Explanation
BACKGROUND: Columbus City Council, by Ordinance 1665-2012, passed July 30, 2012, authorized the City of Columbus to enter into a Job Creation Tax Credit Agreement (the Agreement) with MSC Industrial Direct Co., Inc., Sid Tool Co., Inc., and MSC Contract Management (collectively Grantee) for a tax credit of sixty-five percent (65%) for a period of eight (8) years in consideration of the Grantee’s investment of approximately $55.5 million for new building construction, machinery, equipment, furniture and fixtures and the creation of 300 new full-time permanent positions over a five year period with a total annual payroll of $8.3 million related to the construction of a 400,000 square foot regional distribution center on Alkire Road for subsidiary Sid Tool Co., Inc. and MSC Contract Management which provides employee management services for the company operations. The Agreement was made and entered into to be effective October 1, 2012 by and between the City and the Grantee with the term to commence January 1, 2015 and to continue for eight (8) consecutive taxable years thereafter.
In a letter from the Grantee dated January 22, 2016, the Grantee stated that since the Agreement was executed in 2012 they have faced unexpected, adverse economic conditions causing a decline in overall global activity. The Grantee is one of the largest direct marketers and distributors in the United States. The Grantee 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 Grantee’s 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 t...
Click here for full text