Explanation
BACKGROUND: The need exists to enter into an Enterprise Zone Agreement with KDL Properties LLC and Fortner Upholstering, Inc. The Ohio Enterprise Zone law O.R.C. Section 5709.62(C) requires the City to enter into a Council-approved agreement between the City and participating companies.
Headquartered in the City of Columbus, KDL Properties, LLC is a real estate holding company established in the fall of 2012. Fortner Upholstering, Inc. is Ohio’s largest reupholstery furniture company. The company has been serving Columbus’ furniture needs, both residential and commercial, with reupholstering and custom built furniture since 1929. Fortner Upholstering, Inc. boasts over 300 years of collective upholstering experience, and is still family owned and operated. Justin McAllister, the grandson of David Fortner Sr., is the fourth generational owner and President/CEO of Fortner Upholstering, Inc., and is the President of KDL Properties LLC.
KDL Properties LLC and Fortner Upholstering, Inc., two entities under common ownership, propose to invest a total project cost of approximately $2.3 million in real property improvements to renovate and redevelop a historic manufacturing facility (formerly Seagrave Fire Truck Manufacturing; most recently Jet Container) with a total square footage of approximately 209,334 sq. ft. at 2050 - 2060 S. High Street (parcel number 010-104087), an adjacent property located at 2000 S. High Street (parcel numbers 010-104083 and 010-104093), and four vacant adjacent S. High Street lots (parcel numbers 010-104088, 010-104232, 010-002039, and 010-104098), Columbus, Ohio, 43207. Upon completion of the renovations, Fortner Upholstering, Inc. proposes to expand its corporate headquarters (HQ) and manufacturing facilities by occupying approximately 60,000 square feet +/- of the proposed 209,334 square-foot facility. Fortner Upholstering, Inc. will be one of the tenants and employer of record, and will enter into a lease agreement with KDL Properties LLC. Additionally, Fortner Upholstering, Inc. will retain 37 full-time jobs with an annual payroll of approximate $1.86 million and create 6 net new full-time permanent positions with an estimated annual payroll of approximately $237,000 at the proposed project site. The remaining square footage (approximately 149,334 sq. ft. +/-) will be used to attract other future potential tenants.
The Department of Development recommends 75%/10-year Enterprise Zone tax abatement on real property improvements.
The Columbus City School District has been advised of this project. This legislation is presented as 30-day legislation.
FISCAL IMPACT:
No Funding is required for this legislation.
Title
To authorize the Director of the Department of Development to enter into an Enterprise Zone Agreement with KDL Properties LLC and Fortner Upholstering, Inc. for a tax abatement of seventy-five percent (75%) for a period of ten (10) consecutive years in consideration of a total proposed capital investment of approximately $2.3 million, the retention of 37 full-time jobs and the creation of 6 new full-time permanent positions with an estimated annual payroll of approximately $237,000.00.
Body
WHEREAS, the Columbus City Council authorized the designation of the Central Enterprise Zone by legislation, Ordinance Number 779-85, dated April 22, 1985; and subsequently amended the Zone by Ordinance Nos. 2722-85 in 1986; 2080-89 in 1989; 1949-92, 2690-92 and 2249-92 in 1992; 1079-94 and 1228-94 in 1994; 2196-95 and 2817-95 in 1995; 0533-99 in 1999; 1785-00 in 2000; 1464-02 in 2002; 0225-03 in 2003; and 0032-2012 in 2012; and
WHEREAS, the Director of the Development Department of the State of Ohio determined that the Columbus Enterprise Zone as amended by the aforementioned Ordinances continued to contain the characteristics set forth in Section 5709.61(A) of the Ohio Revised and recertified said Zone in 1986, December 20, 1989, September 28, 1992, October 22, 1992, December 17, 1992, May 31, 1994, June 24, 1994, June 16, 1995, October 5, 1995, December 19, 1995, April 1, 1999, September 25, 2000, January 27, 2003, August 19, 2003 and most recently on April 3, 2012 as an “urban jobs and enterprise zone” under Chapter 5709 of the Ohio Revised Code; and
WHEREAS, KDL Properties LLC is a real estate holding company established in the fall of 2012 by Justin McAllister, President; and
WHEREAS, Fortner Upholstering, Inc. is Ohio’s largest reupholstery furniture company, which has been servicing Columbus’ furniture needs, both residential and commercial, with reupholstering and custom built furniture since 1929. Fortner Upholstering, Inc. boasts over 300 years of collective upholstering experience, and is still family owned and operated; and
WHEREAS, both entities are owned and operated by Justin McAllister, the grandson of David Fortner Sr., and he is the fourth generational President/CEO; and
WHEREAS, KDL Properties LLC and Fortner Upholstering, Inc., two entities under common ownership, propose to invest a total project cost of approximately $2.3 million in real property improvements to renovate and redevelop a historic manufacturing facility (formerly Seagrave Fire Truck Manufacturing; most recently Jet Container) with a total square footage of approximately 209,334 sq. ft. at 2050 - 2060 S. High Street (parcel number 010-104087), an adjacent property located at 2000 S. High Street (parcel numbers 010-104083 and 010-104093), and four vacant adjacent S. High Street lots (parcel numbers 010-104088, 010-104232, 010-002039, and 010-104098), Columbus, Ohio, 43207; and
WHEREAS, upon completion of renovations, Fortner Upholstering, Inc. proposes to expand its corporate HQ and manufacturing facilities by occupying approximately 60,000 square feet +/- of the proposed 209,334 square-foot facility. The remaining unused square footage (approximately 149,334 sq. ft. +/-) will be used to attract other future potential tenants; and
WHEREAS, Fortner Upholstering, Inc. will be one of the tenants and the employer of record, and will enter into a lease agreement with KDL Properties LLC at the proposed project site, retain 37 full-time positions with an estimated an annual payroll of approximately $1.86 million and create 6 new full-time permanent positions with an estimated annual payroll of approximately $237,000; and
WHEREAS, the City is encouraging this project because of plans to renovate and redevelop a historic manufacturing facility (formerly Seagrave) in the Southside community; and
WHEREAS, the City desires to enter in such a binding formal agreement in order to foster economic growth for the preservation of public health, peace, property and safety; NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF CITY OF COLUMBUS:
Section 1. That 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 abatement is a critical factor in the decision by KDL Properties LLC and Fortner Upholstering, Inc. to go forward with the project expansion.
Section 2. That the Director of the Department of Development is hereby authorized and directed to enter into an Enterprise Zone Agreement with KDL Properties LLC and Fortner Upholstering, Inc. to provide therewith an exemption of seventy-five percent (75%) on real property improvements for a term of ten (10) consecutive taxable years in association with the project’s proposed total investment of approximately $2.3 million at 2050 - 2060 S. High Street (parcel number 010-104087), an adjacent property located at 2000 S. High Street (parcel numbers 010-104083 and 010-104093), and four vacant adjacent S. High Street lots (parcel numbers 010-104088, 010-104232, 010-002039, and 010-104098), Columbus, Ohio, 43207. Additionally, Fortner Upholstering, Inc. will retain 37 employees with an annual payroll of approximately $1.86 million and create 6 new full-time permanent positions with an estimated annual payroll of approximately $237,000 million.
Section 3. That the City of Columbus Enterprise Zone Agreement is signed by KDL Properties LLC and Fortner Upholstering, Inc. within ninety (90) days of passage of this ordinance, or this ordinance and the abatements and credit authorized herein are null and void.
Section 4. That this ordinance shall take effect and be in force from and after the earliest period allowed by law.