Explanation
BACKGROUND: Columbus City Council, by Ordinance 1372-2006, passed August 2, 2006, authorized the City to enter into a Job Creation Tax Credit Agreement (the Agreement) with Action Group, Inc. (Enterprise) for sixty percent (60%) for a period of six (6) years in consideration of a $1.3 million investment in machinery and equipment and for the retention of 69 full-time permanent jobs and the creation of 25 full-time permanent jobs related to property at 411 Reynoldsburg-New Albany Road within the City of Columbus (Project). The Agreement was made and entered into to be effective March 30, 2007.
As per a letter dated June 10, 2011, Enterprise requested to withdraw from the Agreement due to low employment numbers which were below the retained jobs for the second consecutive year as per the Agreement, and Enterprise does not foresee additional job growth in the future. As the Agreement is now out of compliance and both the City and Enterprise have agreed to dissolve the Agreement.
This legislation is presented as an emergency measure.
FISCAL IMPACT: No funding is required for this legislation.
Title
To authorize the Director of the Department of Development to dissolve the Job Creation Tax Credit Agreement with Action Group, Inc.; 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, the Columbus City Council approved the Job Creation Tax Credit Agreement with Action Group, Inc. (Agreement) on August 2, 2006 by Ordinance 1372-06 and entered into effective March 30, 2007; and
WHEREAS, the Agreement grants Action Group, Inc a 60%/6-Year Job Creation Tax Credit; and
WHEREAS, the Agreement requires Action Group, Inc. to invest $1.3 million in real property, improvements, machinery and equipment and to retain 69 full-time permanent jobs and create 25 new full-time permanent jobs at the facility at 411 Reynoldsburg-New Albany Road; and
WHEREAS, an analysis of the Report Year 2010 Annual Report submitted to the City by Enterprise during the most recent reporting cycle indicated that the Project had not retained the 69 full-time permanent employees nor has the project created the 25 new full-time positions within the parameters of the Job Creation Tax Credit Agreement; and
WHEREAS, Action Group, Inc., by written communication, has indicated that it will not be able to meet the employment requirements of the Job Creation Tax Credit Agreement due to market conditions and changed in the economy; and
WHEREAS, the project is now out of compliance with the Agreement and as the City and Enterprise have agreed to dissolve 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 in order for this amendment to be dissolved, 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 Columbus City Council hereby dissolves the Action Group, Inc. Job Creation Tax Credit Agreement as of December 31, 2010, with 2010 being the final reporting year.
Section 2. That the Director of Development is hereby directed to notify the necessary local and state agencies of any changes to the Action Group, Inc. 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.