(a) Introduction. In an effort to spur revitalization of the City's traditional industrial belt, the City of London has designated an Enterprise Zone pursuant to State law. An Enterprise Zone is an area within which special tax incentives may be offered by contract to businesses which agree to invest in capital improvements and/or create and/or retain jobs. Tax incentives will be offered, provided that program guidelines are met and a substantial investment is made. Jobs must be either created or retained. Each contract with a business within the Enterprise Zone relating to jobs, investment and tax incentives must be submitted to London City Council and the Madison County Commissioners for their approval.
(b) Purpose. The purpose of the Enterprise Zone is to encourage as much investment and job creation as possible within the boundaries of the Enterprise Zone. Retaining jobs is also a priority. Each contract negotiated with a local business shall be designed to spur capital investment while creating or retaining jobs. In return, the City will agree to provide the minimum amount of tax incentives possible under the circumstances of each transaction.
(c) Eligible Businesses.
(1) Only those businesses that are "qualified by financial responsibility and business experience to create and preserve employee opportunities in the Enterprise Zone and to improve the economic climate of the municipal corporation..." (Ohio R.C. 5709.632) may apply for the tax incentives available.
(2) Furthermore, only businesses engaged in manufacturing, warehousing, research and development, and distribution, will be eligible to apply for the tax incentives. These uses are customarily permitted in M-1 Heavy Manufacturing, M-2 Light Manufacturing and PUD Planned Unit Development Districts, as set forth in the Zoning Code.
(3) No housing, commercial (retail) or institutional uses may benefit from the Enterprise Zone Program. Businesses engaged in B-1, B-2, B-3, R-1, R-2, R-3 and R-4 land uses are not eligible.
(d) Minimum Assistance. In order to minimize the loss of new tax revenues, only the minimum abatement possible to bring about the investment will be offered. State law permits up to seventy-five percent abatement of new real and personal property taxes for a period of up to ten years. The maximum allowable abatement in amount and in duration will only be offered when absolutely necessary to bring about the investment.
(e) No Retroactivity. The tax incentives available will only be offered when absolutely necessary to bring about the investment. No incentives will be made available after an investment in land, building and/or equipment has already occurred. In order to qualify to receive the tax incentives, the investment must take place subsequent to approval by the City of London. Any business interested in receiving the tax incentives must show that the incentives requested are essential to cause the investment and, if not for the available tax incentives, the investment would not have been made.
(f) Degree of Investment Required. Only businesses that agree to make a substantial investment in either real property and/or personal property shall be eligible to receive the benefits available under the Program. The amount of investment needed to qualify as a substantial investment shall depend on the facts and circumstances of each applying business. As a general guideline, a substantial investment in real property shall exist whenever the following conditions apply:
(1) When new construction is involved, a building or addition of at least 10,000 square feet in size, or two hundred and fifty thousand dollars ($250,000) in construction costs is proposed; or
(2) When renovation or remodeling of an existing structure is involved, the amount of the proposed real property investment must equal or exceed ten percent of the market value of the existing improvements located on the parcel. The market value, not including land value, will be determined by the Madison County tax records; or
(3) When an investment in personal property is contemplated, an investment of at least ten percent of the existing personal property market value (for tax purposes) must be proposed to qualify as a substantial investment; or
(4) When an investment in real and personal property is contemplated, an investment of at least ten percent of the real property market value, not including land value, must be proposed to qualify as a substantial investment.
(g) Substantial Impact on Jobs. Any business applying for the incentives available must, in addition to the other requirements herein, agree by contract that its project will have a substantial positive impact on job opportunities at the London location. To qualify as a substantial impact, an existing business must agree that at least ten percent of the existing number of full-time employees will be added or that all existing full-time jobs will be retained. New businesses must agree to employ at least ten full-time persons as a result of the investment in order to qualify as having a substantial impact on jobs.
(h) Location Within the Zone. Only businesses already located or proposed to be located within the boundaries of the Enterprise Zone designated by London City Council may apply for a tax incentive.
(i) Other Requirements. In addition to the guidelines set forth herein, any business applying must comply with all other applicable local, County and State regulations pertaining to the Enterprise Zone Program. Applicants must submit all information required by the City of London, Madison County or the State of Ohio. Applicants must comply with the notice requirements of Ohio R.C. 5709.83.
(j) Principals Only. Only individuals who are principally involved as an owner or manager of a business interested in the Enterprise Zone tax incentives may negotiate with City officials regarding the specific incentives available under the terms of any investment agreement. Landlords of property, rather than brokers, may negotiate for tax incentives relative to real property improvements.
(k) Promotion. General information about London's Enterprise Zone shall be widely distributed and the incentives available shall be aggressively promoted along with other attributes.
(l) Tax Incentive Review Council. Pursuant to State law, a Tax Incentive Review Council will be created to monitor compliance with the terms of any agreement approved by the City Council. This Tax Incentive Review Council shall review all agreements to determine whether the businesses have complied with their terms and shall make recommendations regarding them to the London City Council. The Tax Incentive Review Council may apply to the County Commissioners for funds available under a fund created by fees collected under Ohio R.C. 5709.632(e) and titled Fee Section of these guidelines to take care of expenses used directly in obtaining information necessary for the Tax Incentive Review Council to complete its obligation under this program. The Tax Incentive Review Council shall meet yearly prior to February 1 of every year and the report must be forwarded to the Enterprise Zone Manager by March 1. The City Council may take any action available to a party to a contract to obtain compliance with the agreement.
(m) City to Negotiate Agreements.
(1) The Madison County Commissioners have approved the designation of the London Enterprise Zone. The Madison County Commissioners have employed the London Chamber of Commerce as the manager for the Enterprise Zone. The London Chamber of Commerce has delegated to the City of London the authority to negotiate and administer tax incentive agreements with businesses located therein. Therefore, all interested parties must contact the London Chamber of Commerce who will set up the negotiations directly with the City of London.
(2) The negotiating committee for the London Enterprise Zone must comply with the agreement between the City and the School Board to include a fifty percent split of any newly generated income tax based on the Enterprise Agreement, if the payroll for newly created positions exceeds five hundred thousand dollars ($500,000).
(Ord. 162-94. Passed 7-21-94.)
(n) Fees.
(1) At the completion of the preliminary negotiations for an Enterprise Agreement, the applicant must pay a five hundred dollar ($500.00) application fee, which is to be directed to the Department of Development per statute. The applicant shall also pay a five hundred dollar ($500.00) processing fee to the County Commissioners which will be used for the purpose of administering and processing the application and paying any legal expenses that might be involved in the processing of the application.
(Ord. 184-94. Passed 9-1-94.)
(2) All enterprises that are subject to an agreement that has been approved by the State shall pay an annual fee to the County Commissioners equal to the greater of one percent of the dollar value of incentives offered under the agreement or five hundred dollars ($500.00), provided however, that if the value of the incentives exceeds two hundred and fifty thousand dollars ($250,000), the fee shall not exceed two thousand, five hundred dollars ($2,500). The fee shall be payable to the County Commissioners each year by February 1. The fees paid shall be deposited in a special fund created by the County Commissioners and shall be used by the Commissioners exclusively for the purposes of complying with Ohio R.C. 5709.68, and by the Tax Incentive Review Council created under Ohio R.C. 5709.85 exclusively for the purpose of performing duties prescribed under that section.
(3) The County Commissioners may waive or reduce the amount of fee paid by an Enterprise if money is available to comply with the reporting requirements by the Enterprise Zone.
(o) No Duplication of Public Benefits. Any London business receiving tax-exempt industrial revenue bonds to finance improvements to real or personal property or the acquisition of real or personal property shall not be eligible for the benefits of the Enterprise Zone Program. Businesses must choose between tax-exempt bonds and Enterprise Zone tax incentives.
(p) Continuing Obligation. During the term of any approved agreement, the business involved must continue to cooperate with City officials by providing any information requested to ensure compliance with the terms of the tax incentive agreement.
(q) Deadline. Pursuant to State law, the deadline for executing tax incentive agreements shall be December 31, 1997. Any agreements negotiated prior to that time that provide tax incentives for a period extending beyond the deadline shall remain in full force and effect until the end of the term or termination.
(Ord. 162-94. Passed 7-21-94.)