Explanation
BACKGROUND: Columbus City Council (COUNCIL), by Ordinance No. 1686-2014, passed July 28, 2014, authorized the City of Columbus (CITY) to enter into an Enterprise Zone Agreement (the AGREEMENT) with Clarus Partners, LLC and Clarus Solutions, LLC (ENTERPRISE) for a tax abatement of seventy-five percent (75%) for a period of ten (10) consecutive taxable years in consideration of a proposed $1.5 million investment in real property improvements, the creation of thirty-three (33) new full-time permanent positions with an associated annual payroll of approximately $1,745,600, and the relocation and retention of thirty-nine existing (39) full-time jobs that were currently within the CITY with an associated retained payroll of approximately $3,232,200 related to the renovation of an existing approximately 20,000 square-foot building at 1233 Dublin Road on parcel number 010-129600 (the PROJECT SITE), in Columbus Ohio, within the Columbus City School District and within the City of Columbus Enterprise Zone (Zone 023). The AGREEMENT was made and entered into effective November 25, 2014 (EZA #023-14-100).
The AGREEMENT was subsequently authorized by COUNCIL to be amended for the first time to add Clarus Ventures LLC as OWNER by Ordinance No. 0614-2017, passed March 27, 2017, executed June 23, 2017 and effective as of the day and year first written in the AGREEMENT and as of that time the abatement was active and running from 2016 through 2025.
Based on a recommendation from the 2020 Tax Incentive Review Council (“TIRC”) to amend the AGREEMENT to add any needed additional Clarus-related job creating entities to the AGREEMENT and also to establish a suitable and attainable end-of-reporting-year new job commitment, COUNCIL, by Resolution 0133X-2020, passed September 21, 2020, accepted the written recommendations presented by the 2020 TIRC. COUNCIL, by Ordinance 0289-2021, passed on July 19, 2021, then authorized the Director of Development to amend the AGREEMENT for the second time to comply with the 2020 TIRC recommendation but ENTERPRISE failed to sign the amendment.
In a letter dated January 3, 2022, and received that same day by email, the CITY was advised by Plymouth Industrial REIT, Inc. and its affiliate, Plymouth Dublin Office LLC (together, “BUYER”) that the BUYER had acquired the PROJECT SITE from Clarus Ventures, LLC on December 1, 2021 with the letter also formally requesting to “dissolve the Enterprise Zone Agreement relating to 1233 Dublin Road, Columbus, Ohio.”
This legislation is presented as an emergency measure in order for this dissolution to be legislated in the most expedient manner as possible so that this dissolution of the AGREEMENT can be reported to the necessary local and state agencies prior to the end of the annual reporting cycle for Report Year 2021.
FISCAL IMPACT: No funding is required for this legislation.
Title
To dissolve the Enterprise Zone Agreement with Clarus Ventures LLC, Clarus Solutions, LLC and Clarus Partners, LLC (ENTERPRISE), and 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 City of Columbus (CITY) entered into an Enterprise Zone Agreement (the “AGREEMENT”) with Clarus Partners, LLC and Clarus Solutions, LLC (ENTERPRISE), approved by Columbus City Council (COUNCIL) on July 28, 2014 by Ordinance No. 1686-2014 with this AGREEMENT made and entered into effective November 25, 2014; and
WHEREAS, the AGREEMENT granted a 75%/10-Year abatement on real property improvements; and
WHEREAS, the incentive was granted in consideration of a proposed $1.5 million investment in real property improvements, the creation of thirty-three (33) new full-time permanent positions with an annual payroll of approximately $1,745 and the relocation and retention of thirty-nine existing (39) full-time jobs that were currently within the CITY with an associated retained payroll of approximately $3,232,200 related to the renovation of an existing approximately 20,000 square-foot building at 1233 Dublin Road on parcel number 010-129600 (the PROJECT SITE), in Columbus Ohio, within the Columbus City School District and within the City of Columbus Enterprise Zone (Zone 023); and
WHEREAS, the AGREEMENT was subsequently authorized by COUNCIL to be amended for the first time to add Clarus Ventures LLC as OWNER by Ordinance No. 0614-2017, passed March 27, 2017, executed June 23, 2017 and effective as of the day and year first written in the AGREEMENT and as of that time the abatement was active and running from 2016 through 2025; and
WHEREAS, based on a recommendation from the 2020 Tax Incentive Review Council (“TIRC”) to amend the AGREEMENT to add any needed additional Clarus-related job creating entities to the AGREEMENT and also to establish a suitable and attainable end-of-reporting-year new job commitment, COUNCIL, by Resolution 0133X-2020, passed September 21, 2020, accepted the written recommendations presented by the 2020 TIRC. COUNCIL, by Ordinance 0289-2021, passed on July 19, 2021, then authorized the Director of Development to amend the AGREEMENT for the second time to comply with the 2020 TIRC recommendation but ENTERPRISE failed to sign the amendment; and
WHEREAS, in a letter dated January 3, 2022, and received that same day by email, the CITY was advised by Plymouth Industrial REIT, Inc. and its affiliate, Plymouth Dublin Office LLC (together, “BUYER”) that the BUYER had acquired the PROJECT SITE from Clarus Ventures, LLC on December 1, 2021 with the letter also formally requesting to “dissolve the Enterprise Zone Agreement relating to 1233 Dublin Road, Columbus, Ohio;” 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 dissolution to be legislated in the most expedient manner as possible so that this dissolution of the AGREEMENT can be reported to the necessary local and state agencies prior to the end of the annual reporting cycle for Report Year 2021, 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 Clarus Ventures LLC, Clarus Solutions, LLC and Clarus Partners, LLC Enterprise Zone Agreement (EZA# 023-14-100) as of January 1, 2021, which was to apply a 75%/10-year real property tax abatement to the value of real property improvements made to parcel number 010-129600 within the City of Columbus Enterprise Zone.
SECTION 2. That the Director of Development is hereby directed to notify the necessary local and state agencies of any changes to the Clarus Ventures LLC, Clarus Solutions, LLC and Clarus Partners, LLC 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.