Explanation
BACKGROUND: The Tax Incentive Review Council (the "TIRC") recommended on August 25, 2006, that the City should amend the Enterprise Zone Agreement with COMTEX to allow subcontracted drivers to count towards the Agreement's job and payroll goals if the jobs are full-time and serve the COMTEX facility exclusively and providing that COMTEX supplies the City with detailed annual information on the jobs, earnings and City income tax withheld. The TIRC also recommended that the City should meet with COMTEX to negotiate a realistic payroll goal and amend the EZA accordingly.
Columbus City Council approved the Enterprise Zone Agreement with COMTEX by Ord. No. 0464-02, adopted on April 8, 2002 and the Enterprise Zone Agreement with COMTEX was entered into effective August 14, 2002 (the "EZA"). COMTEX is also known as Central Ohio Medical Textiles. It is a joint venture of OhioHealth and Mount Carmel to provide clean linens for hospital use. COMTEX uses state-of-the-art automated equipment to efficiently collect, launder and deliver hospital textiles. COMTEX is located at 575 Harmon Avenue, in the WestEdge Business Center. The EZA grants a 75%/10-yr abatement on real property improvements and new personal property (2004-2013). COMTEX agreed to invest $6.2 million to build a new 67,700 square foot facility and $5.4 million to acquire new personal property. The company also agreed to retain 52 jobs and create new 79 jobs with an annual payroll of $2,078,492. The job creation was supposed to be attained by the end of 2005.
COMTEX has satisfied the real and personal property investment goal and has satisfied the job retention goal. As of August 2006, COMTEX had created 55 jobs, 24 jobs short of the goal (70% attainment). However, subcontractors employ approximately 10 drivers whose work serves COMTEX exclusively. In addition, several facility maintenance people are employed by a subcontractor and at least one may work full-time exclusively at COMTEX. The jobs of subcontractors are not currently counted toward the EZA job and payroll goals. Also, as recommended by the TIRC, Development Department staff met with COMTEX and identified $1.35 million as a payroll (annual) goal that is more realistic than the initial goal of $2,078,492.
FISCAL IMPACT: No funding is required for this legislation.
Title
To authorize the Director of the Department of Development to amend the Enterprise Zone Agreement with COMTEX to reduce the goal for annual payroll creation to $1.35 million and to allow the jobs of subcontracted drivers and facility maintenance workers to be counted towards the job and payroll goals provided that the jobs are full-time to serve the COMTEX facility and providing that COMTEX provides the City with detailed annual information on the jobs, earnings and City income tax withheld. ; and to declare an emergency.
Body
WHEREAS, the Columbus City Council approved an Enterprise Zone Agreement with COMTEX by Ord. No. 0464-02, adopted on April 8, 2002 and the Enterprise Zone Agreement with COMTEX was entered into effective August 14, 2002 (the "EZA"); and
WHEREAS, the EZA provides for a 75%/10-yr abatement on real property improvements and new personal property; and
WHEREAS, COMTEX agreed to invest $6.2 million in real property improvements and $5.4 million in new personal property, to retain 52 jobs and create new 79 jobs with new jobs having an annual payroll of $2,078,492; and
WHEREAS, COMTEX has satisfied its real and personal property investment goals and has satisfied the job retention goal, but is short on job creation and in the annual payroll from job creation; and
WHEREAS, the Tax Incentive Review Council (the "TIRC") has recommended that the jobs of subcontracted drivers be allowed to count towards the job creation and payroll goals providing their work serves the COMTEX project exclusively and COMTEX provides the City with annual job, payroll and City income information, and the City desires to modify the EZA accordingly; and
WHEREAS, the TIRC also recommended that the City negotiate with COMTEX a payroll goal that is more realistic than the amount ($2,078,492) in the existing EZA, and the City has met with COMTEX and has determined that $1.35 million is a realistic goal for the annual payroll from created jobs and desires to amend the EZA accordingly; and
WHEREAS, the City also desires to allow COMTEX to allow facility maintenance workers to be counted toward the job creation and payroll goals, provided that their work serves the COMTEX project exclusively and COMTEX provides the City with annual job, payroll; NOW THEREFORE 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. To authorize the Director of the Department of Development to amend the Enterprise Zone Agreement with COMTEX to reduce the goal for the annual payroll creation to $1.35 million and to allow the jobs of subcontracted drivers and facility maintenance workers to be counted towards the job and payroll goals provided that the jobs are full-time in service to the COMTEX facility and providing that COMTEX provides the City with detailed annual information on the jobs, earnings and City income tax withheld.
Section 2. 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. That this ordinance shall take effect and be in force from and after the earliest period allowed by law.