Explanation
BACKGROUND: Columbus City Council, by Ordinance Number 1082-2005, passed June 20, 2005, authorized the City to enter into an Enterprise Zone Agreement (the Agreement) with Columbus Wood Products, LLC, Continental Millworks Company, LLC, Nacht Holdings, LLC, and 1800 Fifth Ave. Holdings, LLC (Enterprise) for a tax abatement of sixty-five percent (65%) for a period of seven (7) years in consideration of a $2.4 million investment in real property improvements, a $160,000 investment in personal property, the retention of 98 permanent full-time jobs, and the creation of 21 permanent full-time jobs related to the renovation of a facility of approximately 117,000 square feet on Parcel Number 010-014784 at 1800 E. Fifth Avenue, located in Columbus, Ohio and within the City of Columbus Enterprise Zone. The Agreement was made and entered into to be effective August 2, 2005 (EZA# 023-05-06) and was subsequently authorized by Council to be amended for the first time by Ordinance Number 1551-2008, passed October 20, 2008, effective April 20, 2009, to allow the full-time jobs that are generated by tenants at the project site to be counted toward the full-time job creation commitment in the Agreement and was again subsequently authorized by Council to be amended for the second time by Ordinance Number 0614-2009, passed on May 11, 2009, effective January 1, 2009 that eliminated any and all language from the Agreement that pertained to personal property investment.
During the most recent tax abatement reporting cycle following Report Year 2009 which ended December 31, 2009, the $1,000 monitoring fee check submitted by Enterprise as part of their annual reporting submission was returned as the account from which payment was to be made had been closed. Subsequent attempts made by the City to contact Enterprise both by telephone and by site visits were unsuccessful in making contact with Enterprise. On May 27, 2010 a package was received by the City which contained paperwork detailing the Chapter 7 Bankruptcy filing made on May 22, 2010 by Enterprise in the United States Bankruptcy Court for the Southern District of Ohio Eastern Division. This legislation is to formally dissolve the Agreement.
As of the most recent Tax Incentive Review Council (TIRC) review on August 18, 2009, Enterprise had exceeded their real property investment goal of $2.4 million with a reported $8.12 million investment (338% attainment), had exceeded their personal property investment goal of $160,000 with a reported $7.79 million investment (4,869% attainment), but had not met their job retention goal of 98 jobs with a reported 85 jobs (87% attainment), and had not met their new job creation goal of 21 jobs with a reported 3 new jobs (14% attainment). The TIRC recommended that the City request from Enterprise a written plan regarding the attainment of the job retention and creation goals of the Agreement with which Enterprise complied.
If the Agreement is dissolved, 2008 will have been the final tax year for any possible incentives and the City will not seek repayment of any taxes which may have been exempted from prior years. This legislation is presented as an emergency measure in order for the dissolution to be in effect prior to the 2010 TIRC.
FISCAL IMPACT: No funding is required for this legislation.
Title
To dissolve the Enterprise Zone Agreement with Columbus Wood Products, LLC, Continental Millworks Company, LLC, Nacht Holdings, LLC, and 1800 Fifth Ave. Holdings, LLC; to direct the Director of the Department of Development to notify as necessary the local and state tax authorities; and to declare an emergency.
Body
WHEREAS, Columbus City Council approved an Enterprise Zone Agreement (EZA) with Columbus Wood Products, LLC, Continental Millworks Company, LLC, Nacht Holdings, LLC, and 1800 Fifth Ave. Holdings, LLC (Enterprise) by Ordinance Number 1082-2005 on June 20, 2005, entered into and effective August 2, 2005 (EZA# 023-05-06); and
WHEREAS, the EZA grants Enterprise a 65%/7-Year abatement on real and personal property investment; and
WHEREAS, the EZA requires Enterprise to invest $2.4 million in real property improvements, $160,000 in personal property, create 21 new full-time jobs, and retain 98 full-time jobs at its 1800 E. Fifth Avenue facility; and
WHEREAS, the EZA was subsequently authorized by Council to be amended for the first time by Ordinance Number 1551-2008, passed October 20, 2008, effective April 20, 2009, and was again subsequently authorized by Council to be amended for the second time by Ordinance Number 0614-2009, passed on May 11, 2009, effective January 1, 2009; and
WHEREAS, Enterprise has fulfilled the real and personal property investment terms but has not fulfilled the job retention and creation terms of their EZA but has complied with the request of the Tax Incentive Review Council to provide a written job creation plan; and
WHEREAS, the City has received notice of the Chapter 7 Bankruptcy filing by Enterprise; and
WHEREAS, the City desires to dissolve the EZA and end the possibility of Enterprise receiving tax incentives as a result of this project as of December 31, 2008; and
WHEREAS, an emergency exists in the usual daily operation of the Department of Development, in that it is immediately necessary to take action on these agreements in order for the respective dissolutions to be in effect prior to the 2010 TIRC, all for the preservation of the public health, property, safety and welfare; NOW, THEREFORE
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1. That Columbus City Council hereby dissolves the Columbus Wood Products, LLC, Continental Millworks Company, LLC, Nacht Holdings, LLC, and 1800 Fifth Ave. Holdings, LLC Enterprise Zone Agreement as of December 31, 2008, with 2008 as the final tax year for the exemptions.
Section 2. That the Director of Development is hereby directed to notify the necessary local and state agencies of any changes to the Columbus Wood Products, LLC, Continental Millworks Company, LLC, Nacht Holdings, LLC, and 1800 Fifth Ave. Holdings, LLC Enterprise Zone Agreement.
Section 3. For the reasons stated in the preamble hereto, which is made a part hereof, this Ordinance is 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 (10) days after passage if the Mayor neither approves nor vetoes this Ordinance.