Explanation
BACKGROUND: The need exists to enter into a Jobs Creation Tax Credit Agreement with Rastra Ohio, Inc. (Rastra). The Ohio Tax Credit Legislation (Section 718.15 of the Ohio Revised Code) authorizing such agreements became effective January 14, 1993 and requires the City to enter a Council-approved agreement between the City and a participating company.
Rastra is a manufacturer that uses a revolutionary "green" building system for houses, apartments, commercial and industrial buildings. The company was established in Europe in the 1970's by an engineering firm headed by Karl Holik, the President of Rastra. A holding company located in Liechtenstein, owns the intellectual property rights to Rastra's building system. The North American subsidiary is headquartered in Scottsdale, Arizona. Rastra's patented Insulated Concrete Form panels are a proven, alternative building material that can be used in place of most types of conventional construction methods including wood framing, masonry block, steel frame, and prefab concrete. The material is derived from post-consumer plastics and is mixed with concrete. Rastra panels, used in Europe for 30 years and the United States for 10 years, significantly reduce energy consumption. The panels are seven times stronger than wood-frame construction. Because of the construction, the panels won't burn, are resistant to tornadoes, hurricanes, earthquakes, mold, rodents and termites, and are adaptable to any architectural style.
Rastra Ohio, Inc. is proposing to lease a 12,000 square foot facility built by SWACO at the Jackson Pike location.
Emergency action is requested in order to allow the project to begin as soon as possible.
FISCAL IMPACT: No funding is required for this legislation.
Title
To authorize the Director of Development to enter into an agreement with Rastra Ohio, Inc. for a Jobs Creation Tax Credit of 65% for a period of 8 years in consideration of the company's investment of $3.9 million in new personal property and the creation of 47 permanent full-time jobs; and to declare an emergency.
Body
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 tax or income tax, which tax credits are provided to create new jobs in the State of Ohio; and
WHEREAS, the Ohio Department of Development approved a 25%/5 year Jobs Creation Tax Credit for Rastra Ohio, Inc. on September 25, 2006; and
WHEREAS, pursuant to Section 718.15 of the Ohio Revised Code (the "City Act") a municipal corporation is authorized to grant local income tax credits to taxpayers who have received tax credits from the State; and
WHEREAS, contingent on the City granting a Jobs Creation Tax Credit, Rastra Ohio, Inc. will locate in Columbus creating 47 full-time permanent jobs with an annual payroll of $1.6 million, investing $3.9 million in machinery & equipment and furniture & fixtures and increasing job opportunities and strengthening the economy of the city; and
WHEREAS, receiving these tax credits from the State and the City is a critical factor in Rastra Ohio, Inc.'s decision to go forward with the project in the City of Columbus; 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 an agreement with Rastra Ohio, Inc. to begin investing and creating jobs as quickly as possible, 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 City hereby finds and determines that the project will (1) create jobs in the State and City; (2) the project is economically sound and will benefit the people of the State and City by increasing opportunities for employment and strengthening the economy of the State and City; and (3) receiving the aforementioned tax credit is a critical factor in the decision by Rastra Ohio, Inc. to go forward with the project.
Section 2. That the City Council hereby finds and determines that the project meets all the requirements of the City Act.
Section 3. That the Director of the Department of Development is hereby authorized and directed to enter into and execute an 8-year, 65% Jobs Creation Tax Credit Agreement with Rastra Ohio, Inc.
Section 4. That the City of Columbus Jobs Creation Tax Credit Agreement be signed by Rastra Ohio, Inc. within 90 days of passage of this ordinance, or this ordinance and the credit herein shall be null and void.
Section 5. 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 the passage if the Mayor neither approves nor vetoes the same.