Explanation
BACKGROUND: This legislation will dissolve the Enterprise Zone Agreement with Mohawk Carpet Distribution LP (the "EZA"). Mohawk Carpet Distribution LP is a subsidiary of Mohawk Industries, Inc. ("Mohawk").
Mohawk's Attorney sent a letter to the Economic Development Division, dated August 22, 2006, which states that in the past 18 months Mohawk experienced a dramatic market downturn in the central Ohio area and will be unable to continue participation in the Enterprise Zone Agreement.
Columbus City Council approved the EZA by Ord. No. 2366-2003, adopted on November 3, 2003. The EZA was entered into on March 15, 2004 and provided for a 75%/10-year tax abatement (2005-2014) on real property improvements, the construction of a 350,000 square foot distribution facility, the retention of 100 existing jobs and the creation of 50 new jobs over a five year period, of which 10 jobs were to have been created by December 31, 2005. The facility has been built and the real and personal property investment satisfied. The project has created no jobs to date, however.
The EZA will be dissolved upon approval of this legislation. Mohawk has not commenced taking tax exemptions under the EZA and thus there are no forgone taxes.
The present legislation will also rescind Ord. No. 396-2006, approved by Columbus City Council on March 13, 2006, which authorized modifying the EZA by adding FED ONE Properties VI, LLC, owner of the real property at the project site. FED ONE had been inadvertently omitted in drafting the EZA. The City did not move forward with executing an amended agreement, however, due to problems that emerged related to lack of job creation and reporting.
This legislation is presented as an emergency measure in order to meet the deadline under state law for City Council to vote on TIRC recommendations.
FISCAL IMPACT: No funding is required for this legislation.
Title
To dissolve the Mohawk Carpet Distribution LP...
Click here for full text