Agenda Item # 2
Columbus Consolidated Government
Council Meeting
November 26, 2013
Agenda Report # 47
TO: Mayor and Council
SUBJECT: Enterprise Zone ? Hill Three, LLC, d.b.a. Bojangle?s of Columbus
INITIATED BY: Planning Department
Recommendation: Approval is requested of a resolution for Hill Three, LLC,
d.b.a. Bojangle?s of Columbus, to receive ad valorem tax abatements (with the
exclusion of school and general obligation debt levies) as specified under the
Enterprise Zone Employment Act. Said project meets the minimum requirements as
established in the Enterprise Zone Employment Act.
Background: Hill Three, LLC, d.b.a. Bojangle?s of Columbus, is located at
3260 Victory Drive within the boundaries of the Columbus Business Development
Center (Enterprise Zone). The applicant is requesting to receive tax
abatements on all ad valorem taxes (with the exclusion of school and general
obligation debt levies) for a $1,435,000.00 investment in land, buildings,
machinery and equipment.
Analysis: Hill Three, LLC, d.b.a. Bojangle?s of Columbus, will hire employees
and maintain at least five new jobs, (estimated total of 50) as required by the
Enterprise Zone Employment Act, prior to the tax abatement period. They plan to
maintain 50 jobs overall, with hiring to be based on qualifications and a
target of approximately 90% of those hired being qualified as low to moderate
income residents. This project combines four lots.
This project is being internally funded by its owners: Hill Three, LLC.
Financial Considerations: Tax abatements under the State of Georgia Enterprise
Zone Act will be made available to this project. Ad valorem taxes will be
abated based upon the following schedule:
One hundred percent (100%) of the property taxes shall be exempt for the first
five years; and,
Eighty percent (80%) of the property taxes shall be exempt for the next two
years; and,
Sixty percent (60%) of the property taxes shall be exempt for the next year;
and,
Forty percent (40%) of the property taxes shall be exempt for the next year;
and Twenty percent (20%) of the property taxes shall be exempt for the last
year.
The Board of Tax Assessors will provide the estimate of taxes abated for the
ten-year period beginning with Tax Year 2014.
Projected Annual Fiscal Impact Statement: At a stated value of $1,435,000.00
investment in real property, (land $385,000.00, buildings $750,000.00 and
equipment $305,000.00) the 10-year abatement would be based on an annual
valuation of the asset, the type of asset (percentages set by the state) and
the annual mileage rate.
Applicant proposes to begin construction in January 2014 and complete
construction in mid-May 2014. Based on a planned investment of $1,435,000.00
in buildings, land and machinery and equipment, the ad valorem tax levied would
increase from the 41.40 mil rate in 2013 of $6,587.74 ($5,663.52 in land and
$924.22 in building structures) to approximately $23,763.60 (with a slight
adjustment to the state mil rate). Of that $23,763.60 of ad valorem taxes due,
the abatement would not cover school district taxes (23.37 mils) or state taxes
(.15 or .10 mils), nor would it abate Bond debt service (.79 mils) but would
only be an abatement for the city portion of ad valorem taxes collected (17.09
mils). The abatement, which is distributed over 10 years, 100% of the city's
portion for the first five years, then 80% of the city?s portion in the sixth
and seventh years, 60% of the city?s portion in the eighth year, 40% of the
city?s portion in the ninth year and 20% of the city?s portion in the 10th
year. Based on this declining schedule, and using as value the applicant's
stated investment (actual appraisals are performed by the Tax Assessor's
office), the approximate tax abatement would be: Years 1-5 $9,809.66 each
year, Years 6-7 $7,847.73 each year, Year 8 $5,885.80, Year 9 $3,923.86 & Year
10 $1,961.93 for a total of $76,515.35 over ten years - an average annual
abatement of $7,651.53. Without the additional $1,435,000.00 investment
proposed by the applicant, the annual tax revenue, (net to the city after
school, state and bond mils are subtracted) would only be $1,125.85 per year.
Over ten years, (with no new investment - at it's current valuation and millage
rate) the property would generate approximately $11,258.50. With the
additional investment of $1,435,000.00, even with Enterprise Zone abatements,
this property will generate approximately $21,581.25 over the ten year
abatement period - an average annual revenue of $2,158.13. Therefore, the
proposed investment would nearly double the 10-year average annual tax revenue
that the city now receives, even with the EZ abatement in place. Additionally,
after the 10th year, applicant will pay 100% of their ad valorem taxes ? the
city?s portion being approximately $9,809.66 per year - an increase of over
300% of the current city tax revenue generated by this property. Tax millage
rates, which were never subject to abatement (those taxes due to state, bond
service and school board), will continue to be paid annually, regardless of
Enterprise Zone abatements for the city portion of ad valorem taxes.
Legal Considerations: The Board of Tax Assessors also requires to be notified
of the status of the project as of January 1 of each year in order to grant the
abatement. This information enables the Board to value the property at the
stage of completion as of the January 1 valuation date asset by Georgia code.
The Board would need to know when the project is considered completed. The only
personal property types, which have been approved for recognition within the
Enterprise Zone, are machinery and equipment that is permanently located within
the EZ.
Recommendations/ Actions: Approve the resolution authorizing the City Manager
to extend ad valorem tax abatements to Hill Three, LLC, d.b.a. Bojangle?s of
Columbus, for the investment of $1,435,000.00 at their 3260 Victory Drive
location, with consideration of the CCG Board of Tax Assessors' recommendation.
A RESOLUTION
NO. _____
A RESOLUTION AUTHORIZING APPROVAL OF THE REQUEST FOR HILL THREE, LLC, D.B.A.
BOJANGLES OF COLUMBUS, LOCATED AT 3260-3268 VICTORY DRIVE, TAX MAP PARCEL ID
#044-001-001, TO RECEIVE TAX ABATEMENTS UNDER THE STATE OF GEORGIA ENTERPRISE
ZONE ACT.
WHEREAS, Hill Three, LLC, d.b.a. Bojangles of Columbus, (Tax Map Parcel ID
#044-001-001) is located within the boundaries of the Columbus Business
Development Center (Enterprise Zone); and,
WHEREAS, Hill Three, LLC, d.b.a. Bojangles of Columbus proposes to make an
additional investment in personal property at their 3260-3268 Victory Drive
location in the amount of $1,435,000.00; and,
WHEREAS, the project meets the Enterprise Zone business type criteria as
retail; and,
WHEREAS, Hill Three, LLC, d.b.a. Bojangles of Columbus, will create at least 5
jobs (approximately 50 jobs) at this particular location prior to the tax
abatement period, and maintain the 5 jobs (net) during the full length of the
tax abatement period in order to provide additional economic stimulus to the
area; and,
WHEREAS, Hill Three, LLC, d.b.a. Bojangles of Columbus, will provide operating
statements, income and expense information, as well as before and after
photographs to the Board of Tax Assessors at the stage of completion as of the
January 1 valuation date as set by Georgia code; and,
WHEREAS, the project will incorporate and maintain the facade requirement for
the duration of the tax exemption period, as established by local Ordinance
#98-30.
NOW, THEREFORE, THE COUNCIL OF COLUMBUS, GEORGIA, HEREBY RESOLVES AS FOLLOWS:
That the Council of the Consolidated Government of Columbus hereby authorizes
and approves Hill Three, LLC, d.b.a. Bojangles of Columbus, located at
3260-3268 Victory Drive, Tax Map Parcel ID #044-001-001, to receive abatement
of taxes as allowed by law under the Enterprise Zone Employment Act of the
State of Georgia. Hill Three, LLC, d.b.a. Bojangles of Columbus, shall comply
with the listed requirements in order to receive those tax abatements:
1.
Hill Three, LLC, d.b.a. Bojangles of Columbus, will show proof to The Board of
Tax Assessors every year that they are maintaining those five (5) new jobs
required under the Enterprise Zone Employment Act. Failure to maintain those
new jobs will result in the termination of the tax abatements.
2.
The Board of Tax Assessors also requires recipients to provide notice of the
status of the project as of January 1 of each year in order to grant the
abatement. This information enables the Board to value the property at the
stage of completion as of the January 1 valuation date as set by Georgia code.
The Board would need to know when the project is considered completed.
3.
The project will incorporate and maintain the landscape requirement, for the
duration of the tax exemption period, as established by local ordinance# 98-30.
The applicant shall also be required to follow any additional requirements as
determined by the City.
4.
Facade enhancement shall be approved by the City official prior to the granting
of the tax abatements.
_______________________
Introduced at a regular meeting of the Council of Columbus, Georgia, held
the _________ day of _____________ 2013, and adopted at said meeting by the
affirmative vote of _____________ members of said Council.
Councilor Allen voting __________.
Councilor Baker voting __________.
Councilor Barnes voting __________.
Councilor Davis voting __________.
Councilor Henderson voting __________.
Councilor Huff voting __________.
Councilor McDaniel voting __________.
Councilor Turner Pugh voting __________.
Councilor Thomas voting __________.
Councilor Woodson voting __________.
__________________________ ______________________
Tiny B. Washington, Clerk of Council , Mayor
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