Explanation
BACKGROUND: Columbus City Council (“COUNCIL”), by Ordinance No. 0912-2020, passed May 18, 2020, authorized the City of Columbus (“CITY”) to enter into an Enterprise Zone Agreement (the “AGREEMENT”) with The Gravity Project 2, LLC (hereinafter, referred to as “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 $194,500,000.00, which included approximately $7,500,000.00 in land and acquisition costs, $165,000,000.00 in real property improvements and approximately $22,000,000.00 in a new parking structure to redevelop approximately five (5) acres on Parcel Number 010-039621 (the “ORIGINAL PARCEL”), near the corner of W. Broad Street and McDowell Street in East Franklinton located at 451 and 455 W. Broad Street, Columbus, Ohio, 43215 (the “PROJECT SITE”). The proposed mixed-use development consists of a new 6-story Class A commercial office facility consisting of approximately 184,189 square feet, a 12-story residential building comprised of approximately 218,796 square feet, with ground floor Class A office space consisting of approximately 22,622 square feet, a 5-story residential mid-rise building consisting of approximately 81,340 square feet, a 5-story residential building consisting of approximately 24,461 square feet of residential townhomes and flat apartment units and renovation of a 1-story retail building consisting of approximately 4,600 square feet. Additionally, a new parking structure of approximately 293,000 square feet containing approximately 889 parking spaces (of which, 200 of those parking spaces are targeted for public use).
The “PROJECT” as related to the AGREEMENT consisted in the construction of the 6-story 184,189 square-foot Class A commercial office facility and a ground floor Class A office space comprising of approximately 22,622 square feet located in the residential building as it relates to the aforementioned project. The ENTERPRISE projected to invest approximately $31,176,371.00 of the proposed $165,000,000.00 in real property improvements, on the development of the commercial office facility and the ground floor office space. In addition, the ENTERPRISE committed to create 50 net new full-time permanent positions with an estimated annual payroll of approximately $3,000,000.00, to preserve or create employment opportunities within the Columbus Enterprise Zone, (hereinafter referred to as the “PROJECT”). The AGREEMENT was made and entered into effective October 15, 2020.
Paragraph fifteen 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 sixteen 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 Kaufman Development on behalf of the ENTERPRISE dated December 19, 2023, received by the CITY and through ensuing correspondence, The Gravity Project 2, LLC confirmed that they have transferred all of its interest and assets of the aforementioned commercial office building (the 6-story 184,189 square-foot Class A office) to another entity under the Kaufman Development umbrella, “Gravity 2 - Office, LLC”. The transfer of ownership was recorded at the County Auditor’s Office on February 11, 2021. In addition, the PROJECT SITE has been revised to be Parcel Number 010-301921 (split from the ORIGINAL PARCEL), containing approximately 1.032 +/- acres of developed land with a current street address of 449 - 461 W. Broad Street, Columbus, Ohio 43215.
Due diligence has been undertaken by the CITY in that Gravity 2 - Office 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 The Gravity Project 2, LLC as ENTERPRISE and party to the AGREEMENT and to be replaced with Gravity 2 - Office, LLC as ENTERPRISE and party to the AGREEMENT, where by Gravity Project 2 - Office, 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 the ENTERPRISE within Section 6 of the AGREEMENT.
This legislation is presented as 30-day legislation.
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 the first time for Assignment & Assumption with The Gravity Project 2, LLC to (1) remove The Gravity Project 2, LLC as ENTERPRISE and party to the AGREEMENT and to be replaced with Gravity 2 - Office, LLC as ENTERPRISE and party to the AGREEMENT, whereby Gravity 2 - Office, 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 6 of the AGREEMENT.
Body
WHEREAS, the City of Columbus (“CITY”) entered into an Enterprise Zone Agreement (the “AGREEMENT”) with The Gravity Project 2, LLC (“ENTERPRISE”), approved by Columbus City Council (“COUNCIL”) by Ordinance No. 0912-2020, passed May 18, 2020, with this AGREEMENT made and entered into effective October 15, 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 194,500,000.00, which included approximately $7,500,000.00 in land and acquisition costs, $165,000,000.00 in real property improvements and approximately $22,000,000.00 in a new parking structure to redevelop approximately five (5) acres on Parcel Number 010-039621 (the “ORIGINAL PARCEL”), near the corner of W. Broad Street and McDowell Street in East Franklinton located at 451 and 455 W. Broad Street, Columbus, Ohio, 43215 (the “PROJECT SITE”). The proposed mixed-use development constructed a new 6-story Class A commercial office facility consisting of approximately 184,189 square feet, a 12-story residential building comprised of approximately 218,796 square feet, with ground floor Class A office space consisting of approximately 22,622 square feet, a 5-story residential mid-rise building consisting of approximately 81,340 square feet, a 5-story residential building consisting of approximately 24,461 square feet of residential townhomes and flat apartment units and renovation of a 1-story retail building consisting of approximately 4,600 square feet. Additionally, a new parking structure of approximately 293,000 square feet containing approximately 889 parking spaces (of which, 200 of those parking spaces are targeted for public use); and
WHEREAS, the “PROJECT” as related to the AGREEMENT consisted of the development of the 6-story Class A commercial office facility consisting of approximately 184,189 square-feet and a ground floor Class A office space comprising of approximately 22,622 square feet located in the residential building as it relates to the aforementioned project. The ENTERPRISE projected to invest approximately $31,176,371.00 of the proposed $165,000,000.00 in real property improvements, on the development of the commercial office facility and the ground floor office space. In addition, the ENTERPRISE committed to create 50 net new full-time permanent positions with an estimated annual payroll of approximately $3,000,000.00, to preserve or create employment opportunities within the Columbus Enterprise Zone, (hereinafter referred to as the “PROJECT”). The AGREEMENT was made and entered into effective October 15, 2020; and
WHEREAS, paragraph fifteen 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 sixteen 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 Kaufman Development on behalf of the ENTERPRISE dated December 19, 2023, received by the CITY and through ensuing correspondence, The Gravity Project 2, LLC confirmed that they have transferred all of its interest, ownership and title of the aforementioned commercial office building (the 6-story 184,189 square-foot Class A office) to another affiliate entity under the Kaufman Development umbrella, “Gravity 2 - Office, LLC”. The transfer of title and ownership was recorded at the County Auditor’s Office on February 11, 2021. In addition, the PROJECT SITE has been revised to be Parcel Number 010-301921 (split from the ORIGINAL PARCEL), containing approximately 1.032 +/- acres of developed land with the current street address of 449 - 461 W. Broad Street, Columbus, Ohio 43215; and
WHEREAS, due diligence has been undertaken by the CITY in that Gravity 2 - Office, 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 The Gravity Project 2, LLC as ENTERPRISE and party to the AGREEMENT and to be replaced with Gravity 2 - Office, LLC as ENTERPRISE and party to the AGREEMENT; and
WHEREAS, the Director of the Department of Development of the CITY has investigated the Economic Development Application of The Gravity Project 2, LLC and concurs with the Columbus City Council on the basis that Gravity 2 - Office, 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 amendment for Assignment & Assumption to the AGREEMENT with The Gravity Project 2, LLC to (1) remove The Gravity Project 2, LLC as ENTERPRISE and to be replaced by Gravity 2 - Office, LLC as ENTERPRISE and party to the AGREEMENT, Gravity 2 - Office, LLC will assume the terms and commitments of the AGREEMENT as ENTERPRISE, (2) revise the description of the PROJECT SITE, and (3) revise the notice information; and NOW THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
SECTION 1. That the Columbus City Council 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 The Gravity Project 2, LLC (the AGREEMENT) to remove The Gravity Project 2, LLC as ENTERPRISE to be replaced with Gravity 2 - Office, LLC as ENTERPRISE whereby Gravity 2 - Office, 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 010-301921 (split from the ORIGINAL PARCEL), containing approximately 1.032 +/- acres with the current street address of 449 - 461 W. Broad Street, Columbus, Ohio 43215.
SECTION 4. 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 Gravity 2 - Office, LLC in C/O Kaufman Development 30 Warrant Street, Columbus, Ohio 43215 Farms, LLC attention: Brent Kaufman, Manager.
SECTION 5. That this FIRST AMENDMENT for Assignment & Assumption to the City of Columbus Enterprise Zone Agreement be signed by Gravity 2 - Office, LLC 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 this Ordinance shall take effect and be in force from and after the earliest period allowed by law.