Explanation
BACKGROUND: Columbus City Council (“COUNCIL”), by Ordinance No. 1562-2021, passed July 19, 2021, authorized the City of Columbus (“CITY”) to enter into an Enterprise Zone Agreement (the “AGREEMENT”) with Shook Road Storage, 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 $20,904,201.00 in real property improvements and the creation of 10 net new full-time permanent positions with an associated annual payroll of approximately $312,000.00 related to the construction of a new approximately 165,000 square-foot speculative cold storage warehouse facility (the “PROJECT”) at B Miller Street, Columbus, Ohio 43217, parcel number 512-299843 within the City of Columbus and within the City of Columbus Enterprise Zone (the “PROJECT SITE”). The AGREEMENT was made and entered into effective August 30, 2021 with the PROJECT expected to begin approximately September 2021, with all real property improvements expected to be completed by August 2022 and with the abatement to commence no later than 2023 nor extend beyond 2032 (Agreement No. 023-21-10).
Paragraph fourteen within Section 7 (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 received by the CITY on behalf of the ENTERPRISE dated January 24, 2023, and through ensuing correspondence, it was confirmed that ARIS Shook Road, LLC has acquired ownership of the PROJECT SITE from Shook Road Storage, LLC with the transfer having been recorded at the County Auditor’s Office on January 27, 2023. Due diligence has been undertaken by the CITY in that ARIS Shook Road, 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 Shook Road Storage, LLC as ENTERPRISE and party to the AGREEMENT and to be replaced with ARIS Shook Road, LLC as ENTERPRISE and party to the AGREEMENT, whereby ARIS Shook Road, LLC will assume the terms and commitments of the AGREEMENT, 2) revise the description of the PROJECT SITE, and (3) revise the notice information related to ENTERPRISE within Section 7 of the AGREEMENT.
Based on the above, the Director of the Department of Development of the CITY has investigated the Economic Development Application of ARIS Shook Road, LLC and concurs with Columbus City Council on the basis that ARIS Shook Road, 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.
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 enter into a FIRST AMENDMENT with Shook Road Storage, LLC, to remove Shook Road Storage, LLC as the ENTERPRISE and party to the ENTERPRISE ZONE AGREEMENT and replaced with ARIS Shook Road, LLC as the ENTERPRISE and party to the AGREEMENT and to declare an emergency ($0.00).
Body
WHEREAS, the City of Columbus (“CITY”) entered into an Enterprise Zone Agreement (the “AGREEMENT”) with Shook Road Storage, LLC (hereafter referred to as “ENTERPRISE”), approved by Columbus City Council (“COUNCIL”) on July 19, 2021 by Ordinance No. 1562-2021; and
WHEREAS, the AGREEMENT granted the ENTERPRISE a 75%/10-Year abatement on real property improvements; and
WHEREAS, the incentive was granted in consideration of company’s investment of approximately $20,904,201.00 in real property improvements and the creation of ten (10) net new full-time permanent positions with a total payroll of approximately $312,000.00. The project involved the construction of an approximately 165,000 square foot speculative cold storage warehouse facility at B Miller Street, Columbus, Ohio 43217, parcel number 512-299843 (the “PROJECT SITE”) located within the Hamilton Local School District and the Eastland Fairfield Joint Vocational School District, and within the Columbus Enterprise Zone, (hereinafter referred to as the “PROJECT”); and
WHEREAS, paragraph fourteen within Section 7 (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 received by the CITY on behalf of the ENTERPRISE dated January 24, 2023, and through ensuing correspondence, it was confirmed that ARIS Shook Road, LLC has acquired ownership of the PROJECT SITE from Shook Road Storage, LLC with the transfer having been recorded at the County Auditor’s Office on January 27, 2023; and
WHEREAS, due diligence has been undertaken by the CITY in that ARIS Shook Road, 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, including the five-hundred dollar ($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 Shook Road Storage, LLC as ENTERPRISE and party to the AGREEMENT and to be replaced with ARIS Shook Road, LLC as ENTERPRISE and party to the AGREEMENT, revise the description of the PROJECT SITE, revise the notice information related to ENTERPRISE within Section 7 of the AGREEMENT; (the "FIRST AMENDMENT") and
WHEREAS, the Director of the Department of Development of the CITY has investigated the Economic Development Application of ARIS Shook Road, LLC and concurs with the Columbus City Council on the basis that ARIS Shook Road, 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 enter into this FIRST AMENDMENT for Assignment & Assumption to the AGREEMENT with Shook Road Storage, LLC to (1) remove Shook Road Storage, LLC as the ENTERPRISE and be replaced by ARIS Shook Road, LLC as the ENTERPRISE and party to the AGREEMENT; (2) and ARIS Shook Road, LLC will assume the terms and commitments of the AGREEMENT as the ENTERPRISE, (3) revise the description of the PROJECT SITE, and (4) revise the notice information related to ENTERPRISE within Section 7 of the AGREEMENT; thereby preserving the public health, peace, property and safety
NOW, THEREFORE
BE IT ORDAINED BY THE COUNCIL 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. The Director of the Department of Development ("Director") is authorized to execute and amend the Enterprise Zone Agreement with Shook Road Storage, LLC (the AGREEMENT) to remove Shook Road Storage, LLC as the ENTERPRISE and party to the AGREEMENT to be replaced with ARIS Shook Road, LLC as the ENTERPRISE and party to the AGREEMENT, whereby ARIS Shook Road, LLC will assume the terms and commitments of the AGREEMENT as the ENTERPRISE.
Section 3. That the Director is authorized to amend Section 1 (Establishment by Corporation) of the AGREEMENT to state that the PROJECT SITE is revised to be Parcel Number 512-299843 with the two separate street addresses of 6900 Shook Road and 2099 Wright Brothers Avenue, Columbus, Ohio 43217.
Section 4. That the Director is authorized to amend the notice requirement within Section 7 (Program Compliance) of the AGREEMENT, to reflect the ENTERPRISE as being ARIS Shook Road, LLC, with attention to, or in care of, Jenette O’Brien.
Section 5. That the parties shall enter into this FIRST AMENDMENT for Assignment & Assumption of the AGREEMENT within ninety (90) days of passage of this ordinance, or this ordinance and the incentive authorized herein shall be null and void.
Section 6. That for reasons stated in the preamble hereto, which is made a part hereof, the 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 days after the passage if the Mayor neither approves nor vetoes the same.