Explanation
BACKGROUND: The need exists to enter into a Job Creation Tax Credit with Frank Brunckhorst Co., LLC. The Ohio Tax Credit Legislation (Section 718.15 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.
Frank Brunckhorst Co., LLC is a privately-owned company that was incorporated in 1905 in New York City as a supplier of delicatessen meats and cheeses. Frank Brunckhorst, the company founder, eventually became discouraged with the quality of meats that were available to him for distribution. He decided to open a small manufacturing plant in Brooklyn to prepare his own meats in 1933. By 1975, his company had expanded its distribution of premium meat and cheeses throughout the entire United States. Today, Frank Brunckhorst Co., LLC distributes sausages, meats, and cheese that are manufactured by its subsidiary Boar's Head Provisions Co. (Boar's Head). The products are distributed to food wholesalers, delicatessens, supermarkets and gourmet stores. The company remains privately held and is operated by the descendants of Frank Brunckhorst.
The project involves the acquisition and equipping of a facility at 2225 Spiegel Drive. The company plans to centralize its distribution operations at the project site. Frank Brunckhorst Co., LLC will make a fixed-asset investment of approximately $21.6 million including $9 million for the acquisition of land and building, $1.7 million for building improvements, $9.8 million in machinery and equipment and $1.1 million in furniture and fixtures. Frank Brunckhorst Co., LLC will create 93 new permanent full-time positions.
FISCAL IMPACT: No funding is required for this legislation.
Title
To authorize the Director of Development to enter into a Job Creation Tax Credit Agreement of sixty-five percent (65%) for a period of six (6) years with Frank Brunckhorst Co., LLC in consideration of the company's investment of $21.6 million for building acquisition, building improvements, machinery, equipment, furniture and fixtures and the creation of 93 new permanent full-time positions.
Body
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 tax payers job creation tax credits against their corporate franchise tax or income tax, which tax credits are provided to create new jobs in the State of Ohio; and
WHEREAS, pursuant to Section 718.15 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, contingent on the City granting a Job Creation Tax Credit for the acquisition and equipping of a distribution facility at 2225 Speigel Drive, and the creation of 93 new permanent full-time positions, with a total annual payroll of $3.19 million, Frank Brunckhorst Co., LLC will make a fixed-asset investment of approximately $21.6 million including: $9 million for building acquisition; $1.7 million for building improvements; $9.8 million in new machinery and equipment; and $1.1 million in furniture and fixtures and to increase job opportunities and strengthen the economy of the city; and
WHEREAS, receiving these tax credits from the State and the City is a critical factor in Frank Brunckhort Co., LLC's decision to go forward with the project in Columbus; and
WHEREAS, the City desires to increase employment opportunities and encourage the creation of new jobs in the City in order to improve the overall economic climate of the City and its citizens; and
WHEREAS, the Department of Development has received completed applications for a Job Creation Tax Credit; and
WHEREAS, Frank Brunckhorst Co., LLC has indicated that a Job Creation Tax Credit is crucial to its decision to locate the aforementioned distribution facility in Columbus; and
WHEREAS, the City of Columbus desires to facilitate Frank Brunckhorst Co., LLC's future growth at the project site; 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 aforementioned tax credits is a critical factor in the decision by Frank Brunckhorst Co., LLC to go forward with the project.
Section 2. That the City Council hereby finds and determines that the project meets all the requirements of the City Act.
Section 3. That the Director of the Department of Development is hereby authorized and directed to enter into and execute a Job Creation Tax Credit of sixty-five percent (65%) of the amount of personal income tax withheld on new employees for a term of six (6) years with Frank Brunckhorst Co., LLC.
Section 4. That the City of Columbus Job Creation Tax Credit Agreement is signed by Frank Brunckhorst Co., LLC within 90 days of passage of this ordinance, or this ordinance and the credit herein shall be null and void.
Section 5. That this ordinance shall take effect and be in force from and after the earliest period allowed by law.