Explanation
BACKGROUND: The need exists to enter into an Enterprise Zone Agreement with Value City Department Stores Inc. and Northland Associates LLC. The Ohio Enterprise Zone law O.R.C. Section 5709.62 (3) requires the City to enter into a Council-approved agreement between the City and participating companies. The need also exists to enter into a Jobs Creation Tax Credit Agreement with Value City Department Stores Inc. The Ohio Tax Credit Legislation (Section 718.08 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.
Value City Department Stores Inc. and Northland Associates LLC plan to renovate a 300,000 square foot facility to accommodate relocation and expansion. The project will include an investment of $19.5 million the creation of 110 (one-hundred ten) full-time positions and the retention of 548 (five-hundred forty-eight) full-time jobs. This is the first catalyst project in the overall $150 -$200 million redevelopment effort know as NorthlandPARK.
The Department of Development recommends a 75%/10 year tax abatement on real property improvements, machinery & equipment, furniture & fixtures and a 60%/15 year Job Creation Tax Credit. This proposal is consistent with Columbus Tax Incentive Policy under Core Central City projects. The Columbus Public School District has been advised of this project.
FISCAL IMPACT: No funding is required for this legislation.
Title
To authorize the Director of Development to enter into agreements with Value City Department Stores Inc. and Northland Associates LLC for a tax abatement of seventy-five percent (75%) for a period of 10 (ten) years on real property improvements and personal property and a jobs creation tax credit of sixty percent (60%) for a period of fifteen years with Value City Department Stores Inc. in consideration of a proposed $19.5 million investment, the retention of 548 (five-hundred forty-eight) full-time jobs and the creation of 110 (one-hundred ten) new full-time positions; and to declare an emergency.
Body
WHEREAS, the Columbus City Council authorized the designation of the Enterprise Zone by legislation, Ordinance Number 779-85, dated April 22, 1985; and
WHEREAS, the Ohio Development Department approved this designation under State of Ohio enterprise law, by letter dated June 12, 1985; 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 State of Ohio Tax Credit Authority has granted Value City Department Stores, Inc. a 60% 7 year Jobs Creation Tax Credit on September 29, 2003; and
WHEREAS, pursuant to Section 718.08 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, the granting of the tax credit by the City for the proposed relocation and expansion project by Value City Department Stores, Inc. will create 110 (one-hundred ten) full-time positions and retain 548 (five-hundred forty-eight) full-time permanent jobs and increase opportunities for employment and strengthen the economy of the city; and
WHEREAS, receiving these tax credits from the State and the City is a critical factor in Value City Department Stores, Inc.'s decision to go forward with the project; and
WHEREAS, Value City Department Stores Inc. and Northland Associates LLC plans to renovate a 300,000 square foot facility to accommodate relocation and expansion; and
WHEREAS, the expansion will add approximately $19.5 million in investment within the City and is a catalyst project for the anticipated $150-200 million NorthlandPARK project; and
WHEREAS, an emergency exists in the usual daily operation of the Department of Development in that it is immediately necessary to enter an Enterprise Zone Agreement and a Jobs Creation Tax Credit Agreement in order to preserve the public health, peace, property, safety and welfare; 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 forementioned incentives is a critical factor in the decision by Value City Department Stores, Inc. and Northland Associates LLC to go forward with this project
Section 2. That the Director of Development is hereby authorized to enter into an Enterprise Zone Agreement with Value City Department Stores Inc. and Northland Associates LLC and to provide therewith an exemption of seventy-five percent (75%) on real property improvements, machinery & equipment and furniture & fixtures for a term of 10 (ten) taxable years and execute a 15-year, 60% Jobs Creation Tax Credit Agreement with Value City Department Stores Inc. in association with the project's proposed $19.5 million investment.
Section 3. That the City Council hereby finds and determines that the project meets all the requirements of the City Act.
Section 4. That for reasons stated in the preamble hereto, which is hereby made a part hereof, this ordinance is declared to be an emergency measure and shall take effect and be in force from and after passage and approval by the Mayor or ten days after passage and approval by the Mayor or ten days after passage if the Mayor neither approves nor vetoes the same.