Explanation
BACKGROUND: Columbus City Council (“Council”), by Ordinance No. 1614-2019 (the “Ordinance”), approved on July 22, 2019, authorized the Director of the Department of Development of the City of Columbus (“CITY”) to enter into a Columbus Downtown Office Incentive Agreement (the “AGREEMENT”) with Adept Marketing Outsourced LLC (the “GRANTEE”) for an annual cash payment equal to fifty percent (50%) of the City of Columbus income tax withheld on the payroll for the new employees added to the city of Columbus for a term of three (3) consecutive years on the estimated job creation of 35 net new full-time permanent positions with an annual payroll of $2.1 million at 555 Edgar Waldo Way, Columbus, Ohio 43215, (the “PROJECT SITE”). The AGREEMENT was made and entered into effective January 15, 2020, with the incentive term beginning January 1, 2021 through December 31, 2023.
In an electronic written communication from the GRANTEE received by the CITY on August 2, 2022, the GRANTEE requested that the City of Columbus dissolve its current AGREEMENT with the CITY. Unfortunately, the GRANTEE indicated that the anticipated expansion and growth as previously planned will not occur. The GRANTEE is voluntarily seeking to cancel the AGREEMENT effective immediately because of the effects of the Coronavirus (“COVID-19”). Due to the prolonged nature of COVID-19 and its many ripple effects, the GRANTEE will not create the proposed new jobs as described in the AGREEMENT. Additionally, the GRANTEE’s business was purchased by another entity that is not part of the AGREEMENT. There is a need to dissolve this AGREEMENT between the CITY and GRANTEE related to the effects of COVID-19 and the change of ownership.
This legislation is presented as an emergency measure in order for this dissolution to be legislated in the most expedient manner as possible so that this dissolution of this AGREEMENT can be reported to the necessary agencies.
FISCAL IMPACT:
No funding is required for this legislation.
Title
To authorize the Director of the Department of Development to dissolve the City of Columbus Downtown Office Incentive Agreement with Adept Marketing Outsourced LLC (the "GRANTEE") and, to declare an emergency.
Body
WHEREAS, the City of Columbus (“CITY”) entered into a Columbus Downtown Office Incentive Agreement (the “AGREEMENT”) with Adept Marketing Outsourced LLC (the “GRANTEE”) effective January 15, 2020; and
WHEREAS, Columbus City Council (“Council”), approved the AGREEMENT by Ordinance No. 1614-2019 (the “ORDINANCE”), adopted on July 22, 2019, and granted an annual cash payment equal to fifty percent (50%) of the City of Columbus income tax withheld on the payroll for the New Employees added to the city of Columbus for a term of three (3) consecutive years thereafter (i.e. January 1, 2021 through December 31, 2023 for a 3-year credit); and
WHEREAS, the incentive was granted in consideration of a proposed investment of approximately $150,000.00, which included $100,000 in leasehold improvements and $50,000 in furniture and fixtures to relocate and expand the GRANTEE’s corporate headquarters in a commercial office space consisting of approximately 12,000 square feet, the retention of 30 full-time permanent positions with an annual payroll of approximately $2.73 million and the creation of 35 net new full-time permanent positions with an estimated annual payroll of approximately $2.1 million (the “PROJECT”) at 555 Edgar Waldo Way, Columbus, Ohio 43215 (the “PROJECT SITE”) The AGREEMENT was made and entered into effective January 15, 2020, with the incentive term beginning January 1, 2021 through December 31, 2023; and
WHEREAS, in an electronic written communication from the GRANTEE received by the CITY on August 2, 2022, and through ensuing correspondences, it was confirmed the GRANTEE requested that the City of Columbus dissolve its current AGREEMENT with the CITY. Unfortunately, the GRANTEE indicated that the anticipated expansion and growth as previously planned will not occur. The GRANTEE is voluntarily seeking to cancel the AGREEMENT effective immediately because of the effects of the Coronavirus (“COVID-19”). Due to the prolonged nature of COVID-19 and its many ripple effects, the GRANTEE will not create the proposed new jobs as described in the AGREEMENT. Additionally, the GRANTEE’s business was purchased by another entity that is not part of the AGREEMENT; and
WHEREAS, an emergency exists in the usual daily operation of the Department of Development, in that it is immediately necessary to take action on this AGREEMENT in order for this dissolution to be legislated in the most expedient manner as possible so that this dissolution of the AGREEMENT can be reported to the necessary agencies, 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 the Director of the Department of Development is hereby authorized and directed to dissolve the Adept Marketing Outsourced LLC Columbus Downtown Office Incentive Agreement effective as of December 31, 2021.
SECTION 2. That the Director of the Department of Development is hereby authorized and directed to notify the necessary local agencies of any changes to the Adept Marketing Outsourced LLC’s Downtown Office Incentive Agreement.
SECTION 3. For the reasons stated in the preamble hereto, which is made a part hereof, this Ordinance is 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 (10) days after passage if the Mayor neither approves nor vetoes this Ordinance.