09-24-18 Council Minutes - Laserfiche WebLink

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REGULAR MEETING September 24, 2018 18-53 A RESOLUTION OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND DESIGNATING CERTAIN AREAS WITHIN THE CITY OF SOUTH BEND, INDIANA, COMMONLY KNOWN AS LOT 5 U S 31 INDUSTRIAL PARK PHASE II AN ECONOMIC REVITALIZATION AREA FOR PURPOSES OF A(9)NINE-YEAR REAL PROPERTY TAX ABATEMENT FOR NATIONAL DISTRIBUTION CENTERS, LLC Councilmember Gavin Ferlic, chair of the Community Investment Committee, reported that they met this afternoon and send this bill forward with a favorable recommendation. Dan Buckenmeyer, Director of Business Development for the Department of Community Investment with offices located on the 14th floor of the County-City Building, South Bend, IN, served as the presenter to this bill. Mr. Buckenmeyer stated, Good evening, Council. We have a property tax phase-in proposed. We are talking about a parcel in Portage Prairie on Dylan Drive. It is just north of Cleveland and Brick Road. This is about a twenty(20)acre parcel we are dealing with here for this phase-in. This is a great opportunity to keep a great company here in South Bend. As a side note, and I know the petitioner will expand on this,the petitioner had good reason not to locate in South Bend but a few good reasons are keeping him here. One (1) is the partnership and potential tax abatement offered by the City. The other is a great workforce which we are really proud of. They have one hundred and eight(10 8) fantastic employees that they want to make sure they keep in place here in South Bend. Mr. Buckenmeyer continued, In January 2018 this parcel was assessed at $23,500. They will be purchasing it for around $1 million. Again, this bodes well for raising and rising property values. Their private investment in that real property will be over $14 million. They anticipate an additional $4 million plus in additional personal property, machinery and equipment. It is a great project given that this is a property presently only generating$705 per year in property tax revenue. Our estimates are that it will generate over$312,000 per year in revenue post-investment.To break that down briefly, if you look over the nine(9)years of this tax abatement,if this investment didn't exist,we would only enjoy an additional$6,345 in property tax revenue. Even with the abatement, there will be over $1.1 million in tax revenue total over the nine (9) years. We will be revenue- positive in year two (2). There is no public investment in this one (1), in other words there are no TIF dollars going into this.We do anticipate helping them out on the equipment side later on down the road. Again, we are retaining one hundred and eight (10 8)jobs in the great workforce here in South Bend. Troy Adams,Director of Real Estate for NFI with offices located at 1515 Burnt Mill Road, Cherry Hill, New Jersey, served as the petitioner for this bill. Mr. Adams stated, I am here on behalf of NFI.NFI is a privately held third(3rd)party logistics company that is headquartered in Cherry Hill, New Jersey. We are in our eighty-sixth (86th) year of doing business. We are still owned by the same family. It started out in Vineland,New Jersey in 1932 with one (1)truck. The company now owns over 4,000 trucks, employs over 10,000 and has a presence across North America in the US and Canada. We also do global logistics. Most people know us for our trucks,however,we operate about 47 million square feet of warehouse space across the US and Canada. We have continued to grow with the economy and on our own through some acquisitions. We've been in South Bend for about four (4) years now. We started out with a facility in Ohio and decided we needed to move more into the central part of the upper Midwest.We located a warehouse in South Bend on Sample Street which is where we currently operate. It is a sublease. It expires and we thought long and hard about where we go when this sublease expires next. We embarked on a search about six (6) months ago throughout most of Indiana from Indianapolis on up north. We really centered in on the sixty-nine (69) corridor and Fort Wayne came up as where it may be best to locate. We contemplated buying a site by the airport in Fort Wayne. The math for the transportation costs from our model shows that we should be in Fort Wayne because of where we distribute. Mr. Adams continued, The reason we are making the decision, hopefully with your support tonight, to stay in South Bend is one hundred percent (100%) based on the employment we have 2