Confirming Tax Abatement - McCormick & Co. Inc. 3425 W Lathrop Dr. (5 Yr. Personal Property)

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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 CITY OF SOUTH BEND STEPHEN J. LUECKE, MAYOR COMMUNITY ~ ECONOMIC DEVELOPMENT JEFFREY V. GIBNEY January 10, 201 1 EXECUTIVE DIRECTOR Council Member Timothy A. Rouse, Chairperson Community & Economic Development Committee South Bend Common Council 4th Floor, County City Building South Bend, IN 46601 RE: Real and Personal Property Tax Abatement Petitions for: MC CORMICK AND COMPANY, INCORPORATED Dear Council Member Rouse: On July 26, 2010, the Common Council approved Designating Resolutions for real and personal property tax abatements for the subject firm. The property will be located at 3425 West Lathrop Drive. At the time the Designating Resolutions were considered the firm had not completed the list of construction contractors and suppliers for its proposed project as called for in the real property petition forms. In approving the Designating Resolution for real property it was noted that the firm could qualify for up to anine-year abatement term. The firm agreed to provide the required information prior to the Council considering its real property Confirming Resolution. Consideration of the Confirming Resolutions for both tax abatements was held in abeyance pending receipt of the required information. McCormick has now completed the list of contractors and suppliers for construction of the addition and submitted it tome. I have reviewed the information and found that the firm qualifies for aneight-year real property tax abatement term. Ilowever, due to an increase in customer demand McCormick had to enlarge the project. A summary tax abatement report on the revised project follows: Project Description: The project originally entailed the construction and equipping of a 50,000 square foot addition to their manufacturing facility. The cost of construction was estimated at $5,010,913 and equipment procurement was estimated at $875,173 for a total project cost of $5,886,086. The equipment includes fork lifts, coolers, racking, computers and furniture and fixtures. The addition is intended to house a distribution operation for the products McCormick makes. The products include condiments (ketchup, mustard, salad dressing, etc.) for major restaurant chains. During initial discussions the company was also considering alternate sites in Michigan, Illinois and other states to locate the distribution operation. After the Designating Resolutions were approved the company selected South Bend. Since then an increase in business volume from their main customer has caused the company to increase the size of the project by adding 25,000 more square feet to the addition at a cost of $884,071 and providing more equipment at a cost of $487,000. The revised cost of construction is now estimated at $5,894,984 and the equipment procurement is estimated at $1,362,173 for a new total project cost of $7,257,157. However, the goals and objectives of the project remain the same as those originally presented for the Designating Resolutions. COMMUNITY DEVELOPMENT ECONOMIC DEVELOPMENT FINANCIAL RC PROGRAM PAMELA C• MEYER DONALD E. INKS MANAGEMENT 574/235-9660 574/235-9371 ELIZABETH LEONARD PAX: 574/235-9469 ~ 574/235-9371