Explanation
BACKGROUND: Columbus City Council by Ordinance 0443-2010, passed April 5, 2010, authorized the Director of Development (City) to enter into an Enterprise Zone Agreement (Agreement) with Wood Real Estate, LLC and Wood Operating Company, LLC (together identified as Enterprise) for a tax abatement of seventy-five percent (75%) for a period of ten (10) years in consideration of a $4.2 million investment in real property improvements, the retention of twelve (12) full-time employees with an annual payroll of $551,000 and the creation of three (3) full-time permanent positions with an annual payroll of approximately $111,300 related to the renovation of a 1-story commercial building into a 4-story mixed use property comprising of 45,700 square feet of office and residential space on parcel number 010-077892, located at 937-951 N. High Street in Columbus Ohio and within the City of Columbus Enterprise Zone. The Agreement was made and entered into effective June 3, 2010 (EZA #023-10-03). The Agreement stated that construction on the improvements was expected to begin in June 2010 with these improvements expected to be completed by December 31, 2011 and that no real property exemption was to commence after 2013 nor extend beyond 2022.
In a letter to the City from The Wood Companies dated December 4, 2013, it was indicated that property upon which the improvements have been made is undergoing a refinance process with part of this process being the transfer of property ownership from Wood Real Estate, LLC to a new special purpose entity, Wood Co. Building, LLC, a company wholly owned by Wood Real Estate, LLC. The letter requested that Wood Real Estate, LLC be replaced by Wood Co. Building, LLC as Enterprise and party to the Agreement. The letter also indicated that the development took longer than expected to complete and requested that the Agreement be modified to allow the 10-year abatement period to cover the period of 2014 through 2023 instead of 2013 through 2022. The City advised The Wood Companies to advise the City of the ownership change once that occurs and at that point the City would undertake the steps necessary to amend the Agreement as requested.
In a letter to the City from The Wood Companies dated February 3, 2014, it was confirmed that Wood Real Estate, LLC had transferred its real estate ownership interest in the project to Wood Co. Building, LLC, a single asset LLC wholly-owned by Wood Real Estate, LLC with the transfer having occurred on December 12, 2013.
This legislation is to authorize the Director of Development to amend the Agreement for the first time to remove Wood Real Estate, LLC as party to the Agreement to be replaced with Wood Co. Building, LLC as party to the Agreement and to modify the term of the exemption from not to commence after 2013 nor extend beyond 2022 to not commence after 2014 nor extend beyond 2023.
This legislation is being presented as an emergency measure in order for this amendment to be legislated in as expedient manner as possible so that this amendment to the Agreement can be executed as close to the start of the 2013 annual reporting cycle as is possible.
FISCAL IMPACT: No funding is required for this legislation.
Title
To authorize the Director of Development to amend the Enterprise Zone Agreement with Wood Real Estate, LLC and Wood Operating Company, LLC, to replace Wood Real Estate, LLC with Wood Co. Building, LLC as party to the Agreement and to modify the term of the exemption; and to declare an emergency.
Body
WHEREAS, the Director of Development (City) entered into an Enterprise Zone Agreement (Agreement) with Wood Real Estate, LLC and Wood Operating Company, LLC, approved by Columbus City Council on April 5, 2010 by Ordinance 0443-2010 with this Agreement made and entered into effective June 3, 2010; and
WHEREAS, the Agreement granted a 75%/10-Year abatement on real property improvements; and
WHEREAS, the incentive was granted in consideration of a $4.0 million investment in real property improvements, the retention of 12 full-time employees with an annual payroll of $551,000 and the creation of 3 full-time permanent positions with an annual payroll of approximately $111,300 related to the renovation of a 1-story commercial building into a 4-story mixed use property comprising of 45,700 square feet of office and residential space on parcel number 010-077892, located at 937-951 N. High Street in Columbus Ohio and within the City of Columbus Enterprise Zone; and
WHEREAS, a letter to the City from The Wood Companies dated December 4, 2013 indicated that property upon which the improvements have been made is undergoing a refinance process with part of this process being the transfer of property ownership from Wood Real Estate, LLC to a new special purpose entity, Wood Co. Building, LLC, a single asset LLC wholly owned by Wood Real Estate, LLC; and
WHEREAS, the letter requested that Wood Real Estate, LLC be replaced by Wood Co. Building, LLC as Enterprise and party to the Agreement; and
WHEREAS, the letter also indicated that the development took longer than expected to complete and requested that the Agreement be modified to allow the 10-year abatement period to cover the period of 2014 through 2023 instead of 2013 through 2022 and so the City advised The Wood Companies to advise the City of the ownership change once that occurs and at that point the City would undertake the steps necessary to amend the Agreement as requested; and
WHEREAS, a letter to the City from The Wood Companies dated February 3, 2014 confirmed that Wood Real Estate, LLC had transferred its real estate ownership interest in the project to Wood Co. Building, LLC, a single asset LLC and wholly-owned subsidiary of Wood Real Estate, LLC with the transfer having occurred on December 12, 2013; and
WHEREAS, an amendment is needed to (1) to remove Wood Real Estate, LLC as and party to the Agreement to be replaced by Wood Co. Building, LLC as party to the Agreement and (2) to modify the term of the exemption from not to commence after 2013 nor extend beyond 2022 to not commence after 2014 nor extend beyond 2023; and
WHEREAS, an emergency exists in the usual daily operation of the Columbus Department of Development in that it is immediately necessary to seek an amendment to the Agreement with Wood Real Estate, LLC and Wood Operating Company, LLC so that this amendment to the Agreement can be executed as close to the start of the 2013 annual reporting cycle as is possible, thereby preserving the public health, peace, property and safety, 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 with Wood Real Estate, LLC and Wood Operating Company, LLC, to remove Wood Real Estate, LLC as Enterprise and party to the Agreement to be replaced by Wood Co. Building, LLC as Enterprise and party to the Agreement and to modify the term of the exemption from not to commence after 2013 nor extend beyond 2022 to not commence after 2014 nor extend beyond 2023.
Section 2. That this First Amendment to the City of Columbus Enterprise Zone Agreement be signed by Wood Co. Building, LLC and Wood Operating Company, LLC 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 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.