Explanation
BACKGROUND: Columbus City Council, by Ordinance 1668-2012, passed July 30, 2012, authorized the City of Columbus to enter into an Enterprise Zone Agreement (the Agreement) with MSC Industrial Direct Co., Inc., Sid Tool Co., Inc., and MSC Contract Management (collectively Enterprise) for an exemption of seventy-five percent (75%) on real property improvements for a term of ten (10) taxable years in association with the project's proposed investment of approximately $55.5 million, including $27.5 million for building construction, $26.7 million for machinery and equipment, and $1.3 million for furniture and fixtures and the creation of 300 new permanent full-time positions with an annual payroll of approximately $8.3 million. The Agreement was made and entered into to be effective October 1, 2012 by and between the City and the Enterprise with the term to commence no later than 2015 and to extend no later than 2024.
In a letter from the Enterprise dated January 22, 2016, the Enterprise stated that since the Agreement was executed in 2012 they have faced unexpected, adverse economic conditions causing a decline in overall global activity. The Enterprise is one of the largest direct marketers and distributors in the United States. The Enterprise distributes its broad range of metalworking, maintenance, repair and operational supplies to industrial customers throughout the U.S. Unfortunately, the recent decline in oil prices has resulted in lower than projected order volumes from industrial customers servicing the oil and gas industries. Weaker than expected export demand has also hindered growth. The Enterprise expects these economic conditions to persist and has therefore requested that the job creation commitment and associated payroll as stated in the Agreement be reduced. As such, the need exists to amend the Enterprise’s job creation and new job payroll commitments as set forth in the Agreement.
This legislation seeks to authorize the amendment ...
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