Explanation
BACKGROUND: Columbus City Council (COUNCIL), by Ordinance No. 1449-2020, passed July 6, 2020, authorized the City of Columbus (CITY) to enter into an Enterprise Zone Agreement (the AGREEMENT) with 1489 Rohr Holding, LLC (“ENTERPRISE”), for a real property tax abatement of seventy-five percent (75%) for a period of ten (10) consecutive years in consideration of a proposed $12.6 million investment in real property improvements and the creation of 4 net new full-time permanent positions with an associated annual payroll of approximately $124,800 related to the construction of a new approximately 550,000 square foot speculative industrial distribution and warehouse facility (the PROJECT) on approximately 230 +/- acres of undeveloped land located at 1279 and 1489 Rohr Road (Parcel Numbers 495-266702, 495-266703, 495-266704) within the City of Columbus and within the City of Columbus Enterprise Zone (the PROJECT SITE). The AGREEMENT was made and entered into effective December 23, 2020 with the PROJECT expected to begin approximately November 2020, with all real property improvements expected to be completed by approximately March 2022 and with the abatement to commence no later than 2025 nor extend beyond 2034 (Agreement No. 023-21-05).
The AGREEMENT was subsequently authorized by COUNCIL to be amended for the first time to revise the scope of the PROJECT to: (1) revise the investment in real property improvements from $12.6 million to $25 million; and (2) revise the proposed total square footage of the facility from approximately 550,000 square feet to approximately 1 million square feet by Ordinance No. 1916-2021, passed July 19, 2021, with the First Amendment executed on and made effective as of April 14, 2021.
As of this date there has not been a filing of the DTE-24 with the Franklin County Auditor, no Final Determination from the Ohio Department of Taxation, and so no forgone tax benefit has yet been received.
Paragraph fourteen within Section 6 (Program Compliance) of the AGREEMENT states that the “AGREEMENT is not transferable or assignable without the express, written, approval of the CITY” and paragraph fifteen of that same section states that “any requested amendment…to any of the terms of the AGREEMENT…shall require the payment to the CITY by the ENTERPRISE of an AMENDMENT FEE in the amount of five-hundred dollars ($500.00).”
In a letter received by the City from ENTERPRISE dated September 28, 2021, the CITY was advised that “1489 Rohr is moving forward with the Project, but the ownership structure for the Project has evolved and the location of the Project has been identified.” The letter also advised that “1489 Rohr is owned by two companies, Trident Capital Group and O’Conner Capital Partners” and that “those parties are entering into a joint venture with AEW Capital Management (“AEW”) to develop the Project on approximately 60 acres at the Project Site (the “Joint Venture Site”) and that “as a result of the joint venture, TCG-OCP PIX Rohr Owner I, LLC will own the Joint Venture Site.” Per an Overall Site Plan map provided to the CITY, this “Joint Venture Site” is comprised of the newly created parcel 495-303783 (59.64 acres) on Rohr Road (legal description per the Franklin County Auditor as 1489 Rohr, Lot 2, 59.639), sharing the current street address of 1489 Rohr Road with three other newly created parcels. Upon build out of each parcel, each parcel will have its own street address. The letter concluded by requesting that the City amend the AGREEMENT to: (1) assign the AGREEMENT, (2) redefine the PROJECT SITE; and (3) revise the notice information. TCG-OCP PIX Rohr Owner I, LLC has also submitted an updated Economic Development Incentive Application and this application and all other pertinent information has been reviewed and vetted including receipt of the AMENDMENT FEE.
This legislation is to authorize the Director of Development to amend the AGREEMENT for the second time to (1) remove 1489 Rohr Holding, LLC as ENTERPRISE to be replaced by TCG-OCP PIX Rohr Owner I, LLC as ENTERPRISE, whereby 1489 Rohr Holding, LLC will assign to and TCG-OCP PIX Rohr Owner I, LLC will then assume the terms and commitments of the AGREEMENT as ENTERPRISE, (2) revise the description of the PROJECT SITE and (3) revise the notice information related to ENTERPRISE within Section 6 of the AGREEMENT.
This legislation is presented as an emergency measure in order for this amendment to be legislated prior to the completion of the 2021 Tax Abatement Agreement reporting cycle and that this amendment to the AGREEMENT can be reported to the necessary local and state agencies in as expedient manner as possible to ensure that ENTERPRISE remains in compliance with the terms of the AGREEMENT.
FISCAL IMPACT: No funding is required for this legislation.
Title
To authorize the Director of Development to amend the AGREEMENT for the second time to assign the AGREEMENT to TCG-OCP PIX Rohr Owner I, LLC whereby TCG-OCP PIX Rohr Owner I, LLC will assume the terms and commitments of the AGREEMENT as ENTERPRISE, to redefine the PROJECT SITE, to revise the notice information; and to declare an emergency.
Body
WHEREAS, the City of Columbus (CITY) entered into an Enterprise Zone Agreement (the “AGREEMENT”) with 1489 Rohr Holding, LLC (“ENTERPRISE”), approved by Columbus City Council (COUNCIL) by Ordinance No. 1449-2020, passed July 6, 2020, with this AGREEMENT made and entered into effective December 23, 2020; 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 $12.6 million investment in real property improvements and the creation of 4 net new full-time permanent positions with an associated annual payroll of approximately $124,800 related to the construction of a new approximately 550,000 square foot speculative industrial distribution and warehouse facility located on approximately 230 +/- acres of undeveloped land located at 1279 and 1489 Rohr Road (Parcel Numbers 495-266702, 495-266703, 495-266704) within the City of Columbus and within the City of Columbus Enterprise Zone (the PROJECT SITE) with the PROJECT expected to begin approximately November 2020, with all real property improvements expected to be completed by approximately March 2022 and with the abatement to commence no later than 2025 nor extend beyond 2034 (Agreement No. 023-21-05).
WHEREAS, the AGREEMENT was subsequently authorized by COUNCIL to be amended for the first time to revise the scope of the PROJECT to: (1) revise the investment in real property improvements from $12.6 million to $25 million; and (2) revise the proposed total square footage of the facility from approximately 550,000 square feet to approximately 1 million square feet by Ordinance No. 1916-2021, passed July 19, 2021, with the First Amendment executed on and made effective as of April 14, 2021.
WHEREAS, as of this date there has not been a filing of the DTE-24 with the Franklin County Auditor, no Final Determination from the Ohio Department of Taxation, and so no forgone tax benefit has yet been received; and
WHEREAS, paragraph fourteen within Section 6 (Program Compliance) of the AGREEMENT states that the “AGREEMENT is not transferable or assignable without the express, written, approval of the CITY” and paragraph fifteen of that same section states that “any requested amendment…to any of the terms of the AGREEMENT…shall require the payment to the CITY by the ENTERPRISE of an AMENDMENT FEE in the amount of five-hundred dollars ($500.00);” and
WHEREAS, in a letter received by the City from ENTERPRISE dated September 28, 2021, the CITY was advised that “1489 Rohr is moving forward with the Project, but the ownership structure for the Project has evolved and the location of the Project has been identified.” The letter also advised that “1489 Rohr is owned by two companies, Trident Capital Group and O’Conner Capital Partners” and that “those parties are entering into a joint venture with AEW Capital Management (“AEW”) to develop the Project on approximately 60 acres at the Project Site (the “Joint Venture Site”) and that “as a result of the joint venture, TCG-OCP PIX Rohr Owner I, LLC will own the Joint Venture Site.” Per an Overall Site Plan map provided to the CITY, this “Joint Venture Site” is comprised of the newly created parcel 495-303783 (59.64 acres) on Rohr Road (legal description per the Franklin County Auditor as 1489 Rohr, Lot 2, 59.639), sharing the current street address of 1489 Rohr Road with three other newly created parcels. Upon build out of each parcel, each parcel will have its own street address. The letter concluded by requesting that the City amend the AGREEMENT to (1) assign the AGREEMENT, (2) redefine the PROJECT SITE and (3) revise the notice information. TCG-OCP PIX Rohr Owner I, LLC has also submitted an updated Economic Development Incentive Application and this application and all other pertinent information has been reviewed and vetted; and
WHEREAS, an emergency exists in the usual daily operation of the Department of Development in that it is immediately necessary to seek an Amendment for Assignment and Assumption to the AGREEMENT with 1489 Rohr Holding, LLC to: (1) remove 1489 Rohr Holding, LLC as ENTERPRISE to be replaced by TCG-OCP PIX Rohr Owner I, LLC as ENTERPRISE, whereby 1489 Rohr Holding, LLC will assign to and TCG-OCP PIX Rohr Owner I, LLC will then assume the terms and commitments of the AGREEMENT as ENTERPRISE, (2) revise the description of the PROJECT SITE and (3) revise the notice information related to ENTERPRISE within Section 6 of the AGREEMENT;- in order to allow for this amendment to be legislated prior to the completion of the 2021 Tax Abatement Agreement reporting cycle and that this amendment to the AGREEMENT can be reported to the necessary local and state agencies in as expedient manner as possible to ensure that ENTERPRISE remains in compliance with the terms of the AGREEMENT thereby preserving the public health, peace, property and safety; NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
SECTION 1. That the Council of Columbus finds that the enterprise submitting this proposal is qualified by financial responsibility and business experience to create and preserve employment opportunities in the zone and improve the economic climate of the municipal corporation.
SECTION 2. That the Director of the Department of Development is hereby authorized to amend the Enterprise Zone Agreement with 1489 Rohr Holding, LLC (the AGREEMENT) to remove 1489 Rohr Holding, LLC as ENTERPRISE to be replaced with TCG-OCP PIX Rohr Owner I, LLC as ENTERPRISE whereby TCG-OCP PIX Rohr Owner I, LLC will assume the terms and commitments of the AGREEMENT as ENTERPRISE.
SECTION 3. That the Director of Development is hereby authorized to amend Section 1 (Establishment by Corporation) of the AGREEMENT to state that the PROJECT SITE is revised to be Parcel Number 495-303783 (59.64 acres) on Rohr Road (legal description per the Franklin County Auditor as 1489 Rohr, Lot 2, 59.639) with the current street address of 1489 Rohr Road but that this street address may or may not change upon PROJECT completion.
SECTION 4. That the Director of Development is hereby authorized to amend within Section 6 (Program Compliance) of the AGREEMENT, the “if to the ENTERPRISE” section regarding written communication to 1489 Rohr Holding, LLC, C/O Warden Capital to Trident Capital Group and to O’Connor Capital Partners and to AFW Capital Management.
SECTION 5. That this SECOND AMENDMENT FOR ASSIGNMENT AND ASSUMPTION to the City of Columbus Enterprise Zone Agreement be signed by TCG-OCP PIX Rohr Owner I, LLC within ninety (90) days of passage of this ordinance, or this ordinance and the incentive authorized herein shall be null and void.
SECTION 6. 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.