Explanation
BACKGROUND: Columbus City Council, by Ordinance 0121-2013, passed January 28, 2013, authorized the City of Columbus to enter into an Enterprise Zone Agreement (Agreement) with SEA, Ltd. (Enterprise) for a tax abatement of seventy-five percent (75%) for a period of ten (10) years in consideration of a $9 million investment in real property improvements, the retention of ninety-six (96) full-time employees with an annual payroll of $9.77 million and the creation of thirty (30) full-time permanent positions with an annual payroll of approximately $3 million related to the construction of a new global headquarters and research & development facility of approximately 90,000 square feet on Schrock Road at parcel number 610-291371, in Columbus Ohio, within the Worthington City School District and within the Columbus North Enterprise Zone. The Agreement was made and entered into effective May 5, 2013 (EZA #393-13-01). The Agreement stated that construction on the improvements (Project) was expected to begin in October 2013, but in no event later than April 1, 2014 with these improvements expected to be completed by June 2015, but in no event later than October 31, 2015 and that no real property exemption was to commence after 2016 nor extend beyond 2025.
In a letter to the City from SEA, Ltd., dated September 3, 2014 and received September 4, 2014, it was indicated that due to several factors, the planned investment in real property improvements had been delayed. The letter requested that the Agreement be modified to state that the Project is expected to begin no later than December 31, 2014 and that all improvements are expected to be completed no later than March 31, 2016. Additionally, the letter requested that the term of real property exemption be amended to commence no later than 2017 nor extend beyond 2026 instead of 2016 through 2025.
This legislation is to authorize the Director of Development to amend the Agreement for the first time to (1) state that the Project is expected to begin no later than December 31, 2014 and that all improvements are expected to be completed no later than March 31, 2016, and (2) that no real property exemption would commence after 2017 nor extend beyond 2026.
This legislation is being presented as an emergency measure in order for this amendment to be legislated in as expedient manner as possible so that this amendment to the Agreement can be executed prior to the start of the Report Year 2014 annual reporting cycle and 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 Enterprise Zone Agreement with SEA, Ltd. to revise the Project commencement and completion dates as well to revise the dates for which the abatement would begin and end; and to declare an emergency.
Body
WHEREAS, the City of Columbus entered into an Enterprise Zone Agreement (Agreement) with SEA, Ltd. (Enterprise), approved by Columbus City Council on January 28, 2013 by Ordinance No. 0121-2013 with this Agreement made and entered into effective May 5, 2013; and
WHEREAS, the Agreement granted a 75%/10-Year abatement on real property improvements; and
WHEREAS, the incentive was granted in consideration of a $9.0 million investment in real property improvements, the retention of 96 full-time employees with an annual payroll of $9.77 million and the creation of 30 full-time permanent positions with an annual payroll of approximately $3 million related to the construction of a new global headquarters and research & development facility of approximately 90,000 square feet on Schrock Road at parcel number 610-291371, in Columbus Ohio, within the Worthington City School District and within the Columbus North Enterprise Zone; and
WHEREAS, the Agreement stated that construction on the improvements (Project) was expected to begin in October 2013, but in no event later than April 1, 2014 with these improvements expected to be completed by June 2015, but in no event later than October 31, 2015 and that no real property exemption was to commence after 2016 nor extend beyond 2025; and
WHEREAS, in a letter to the City from SEA, Ltd., dated September 3, 2014 and received September 4, 2014, it was indicated that due to several factors, the planned investment in real property improvements had been delayed; and
WHEREAS, the letter requested that the Agreement be modified to state that the Project is expected to begin no later than December 31, 2014 and that all improvements are expected to be completed no later than March 31, 2016; and
WHEREAS, the letter also requested that the term of real property exemption be amended to commence no later than 2017 nor extend beyond 2026 instead of 2016 through 2025; and
WHEREAS, an amendment is needed to revise the Project commencement and completion dates as well to revise the dates for which the abatement would begin and end; and
WHEREAS, an emergency exists in the usual daily operation of the Department of Development in that it is immediately necessary to amend the Agreement with SEA, Ltd. to ensure that they stay in compliance with 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 Director of Development is hereby authorized to amend the Enterprise Zone Agreement with SEA, Ltd., to (1) modify the dates of the construction of real property improvements from being expected to begin in October 2013, but in no event later than April 1, 2014 with these improvements expected to be completed by June 2015, but in no event later than October 31, 2015 to being expected to begin no later than December 31, 2014 with these improvements expected to be completed by March 31, 2016; and (2) to modify the term of the exemption from not to commence after 2016 nor extend beyond 2025 to not commence after 2017 nor extend beyond 2026.
SECTION 2. That this First Amendment to the City of Columbus Enterprise Zone Agreement be signed by SEA, Ltd. within ninety (90) days of passage of this ordinance, or this ordinance and the incentive authorized herein shall be 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 the passage if the Mayor neither approves nor vetoes the same.