Explanation
BACKGROUND: The need exists to enter into a Job Creation Tax Credit Agreement with Sage Sustainable Electronics, 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 into a Council-approved agreement between the City and a participating company.
Sage Sustainable Electronics, LLC is a privately held company formed in April 2014, by co-founders Robert Houghton and Jill Vaske, respectively. The company is a start-up that will serve the information technology asset disposition ("ITAD") market on a national basis. The co-founders formed the company to find methods to extend the useful life of electronics equipment, thereby reducing materials placed into the waste system and/or landfills. The company will target large and medium business as well as consumers to provide logistics, data security, repair and refurbishing services, and then sell the refurbished electronics products to new owners. Robert and Jill have 16 years in the information technology industry and were the co-founders of Redemtech, the recycling division of Hilliard-based Micro Electronics Inc., which sold Redemtech to Englewood, Colorado-based Arrow Electronics Inc. Sage Sustainable Electronics, LLC plans to begin offering electronics refurbishing and buybacks to the public in January.
Sage Sustainable Electronics, LLC is proposing to invest approximately $300,000, which includes leasehold improvements, machinery, equipment, furniture and fixtures, to establish its national headquarters along with its Midwest operating facility in the City of Columbus, by leasing a 26,000 square foot mixed-used industrial distribution property located in the Northwest corridor. In addition, the company is proposing to create 52 new full-time permanent positions with an estimated annual payroll of approximately $3.24 million and retain 8 full-time associates (which will be relocated from the City of Dublin) with an estimated annual payroll of $858,500.
FISCAL IMPACT: No funding is required for this legislation.
Title
To authorize the Director of the Department of Development to enter into a Job Creation Tax Credit Agreement of sixty percent (60%) for a period of six (6) years with Sage Sustainable Electronics, LLC in consideration of the company's proposed total investment of $300,000.00 and the creation of 52 new full-time permanent positions.
Body
WHEREAS, pursuant to Section 718.15 of the Ohio Revised Code a municipal corporation is authorized to grant local income tax credits to taxpayers to foster job creation in the municipal corporation; and
WHEREAS, contingent on the City granting a Job Creation Tax Credit, Sage Sustainable Electronic, LLC will establish its national headquarters along with its Midwest operating facility by entering into a lease agreement on a mixed-used industrial distribution property consisting of approximately 26,000 square feet and invest roughly $300,000.00 in leasehold improvements, machinery, equipment, furniture and fixtures; and
WHEREAS, Sage Sustainable Electronics, LLC is proposing to create 52 new full-time permanent positions with an estimated annual payroll of approximately $3.24 million and retain 8 full-time jobs, increase job opportunities and strengthen the economy of the city; and
WHEREAS, receiving these tax credits from the City is a critical factor in Sage Sustainable Electronics, LLC's decision to go forward with the project in Columbus; and
WHERESAS, the City desires to increase employment opportunities and encourage the creation of new jobs in the City in order to improve the overall economic climate of the City and its citizens; and
WHEREAS, the City of Columbus desires to facilitate Sage Sustainable Electronics, LLC's growth at the project site; 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 City; (2) the project is economically sound and will benefit the people of the City by increasing opportunities for employment and strengthening the economy of the City; and (3) receiving the aforementioned tax credits is a critical factor in the decision by Sage Sustainable Electronics, LLC to go forward with the project.
SECTION 2. That the Director of the Department of Development is hereby authorized and directed to enter into and execute a Job Creation Tax Credit Agreement of sixty percent (60%) of the amount of personal income tax withheld on new employees for a term of six (6) years with Sage Sustainable Electronics, LLC.
SECTION 3. That the City of Columbus Job Creation Tax Credit Agreement is signed Sage Sustainable Electronics, LLC within 90 days of passage of this ordinance, or this ordinance and the credit herein shall be null and void.
SECTION 4. That this ordinance shall take effect and be in force from and after the earliest period allowed by law.