Explanation
BACKGROUND: Columbus City Council (“COUNCIL”), by Ordinance No. 2913-2022, passed November 21, 2022, authorized the City of Columbus (“CITY”) to enter into an Enterprise Zone Agreement (the “AGREEMENT”) with Cologix US, Inc. and Cologix Services Company, LLC (collectively, and hereinafter referred to as the “ENTERPRISE”) for a tax abatement of seventy-five percent (75%) for a period of ten (10) consecutive years in consideration of the company’s total proposed investment of approximately $160,500,000, which included approximately $61,000,000 in real property improvements and $99,500,000 in machinery and equipment to construct a data center of approximately 250,000 square feet on an undeveloped land consisting of 7.49 +/- acres at 7500 & 7474 Alta View Boulevard, Columbus Ohio 43085, parcel number 610-207094, (the “PROJECT”). The ENTERPRISE committed to create fifteen (15) net new full-time permanent positons with an estimated annual payroll of approximately $1,500,000 and retain 24 full-time jobs with an annual payroll of approximately $1,400,000 at two separate locations, 7500 & 7474 Alta View Boulevard, Columbus, Ohio 43085, parcel number 610-207094 and 555-585 Scherers Court, parcel number 610-210593, which are adjacent from one another, (collectively, the “PROJECT SITE”), and within the City of Columbus Enterprise Zone. The AGREEMENT was made and entered into effective January 24, 2023.
Paragraph fourteen within Section 8 (Program Compliance) of the AGREEMENT states that the “AGREEMENT is not transferable or assignable without the express, written, approval of the CITY” and paragraph fifteen of that same section states that “any requested amendment…to any of the terms of the AGREEMENT…shall require the payment to the CITY by the ENTERPRISE of an AMENDMENT FEE in the amount of five-hundred dollars ($500.00).”
In a letter received by the CITY from the ENTERPRISE dated June 8, 2023, and through ensuing correspondence, the ENTERPRISE indicated that an internal reorganization of the company’s structure occurred to realign with a new corporate strategy. Because of this restructuring, the ENTERPRISE confirmed that Cologix Col4, LLC and Cologix, Inc. (both affiliates of Cologix US, Inc. and Cologix Services Company, LLC) was formed to accommodate the company’s strategic growth plan. Additionally, the ENTERPRISE confirmed that Cologix Col4, LLC is the entity that actually owns the PROJECT SITE with the transfer of ownership recorded in the County Auditor’s Office on December 15, 2022. The ENTERPRISE is requesting the AGREEMENT be amended to add Cologix Col4, LLC and Cologix, Inc. as additional entities and party to the AGREEMENT. As such, the need exists to amend the AGREEMENT for the first time to add Cologix Col4, LLC and Cologix, Inc. as additional entities and party to the AGREEMENT, which allows the company to begin receiving any tax savings benefits and adhere to the requirements of the AGREEMENT.
This legislation is to authorize the Director of the Department of Development to amend the AGREEMENT for the first time to add Cologix Col4, LLC and Cologix, Inc., as additional entities and party to the AGREEMENT; whereby, all four entities will collectively be parties to the terms and commitments in the AGREEMENT.
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 amend the City of Columbus Enterprise Zone Agreement for the first time with Cologix US, Inc. and Cologix Services Company, LLC, to add Cologix Col4, LLC and Cologix, Inc., as additional entities and party to the EZ Agreement.
Body
WHEREAS, the City of Columbus (“CITY”) entered into an Enterprise Zone Agreement (the “AGREEMENT”) with Cologix US, Inc. and Cologix Services Company, LLC (collectively, and hereinafter referred to as the “ENTERPRISE”), approved by Columbus City Council (“COUNCIL”) on November 21, 2022 by Ordinance No. 2913-2022 with this AGREEMENT made and entered into effective January 24, 2023; and
WHEREAS, the AGREEMENT granted a 75%/10-Year tax abatement on real property improvements; and
WHEREAS, the incentive was granted in consideration of a total capital investment of approximately $160,500,000.00 which included approximately $61,000,000.00 in real property improvements and $99,500,000.00 in machinery and equipment to construct a new data center of approximately 250,000 square feet on an undeveloped land consisting of 7.49 +/- acres (the “PROJECT”), at 7500 & 7474 Alta View Boulevard, Columbus Ohio 43085, parcel number 610-207094 (the “PROJECT SITE”) located in the Worthington City School District, and within the City of Columbus Enterprise Zone with the abatement to begin no later 2025 nor extend beyond 2034 will all real property improvements expected to be completed by the end of the first quarter; and
WHEREAS, the ENTERPRISE committed to create fifteen (15) net new full-time permanent positions with an estimated annual payroll of approximately $1,500,000 and retain 24 full-time jobs with an annual payroll of approximately $1,400,000.00 at the PROJECT SITE; and
WHEREAS, paragraph fourteen within Section 8 (Program Compliance) of the AGREEMENT states that the “AGREEMENT is not transferable or assignable without the express, written, approval of the CITY” and paragraph fifteen of that same section states that “any requested amendment…to any of the terms of the AGREEMENT…shall require the payment to the CITY by the ENTERPRISE of an AMENDMENT FEE in the amount of five-hundred dollars ($500.00);” and
WHEREAS, in a letter received by the CITY from the ENTERPRISE dated June 8, 2023, and through ensuing correspondence, the ENTERPRISE indicated that an internal reorganization of the company’s structure occurred to realign with a new corporate strategy. Because of this restructuring, the ENTERPRISE confirmed that Cologix Col4, LLC and Cologix, Inc. (both affiliates of Cologix US, Inc. and Cologix Services Company, LLC) were formed to accommodate the company’s strategic growth plan. Additionally, the ENTERPRISE confirmed that Cologix Col4, LLC is the entity that actually owns the PROJECT SITE with the transfer of ownership recorded in the County Auditor’s Office on December 15, 2022. The ENTERPRISE is requesting the AGREEMENT be amended to add Cologix Col4, LLC and Cologix, Inc., as additional entities and party to the AGREEMENT. As such, the need exists to amend the AGREEMENT for the first time to add Cologix Col4, LLC and Cologix, Inc., as additional entities and party to the AGREEMENT, which will allow the company to begin receiving any tax savings benefits and adhere to the requirements of the AGREEMENT; and
WHEREAS, an amendment to the AGREEMENT is now needed to add Cologix Col4, LLC and Cologix, Inc., as additional entities and party to the AGREEMENT; and
WHEREAS, a First Amendment to the City of Columbus Enterprise Zone Agreement with Cologix US, Inc. and Cologix Services Company, LLC is now required to add Cologix Col4, LLC and Cologix, Inc., as additional entities and party to the AGREEMENT; and
WHEREAS, it has become necessary in the daily operations of the Department of Development to amend the AGREEMENT so that all four entities: Cologix US, Inc., Cologix Services Company, LLC, Cologix Col4, LLC and Cologix, Inc., (collectively, the “ENTERPRISE”), will then be parties to the terms and commitments of the AGREEMENT;
NOW THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF COLUMBUS:
Section 1. That the Director of the Department of Development is authorized to amend the City of Columbus Enterprise Zone Agreement for the first time with Cologix US, Inc., and Cologix Services Company, LLC, to add Cologix Col4, LLC and Cologix, Inc., as additional entities and party to the AGREEMENT.
Section 2. That the First Amendment to the City of Columbus Enterprise Zone Agreement be signed by Cologix US, Inc., Cologix Services Company, LLC, Cologix Col4, LLC and Cologix, Inc., within ninety (90) days of passage of this ordinance, or this ordinance and the incentive authorized herein shall be null and void.
Section 3. That this ordinance shall take effect and be in force from and after the earliest period allowed by law.