Explanation
BACKGROUND: This legislation authorizes the Director of Development to dissolve the Enterprise Zone Agreement with Commercial Movers, Inc. (EZA) and end the abatement one year early. Thus, the final year of abatement will be 2003 instead of 2004. The property would be fully taxable for 2004 (payable 2005). Columbus City Council approved the EZA by Ordinance No. 1146-99, adopted May 10, 1999. The tax incentive is 50% on real property improvements for five (5) taxable years (2000-2004). As of December 2003, Commercial Movers, Inc. had constructed a 150,000 square foot facility at 1299 Boltonfield Street and completed its real property investment of $6 million. The personal property investment is somewhat short of the $1 million that had been committed. The lack of attainment is that Commercial Movers has not been able to fulfill the EZA's job commitment. The EZA states that 200 jobs would be retained and 100 would be created. As of December 2003, the total number of retained jobs was 102 and no new jobs had been created.
Commercial Movers is a successful and valued member of the business community. In recent years the company's business model shifted away from the labor-intensive segments of the commercial moving industry and towards the more profitable segments, such as interior design, space planning and professional project management services for corporate moves. This shift makes business sense for Commercial Movers but has resulted in fewer jobs than had been anticipated in 1999 when the company applied for the Enterprise Zone tax abatement.
The TIRC recommended on August 12, 2004 that the City dissolve the EZA and end the tax abatement one year early due to the lack of attainment in job retention and creation. The City concurs with the TIRC's recommendation to dissolve the EZA and end the abatement one year early, i.e., as of December 31, 2003. The City will not seek repayment of the exempted taxes from 2000-2003. This legislation is presented as an emergency measure in order to meet the new deadline under State law for City Council vote on TIRC recommendations.
FISCAL IMPACT: No funding is required for this legislation.
Title
To authorize the Director of the Department of Development to dissolve the Commercial Movers, Inc. Enterprise Zone Agreement and end the tax abatement one year early (the final year of exemption will be 2003 instead of 2004 -- the property will be fully taxable for 2004 and payable in 2005); and to declare an emergency.
Body
WHEREAS, the Columbus City Council approved the Commercial Movers, Inc. Enterprise Zone Agreement (EZA)
on May 10, 1999 by Ordinance No. 1146-99; and
WHEREAS, the EZA called for Commercial Movers, Inc. to invest $6 million in real property improvements and
$1 million in personal property at 1299 Boltonfield Street, and to retain 200 full-time permanent jobs and create 100
full-time permanent jobs; and
WHEREAS, the EZA granted a 50%/5 year tax abatement on real property improvements; and
WHEREAS, as of the end of 2003, Commercial Movers, Inc. had constructed a 150,000 square foot facility at 1299
Boltonfield Street and met its real property investment, was somewhat short of its personal investment requirement,
and had been able to retain only 102 full-time permanent jobs while creating 0 jobs; and
WHEREAS, Commercial Movers has no plans to leave Columbus; and
Whereas, the Columbus Tax Incentive Review Council (TIRC) voted on August 12, 2004 to recommend that
the City dissolve the EZA and end the tax abatement one year early, such that the final year of abatement is 2003
instead of 2004; and
WHEREAS, the City concurs with the TIRC recommendation concerning Commercial Movers, Inc., and desires to
dissolve the EZA and end the tax abatement as of December 31, 2003, and is not seeking repayment of the exempted
taxes from 2000-2003; and
WHEREAS, an emergency exists in the usual daily operation of the Department of Development in that it is immediately
necessary to obtain City Council's vote in order to meet the new deadline under State law for voting on the
TIRCrecommendations, thereby preserving the public health, peace, prosperity, safety and welfare;
NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1. That the Director of the Department of Development is hereby authorized to dissolve the
Commercial Movers, Inc. Enterprise Zone Agreement (EZA), end the tax abatement one year early (2003 to be
the final year), and notify as necessary the local and state authorities.
Section 2. That for the reasons stated in the preamble thereto, which is made a part hereof, this Ordinance is
declared to be an emergency measure and shall 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.