Explanation
BACKGROUND: The City of Columbus entered into a Job Creation Tax Credit Agreement (hereinafter "Agreement") with Citi Fund Services Ohio, Inc., Citicorp North America, Inc., Citigroup Technology, Inc. and Citigroup Management Corp. (together also referred to as "Grantee") effective May 11, 2012. Columbus City Council approved the Agreement by Ordinance 0080-2011, adopted January 31, 2011, as amended by Ordinance 0803-2011, adopted June 6, 2011 and Ordinance 1388-2011, adopted September 12, 2011, and granted a non-refundable tax credit (the "City Tax Credit") allowed against the tax imposed under Section 361.09 of the Columbus City Codes (the "City Tax Credit") of sixty-five percent (65%) of the new income tax revenue received by the City for a calendar year from New Employees, as that term was defined in Section 4 of the Agreement, commencing January 1, 2011 and for six (6) consecutive years thereafter based on an investment of approximately $2.8 million, including $2.25 million in new machinery and equipment, and $610,000 in renovations and leasehold improvements at 3435 Stelzer Road in Columbus, the creation of 300 new permanent full-time positions and the retention of 715 full-time employees.
As the term was set to begin January 1, 2011 but the Agreement was not executed until May 15, 2012, annual reporting documents for Report Year (RY) 2011 and RY 2012 were sent to Grantee on April 1, 2013 but no annual report documents were submitted. Annual report materials for RY 2013 were sent to Grantee on April 2, 2013 with a request for full reporting for all years to-date. No annual report submissions have been received by the City. A letter dated April 11, 2014 was received by the City via regular mail on April 18, 2014 from the Corporate Tax Department at Citigroup, Inc. indicating that Grantee has requested that their Job Creation Tax Credit agreement with the State of Ohio be terminated and with their letter to the City they indicated that they "are voluntarily requesting" that the City terminate the Agreement and that they "hereby waive the rights to any unissued tax credits pursuant to the Agreement." This legislation is to dissolve the Agreement between the City of Columbus and Citi Fund Services Ohio, Inc., Citicorp North America, Inc., Citigroup Technology, Inc. and Citigroup Management Corp.
This legislation is presented as an emergency measure so that the dissolution of the Agreement can be reported to the necessary local and state agencies in as expeditious a manner as possible.
FISCAL IMPACT: No funding is required for this legislation.
Title
To dissolve the Job Creation Tax Credit Agreement between the City of Columbus and Citi Fund Services Ohio, Inc. et al; 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 a Job Creation Tax Creation Agreement ("Agreement") with Citi Fund Services Ohio, Inc., Citicorp North America, Inc., Citigroup Technology, Inc. and Citigroup Management Corp. (together also referred to as "Grantee") by Ordinance 0080-2011, adopted January 31, 2011, as amended by Ordinance 0803-2011, adapted June 6, 2011 and Ordinance 1388-2011, adapted September 12, 2011; and
WHEREAS, the Agreement grants a non-refundable tax credit (the "City Tax Credit") allowed against the tax imposed under Section 361.09 of the Columbus City Codes (the "City Tax Credit") of sixty-five percent (65%) of the new income tax revenue received by the City for a calendar year from New Employees commencing January 1, 2011 and for six (6) consecutive years thereafter; and
WHEREAS, in the Agreement, Grantee commits to making an investment of approximately $2.8 million, including $2.25 million in new machinery and equipment, and $610,000 in renovations and leasehold improvements at 3435 Stelzer Road in Columbus, the creation of 300 new permanent full-time positions and the retention of 715 full-time employees; and
WHEREAS, as the term was set to begin January 1, 2011 but the Agreement was not executed until May 15, 2012, annual reporting documents for Report Year (RY) 2011 and RY 2012 were sent to GRANTEE on April 1, 2013 but no annual report documents were submitted; and
WHEREAS, annual report materials for RY 2013 were sent to Grantee on April 2, 2013 with a request for full reporting for all years to-date; and
WHEREAS, an annual report submissions have been received by the City; and
WHEREAS, a letter dated April 11, 2014 was received by the City via regular mail on April 18, 2014 from the Corporate Tax Department at Citigroup, Inc., indicated that Grantee has requested that their Job Creation Tax Credit agreement with the State of Ohio be terminated and with their letter to the City they indicated that they "are voluntarily requesting" that the City terminate the Agreement and that they "hereby waive the rights to any unissued tax credits pursuant to the Agreement;" 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 this agreement so the dissolution of the Agreement can be reported to the necessary local and state agencies in as expeditious a manner as possible, in order 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 Columbus City Council hereby dissolves the Citi Fund Services Ohio, Inc., Citicorp North America, Inc., Citigroup Technology, Inc. and Citigroup Management Corp. Job Creation Tax Credit Agreement effective January 1, 2011 thereby effectively eliminating any remaining tax years for the incentive.
SECTION 2. That the Director of Development is hereby directed to notify the necessary local and state agencies of any changes to the Citi Fund Services Ohio, Inc., Citicorp North America, Inc., Citigroup Technology, Inc. and Citigroup Management Corp. Job Creation Tax Credit 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.