Explanation
BACKGROUND: This legislation authorizes the Development Director to dissolve the City's Enterprise Zone Agreement (EZA) and Jobs Creation Tax Credit Agreement (JCTCA) with Distribution Fulfillment Services, Inc. (DFS). City Council approved the incentives on May 24, 1994 by Ordinance No. 1080-94 (EZA) and Ordinance No. 1081-94 (JCTCA). The jobs tax credits could be used through 2004 or 2005 and the personal property tax exemptions could be used as late as 2009, depending on how the eligible investments were timed. The Tax Incentive Review Council recommended (11/12/2003) that the City dissolve the EZA with DFS because the job goals are not being met. The City concurs with the TIRC's recommendation and wishes also to dissolve the JCTCA.
In 1994, DFS, a subsidiary of Spiegel, Inc., wanted to expand its distribution capacity and became interested in a vacant 4 million square foot facility at 4545 Fisher Road (west side). Columbus granted DFS tax incentives to occupy, renovate and create/retain jobs at the facility: a 100%/10-year abatement on real property improvements, a 50% (avg)/10-year abatement on personal property (sliding scale, 100% in the first year decreasing to 10% in the final year), and a 50%/10-year municipal tax credit based on the creation of new jobs. DFS agreed to invest $58.5 million (of which $55 million was for fixed assets including site/facility acquisition costs, real property improvements and M & E) and create 375 new jobs plus retain 375 existing jobs relocated to the site from other local DFS operations (i.e., 750 jobs in total). By the end of 2002, DFS reported 626 jobs at the Fisher Road site and an investment of $83.5 million, of which $51 million was in M & E and other personal property.
The DFS parent corporation, Spiegel, filed for bankruptcy in March of 2003. To streamline and gain efficiency, DFS/Spiegel has elected to consolidate jobs and operations at the DFS facility in Groveport. Jobs have been...
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