Explanation
BACKGROUND: The need exists to enter into a Jobs Creation Tax Credit Agreement with Budenheim USA 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.
This legislation authorizes the Director of Development to enter into an agreement with Budenheim USA Inc. for a Jobs Creation Tax Credit of 65% for a period of 8 years in consideration of the company's investment of $3 million in leasehold improvements and personal property, which includes machinery and equipment, furniture and fixtures, and the creation of 40 new permanent full-time jobs. Budenheim is proposing to relocate its distribution center from Plainview, New York to Columbus, Ohio and enter into a 5-year lease agreement on the property located at 2219 Westbrooke Drive, Bldg M. This operation will support manufacturing, distribution, research and development. The State has approved a Jobs Creation Tax Credit of 45% for 5 years for Budenheim.
Chemische Fabrik Budenheim was founded in 1908 in Germany and is a major producer of phosphates. Budenheim USA Inc. is a subsidiary of Budenheim Germany. Budenheim developed its own process producing pure phosphoric acid, which is the basis for the production of their phosphates. This technology has made them one of the leading manufacturers of phosphates and phosphate specialties throughout the world. Budenhiem is not only in Germany, but have subsidiaries in Monterrey, Mexico, La Zaida and Valencia Spain as well as the United States. Budenheim phosphates are used in a variety of applications such as food & beverage, meat, seafood & poultry, health & nutrition and industrial.
Emergency action is necessary in order to allow Budenheim 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 Budenheim USA Inc. for a Jobs Creation Tax Credit of 65% for a period of 8 years in consideration of the company's investment of $3 million in leasehold improvements and personal property and the creation of 40 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 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 45%/5 year Jobs Creation Tax Credit on October 29th, 2007 for Budenheim USA 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, Budenheim USA Inc. will relocate its distribution center from Plainview, New York to Columbus, Ohio and create 40 new permanent full-time positions, which will be new to Columbus, with an annual payroll of $1.7 million, invest $1 million in leasehold improvements, invest $1 million in machinery and equipment, invest $1 million in furniture and fixture 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 Budenheim USA Inc.'s decision to go forward with the project in Columbus; and
WHEREAS, an emergency exists in the usual daily operation of the Columbus Department of Development in that it is immediately necessary to enter into an agreement with Budenheim USA Inc. in order to allow Budenheim to begin investing and creating jobs as quickly as possible, all 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 Budenheim USA 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 Budenheim USA Inc.
Section 4. That the City of Columbus Jobs Creation Tax Credit Agreement is signed by Budenheim USA 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.