Explanation
BACKGROUND: This legislation authorizes the Director of Development to amend the existing ISG Columbus Coatings Enterprise Zone Agreement (EZA). Columbus City Council approved the EZA by Ord. No. 1985-99 on July 26, 1999. Columbus Coatings was granted a 50%/5-year tax abatement on new M & E (2001-2005) and agreed to invest $118,859,000 in M & E, $11,887,000 in real property improvements and to retain 95 existing jobs. Columbus Coating is located at 1800 Watkins Rd. on the city's Southside. The investment was to convert Columbus Coating's electro-galvanizing process technology to a state-of-the-art hot-dip galvanizing system. The conversion was completed in 2000 and, as anticipated, has helped Columbus Coatings stay competitive. LTV Steel and Bethlehem Steel were joint partners in the conversion project. In 2000, LTV declared bankruptcy and Bethlehem followed suit in 2001. In June of 2002, Bethlehem became sole owner of Columbus Coatings and in May 2003 all Bethlehem's assets were acquired by International Steel Group (ISG), Columbus Coatings became part of ISG. City Council consented to transfer the EZA to ISG Columbus Coatings by Ordinance No. 1913-03, passed on July 28, 2003. ISG's purchase cost for all the Bethlehem Steel assets nationwide was $1.5 billion, significantly less than the original historical cost of the assets. ISG Columbus Coatings used the 2003 purchase cost ($15,607,000) in its personal property tax return for the value of the M & E. This was accepted by the Ohio Department of Taxation. In the Enterprise Zone annual report, which the City uses to evaluate compliance with the EZA, the company used the original historical acquisition cost of the M & E ($123,049,208).
The Columbus Tax Incentive Review Council (TIRC) recommended on August 11, 2004, that the City amend the EZA to reduce the tax exemption on M & E from 50% to 25% for the final two years of abatement. However, the City does not concur with the TIRC's re...
Click here for full text