Explanation
BACKGROUND: The 2010 Columbus Tax Incentive Review Council (TIRC) reviewed the 1 Spring LLC & Barrio Ltd. Enterprise Zone project on August 19, 2010, and recommended that the City should consider dissolving the Enterprise Zone Agreement (EZA #023-09-01, hereinafter "Agreement") between the City and 1 Spring LLC & Barrio Ltd. (hereinafter "Enterprise"). The City concurs with the recommendation of the TIRC.
Columbus City Council approved the Agreement by Ordinance No. 1623-2008, adopted October 20, 2008. The Agreement was entered into effective January 5, 2009 and granted a 75%/10-Year abatement on real property improvements with a commitment of $170,000 in real property improvements and the creation of 15 new permanent full-time jobs with a payroll of $640,000 related to the renovation of a 4,619 square foot restaurant facility on parcel number 010-196519 located at 185 North High Street within the City of Columbus Enterprise Zone (Zone #023). The project was expected to begin January 2009 and all real property improvements were expected to be completed by December 31, 2009. Five (5) of the new full-time jobs were to be created by the end of the first year the Agreement was in effect (year end 2009), five (5) more by year end 2010, and five (5) more by year end 2011. No real property tax exemption was to neither commence after 2010 nor extend beyond 2019.
As of the TIRC review on August 19, 2010, the City reported that Enterprise had not submitted their annual report. Enterprise missed the March 31, 2010 reporting deadline. A certified letter was sent to Enterprise on April 19, 2010 giving 30 day notice to report or the Agreement would be dissolved - this letter was returned on May 14, 2010 as "unclaimed." A "Report or Dissolve" memo was prepared and hand-delivered to Enterprise on or about May 17, 2010. City staff met with Enterprise on May 21, 2010 - Enterprise was to decide whether or not to continue with the abatement. No further reporting or communication was received from Enterprise prior to the TIRC. The TIRC found Enterprise to be out of compliance.
The TIRC recommended that a letter be sent to Enterprise via certified mail requesting full reporting compliance within 30 days of receipt of the letter or Agreement would be dissolved. The 30-day window for response by Enterprise was October 12, 2010. Enterprise did not respond.
As application has not been made through the submittal of the Form DTE-24, Enterprise has derived no benefit from the abatement and thus there is no repayment of exempted or credited taxes from prior years to be sought by the City.
This legislation is presented as an emergency measure in order to meet the deadline under state law for City Council to vote on TIRC recommendations.
FISCAL IMPACT: No funding is required for this legislation.
Title
To dissolve the Enterprise Zone Agreement between the City of Columbus and 1 Spring LLC & Barrio Ltd.; 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 an Enterprise Zone Agreement ("EZA") with 1 Spring LLC & Barrio Ltd. ("Enterprise") by Ordinance No. 1623-2008 on October 20, 2008; and
WHEREAS, the EZA grants Enterprise a 75%/10-Year abatement on real property improvements; and
WHEREAS, the EZA requires Enterprise to invest $170,000 in real property improvements, and create 15 new full-time jobs with an annual payroll of $640,000 related to the renovation of a 4,619 square foot restaurant facility at 185 North High Street (parcel number 010-196519); and
WHEREAS, as per the review by the 2010 Columbus Tax Incentive Review Council (TIRC) on August 19, 2010, it was reported that Enterprise had not submitted the annual report for Report Year 2009; and
WHEREAS, the TIRC found Enterprise to be in a state of non-compliance in that Enterprise had missed the reporting deadline and had been unresponsive in follow-up requests for reporting; and
WHEREAS, the TIRC recommended that a letter be sent to Enterprise via certified mail requesting full reporting compliance within 30 days of receipt of the letter or the EZA would be dissolved. The 30-day window for response by Enterprise was October 12, 2010; and
WHEREAS, as Enterprise did not respond, the City concurs with the TIRC recommendation and desires to dissolve the EZA as of December 31, 2009; 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 Columbus City Council hereby dissolves the 1 Spring LLC & Barrio Ltd. Enterprise Zone Agreement as of December 31, 2009, with 2009 as the final tax year for the exemptions.
Section 2. That the Director of Development is hereby directed to notify the necessary local and state agencies of any changes to the 1 Spring LLC & Barrio Ltd. Enterprise Zone 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.