Explanation
BACKGROUND: The Tax Incentive Review Council (the "TIRC") recommended on August 25, 2006, that the City should seek recovery of a percentage of the 2005 personal property taxes that were exempted under the Enterprise Zone Agreement with Roanoke Furniture ("the EZA"). This legislation follows the TIRC's recommendation and authorizes the Director of Development to seek recovery of the exempted taxes in proportion to the deficit in the number of jobs retained by Roanoke Furniture ("Roanoke") at the project site as of December 31, 2005. Payment will be sought through the assistance of the Franklin County Auditor and the amount paid will be distributed in the same manner as personal property tax revenue.
Columbus City Council approved the EZA with Roanoke by Ord. No. 2291-99 on October 4, 1999. Roanoke is a division of American Signature Inc., the latter being a wholly owned subsidiary of the Schottenstein Stores Corporation. The tax incentive was a 50%/5 year abatement (2001-2005) on new inventory at the project site, with 2005 as the final tax year of the abatement. The project site is at 4030 E. 5th Avenue. 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. As of December 31, 2005, Roanoke had satisfied the real and personal property investment goals. The number of jobs at the Roanoke project site fell from 110 in 2000 to 42 jobs in July of 2004. As a result of the absence of job creation and the low job retention, the TIRC recommended in 2004 that the City amend the EZA. On November 1, 2004, Columbus City Council adopted Ord. No. 1922-2004 to amend the EZA by eliminating the job creation goal and requiring Roanoke to attain at least 75% of the job retention goal by December 31, 2005 (i.e, 56 jobs) or else repay a share of the 2005 savings from the tax exemption, proportional to the deficit in the number of retained jobs.
Roanoke reported having a total of 38 retained jobs as of December 31, 2005, compared to the required minimum of 56 jobs. This equates to a 32% deficit. Thus, we will seek recovery of 32% of the amount of Roanoke's 2005 exempted personal property taxes. The exact amount of the 2005 exempted personal property taxes will be identified with the assistance of the Franklin County Auditor's Office. The amount that will be recovered is anticipated to be in the range of $3,500 to $3,800.
FISCAL IMPACT: No funding is required for this legislation.
Title
To authorize the Director of the Department of Development to seek the recovery of a percentage of the 2005 personal property taxes exempted under the Roanoke Furniture Enterprise Zone Agreement in proportion to the deficit in the number of jobs retained by Roanoke Furniture at the project site as of December 31, 2005; and to declare an emergency.
Body
WHEREAS, Columbus City Council approved an Enterprise Zone Agreement with Roanoke Furniture ("EZA") on October 4, 1999 by Ord. No. 2291-99; and
WHEREAS, the EZA granted a 50%/5 year abatement (2001-2005) on inventory; and
WHEREAS, the EZA required Roanoke Furniture to invest a total of $2.2 million, create 20 new jobs and retain 75 jobs; and
WHEREAS, as of July 2004 the project had retained only 42 jobs and had not created any jobs; and
WHEREAS, based on a recommendation from the Tax Incentive Review Council ("TIRC"), Columbus City Council adopted Ord. No. 1922-2004 on November 1, 2004, to amend the EZA by eliminating the job creation goal and requiring Roanoke to attain at least 75% of the job retention goal by December 31, 2005 (i.e, 56 jobs) or else repay a share of the 2005 savings from the tax exemption, proportional to the deficit in the number of retained jobs; and
WHEREAS, as of December 31, 2005, Roanoke had 38 retained jobs, which equates to a 32% deficit relative to the minimum required number of 56 jobs; and
WHEREAS, the TIRC recommended on August 25, 2006, that the City should seek to recover a part of the 2005 personal property taxes that were exempted under the EZA, in proportion to the 2005 deficit in the number of retained jobs; and
WHEREAS, the City desires to follow the 2006 TIRC recommendation to recover a part of the 2005 personal property taxes exempted under the EZA, in proportion to the 2005 deficit in the number of retained jobs, and desires the assistance of the Franklin County Auditor in effecting the recovery, and for the recovered amount to be distributed in the same manner as personal property tax revenue; 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 the TIRC's recommendations to comply with the sixty (60) day deadline for City Council action imposed by imposed by R.C. Section 5709.85 and to preserve the public health, property, safety and welfare; NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1. That the Director of Development is hereby authorized to seek to recover a part of the 2005 personal property taxes exempted under the Roanoke Furniture Enterprise Zone Agreement, in proportion to the deficit in the number of jobs retained by Roanoke Furniture ("Roanoke") at the project site as of December 31, 2005, and to request the assistance of the Franklin County Auditor in the recovery and in distributing the recovered amount it in the same manner as personal property tax revenue.
Section 2. 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.