Columbus in that it is immediately necessary to amend the existing Enterprise Zone Agreement (EZA) with Coca-Cola Fountain, Inc. and to reduce the requirement of machinery and equipment, extend the allowable time of investment, eliminate the requirement for job creation and reduce the job retention requirement in order to preserve the public health, peace, property, safety, and welfare NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1. That the Director of Development is hereby authorized to amend the Enterprise Zone Agreement (EZA) between the City and Coca-Cola Fountain, Inc. and to reduce the investment requirement for machinery and equipment from $37.2 million to $25 million, extend the period of time to make the investment in machinery and equipment to 12/31/2005, eliminate the requirement of creating 10 new jobs and reduce the job retention requirement from 138 jobs to 132 jobs.
Section 2. That for the reasons stated in the preamble thereto, 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.