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087-88 Ordinance RECORD OF ORDINANCES , National Graphics Corp.. Cols.. O. ~ Form No. 2806-A Ordinance No. ____8}:-:-~_8_________ Passed _________________ _____________________________19_______ AN ORDINANCE TO AUTHORIZE THE CITY MANAGER TO ENTER INTO AN INDUCEMENT AGREEMENT WITH THE ASHLAND CHEMICAL COMPANY TO ASSIST IN THE EXPANSION OF THE COMPANY'S DUBLIN FACILITY WHEREAS, the City of Dublin recognizes the contributions that the Ashland Chemical Company has made to this community; and, WHEREAS, the Company is considering an expansion of their facilities; and, WHEREAS, the City of Dublin is willing to offer assistance to encourage this expansion within the community due to the increased tax benefits and other positive contributions which will be forthcoming. NOW, THEREFORE, BE IT ORDAINED by the Council of the City of Dublin, State of Ohio, 7 of the elected members concurring: Section 1. That the City of Dublin, in order to encourage Ashland's epxansion of its Dublin facility desires to enter into an agreement with the Company to enumerate the various ways in which the City can assist in their proposed project. Section 2. That a copy of the agreement is hereto attached as Exhibit "A". Section 3. That the City Manager is hereby authorized and directed to execute said agreement with the Ashland Chemical Company, a division of Ashland Oil, Incorporated. Section 4. That this Ordinance be, and the same hereby is, declared to be an emergency measure necessary for the public health, safety and welfare, and therefore, shall take effect and be in force immediately upon its passage. Passed this day of September , 1988. - ~. / Mayor - Presiding Officer I, Frances M. Urban Clerk of Council. hereby certify that the foregoing is a true copy of OrdinanceAt~~ No. _87-88 duly adopted by the Council of the City of Dublin, Ohio, on the 6th Attest: day of September , 1988 ~~.;;r.. ~ Clerk of Counei , Dublin. Ohio / ~A~2 ~, 't~~/ Clerk of Co cil I hereby certify that wfl:es of t~j5 Ord'nonce/Rcso!ution were posted.~ , !" 2 Sponsor: City Manager City of Dublin in lIcco:dame w:th Secron 731.25 of the Ohio Revised ( Je. _/~~ //;,1, 't(~ Clerk of CounCil, Dublin, Ohio . ADMINISTRATIVE REPORT TO: Members of Dublin City Council FROM: Timothy C. Hansley, Ci ty Manager / SUBJECT: Inducement Agreement/Ashland Chemical DATE: September 1, 1988 SUMMARY AND ACTION RECOMMENDED Ashland Chemical Company is considering expanding its Dublin facility. The final decision as to whether to increase operations at this site or at one of three other company-owned sites, will be made by the parent company, Ashland Oil, Inc. To strengthen the position of the local site, relative to the competing locations, Mr. Jack Boston, the Administrative Vice-President, approached the City Administration in January, 1988 and requested that we prepare an inducement package to assist him in this regard. The attached legislation and companion inducement agreement reflects several months of negotiations and discussions between the City and the Company. It also incorporates the changes which City Council made to the draft document which you saw in May. The Administration is recommending that City Council adopt this legisla- tion as an emergency measure to ensure that the local site maintains the highest possible competitive position as the presentations are reviewed at the corporate level. ISSUE - The attached Inducement Agreement fully outlines the Company's plans regarding expanding the local facility. It is slightly different than the draft copy which City Council reviewed in May of this year, in that it allows for a phasing of the project. It also adds under the road improvement section the statement that mounding and landscaping will be a part of the overall road improvement project. In addition under II 5, we have added the further condition that the City's sanitary sewer system will be extended to the Company's property. It has long been the inten- tion of the City Staff to recommend to City Council that the City bear the major burden of extending this line in this particular area as a way to eventually provide service underneath the 1-270 expressway. This agreement represents a reasonable expenditure of public funds in light of the over 700 jobs that will either be created or retained in Dublin if this facility is induced to expand here. Obviously, the main selling point is the expansion would produce a payroll of over $400,000 a year. Therefore the estimated payback period on all the direct costs from the City of Dublin under this inducement agreement would be less than five (5) years. Thus, it is highly beneficial to the City. It is also interesting to note that a n~rrnal inducement in this type of situation would include a request for tax abatement. In this case both the City and the Company have agreed that an abatement of taxes would not be appropriate. It was mutually agreed that rather than abating taxes, these dollars would be better used to improve the overall appearance of the area, and upgrade utility services. It is presently expected that information will be forwarded to the Corporate level within a week after the passage of this legislation with presentations to follow later in September and with a decision and a commitment from the Company to be made by the end of October. If Dublin is successful, construction would commence in the Spring of 1989. ADDITIONAL CONSIDERATIONS An additional factor which should be recognized by City Council is that with this inducement which guarantees the extension of utilities and the construction of the additional road improvements, the City and the Company are working together to attract an additional grant from the State of Ohio Department of Development. Any assistance from the State in this regard, would be conditional upon the City Council taking the action requested by the attached legislation. CONCLUSION The attached Inducement Agreement has been reviewed in draft form by City Council, and your concerns have been included in this final version and the Administrative Staff and the Company have reached mutual agreement as to its terms. We are also working with the State of Ohio to gain from them approval for outside funding. Therefore, it is strongly recommended that this legislation be adopted by City Council to allow this project to move to its next stage and hopefully to a successful conclusion regarding the expansion of this facility. EXHIBIT 'A' AGREEMENT OF INTENT BETWEEN CITY OF DUBLIN AND ASHLAND CHEMICAL COMPANY DIVISION OF ASHLAND OIL, INC. AGREEMENT OF INTENT This Agreement of Intent is entered into on , 1988, between the City of Dublin (the "City") and Ashland Chemical Company a Division of Ashland Oil, Inc. (the "Company") for the purpose of inducing the Company to expand its manufacturing support fad lit)' by the construction of a new facility with an estimated value of $25,000,000 and an estimated size of 171,000 square feet with construction of the init ia 1 phase, estimated to commence by Spring, 1989, and the second phase pla.nned to commence in 1992; such construction schedule based on a continuation of the current business conditions. I. BACKGROUND The Company has been an important and significant part of the Dublin Community since 1971. During this period, both the Company and the City have experienced growth and financial success and have enjoyed a harmonious working relationship. The Company and its individual employees have contributed to the quality of life in Dub li n by their commitment to quality development standards, support of community charitab Ie activities and projects, and service in volunteer and civic positions, to name just a few ways in which the Company has earned a high level of respect within Dublin and the total central Ohio community. The Company has identified a need to expand its manufacturing support activities which will necessitate the construction of a new building. It is estimated that the planned two-phase project would have a value of $25,000,000 and would be 171,000 square feet in size. The construction of this facility is estimated to result in the employment of between 700 and 1,000 persons. It is anticipated that a decision regarding this expansion could be made on or about October 1, 1988 and would result in a Spring, 1989 commencement of Phase I construction. It is recognized and understood by the City that the Company has existing land and/or facilities in the states of New Jersey, Michigan and Kentucky which, in addition to the Dub li n site, are being reviewed and evaluated by the Company in determining the most beneficial location for expanding the manufacturing support facilities. To assist in the decision making process, the City desires to enumerate spec if ic cooperative efforts which will be undertaken in the event the Company chooses the Dublin site over those other sites being evaluated. This effort is being made in recognition that the construction of this facility and the creation of these additional jobs will provide economic benefits to the City and will further add to the quality of this community. Accordingly, the City and the Company wish to set forth certain matters as to which agreement has been reached and to indicate their intent and agreement in principle with regard to other matters. Both the City and the Company recognizes that this Agreement may be replaced or supplemented in the future by more detailed agreements. However, the parties do intend that this Agreement shall set: forth those intentions, principles and details as to which agreements have been reached at this time. II. AGREEMENT OF INTENT The parties, predicated on the previous recitation, agree as follows: 1. Road Improvements. As requested by the Company, and in order to provide the requisite traffic-carrying capacity, the City agrees that it is necessary to rebuild and upgrade Blazer Parkway. This improvement includes the rebuilding of Blazer Parkway to a ~.,idth of thirty-six (36) feet and the installat ion of curbs and gutters. Lighting, walkways, and the extension of the existing water main, will also be installed as part of the project. Also, mounding and landscaping the street to improve overall safety and appearance. The City "'Till init iate immediately the engineering design work necessary so as to provide for a construction start on this project as soon as weather permits in the Spring of 1989. The final engineering designs, plans and specifications thereof shall be discussed with the Company, and the Company shall have the opportunity to request necessary changes therein. The foregoing road improvements are currently estimated to cost approximately $1,300,000. The City agrees to pay for all of such costs, including those, if any, in excess of such estimates. 2. Parking Requirements. The City agrees to give top priority in all respects to processing the building permit applications from the Company. Both parties agree that the intent of the City's zoning code is to require that an adequate number of parking spaces be constructed to properly serve a new facility. The City recognizes that the Company's proposed facility provides for multi-purpose space to be ut il ized for a wide-range of functions and therefore would not be subject to the same parking requirement formula as would an office building with leased space. The City agrees to work coopera- tively with the Company to determine parking requirements that meet the needs of the Company and to also satisfy the above stated intent of the zoning code. 3. Signage. The City will give top priority in all respects to processing an application from the Company for a variance to move or rebuild the existing corporate signage. It is recognized by the parties that the Dublin Board of Zoning Appeals has granted variances from the requirements of the zoning code where it has been demonstrated by the staff report and the presentation of the applicant that the existing or proposed sign has been integrated into a well-designed site plan and is of the proper scale and architecturally harmonious with the facility it identifies. The City Administrative Staff agrees that the Company's existing sign meets this criteria and therefore represents the community standard. The City Administrative Staff agrees, at a future date and as a part of a Board of Zoning Appeals hearing on the Company's request for a sign variance, to furnish this opinion to the Board. It is recognized by both parties that the Board of Zoning Appeals and/or the Dublin City Council would have the final review authority. 4. Water System. In order to assure an adequate supply of water for the Company, the City agrees to extend the existing waterline to the Company's property. The City agrees that the Company is not now, nor will they be in the future, required to tap into this line as long as the Company's on-site water system meets state and federal safe drinking water standards. Both parties recognize that EPA and County Health Department reviews for a new well or other expansions to the Company's private water system may be more strict, when tapping into the municipal water system is a viable option. 5. Sewer System. In order to allow for the expansion of this facility in a cost-effective manner, the City agrees to extend the sanitary sewer line from Frantz Road and Rings Road to the Company's property. 6. Zoning Code Restrictions/Sideyards. The City Administrative Staff agrees that if the Company provides evidence that they, or a closely related holding company or other affiliated corporate entity, has overall control of the acreage, the sideyard requirements of the Dublin Zoning Code will apply to the perimeter of the area of control. 7. Coordination. The City agrees to assign the City Manager to work closely with the Company as a liaison between the City and the Company, and to serve as a coordinator with other agencies and levels of government. Specifically, in this regard, the City agrees to act through its City Manager to apply for State funds on behalf of the Company; such funds to be used by the Company to assist with site development costs or with other eligible costs of establishing this proposed facility. III. Intention of Company It is the Company's intention to review the Dublin site with full consideration given to the inducements herein enumerated and in recognitio~ of the other benefits available to the Company by expanding its facilities in the Dublin community. In the event that the Dublin site is chosen, the~ it is the Company's intention to carry out the construction and operation of the proposed new facility as contemplated by this Agreement and as set forth hereinabove, provided the conditions agreed to by the City in this Agreement have been undertaken in a timely manner. IV. Expeditious Action The City and the Company recognize that the creation of additional jobs is a matter of highest priority, and both parties will use their best efforts to proceed as expeditiously as possible in carrying out their responsibilities hereunder. V. Authorization This Agreement shall become effective when fully executed by both parties. The City Manager will sign on behalf of the City following the adoption of an ordinance by Dublin City Council authorizing such action. CITY OF DUBLIN By Timothy . Hansley City Manager ASHLAND CHEMICAL COMPANY DIVISION OF ASHLAND OIL, INC. By