03-08-10 Council Agenda & Packet

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RE: Tax Abatement for Olive Cleveland Partners, Inc. February 19, 2010 Page 2 The Petitioner has just begun collecting information on potential suppliers and contractors for the project. For this reason they were unable to answer the questions related to suppliers of construction materials and construction contractors. They intend to submit this information prior to the Common Council meeting to consider their confirming resolution. At that time final points will be awarded and the length of the abatement term set. Based on current information, the Petitioner will score sufficient points for a three -year term. The Petitioner has supplied information from a previous project to be used for estimation purposes. If they score all of the points for construction they would have enough for five years. For purposes of consideration of the Declaratory Resolution we are estimating the term at six years to allow for any extra adjustment. Anything less will result in a reduction in the amount of tax revenue abated. Assuming a six -year abatement terns is approved at the Confirming Resolution, the total taxes to be abated during that term are estimated at $210,386. Total taxes to be paid during the six -year term are estimated at $218,637. If the term remained at three years, total taxes to be abated are estimated at $123,376. Total taxes to be paid over the three -year term are estimated at $91,136. EMPLOYMENT IMPACT Per the petition, it is estimated that the project will not create any new, permanent full -time positions. However, it will retain 23 existing permanent full -time positions, including 7 existing permanent full -time minority employees, with a total annual payroll of $668,820. 1, A review of the tax abatements previously granted finds that the petitioner has been granted or been associated with one (1) previous tax abatement. Termfly_ Resolution No. Date 7 -year real property 3840 -08 3/10/2008 2, The Building Commissioner has reviewed the petition and finds the property to be properly zoned for the proposed project. 3. A review of the South Bend Redevelopment designation areas finds that the property is located in the Airport Economic Area, which is a Tax Incremental Allocation Area, therefore, the petition for real property tax deduction must first be approved by the South Bend redevelopment Commission. 4. A review of the Tax Abatement Ordinance No, 9394 -03 finds that the petitioner meets the qualifications for up to a six -year real property tax abatement under Section 2 -79, Warehouse Development in the City -wide District,