Explanation
BACKGROUND: This legislation authorizes the Director of Development to amend the existing Enterprise Zone Agreement (EZA) with Roanoke Furniture. The Roanoke project site is at 4030 E. 5th Avenue. Roanoke Furniture is a division of American Signature Inc. (part of Schottenstein Stores Corporation). Columbus City Council approved the EZA by Ord. No. 2291-99 on October 4, 1999. The tax incentive is a 50%/5 year abatement on new inventory at the project site (2001-2005). Roanoke agreed to invest $50,000 in real property improvements, $2 million in new inventory, $125,000 in other personal property, to retain 75 existing jobs and to create 20 new jobs. In December of 2003, Roanoke had exceeded its investment commitment and had retained 37 jobs, though by July 2004 the number of jobs had increased to 42. Despite low job numbers at the Roanoke project site, approximately 40 administrative and sales positions were created at the corporate home office in Columbus (1800 Moler Rd) to help serve Roanoke's business operations here and in other states. The Columbus Tax Incentive Review Council (TIRC) recommended on August 11, 2004 that the City amend the EZA because the company has not been able to achieve the job creation/retention goals at the project site. The City concurs with the TIRC's recommendation.
After additional review and discussions with the company, the Department of Development agrees that the EZA should be amended as follows: (1) eliminate the job creation (20) requirement; (2) require the retention of the 42 full-time permanent jobs that existed at the project site in July 2004 and (3) require that a minimum of 75% of the original job retention requirement be attained by the end of 2005 (i.e., a total of 56 permanent full-time jobs) or the company shall repay the amount of taxes for the number of jobs short of the retention goal that were exempted for 2005 that would have been payable had the property not been exempt from taxation under the Enterprise Zone Agreement. The City will still retain the ability to terminate or modify the exemptions based on next year's review of 2004 progress. This legislation is presented as an emergency measure in order to meet the new deadline under State law for City Council vote on TIRC recommendations.
FISCAL IMPACT: No funding is required for this legislation.
Title
To authorize the Director of Development to amend the existing Enterprise Zone Agreement with Roanoke Furniture and to eliminate the job creation requirement (20 jobs); require the retention of the 42 full-time permanent jobs that existed at the project site in July 2004 and require that a minimum of 75% of the original job retention requirement be attained by the end of 2005 or Roanoke shall repay the taxes for the number of jobs short of the retention goal that were exempted for 2005; and to declare this an emergency.
Body
WHEREAS, the Columbus City Council approved an Enterprise Zone Agreement (EZA) for Roanoke
Furniture on October 4, 1999 by Ordinance No. 2291-99; and
WHEREAS, the EZA granted a 50%/5 year abatement on inventory; and
WHEREAS, the EZA required Roanoke Furniture to invest a total of $2.2 million, create 20 new jobs
and retain 75 employees; and
WHEREAS, in its review of 2003 performance, the City's Tax Incentive Review Council determined that Roanoke
Furniture had not met the job creation/retention requirement as stipulated in the EZA and recommended that the
EZA be amended; and
WHEREAS, the City has determined that Roanoke Furniture has not met the job creation/retention requirement
as stipulated in the EZA; and
WHEREAS, the TIRC recommended on August 11, 2004 that the EZA should be amended to eliminate the job
creation requirement, require retention of the 42 full-time permanent jobs that existed at the project site in July 2004
and require that a minimum of 75% of the original job retention requirement be attained by the end of 2005 or the
company shall repay the amount of taxes for the number of jobs short of the retention goal that were exempted for 2005 that would have been payable had the property not been exempt
from taxation under the EZA; and
WHEREAS, the City concurs with the TIRC recommendations regarding the EZA; and
WHEREAS, an emergency exists in the usual daily operation of the Department of Development in that it is
immediately necessary to obtain City Council's vote in order to meet the new deadline under State law for voting
on the TIRC recommendations, 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 (EZA) between the City and Roanoke Furniture to eliminate the job creation requirement, require the retention of the 42 full-time permanent jobs that existed at the project site in July 2004 and require that a minimum of 75% of the original job retention requirement be attained by the end of 2005 (i.e., a total of 56 permanent full-time jobs) or the company shall repay the amount of taxes for the number of jobs short of the retention goal that were exempted for 2005 that would have been payable had the property not been exempt from taxation under the Enterprise Zone Agreement.
Section 2. 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 passage if the Mayor neither approves nor vetoes the same.