Confirming Tax Abatement - 202 South Michigan Street - Various Floors - Key Bank, LLC (The Hinman Company)

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South Bend Common Council RE: Tax Abatement for Key SB, LLC (The Hinman Company) May 1, 2007 Page 2 renovations are all necessary to bring the Key Tower Building to class "A" space and make it possible for Baker & Daniels to be a long term tenant in the downtown South Bend Building. A total of $5,951,680 will be invested in the project. Please note that two building permits (Nos. 105995 and 106222), valued at $477,000, have been issued for a portion of the renovation work. The work authorized under Permit No. 105995 has been completed. The permits are for work on the 2"d, 4th and 5th floors. The work under both permits is ineligible for a tax abatement, however, the applicant is requesting the Common Council to waive the Condition Precedent requiring approval of the abatement application prior to obtaining a building permit and approve the abatement application with this work included. If the waiver request cannot be approved the applicant is requesting the Common Council to approve a tax abatement without the waiver in the amount of $5,474,680. If the waiver is approved total taxes to be abated during the nine (9) year abatement period are estimated at $1,012,426. Total taxes to be paid during the nine (9) year abatement period are estimated at $824,636. If the waiver is not approved total taxes to be abated during the nine (9) year abatement period are estimated at $931,283. Total taxes to be paid during the nine (9) year abatement period are estimated at $758,548. 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 $406,000. The project will also maintain 49 existing, permanent full-time jobs representing an annual payroll of $2,986,470. ABATEMENT QUALIFICATION 1. A review of the tax abatements previously granted finds that the petitioner has not been granted or associated with any previous tax abatements: 2. The Building Commissioner has reviewed the petition and finds the property to be properly zoned for the proposed project. As noted the Commissioner has found that two (2) building permits have been issued for a portion of the total work. 3. A review of the South Bend Redevelopment designation areas finds that the property is located in the Central Development Area, which is a Tax Incremental Allocation Area; therefore, the petition for real property tax abatement must first be approved by the South Bend Redevelopment Commission.