Explanation
BACKGROUND: Columbus City Council (“COUNCIL”), by Ordinance No. 1613-2020, passed July 27, 2020, authorized the City of Columbus (“CITY”) to enter into an Enterprise Zone Agreement (the “AGREEMENT”) with Pinchal & Company LLC (“ENTERPRISE”), for a real property tax abatement of seventy-five percent (75%) for a period of ten (10) consecutive years in consideration of a proposed total capital investment of approximately $29,680,750, which included $26 million in real property improvements, and the creation of 20 net new full-time permanent positions with an associated annual payroll of approximately $624,000 related to the construction of a new approximately 583,740 square-foot speculative industrial distribution and warehouse facility (the “PROJECT”) on approximately 87.230 acres +/- of undeveloped land located at 1594 London Groveport Road, parcel number 495-232641 within the City of Columbus and within the City of Columbus Enterprise Zone (the “PROJECT SITE”). The AGREEMENT was made and entered into effective November 10, 2020 with the PROJECT expected to begin approximately November 2020, with all real property improvements expected to be completed by approximately December 2021 and with the abatement to commence no later than 2022 nor extend beyond 2031 (Agreement No. 023-20-06).
As of this date there has not been a filing of the DTE-24 with the Franklin County Auditor, no Final Determination from the Ohio Department of Taxation, and so no forgone tax benefit has yet been received.
Paragraph fourteen within Section 6 (Program Compliance) of the AGREEMENT states that the “AGREEMENT is not transferable or assignable without the express, written, approval of the CITY” and paragraph fifteen of that same section states that “any requested amendment…to any of the terms of the AGREEMENT…shall require the payment to the CITY by the ENTERPRISE of an AMENDMENT FEE in the amount of five-hundred dollars ($500.00).”
In a letter from London Groveport STS, LLC on behalf of the ENTERPRISE dated March 7, 2022, received by the CITY and through ensuing correspondence, London Groveport STS, LLC confirmed that they had acquired ownership of the PROJECT SITE from ENTERPRISE on May 05, 2021, with the transfer having been recorded at the County Auditor’s Office on May 12, 2021. In addition, the PROJECT SITE has been revised to be Parcel Number 495-302542 London Groveport Road (legal description per the Franklin County Auditor as 1594 Lockbourne Road, R22 T3 S2-2, 42.205 acres) with the current street address 1595 London Groveport Road but that this street address may or may not change upon PROJECT completion. Due diligence has been undertaken by the CITY in that London Groveport STS, LLC has agreed to fully assume the terms and commitments of the ENTERPRISE pursuant to the AGREEMENT, has submitted an updated Economic Development Incentive Application, the five-hundred dollars ($500.00) Amendment Fee and that this application and all other pertinent information has been reviewed and vetted.
This legislation is to authorize the Director of the Department of Development to amend the AGREEMENT for the first time for Assignment & Assumption to (1) remove Pinchal & Company LLC as ENTERPRISE and party to the AGREEMENT and to be replaced with London Groveport STS, LLC as ENTERPRISE and party to the AGREEMENT, whereby London Groveport STS, LLC will assume the terms and commitments of the AGREEMENT, (2) revise the description of the PROJECT SITE (3) revise the notice information related to ENTERPRISE within Section 6 of the AGREEMENT, and (4) to correct the job creation and commensurate payroll commitments in Section 2 of the AGREEMENT.
This legislation is being presented as an emergency measure in order for this amendment to be legislated in as expedient a manner as possible so that this amendment to the AGREEMENT might be fully executed with the proper property owner, which will allow the ENTERPRISE to remain in compliance and receive any future tax savings from the proposed abatement.
FISCAL IMPACT: No funding is required for this legislation.
Title
To authorize the Director of the Department of Development to amend the Enterprise Zone Agreement for a the first time for Assignment & Assumption with London Groveport STS, LLC, to remove Pinchal & Company LLC as ENTERPRISE and party to the AGREEMENT and to be replaced with London Groveport STS, LLC as ENTERPRISE and party to the AGREEMENT, to redefine the PROJECT SITE, revise the notice information, revise the jobs creation and commensurate payroll commitments, and to declare an emergency.
Body
WHEREAS, the City of Columbus (“CITY”) entered into an Enterprise Zone Agreement (the “AGREEMENT”) with Pinchal & Company LLC (“ENTERPRISE”), approved by Columbus City Council (“COUNCIL”) by Ordinance No. 1613-2020, passed July 27, 2020, with this AGREEMENT made and entered into effective November 10, 2020; and
WHEREAS, the AGREEMENT granted a 75%/10-Year abatement on real property improvements; and
WHEREAS, the incentive was granted in consideration of a proposed total capital investment of approximately $29,680,750, which included $26 million in real property improvements, and the creation of 20 net new full-time permanent positions with an associated annual payroll of approximately $624,000 related to the construction of a new approximately 583,740 square foot speculative industrial distribution and warehouse facility (the “PROJECT”) on approximately 87.230 acres +/- of undeveloped land located at 1594 London Groveport Road, parcel umber 495-232641 within the City of Columbus and within the City of Columbus Enterprise Zone (the “PROJECT SITE”). The AGREEMENT was made and entered into effective November 10, 2020 with the PROJECT expected to begin approximately November 2020, with all real property improvements expected to be completed by approximately December 2021 and with the abatement to commence no later than 2022 nor extend beyond 2031 (Agreement No. 023-20-06); and
WHEREAS, as of this date there has not been a filing of the DTE-24 with the Franklin County Auditor, no Final Determination from the Ohio Department of Taxation, and so no forgone tax benefit has yet been received; and
WHEREAS, paragraph fourteen within Section 6 (Program Compliance) of the AGREEMENT states that the “AGREEMENT is not transferable or assignable without the express, written, approval of the CITY” and paragraph fifteen of that same section states that “any requested amendment…to any of the terms of the AGREEMENT…shall require the payment to the CITY by the ENTERPRISE of an AMENDMENT FEE in the amount of five-hundred dollars ($500.00);” and
WHEREAS, in a letter from London Groveport STS, LLC on behalf of the ENTERPRISE dated March 7, 2022, received by the CITY and through ensuing correspondence, London Groveport STS, LLC confirmed that they had acquired ownership of the PROJECT SITE from ENTERPRISE on May 05, 2021, with the transfer having been recorded at the County Auditor’s Office on May 12, 2021. In addition, the PROJECT SITE has been revised to be Parcel Number 495-302542 London Groveport Road (legal description per the Franklin County Auditor as 1595 Lockbourne Rd, R22 T3 S2-2, 42.205 acres) with the current street address of 1594 London Groveport Road but that this street address may or may not change upon PROJECT completion; and
WHEREAS, due diligence has been undertaken by the CITY in that London Groveport STS, LLC has agreed to fully assume the terms and commitments of the ENTERPRISE pursuant to the AGREEMENT, has submitted an updated Economic Development Incentive Application, the five-hundred dollars ($500.00) Amendment Fee and that this application and all other pertinent information has been reviewed and vetted; and
WHEREAS, a first amendment to the AGREEMENT is now needed for Assignment & Assumption to remove Pinchal & Company LLC as ENTERPRISE and party to the AGREEMENT and to be replaced with London Groveport STS, LLC as ENTERPRISE and party to the AGREEMENT, revise the description of the PROJECT SITE, revise the notice information related to ENTERPRISE within Section 6 of the AGREEMENT and to correct the job creation and commensurate payroll commitments in Section 2 of the AGREEMENT; and
WHEREAS, the Director of the Department of Development of the CITY has investigated the Economic Development Application of London Groveport STS, LLC and concurs with the Columbus City Council on the basis that London Groveport STS, LLC is qualified by financial responsibility and business experience to create and preserve employment opportunities in the Columbus Enterprise Zone and improve the economic climate of the CITY; and
WHEREAS, an emergency exists in the usual daily operation of the Columbus Department of Development in that it is immediately necessary to seek an Amendment for Assignment and Assumption to the AGREEMENT with Pinchal & Company LLC to (1) remove Pinchal & Company LLC as ENTERPRISE and to be replaced by London Groveport STS, LLC as ENTERPRISE and party to the AGREEMENT, whereby London Groveport STS, LLC will assume the terms and commitments of the AGREEMENT as ENTERPRISE, (2) revise the description of the PROJECT SITE (3) revise the notice information related to ENTERPRISE within Section 6 of the AGREEMENT, and (4) revise the job creation and commensurate payroll commitments in Section 4 of the AGREEMENT; thereby preserving the public health, peace, property and safety, NOW, THEREFORE
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
SECTION 1. That the Council of Columbus finds that the enterprise submitting this proposal is qualified by financial responsibility and business experience to create and preserve employment opportunities in the zone and improve the economic climate of the municipal corporation.
SECTION 2. That the Director of the Department of Development is hereby authorized to amend the Enterprise Zone Agreement with Pinchal & Company LLC (the AGREEMENT) to remove Pinchal & Company LLC as ENTERPRISE to be replaced with London Groveport STS, LLC as ENTERPRISE whereby London Groveport STS, LLC will assume the terms and commitments of the AGREEMENT as ENTERPRISE.
SECTION 3. That the Director of the Department of Development is hereby authorized to amend Section 1 (Establishment by Corporation) of the AGREEMENT to state that the PROJECT SITE is revised to be Parcel Number 495-302542 London Groveport Road (legal description per the Franklin County Auditor as 1594 Lockbourne Rd, R22 T3 S2-2, 42.205 acres) with the current street address of 1595 Lockbourne Road but that this street address may or may not change upon PROJECT completion.
SECTION 4. That the Director of the Department of Development is hereby authorized to amend within Section 2 (Employment and Payroll) of the AGREEMENT, the “ENTERPRISE shall create or cause to be created four (4) full-time jobs with an annual payroll of approximately $124,800 to the ENTERPRISE shall create or cause to be created twenty (20) full-time jobs with an associated annual payroll of approximately $624,000” as approved by the original ordinance.
SECTION 5. That the Director of the Department of Development is hereby authorized to amend within Section 6 (Program Compliance) of the AGREEMENT, the “if to the ENTERPRISE” section regarding written communication to Pinchal & Company LLC to London Groveport STS, LLC C/O Brian W. McMackin.
SECTION 6. That this FIRST AMENDMENT for Assignment & Assumption to the City of Columbus Enterprise Zone Agreement be signed by London Groveport STS, LLC within ninety (90) days of passage of this ordinance, or this ordinance and the incentive authorized herein shall be null and void.
SECTION 7. That for reasons stated in the preamble hereto, which is hereby made a part hereof, the ordinance is hereby declared to be an emergency measure and shall take effect and be in force from and after its passage and approval by the Mayor or ten days after the passage if the Mayor neither approves nor vetoes the same.