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HomeMy WebLinkAboutConfirming Tax Abatement - 2629 Foundation Drive - Value Production, Inc.RESOLUTION 3669-06 Passed by the Common Council of the City of South Bend, Indiana November 27, 20 06 Attest: C City Clerk President of Common Council Presented by me to the Mayor of the City of South Bend, Indiana November 28, 20 06 Approved and signed by me Nwmeher 79 20~Fa_. City Clerk RESOLUTION NO. 3 bbd- 0~ 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 A FIVE (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 property 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. .. ~ vti~- Member of the o on Council PRESENTED ~ 1~Z~1~~ NOT APPROVED ADOPTED ~ l- 2-~ 'fib Filed In Clerk's Ofifice OCT 1 9 200 JOHN VOORDE CITY CLERK, S0. ©EhD, IN. 1200 COUNTY-C1TY 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 ~ ECONOMIC DEVELOPMENT October 17, 2006 SHARON T. KENDALL EXECUTIVE DIRECTOR Council Member Roland Kelly, 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 Kelly: 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 $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, November 13, 2006. 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 235-5825. Sincerely, Sharon Terrell Economic Development Attachments cc: South Bend Common Council Members Mayor Stephen Luecke Sharon Kendall Don Inks Bill Schalliol COMMUNITY DEVELOPMENT' ECONOMIC DEVELOPMENT FINANCIAL & PROGRAM PAMELA C. MEYER DONALD E. INKS MANAGEMENT 574/235-9660 5741235-9371 ELIZABETH LEONARD PAX: 574/235-9697 574/235-9371 1200 COUNTY-CITY BUILDING 227 W. JEFFERSON BOULEVARD SOUTH BEND,INDiANA 46601-1830 c ~ V' SOU xH ~ C 1, ( ~ . o`~ ,~~11',~I!~r/,~~o F ~\\ /~j~ C PHONE 574/ 235-9371 O ~` \~ ~ ~ ' ~ ~i ~ FAX 574/ 235-9021 W ~\ PEACE// ~ ~•~ v~~ ~~ ~ ~''a~ TDD 574/ 235-5567 ~~s ^ 1865 CITY OF SOUTH BEND STEPHEN J. LUECKE, MAYOR COMMUNITY ~L ECONOMIC DEVELOPMENT SHARON T. KENDALL EXECUTIVE DIRECTOR TAX ABATEMENT REPOR T TO: SOUTH BEND COMMON COUNCIL FROM: SHARON TERRELL SUBJECT: PERSONAL PROPERTY TAX ABATEMENT PETITION FOR: Value Production, Inc. DATE: November 13, 2006 The following page contains a correction to #1 under the Abatement Qualification heading. Value Production HAS BEEN associated with (2) two previous tax abatements. COMMUNITY DEVELOPMENT ECONOMIC DEVELOPMENT FINANCIAL SL PROGRAM PAMELA C. MEYER DONALD E. INKS MANAGEMENT 574/235-9660 574/235-9371 ELIZ4BETH LEONARD FAX: 574/235-9697 574/235-9371 South Bend Common Council RE: Value Production, Inc. October 17, 2006 Page 2 EMPLOYMENT IMPACT Per the petition, it is estimated that the total project will create (5) five new, permanent, full-time jobs in the first year of production representing a new annual payroll of $200,000. The project will also maintain (14) fourteen existing, permanent, full-time jobs representing an annual payroll of $475,000. ABATEMENT QUALIFICATION 1. 2. A review of the tax abatements previously granted finds that the petitioner has been associated with (2) two previous tax abatements. Term/Type 5-year personal property 5-year personal property Resolution No. 3305-04 2955-00 Date February 23, 2004 December 18, 2000 The most recent CF-1 dated 9/5/06 shows the company is in compliance with their projected costs of the project; however, the company showed a decrease in the actual number of employees retained (a loss of 2 employees) while proj ections were to acquire an additional (4) four employees and increase the estimated salaries by $150,000. The proj ections were not met in these categories. 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. 1200 COIJN'['Y-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 ~ ECONOMIC DEVELOPMENT SHARON T. ICENDALL EXECUTIVE DIRECTOR TAX ABATEMENT REPORT TO: SOUTH BEND COMMON COUNCIL FROM: SHARON TERRELL SUBJECT: PERSONAL PROPERTY TAX ABATEMENT PETITION FOR: Value Production, Inc. DATE: October 17, 2006 On October 5, 2006, 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 ofwhich 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 is an ISO 9001:2000 certified company. Value Production was established in October of 2000. The company manufactures tooling for use in the aerospace, automotive, medical, and commercial markets. The company will purchase a new, high-end mill and lathe for their custom aerospace manufacturing needs. The project will invest $500,000 in this new equipment. Total taxes to be abated during the (5) five-year abatement period is estimated at $30,462. Total taxes to be raid during the (5) five-year abatement period is estimated at $15,852. COMMUNITY DEVELOPMENT ECONOMIC DEVELOPMENT FINANCUIL SC PROGRAM PAMELA C. MEYER DONALD E. INKS MANAGEMENT 574/235-9660 5741235-9371 ELIZABETH LEONARD FAX: 574/235-9697 574/235-9371 South Bend Common Council RE: Value Production, Inc. October 17, 2006 Page 2 EMPLOYMENT IMPACT Per the petition, it is estimated that the total project will create (5) five new, permanent, full-time jobs in the first year of production representing a new annual payroll of $200,000. The proj ect will also maintain (14) fourteen existing, permanent, full-time jobs representing an annual payroll of $475,000. ABATEMENT QUALIFICATION A review of the tax abatements previously granted finds that the petitioner has not been granted or associated with any previous tax abatement. Term/Type Resolution No. Date 5-year personal property 3305-04 February 23, 2004 5-year personal property 2955-00 December 18, 2000 The most recent CF-1 dated 9/5/06 shows the company is in compliance with their projected costs of the project; however, the company showed a decrease in the actual number of employees retained (a loss of 2 employees) while proj ections were to acquire an additional (4) four employees and increase the estimated salaries by $150,000. The projections were not met in these categories. 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 Central Business District, 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. Tax Abatement Schedule prepared for: VALUE PRODUCTION, INC. Soufh Bend German 5 Year Personal Property Abatement Schedule* Total estimated Equipment Cost: $500,000 Assume constant tax rate of: 5.1376 Assume constant SRTC rate of: 7.0636 TTV Assessed Gross Less Net Percent Tax Year TTV% (Year 1-5) Value Tax SRTC Tax Abated Abated 1 40% 200,000 200,000 $10,275 726 $9,549 100% $9,549 2 56% 280,000 280,000 $14,385 1,016 $13,369 80% $10,695 3 42% 210,000 210,000 $10,789 762 $10,027 60% $6,016 4 32% 160,000 160,000 $8,220 581 $7,639 40% $3,056 5 24% 120,000 120,000 $6,165 435 $5,730 20% $1,146 $49,834 3,520 $46,314 $30,462 Total Taxes Due During Abatement: $46,314 Total Taxes Abated Duri ng Abateme nt: $30,462 Total Taxes Paid During Abatement: $15,852 10/6/2006 Tax Paid $0 $2,674 $4,011 $4,584 $4,584 $15,852 -This schedule is for estimation purposes only and assumes constant tax rates. The true tax values will ulimately 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, etet sea•,• and South Bend Municipal Code Section 2-84.2, et se for this petition states the following: 1: Describe the proposed project, including information about the new manufacturing equipment personal property ("equipment") to be installed, the amount of land to be -used, if any, the proposed use of the equipment, and a~ general statement as to the value of the project to your business. 2. The project will create 5 new, permanent jobs within the first year, representing a new annual payroll of $ Zoo, ~ - and will maintain existing permanent full-time and ~ ~-~- existing part-time jobs representing an annual payroll of $ ~~ 5~ c~ - The projected annual salaries for each new position created are estimated to be as follows: 3. Estimate the total cost of the Equipment: ~ 5 d ° ~ C~'~ - 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 J ~"~~.~ ~ ~"~ ~ h, L ~ l,tS`I`~ 1 ~ ('~ L ~ ~ 6 ~ ~~ ~K ~ Lfi~ 1l +~ ~ ~ G (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 5. Give a brief description of the overall nature of-the business and of the operations occurAr,~ing at the location for which tax aDbatement is requested: . '_` cab.. ~--F~-c_~c...~, ~i G P 4'~ (~`t, /,~-~. f ~ tl t7~c z 5 ~bv. ~~ /~-~s f 1~-L rZ.- , 6. The commonly known add`r~ess of thecQproperty where th,~e\ Equipment is to be located I.S : ~~ ~ 't"Uk e-~ ~ lY"~ (.C W /(~ ~ J ~ ~ JCl1n.'~ V1 ~ iv-~~ ~ ~ 1 ~-' Ll G 6 Z ~ 7. The Key Number of said property is: Z s - to t v - v ~-{- o ~ ~ 2 S. Attach the legal description of the property where the equipment is to be located, marked "Exhibit A," and is hereby incorporated herein. 9. Attach a map and/or plat describing the property where the equipment is to be located, marked "Exhibit B," and is hereby incorporated herein. 10. Attach photographs of the property, taken within 30 days of filing of this petition, marked "Exhibit 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 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). ~ 1 ~ I~I,OS~ Q U~-LI I= I E~ 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? $ 5p~ . ~ D D 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? N) ~~' ~ p ~ ~ u ~-L! ~~ ~ • (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: - 33 L ~vo 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: ~Iti Qon'1 ~GGtiGv~I L ~./~~L ~GPKnc,,,/~..-( ~11-c~ 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. ~ ~1 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: (Revised 8/2/02) 4 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. 26. _ The following person(s) should be contacted as Petitioner's agent regarding additional iriformation and public hearing notifications: Name: 1 Address: City, State, Telephone: i N i SIG~u~~ 2¢I- WHEREFORE, Petitioner requests that the Common Council of the Ciry 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. Filed In OC`C ~ 5 200 ao~u vooADE Cit`t CLERK, 50. dEND,1t1. By: e Nam ~v~~ ~ (,L~I~LM ~iLES 1d7r7~C (Typed or printed name an capacity of signor if signed by an agent or representative of the owner) (Revised 8/2/02) 5 2 ~ z~3 ti-flt~l?~A-~ D N ~ ~. Name of Property Owner(s): 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 No.: 25-1010-0400.12 Address: 2629 Foundation Drive South Bend, IN 46628 ~x~a r3 rr 3 2629 Foundation Drive 25-1010-040012 e~ ~~= off. a~ a- ~'~ . 0~0 ~I~ a~ a ~ o a 2629 Foundation Drive ~ ~ 6 25-1010-040012 , ~' `J I ~ ~ 0i to o 1,, Q -0 G~ d ~ --6 ---~ (~ ~ ~ ~ ~ ~ ! ~ ' h Bend - -Reg- onal Airport ~ iT~ ., ~, ~ ~ 6 ~~' .~~ 'S~ ~ w~ .~ N ~~ c ,~' 4~ a ~...+m as , . Vr~v s`E~ = ~~,~ ~~ ~ + " ~, y 4 i ~Z=. .~~~~Zy Y J > ea l ~ y.-,AO . k ~ ~di ~' .... ~ y C "l ..~'.~ "s.« ~ ,y .,~~ % ._ ,~ fir, ~ ;ry ~~ {~ ~., ,. ~~ ~, ~s '~ v =,. 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