Explanation
BACKGROUND: The need exists to enter into a Municipal Jobs Creation Tax Credit Agreement with DSW Inc. ("DSW") and Ozburn Hessey Logistics, LLC ("OHL") in connection with the development of an e-commerce business channel in the City of Columbus ("CITY"). Ohio Revised Code Section 718.15 (the Ohio Jobs Creation Tax Credit law) requires the City to enter into a Council-approved agreement between the City and participating companies. Collectively, DSW and OHC will be referred to as "ENTERPRISE."
ENTERPRISE is seeking to develop an e-commerce business channel whereby DSW would sell products over the internet (the "PROJECT"). DSW, by itself or through OHL, anticipates making investments in the facility that it is currently targeting equal to $8,000,000 to $9,000,000 for machinery and equipment, $800,000 to $900,000 for tenant improvements and approximately $27,000,000 for new inventory. These project investments would be complete by approximately March of 2008. The facility will be used primarily as warehouse and distribution center space to support e-commerce. The PROJECT will be located at 4220-4236 East Fifth Avenue, in Columbus. ENTERPRISE also is considering an existing site in Indiana at which OHL already has space, and thus, State and local incentives are necessary for the Project to go forward in Ohio.
DSW plans to hire, or cause OHL to hire, approximately 201 199 new full-time employees in connection with the PROJECT. Approximately 100 99 of these new employees would be hired as soon as the investments are complete, with the remaining 101 100 new employees hired by the end of 2010. The average wage of the new employees would be approximately $15.90 per hour. It is anticipated that the new employees would initially be hired by OHL.
The Department of Development recommends a 65%/7 year Jobs Creation Tax Credit.
Emergency action is necessary in order to allow ENTERPRISE to begin investing and creating jobs as quickly as possible.
FISCAL IMPACT...
Click here for full text