Explanation
BACKGROUND: The need exists to amend Ordinance 1343-2006. This ordinance was approved by Columbus City Council on July 31, 2006. The ordinance authorized the Director of the Department of Development to enter into a Columbus Downtown Office Incentive Agreement of fifty percent (50%) for a period of eight (8) years with Hexion Specialty Chemicals, Inc. related to the expansion of its corporate office and the creation of new jobs at 180 E. Broad Street. An amendment is now required to change the name of the company to Momentive Specialty Chemicals, Inc. (Momentive). The start date of the incentive is being amended from calendar year 2006 to calendar year 2011.
Momentive (formerly Hexion Specialty Chemicals, Inc.) is headquartered in downtown Columbus at 180 E. Broad St., where it leases seven floors of office space. The company is the largest thermosetting resins maker in the world. Thermosets improve product qualities such as: adhesion, gloss, heat resistance, etc., to many paints and adhesive products. Momentive merged with Momentive Performance Materials at the end of 2010 through an acquisition by Apollo Advisors LP. The merger will create one of the world's largest specialty chemical companies with annualized sales of approximately $7.5 million and 10,000 employees. This merger resulted in the change of name for Hexion Specialty Chemicals, Inc. to Momentive. As a result of the merger, synergies can be created through the consolidation of corporate office functions and the scope of the project has been increased.
Additional changes to the project scope are as follows: The original commitment involved 155 retained and 145 new full-time permanent positions. The retained positions now total 243 jobs and a total of 89 new full-time permanent positions will be created. Momentive will make an additional investment in leasehold improvements of $1.36 million. The start date of the incentive will change from calendar year 2006 to calendar year 2011. The original payroll estimates were for $25 million by 2008 and will change to approximately $39.7 million by year end 2013.
This legislation is requested to be considered as an emergency in order to allow Momentive to begin investing and creating jobs as quickly as possible.
FISCAL IMPACT: No funding is required for this legislation.
Title
To amend Ordinance 1346-2006, passed by Columbus City Council on July 31, 2006, for the purpose of changing the company name from Hexion Specialty Chemicals, Inc. to Momentive Specialty Chemicals, Inc. and change the start date of the incentive from calendar year 2006 to calendar year 2011; and to declare an emergency.
Body
WHEREAS, the City desires to increase employment opportunities and encourage the establishment of new jobs in the City in order to improve the overall economic climate of the City and its citizens; and
WHEREAS, the Department of Development has received a new application for the Columbus Downtown Office Incentive Program from Momentive; and
WHEREAS, contingent on the City granting an amendment to ordinance number 1343-2006, Momentive will expand its corporate headquarters located at 180 E. Broad Street, Columbus, Ohio; and
WHEREAS, in connection with the Project, Momentive plans to make a new investment equal to $1.36 million; and
WHEREAS, in connection with the Project, Momentive plans to increase employment levels from 243 retained and add 89 new full-time employees at the project site; and
WHEREAS, on July 31, 2006, Columbus City Council passed Ordinance Number 1343-2006 approving an eight (8) year, fifty percent (50%) Columbus Downtown Office Incentive in connection with the project; and
WHEREAS, an emergency exists in the usual daily operation of the Columbus Department of Development in that it is immediately necessary to seek an amendment from Columbus City Council for Ordinance Number 1343-2006 to change the company name from Hexion Specialty Chemicals, Inc. to Momentive Specialty Chemicals, Inc. and to amend the start date from calendar year 2006 to calendar year 2011, thereby preserving the public health, peace, property and safety; NOW THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1. That Ordinance 1343-2006 is hereby amended to change the company name from Hexion Specialty Chemicals, Inc. to Momentive Specialty Chemicals, Inc. and to change the start date to calendar year 2011.
Section 2. That Columbus City Council hereby finds and determines that the project meets all the requirements of the City Act.
Section 3. That the City of Columbus Downtown Office Incentive Agreement is signed by Momentive within 90 days of passage of this ordinance, or this ordinance and the credit herein shall be null and void.
Section 4. 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.