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1200 CouNTY -Crr BUILDING <br />227 W.JEFFERsON Boui.EVARD <br />SOUTH BEND, INDLa;,a 46601 -1830 <br />PHONE 5741235 -9371 <br />FAX 5741235 -9021 <br />CITY OF SOUTH BEND STEPHEN J. LUECKF, MAYOR <br />COMMUNITY ,CONOM c DEVELOPMENT <br />JEFFREY V. GiBNEY <br />January 10, 201 1 ExF_cuTlvE DIRKTOR <br />Council Member Timothy A. Rouse, Chairperson <br />Community & Economic Development Committee <br />South Bend Common Council <br />4th Floor, County City Building <br />South Bend, IN 46601 <br />RE: Real and Personal Property Tax Abatement Petitions for: <br />MC CORMICK AND COMPANY, INCORPORATED <br />Dear Council Member Rouse: <br />On July 26, 2010, the Common Council approved Designating Resolutions for real and personal <br />property tax abatements for the subject firm. The property will be located at 3425 West Lathrop Drive. <br />At the time the Designating Resolutions were considered the firm had not completed the list of <br />construction contractors and suppliers for its proposed project as called for in the real property petition <br />forms. In approving the Designating Resolution for real property it was noted that the firm could <br />qualify for up to a nine -year abatement term. The firm agreed to provide the required information prior <br />to the Council considering its real property Confirming Resolution. Consideration of the Confirming <br />Resolutions for both tax abatements was held in abeyance pending receipt of the required information. <br />McCormick has now completed the list of contractors and suppliers for construction of the addition and <br />submitted it to me. I have reviewed the information and found that the firm qualifies for an eight -year <br />real property tax abatement term. However, due to an increase in customer demand McCormick had to <br />enlarge the project. A summary tax abatement report on the revised project follows: <br />Project Description: The project originally entailed the construction and equipping of a 50,000 square <br />foot addition to their manufacturing facility. The cost of construction was estimated at $5,010,913 and <br />equipment procurement was estimated at $875,173 for a total project cost of $5,886,086. The <br />equipment includes fork lifts, coolers, racking, computers and furniture and fixtures. The addition is <br />intended to house a distribution operation for the products McCormick makes. The products include <br />condiments (ketchup, mustard, salad dressing, etc.) for major restaurant chains. During initial <br />discussions the company was also considering alternate sites in Michigan, Illinois and other states to <br />locate the distribution operation. After the Designating Resolutions were approved the company <br />selected South Bend. Since then an increase in business volume from their main customer has <br />caused the company to increase the size of the project by adding 25,000 more square feet to the addition <br />at a cost of $884,071 and providing more equipment at a cost of $487,000. The revised cost of <br />construction is now estimated at $5,894,984 and the equipment procurement is estimated at $1,362,173 <br />for anew total project cost of $7,257,157. However, the goals and objectives of the project remain the <br />same as those originally presented for the Designating Resolutions, <br />Commuwry DEVELOPMENT E.cONOMIC DEVELOPMENT FINANCIAL & PROGRAM <br />PAMELA C. MLYER DONALEY E. INKS MANAGEMENT <br />5 74/2 35-9660 574!235 -9371 ELTEAHTH LEONARD <br />FAY: 5741235.9469 5741235 -9371 <br />