Explanation
Background: The need exists to enter into an Enterprise Zone and Jobs Creation Tax Credit Agreement with Core Molding Technologies, Inc. Ohio Enterprise Zone law (O.R.C. Section 5709.62) and Jobs Creation Tax Credit law (O.R.C. Section 718.08) require the City to enter into a Council-approved agreement with a participating company.
Core Molding Technologies, Inc. is a manufacturing company that employs 1,094 employees in the United States and Mexico. The company produces reinforced plastic molded products and sheet molding compound. Core Molding Technologies, Inc. is headquartered in Columbus at 800 Manor Park Drive where truck hoods and plastic products have been manufactured since 1980. The company also has plants located in Gaffney, South Carolina and Matamoros, Mexico. Core Molding's customers include International, Freightliner, Peterbilt and Yamaha.
Core Molding Technologies, Inc. is proposing an expansion to launch new product lines of hoods and roofs for over the road semi-trucks. If Columbus is selected as the site for the expansion, the company would make a total investment of $4.7 million, retain 380 jobs and create 52 new positions. Other locations in contention for this expansion project are Ottawa, Canada, South Carolina and Mexico.
The Columbus Department of Development is proposing a 10-year, 75% Enterprise Zone incentive on real property improvements and personal property under the City's Enterprise Zone Program and a 7-year, 60% Jobs Creation Tax Credit. The State of Ohio Tax Credit Authority has offered Core Molding Technologies, Inc. a 60%/5 year State jobs tax credit to attract the expansion project to locate in Columbus.
This legislation is being submitted as an emergency in order to allow Core Molding Technologies, Inc. to make a decision on the location of the proposed project as quickly as possible.
Fiscal Impact: No funding is required for this legislation.
Title
To authorize the Director of the Department of Development to enter into a 10 year/75% Enterprise Zone Agreement on real property improvements and personal property and a 60%/7 year Jobs Creation Tax Credit Agreement with Core Molding Technologies, Inc. in consideration of Core Molding Technologies, Inc.'s proposed investment of $4.7 million, retention of 380 full-time jobs and the creation of 52 permanent full-time jobs; and to declare an emergency.
Body
WHEREAS, the City has established an Enterprise Zone pursuant to Sections 5709.61 to 5709.66 of the Ohio Revised Code ("O.R.C.") which has been certified by the Director of the Department of Development of the State of Ohio as required by the O.R.C.; and
WHEREAS, Core Molding Technologies, Inc. has submitted a proposal to the City as required by, but not limited to, Section 5709.62, O. R. C. including all of the information required by Section 5709.62; and
WHEREAS, pursuant to Section 122.17 of the Ohio Revised Code, the State of Ohio is authorized to establish the Tax Credit Authority and to execute agreements with taxpayers of the State of Ohio for the purpose of granting these taxpayers job creation tax credits against their corporate franchise or income tax, which tax credits are provided to create new jobs in the State of Ohio; and
WHEREAS, legislative approval is contingent upon a Jobs Creation Tax Credit being granted by the State of Ohio; and
WHEREAS, pursuant to Section 718.08 of the Ohio Revised Code a municipal corporation is authorized to grant local income tax credits to taxpayers who have received tax credits from the State; and
WHEREAS, Core Molding Technologies, Inc. proposes to invest $4.7 million in real property improvements and personal property, retain 380 full-time positions and create 52 new jobs, and is located within Columbus Enterprise Zone and is qualified for consideration of both Enterprise Zone and Jobs Creation Tax Credit incentives; and
WHEREAS, Core Molding Technologies, Inc. has indicated that tax incentives are crucial to its decision to locate the aforementioned expansion at the Columbus site; and
WHEREAS, the Columbus Department of Development has investigated Core Molding Technologies, Inc.'s proposal and application for tax incentives and has determined that Core Molding Technologies, Inc. has the financial ability to undertake the proposed project in Columbus; and
WHEREAS, it is required by law to enter into a formal, binding agreement in order to provide and obtain both Enterprise Zone and Jobs Creation Tax Credit tax incentives in the State and City; and
WHEREAS, the City desires to enter into such agreements with Core Molding Technologies, Inc. to foster economic growth; and
WHEREAS, an emergency exists in the usual daily operation of the Columbus Department of Development in that it is immediately necessary to enter into agreements with Core Molding Technologies, Inc. all for the preservation of public health, peace, property and safety; now, therefore,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1. That the Director of the Department of Development be and is hereby authorized to enter into an Enterprise Zone Agreement and Jobs Creation Tax Credit Agreement with Core Molding Technologies, Inc., and to provide therewith an exemption of 75% on real property improvements and the value of personal property investments for a term of ten (10) taxable years and a 60% Jobs Creation Tax Credit, for a term of seven (7) taxable years, in association with Core Molding Technologies, Inc.'s proposed expansion investment.
Section 2. That the City of Columbus Enterprise Zone Agreement and the Jobs Creation Tax Credit Agreement, shall be signed by Core Molding Technologies, Inc. within ninety (90) days of passage of this ordinance, or this ordinance and the abatements and credits authorized herein are null and void.
Section 3. 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 passage if the Mayor neither approves nor vetoes the same.