HomeMy WebLinkAboutConfirming Tax Abatement - 2629 Foundation Dr., Value Production 5( Yrs.) Personal PropertyRESOLUTION
4032-10
Passed by the Common Council of the City of South Bend, Indiana
June 14, 10
Zo
Attest:
City Clerk
President of Common Council
Presented by me to the Mayor of the City of South Bend, Indiana
June 15,
20 10
City Clerk
Approved and signed by me June 15 , 20 10
RESOLUTION NO. ~- `~ ~ ~- - ~ ~
A RESOLUTION CONFIRMING THE ADOPTION OF A
DECLARATORY RESOLUTION DESIGNATING CERTAIN AREAS
WITHIN THE CITY OF SOUTH BEND, INDIANA, COMMONLY
KNOWN AS
2629 FOUNDATION DRIVE
TO BE AN ECONOMIC REVITALIZATION AREA FOR PURPOSES OF
AFIVE (5) YEAR PERSONAL PROPERTY TAX ABATEMENT FOR
VALUE PRODUCTION, INC.
WHEREAS, the Common Council of the City of South Bend, Indiana, has
adopted a Declaratory Resolution designating certain areas within the City as Economic
Revitalization Areas for the purpose of tax abatement consideration; and
WHEREAS, a Declaratory Resolution designated the area commonly known as
2629 Foundation Drive, South Bend, Indiana, and which is more particularly described as
follows:
A parcel of land in the Southwest Quarter of Section 28, Township 38 North,
Range 2 East, St. Joseph County, Indiana
and which has Key Number 25-1010-0400.12, as an Economic Revitalization Area; and
WHEREAS, notice of the adoption of a Declaratory Resolution and the public
hearing before the Council has been published pursuant to Indiana Code 6-1.1-12.1-2.5;
and
WHEREAS, the Council held a public hearing for the purposes of hearing all
remonstrances and objections from interested persons; and
WHEREAS, the Council has determined that the qualifications for an economic
revitalization area have been met.
NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of
South Bend, Indiana, as follows:
SECTION I. The Common Council hereby confirms its Declaratory Resolution
designating the area described herein as an Economic Revitalization Area for the
purposes of tax abatement. Such designation is for Personal property tax abatement only
and is limited to two (2) calendar years from the date of adoption of the Declaratory
Resolution by the Common Council.
SECTION II. The Common Council hereby determines that the properly owner is
qualified for and is granted Personal property tax deduction for a period of (5) five years,
and further determines that the petition complies with Chapter 2, Article 6, of the
Municipal Code of the City of South Bend and Indiana Code 6-1.1-12 et sec .
SECTION III. This Resolution shall be in full force and effect from and after its
adoption by the Common Council and approved by the Mayor.
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Member of the Common Council
PP.ESENTED vJ~~-lO
NRZ APPROVED
ADOPrEI~ -~° b ~~ ~{--~U
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P,1 AY - 3 2010
JONP~ VQG?^E
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1200 COUNTY-CITY BUILDING
227 W. JEFFERSON BOULEVARD
SOUTH BEND, INDIANA 46601-1830
PHONE 574/ 235-9371
FAx 574/235-9021
TDD 574/ 235-5567
CITY OF SOUTH BEND STEPHEN J. LUECKE, MAYOR
COMMUNITY HL ECONOMIC DEVELOPMENT
JEFFREY V. GIBNEY
EXECUTIVE DIRECTOR
May 3, 2010
Council Member Timothy Rouse, Chairperson
Community & Economic Development Committee
South Bend Common Council
4th Floor, County City Building
South Bend, IN 46601
RE: Personal Property Tax Abatement Petition for:
Value Production, Inc.
Dear Council Member Rouse:
Please find attached the Department of Community & Economic Development's report on a personal
property tax abatement petition for the above-referenced petitioner. Also attached is a copy of the petition,
Statement of Benefits form, and supporting information. The project calls for the acquisition and
installation of new equipment as part of the company's planned increase in productive capacity in its facility
located at 2629 Foundation Drive.
The report contains the Department's findings relative to the above petition. Value Production will be
purchasing and installing new equipment. The total project cost for the equipment is estimated at
$1,500,000. The project meets the qualifications fora (5) five-year personal property tax abatement and a
representative from Value Production will be available to meet with the Committee on Monday, May 24,
2010.
Should you or any of the other Council members have any questions concerning the report, or need
additional information, please feel free to call me at 235-5835.
Sincerely,
Bob Mathia
Assistant Director,
Economic Development
Attachments
cc: South Bend Common Council Members
Mayor Stephen Luecke
Jeff Gibney
Don Inks
COMMUNITY DEVELOPMENT ECONOMIC DEVELOPMENT FINANCIAL & PROGRAM
PAn1ELA C. MEYER DONALD E. INKS MANAGEMENT
574/235-9660 574/235-9371 ELIZABETH LEONARD
FAX: 574/235-9697 574/235-9371
12U0 COUNTY-CITY BUILDING
227 W. JEFFERSON BOULEVARD
SOUTH BEND, INDIANA 46601-1830
PHONE 574/ 235-9371
FAx 574/235-9021
TDD 574/ 235-5567
CITY OF SOUTH BEND STEPHEN J. I.UECKE, MAYOR
COMMUNITY ~L ECONOMIC DEVELOPMENT
JEFFREY V. GIBNEY
EXECUTIVE DIRECTOR
TAX ABATEMENT REPOR T
TO
FROM:
SOUTH BEND COMMON COUNCIL
BOB MATHIA
SUBJECT: PERSONAL PROPERTY TAX ABATEMENT PETITION FOR:
VALUE PRODUCTION, INC.
DATE: May 3, 2010
On May 3, 2010, a petition for personal property tax abatement consideration for property located at 2629
Foundation Drive was filed with the City Clerk by Value Production, Inc. Pursuant to Chapter 2, Article
6, Section 2-84.2 of the Municipal Code of the City of South Bend, this petition was referred to the
Department of Community and Economic Development for purposes of investigation and preparation of a
report determining whether the area qualifies as an Economic Revitalization Area pursuant to
I.C.6-1.1-12.1 and whether all zoning requirements have been met.
The Department of Community and Economic Development has reviewed the petition (a copy of which is
attached), investigated the area, and makes the following report.
PROJECT SUMMARY
Value Production is a modern production machining facility. They provide one-stop shopping for design,
prototypes, and production, and it is an ISO 9001:2000 certified company. Value Production was
established in October of 2000. The company manufactures products for use in the aerospace,
automotive, medical, and commercial markets. The company will purchase a new, Swiss lathe, 2 Mazak
horizontal machining centers and a pallet control center for their custom manufacturing needs. The
project will invest $1,500,000 in this new equipment. Total taxes to be abated during the (5) five-year
abatement period are estimated at $41,882. Total taxes to be paid during the (5) five-year abatement
period are estimated at $124,606.
COMMUNITY DEVELOPMENT ECONOMIC DEVELOPMENT FINANCIAL & PROGRAM
PAMELA C. MEYER DONALD E. INKS MANAGEMENT
574/235-9660 574/235-9371 ELIZABETH LEONARD
Fax: 574!235-9697 574/235-9371
South Bend Common Council
RE: Value Production, Inc.
May 3, 2010
Page 2
EMPLOYMENT IMPACT
Per the petition, it is estimated that the total project will create four (4) new, permanent, full-time jobs in
the first year of production representing a new annual payroll of $120,000. The project will also maintain
twenty-three (23) existing, permanent, full-time jobs and one (1) existing part-time job representing an
annual payroll of $1,000,000.
ABATEMENT QUALIFICATION
1. A review of the tax abatements previously granted finds that the petitioner has been granted or been
associated with the following previous tax abatements:
Term/Tune Resolution No. Date
5-year personal property (Increase) 3770-07 August 13, 2007
5-year personal property 3669-06 November 27, 2006
5-year personal property 3305-04 February 23, 2004
5-year personal property 2955-00 December 18, 2000
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 Development Area, which is a Tax Incremental Allocation Area; therefore,
the petition for personal 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 fora (5) five-year personal property tax abatement under section 2-84.2, Tangible
Personal Property Tax Abatement.
5 YEAR
Value Production, Inc.
South Bend German Township
Personal Property Tax Abatement Schedule*
Tax Key Number
Current Assessed Value:
Estimated Project Cost:
25-1010-040012
689,001
1,500,000
40% 60%
100% 80%
Year1 Year2
3-May-10
55% 45% 37%
60% 40% 20%
Year3 Year4 Years
Current
Assessed Value: AV & Tax Pay 2011 Pay 2012 Pav 2013 Pay 2014 Pav 2015
Current Assessed Value 100% 689,001 689,001 689,001 689,001 689,001 689,001
Base Assessed Value 600,000 900,000 825,000 675,000 555,000
Less Abatement Deduction (600,000) (720,000) (495,000) (270,000) (111,000)
Net Assessed Value 689,001 689,001 869,001 1,019,001 1,094,001 1,133,001
Prooertv Taxes:
Assume constant tax rate of 4.4232% 4.4232% 4.4232% 4.4232% 4.4232% 4.4232%
Gross Tax (tax rate x net assessed value)
Less Circuit Breaker Credit
Net Tax
Circuit Breaker Cap
Circuit Breaker
Debt Service
Circuit Braker Cap
30,476 30,476 38,438 45,072 48,390 50,115
(6,326) 0 0 0 (1,944) (7,072)
24,150 30,476 38,438 45,072 46,446 43,043
3.0000% 20,670 38,670 47,670 45,420 40,920 37,320
0.5051% 3,480 3,480 4,389 5,147 5,526 5,723
24,150 42,150 52,059 50,567 46,446 43,043
New Combined Net
Existing Project Existing & New Tax Tax
Year Taxes Taxes Taxes Abated Paid
Pay 2011 24,150 21,031 45,181 14,705 30,476
Pay 2012 24,150 31,546 55,696 17,258 38,438
Pay 2013 24,150 28,917 53,067 7,995 45,072
Pay 2014 24,150 23,659 47,809 1,364 46,446
Pay 2015 24,150 19,453 43,603 561 43,043
Totals 120,751 124,606 245,356 41,882 203,474
'This schedule is for estimation purposes only and assumes constant tax rates. The true tax values
will ultimately be determined by the actual assessed valuation and the then current tax rates.
CITY OF SOUTH BEND PETITION FOR
TANGIBLE PERSONAL PROPERTY TAX ABATEMENT CONSIDERATION
The undersigned owner(s) of new manufacturing equipment, personal property,
located within the City of South Bend, hereby petitions the Common Council of the
City of South Bend for personal property (new manufacturing equipment) tax
abatement consideration and pursuant to I.C., 6-1.1-12.1, et seg•' and South Bend
Municipal Code Section 2-84.2, et seq.' for this petition states the following:
1. Describe the proposed project, including information about the new
manufacturing equipment personal property (Aequipment@) to be installed, the
amount of land to be used, if any, the proposed use of the equipment, and a
general statement a tIO_ the valuep~of the project to your business. ~}- I
~e~ CsJV..~~~ ~S 2^^-c~V ~e.p~ 1~S v~ ~~~ ~~ c '~'L ~~ l C cv~5 ~
~ sw ass l~,tlti-~ 2 -~~z~~ ~~.,• ,(J 1.,~. ~ .~~,{.~s
tnL~- nail (D~~ P~ ~~ wt ~ A O~-~ ~ 2.~..`~'~l~~.l D _e h~ V V`4 ~. QJv~ u Ln.~ _
2. The project will create ~-t- new, permanent jobs within the first year,
representing a new annual payroll of $ l 2~~ ~ ~o and will maintain
z 3 existing permanent full-time and 1 existing part-time jobs
representing an annual payroll of $ I,oQocp , ro .The projected annual salaries
for each new osition created are estimated to be as follows:
3. Estimate the total cost of the Equipment: ~ I ~ S GU , o W _
4. (a) The Equipment is owned or to be owned by the following individuals or
corporations (if the business organization is publicly= held, indicate also the
name of the corporate parent, if any, and the name under which the
corporation has filed with the Securities and Exchange Commission):
NAME ADDRESS INTEREST
y~~w~ ~~~~~-cco~~ ~N~. Z67-1Fa.,.r.,~~t~t~,,J ~•S•B,~~k66~d (GO ~~
(Revised 8/2/02) 1
(b)The following other persons lease, intend to lease, or have an option to buy
this Equipment (include corporate information as required in (4)(a) above, if
applicable):
NAME ADDRESS INTEREST
~ ~ Qr~Ju-c.-c w~ ~r~ c .
5. Give a brief description of the overall nature of the business and of the
operations occurring at the location for 1Vhich tax abatement is requested:
Mt~k%{'1'~L'[ ttiL1 wl~i / F vV~2~~0`-t N^~~~.X~l 0-t ~ i~ a-~-P~SI~RC'~ r
6.
7. The Key Number of said property is: Z S'' IolO - olkoo t Z-
8. Attach the legal description of the property where the equipment is to be
located, marked AExhibit A,@ and is hereby incorporated herein.
9. Attach a map and/or plat describing the property where the equipment is to be
located, marked AExhibit B,@ and is hereby incorporated herein.
10. Attach photographs of the property, taken within 30 days of filing of this
petition, marked AExhibit C,@ and hereby incorporated herein.
11. The current assessed valuation of the tangible personal property to be replaced
by the new manufacturing equipment is $ -~-
(This information may be obtained from the St. Joseph County Assessors office 235-9523)
12. The current use of the real property where the Equipment is to be installed is
and the current zoning is
_ (use) and (height and area).
(This information may be obtained from the Building Department 235-9553)
(Revised 8/2/02) 2
The commonly known address of the property where the Equipment is to be
located is: Z b ~c ~~~~~~ ~aw ~ ~ ~~~1~ `~a~. ~tJ I-f'~~28
13. List the real and personal property taxes paid at the location during the
previous five years, whether paid by the current owner or a previous owner:
YEAR REAL PROPERTY TAXES PERSONAL PROPERTY TAXES
(This information may be obtained from the St. Joseph County Treasurers office 235-9531)
14. Describe the commitment made within the past five years by your firm to hiring
minority individuals, including number of minorities employed during each of
the past five years, specifying whether full time or part-time and whether
permanent or temporary employees. The Petitioner shall also list the current
number of total employees (full and part-time) and the current number of
minority individuals (full and part-time).
15. Describe on-site child care or day care facilities, services or benefits currently
offered or proposed to be offered by the Petitioner for children of employees.
16. What is your best estimate of the market value of the new Equipment after
installation? ~ I S~ ~ ~ ~~ --
17. What is your best estimate of the amount of taxes to be abated during each of
the five years after installation? $
18. What is the commitment your firm will make to minority employment during
the five years of tax abatement? ~~
(Revised 8/2/02) 3
19. The Equipment has not been installed as of the date of filing of this petition.
(The signature at the end of this Petition is verification of this statement)
20. The standard Industrial Classification Manual major group within which the
proposed project would be classified, by number and description:
332 700
21. The Internal Revenue Service Code of Principal Business Activity by which the
proposed project would be classified, by number and description:
22. The real property where the Equipment will be installed is located in the
following Allocation Area, if any, declared and confirmed by the South Bend
Redevelopment Commission:
~~~Poa ~ Z~Ccwca~n~ ~- ~£~1 ~~~ ti-T r\ ~h-~ ~
23. Other anticipated public financing for the project including, if any, industrial
revenue-bonding to be sought or already authorized, assistance through the
United States Department of Housing and Urban Development funds from the
City of South Bend, Small Business Association Sections 503 and 504 financing
through the Business Development Corporation of South Bend, Mishawaka,
and St. Joseph County, Indiana; or other public financial assistance, including
but not limited to public works improvements.
24. Describe how and why the manufacturing equipment to be replaced or the
facility in which Equipment will be added is currently technologically,
economically or energy obsolete and how and why that obsolescence may lead to
a decline in employment and tax revenues:
25. The new manufacturing equipment will be used in the direct production,
manufacture, fabrication, assembly, extraction, mining, processing, refining, or
finishing of other tangible personal property and that the equipment was never
before used by its owner for any purpose in Indiana. The signature at the end
of this Petition is verification of this statement.
(Revised 8/2/02) 4
26. The following person(s) should be contacted as Petitioner=s agent regarding
additional information and public hearing notifications:
N2me• ~4~--.~ ~ • ~~c~~~ ~-A
Address: 51700 ~~~~~s~:~~ Cam.
City, State, Zip Code: G x-~-r c~ ,c . ~ N G-~ S 3 0
Telephone: S ?ct- _ ~ ~ 6 - (g i 3 0~ ~ ~ ~~ 5 74 - 3i 5 -- ~ 5~ ~
WHEREFORE, Petitioner requests that the Common Council of the City of South
Bend, Indiana, adopt a declaratory resolution designating the area described herein
to be an economic revitalization area for purposes of tangible personal property tax
abatement consideration, and after publication of notice and public hearing,
determine qualifications for an economic revitalization area have been met, and
confirm such resolution. Petitioner herein hereby verifies that the required $250.00
filing fee to cover processing and administrative costs pursuant to Section 2-84.7 of
the Municipal Code of the City of South Bend has been paid in full.
Name of Property Owner(s):
y ~ ~~ ~~ ~~Z ca~-~ ~ 1 ~.1 ~
By:
Nov ~vJ ~~ ~~~ {~~s ~~~aT
(Typed or printed n me and capacity of signor if signed
by an agent or representative of the owner)
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(Revised 8/2/02) 5 -°"'~°~m"'"w M~
EXHIBIT A
LEGAL DESCRIPTION
Description: A parcel of land in the Southwest Quarter of Section 28, Township 38
North, Range 2 East, St. Joseph County, Indiana.
Tax Key Number: 25-1010-0400.12
Address: 2629 Foundation Drive, South Bend, Indiana 46628
h9 AY - 3 2010
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