Explanation
BACKGROUND: The need exists to enter into a Jobs Creation Tax Credit Agreement with Exel Inc. 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 enter a Council-approved agreement between the City and a participating company.
Exel Inc. (Exel) is a leading provider of contract logistics and freight management services. The company is headquartered in Westerville, Ohio and has 25,000 employees in the United States and Canada. Exel is part of the Deutsche Post World Net group and a sister company of DHL.
Exel services a variety of markets including consumer packaged goods manufacturers, technology, automotive, healthcare and chemical. Their portfolio of services spans the entire chain from international logistics management and distribution, to store-to-store logistics and home delivery.
Exel is proposing to expand by leasing 11,500 square feet in Columbus at 1650 Watermark Drive. This operation will support transportation and warehouse logistics being performed in the United States and Canada. These services include arranging for delivery of orders, routing of orders, billing customers and customer support.
The State has approved a Jobs Creation Tax Credit of 45% for 5 years for Exel.
This legislation is requested to be considered as an emergency in order to allow Exel to begin investing and creating jobs as quickly as possible.
FISCAL IMPACT: No funding is required for this legislation.
Title
To authorize the Director of Development to enter into an agreement with Exel Inc. for a Jobs Creation Tax Credit of 65% for a period of 8 years in consideration of the company's investment of $600,500 in leasehold improvements and personal property, the relocation and retention of 22 full-time positions, which will be new to Columbus, and the creation of 45 new permanent full-time jobs; and to declare an emergency.
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 taxpayers 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 45%/5 year Jobs Creation Tax Credit on May 29th, 2007 for Exel Inc.; 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 Jobs Creation Tax Credit, Exel Inc. will relocate and retain 22 full-time positions, which will be new to Columbus, create 45 new permanent full-time jobs with an annual payroll of $1.4 million, invest $600,500 in leasehold improvements and new personal property 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 Exel Inc.'s decision to go forward with the project in Columbus; and
WHEREAS, an emergency exists in the usual daily operation of the Department of Development in that it is immediately necessary to enter into an agreement with Exel Inc. for the preservation of public health, peace, property and safety; 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 Exel 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 an 8-year, 65%, Jobs Creation Tax Credit Agreement with Exel Inc.
Section 4. That the City of Columbus Jobs Creation Tax Credit Agreement be signed by Exel Inc. within 90 days of passage of this ordinance, or this ordinance and the credit herein shall be null and void.
Section 5. That for reasons stated in the preamble hereto, which is hereby made a part hereof, the ordinance is hereby 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 the passage if the Mayor neither approves nor vetoes the same.