Explanation
BACKGROUND: The need exists to enter into a Jobs Creation Tax Credit Agreement with Genpak LLC. 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.
Genpak LLC (Genpak) is a leading manufacturer of single use food service packaging. Headquartered in Glenn Falls, New York, the company has been in business since 1969. Presently, the company has 16 facilities in the United States and Canada, including an existing facility in Columbus, at 800 Kaderly Drive on the City's west side. Genpak produces the widest assortment of "to-go containers" in the industry, being best known for Styrofoam hinged containers.
Genpak's food service containers include plastic, foam and laminated dinnerware, salad and soup bowls, supermarket trays, and bakery and ovenable products. Genpak's customers include Sysco, Performance Food Group, Dean Foods and US Foodservice.
Genpak's Columbus facility produces food containers for KFC, this facility's largest customer. Genpak's manufacturing process consists of processing raw materials into sheets of plastic, which are then stamped into various food containers. The Columbus facility is Genpak's only facility that produces the ovenable line of food packaging.
Due to increased business, Genpak needs to expand in order to add equipment for an additional product line. The company is proposing to purchase, renovate and move its operation into a building at 845 Kaderly Drive, across the street from its current facility. The new facility would add an additional 37,000 square feet to accommodate additional equipment, warehousing, shipping, and employee parking.
Genpak is also considering its Louisville, KY and Scottsburg, IN facilities as possible sites for this expansion.
This legislation is submitted as an emergency order to allow the project to begin as soon as possible.
FISCAL IMPACT: No funding is required for this legislation.
Title
To authorize the Director of Development to enter into an agreement with Genpak LLC for a Jobs Creation Tax Credit of 65% for a period of 8 years in consideration of the company's investment of $7.7 million in real and personal property, the retention of 52 permanent full-time positions and the creation of 25 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 has offered Genpak LLC a 25%/5 year Jobs Creation Tax Credit; 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, Genpak LLC will relocate & expand within Columbus, retaining 52 full-time positions with an annual payroll of $1.7 million and creating 25 full-time permanent jobs with an annual payroll of $588,000, investing $7.7 million in real property improvements and personal property increasing job opportunities and strengthening the economy of the city; and
WHEREAS, receiving these tax credits from the State and the City is a critical factor in Genpak LLC's decision to go forward with the project in the City of 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 Genpak LLC 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 Genpak LLC 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 Genpak LLC.
Section 4. That the City of Columbus Jobs Creation Tax Credit Agreement be signed by Genpak LLC 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.