Explanation
Background:
The need exists to enter into an Enterprise Zone Agreement with Skybus Airlines, Inc., 4300 Venture 34922 LLC and 4300 Venture 6728 LLC, a Jobs Creation Tax Credit Agreement and a Jobs Growth Incentive with Skybus Airlines, 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.
Skybus Airlines, Inc. (Skybus Airlines) is a start-up airline company proposing to headquarter operations at Port Columbus International Airport. Operations are scheduled to begin in spring of 2007. The concept of Skybus Airlines was initially conceived by John Weikle and Ken Gile.
Skybus Airlines markets itself as the next generation of low-fare airlines, promising to reduce average fares by more than 50% and have the lowest price in all markets. The new airline will serve 16 top business and leisure markets in the United Sates with 62 daily departures using Airbus jets with GE engines. Skybus Airlines will utilize an all-new fuel-efficient fleet, single class seating, and approximately 150 leather seats and promote safety and reliability. Skybus Airlines has the support of the State of Ohio Department Development and the Columbus Regional Airport Authority.
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, a 12-year, 65% Jobs Creation Tax Credit and a Jobs Growth Incentive equal to 50% of the amount of personal income tax withheld on new employees for a term of 7 years. The State of Ohio Tax Credit Authority has offered Skybus Airlines a 70%/10 year Jobs Creation Tax Credit to assist with the project.
This legislation is requested to be considered as an emergency in order to allow Skybus Airlines to begin investing and creating jobs as quickly as possible.
Fiscal Impact No funding is required by 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 with Skybus Airlines, Inc., 4300 Venture 34922 LLC and 4300 Venture 6728 LLC; a 12-year 65% Jobs Creation Tax Credit and a Jobs Growth Incentive equal to 50% of the amount of personal income tax withheld on new employees for a term of 7 years with Skybus Airlines, in consideration of Skybus Airlines, Inc., 4300 Venture 34922 LLC and 4300 Venture 6728 LLC's proposed investment of $4.7 million, retention of 28 full-time jobs and the creation of 886 permanent full-time jobs; and to declare an emergency. (AMENDED BY ORD. 0349-2007 PASSED 03/05/2007)
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, Skybus Airlines, Inc., 4300 Venture 34922 LLC and 4300 Venture 6728 LLC 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, the Ohio Department of Development has offered Skybus Airlines, Inc. a 70%/10 year Jobs Creation Tax Credit; 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, Skybus Airlines, Inc., 4300 Venture 34922 LLC and 4300 Venture 6728 LLC propose to invest $19.9 million in real property improvements and personal property, retain 28 full-time positions and create 886 new jobs, and is located within Columbus Enterprise Zone and is qualified for consideration of both Enterprise Zone, Jobs Creation Tax Credit, and Jobs Growth incentives; and
WHEREAS, Skybus Airlines 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 Skybus Airlines's proposal and application for tax incentives and has determined that Skybus Airlines 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 an Enterprise Zone, Jobs Creation Tax Credit and Jobs Growth tax incentives in the State and City; and
WHEREAS, the City desires to enter into such agreements with Skybus Airlines 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 agreement with Skybus Airlines, Inc., 4300 Venture 34922 LLC and 4300 Venture 6728 LLC 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 10-year, 75% Enterprise Zone Agreement with Skybus Airlines, Inc., 4300 Venture 34922 LLC and 4300 Venture 6728 LLC on real property improvements and personal property under the City's Enterprise Zone Program, a 12-year, 65% Jobs Creation Tax Credit and a Jobs Growth Incentive equal to 50% of the amount of personal income tax withheld on new employees for a term of 7 years with Skybus Airlines, in association with Skybus Airlines, Inc., 4300 Venture 34922 LLC and 4300 Venture 6728 LLC's proposed investment.
Section 2. That the City of Columbus Enterprise Zone Agreement be signed by Skybus Airlines, Inc., 4300 Venture 34922 LLC and 4300 Venture 6728 LLC, the Jobs Creation Tax Credit Agreement and the Job Growth Incentive Agreement shall be signed by Skybus Airlines 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.