Explanation
BACKGROUND: The Director of the Department of Development is requesting authorization to enter into an Enterprise Zone Agreement on behalf of the City with Becknell Industrial dba BI Developer LLC (“BI Developer LLC, and also the “Enterprise”). The Ohio Enterprise Zone law Section 5709.62(C) of the Ohio Revised Code authorizes the City to enter into Council-approved tax abatement agreements between the City and qualifying companies.
BI Developer LLC is a subsidiary of Becknell Industrial (“Becknell”) headquartered in Carmel, Indiana. Becknell is a privately held national real estate development firm focused heavily on industrial buildings, including distribution centers, warehouses, processing and assembly plants, manufacturing plants, research-and-development centers, service centers, and other facilities vital to the global supply chain management of regional, national, and multi-national operations. Becknell launched into the industrial real estate business in 1990 when co-founders Dan Harrington and Fritz Hartrich joined forces to build and lease a custom warehouse to Nabisco. Under the long-term leadership of Harrington, who now serves as Becknell’s Executive Chairman and Chief Investment Officer, Becknell’s national portfolio now includes more than $34 million square feet of industrial real estate property, in addition to over $10 million square feet of developable ground for future development.
BI Developer LLC is proposing to invest a total project cost of approximately $43,000,000.00, which includes, $6,000,000.00 in acquisition cost and $37,000,000.00 in real property improvements to construct an approximately 527,023 square-foot Class A proactive industrial facility on a vacant land parcel containing approximately 42.2 +/- acres at 5811 Gender Road Columbus, Ohio 43110, parcel numbers 010-224901 and 010-260326 (the “Project Site”). The Enterprise anticipates that the project will create or cause to be created fifty (50) net, new full-time permanent positions with an estimated new annual payroll of approximately $1,580,800.00 at the Project Site (“New Employees”).
The Director of the Department of Development is recommending that Council approve a 75%/10-year Enterprise Zone tax abatement on real property improvements made by the Enterprise at the Project Site, in consideration of it creating, or causing to be created, the New Employees.
The Columbus City School’s Board of Education has been advised of this project.
FISCAL IMPACT: No funding is required for this legislation.
Title
To authorize the Director of the Department of Development to enter into an Enterprise Zone Agreement with Becknell Industrial dba BI Developer LLC (the “Enterprise”) for a tax abatement of seventy-five percent (75%) for a period of ten (10) consecutive years in consideration of the Enterprise investing approximately $37 million in real property improvements, and the creation of fifty (50) net, new full-time permanent positions with an estimated new annual payroll of approximately $1,580,800.00.
Body
WHEREAS, the Columbus City Council has established the Southeast Enterprise Zone pursuant to Section 5709.61 to 5709.632 of the Ohio Revised Code (“O.R.C.”) which has been certified by the Director of the Department of Development of the State of Ohio as required by the O.R.C.; and
WHEREAS, by City Council Ordinance No. 0428-03 passed March 31, 2003 the City designated the area the Southeast Enterprise Zone as an "MSA principal city non-distressed based jobs and enterprise zone" pursuant to Chapter 5709.61 (A) of the Ohio Revised Code and declared that incentives for business offered by such zones will enhance efforts to promote the viable and diverse economic activity necessary for rejuvenation of the zone; and
WHEREAS, effective August 26, 2003 the Director of Development of the State of Ohio determined that the aforementioned area designated in said Ordinance No. 428-03 contains the characteristics set forth in Section 5709.61(A) of the Ohio Revised Code, and certified said area (the “Columbus Southeast Enterprise Zone”) as an "MSA principal city non-distressed based jobs and enterprise zone" (limited authority) under Chapter 5709 of the Ohio Revised Code; and
WHEREAS, BI Developer LLC (the “Enterprise”) is a subsidiary of Becknell Industrial (“Becknell”) headquartered in Carmel, Indiana. Becknell is a privately held national real estate development firm focused heavily on industrial buildings, including distribution centers, warehouses, processing and assembly plants, manufacturing plants, research-and-development centers, service centers, and other facilities vital to the global supply chain management of regional, national, and multi-national operations; and
WHEREAS, Becknell launched into the industrial real estate business in 1990 when co-founders Dan Harrington and Fritz Hartrich joined forces to build and lease a custom warehouse to Nabisco. Becknell’s national portfolio now includes more than $34 million square feet of industrial real estate property, in addition to over $10 million square feet of developable ground for future development; and
WHEREAS, the Enterprise has submitted a proposal (“Proposal”) to invest a total project cost of approximately $43,000,000.00, which includes, $6,000,000.00 in acquisition cost and $37,000,000.00 in real property improvements (the “Project”) to construct an approximately 527,023 square-foot Class A proactive industrial facility (the “Facility”) on a vacant land parcel containing approximately 42.2 +/- acres at 5811 Gender Road, Columbus, Ohio 43110, parcel numbers 010-224901 and 010-260326 (the “Project Site”). The Enterprise anticipates that the Project will create or cause to be created fifty (50) net, new full-time permanent positions with an estimated new annual payroll of approximately $1,580,800.00 as the Project Site (“New Employees”); and
WHEREAS, after reviewing and investigating the Proposal submitted by the Enterprise, the Director of the Department of Development believes that the Enterprise has demonstrated that it is qualified by financial responsibility and business experience to create and preserve employment opportunities in the Columbus Enterprise Zone and improve the City’s economic climate; and
WHEREAS, the Director of the Department of Development is recommending that City Council approve a 10-year, 75% abatement on the assessed valuation of the Project Site due to construction of the $37 million facility, to incentivize the Enterprise to construct the Class A proactive industrial facility in the Southeast corridor; and
WHEREAS, the Development Director has notified the Columbus City School District of the Project; and
WHEREAS, the City desires to enter into an agreement with the Enterprise to incentivize economic growth and create employment opportunities for its citizens, and for the preservation of public health, peace, property, and safety. NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1. That Columbus City Council, having reviewed the proposal, finds that the Enterprise is qualified by financial responsibility and business experience to create and preserve employment opportunities in the Columbus Southeast Enterprise Zone and improve the City’s economic climate pursuant to Revised Code Section 5709.62(C).
Section 2. That City Council finds and determines (1) that the Enterprise will create, or cause to be created, the New Employee positions in the State and City; (2) that the Project is economically sound and will benefit the people of the State and City by increasing opportunities for employment and strengthening the economy of the State and City; and (3) that receiving the aforementioned tax abatement is a critical factor in the decision by representatives for Becknell Industrial dba BI Developer LLC, the Enterprise hereunder, to go forward with constructing the Project.
Section 3. That, based on this determination, and contingent upon re-zoning and successful sale and transfer of ownership of title, the City Council approves and authorizes a 10-year, 75% abatement on the increase in assessed valuation of real property on the Project Site, contingent upon the Enterprise investing approximately $37 million in real property improvements by constructing an approximately 527,023 sq. ft. proactive industrial facility at 5811 Gender Road, Columbus, Ohio 43110, parcel numbers 010-224901 and 010-260326, and create or cause to be created fifty (50) net, new full-time permanent positions with an estimated new annual payroll of approximately $1,580,800.00 at the Project Site.
Section 4. That the Director of the Department of Development, for and in the name of the City, is authorized to enter into an Enterprise Zone Agreement with the Enterprise in a form substantially similar to the one attached hereto as Exhibit “A” with such changes, amendments or edits thereto, that are not inconsistent with the terms of this Ordinance, or adverse to the City. Such authorized amendment includes assignment of the Agreement from the Enterprise to a Related Member as defined in R.C. Section 5709.61(W), or to a Successor Enterprise as defined by R.C. Section 5709.61(Y). The Director of the Department of Development also is authorized to execute any other agreements or sign any documents necessary to effectuate the Agreement and the Exemption provided therein, and approved as to Form by the City Attorney, if required.
SECTION 5. That the City and the Enterprise must execute the attached Enterprise Zone Agreement within ninety (90) days of this Ordinance’s passage, or this Ordinance, and the authorization to enter into the tax abatement agreement, is null and void.
SECTION 6. That this Ordinance shall take effect and be in force from and after the earliest period allowed by law.