Loading...
HomeMy WebLinkAboutConfirming Tax Abatement - 3605 West Cleveland Road - Federal Mogul Powertrain, Inc.RESOLUTION 3641-06 Passed by the Common Council of the City of South Bend, Indiana September 25, 20 06 Attest: A City Clerk President of Common Council Presented by me to the Mayor of the City of South Bend, Indiana September 26, 20 06 Approved and signed by me S c o t enb c r 2_ Z . - 20..11!' . City Clerk RESOLUTION NO. 3 ~' ~ ~ - ~~ A RESOLUTION CONFIRMING THE ADOPTION OF A DECLARATORY RESOLUTION DESIGNATING CERTAIN AREAS WITHIN THE CITY OF SOUTH BEND, INDIANA, COMMONLY KNOWN AS 3605 WEST CLEVELAND ROAD TO BE AN ECONOMIC REVITALIZATION AREA FOR PURPOSES OF A FIVE (5) YEAR PERSONAL PROPERTY TAX ABATEMENT FOR FEDERAL MOGUL POWERTRAIN, 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 3605 West Cleveland Road, South Bend, Indiana, and which is more particularly described as follows: A tract of land in part of the East half of Section 21, Township 38 North, Range 2 East, 2°d P.M., St. Joseph County, Indiana, and more particularly described as follows: Beginning at a point on the East-West Half section line of said East Half North 88 degrees 53 minutes 36 second East 915.58 feet from the center of said Section 21; thence North 0 degrees 56 minutes 57 seconds West 338.80 feet; thence North 88 degrees 53 minutes 36 seconds East, parallel with the East-West half section line of said Section, 800.00 feet; thence South 0 degrees 56 minutes 57 seconds East 1726.13 feet; thence northwesterly 550.14 feet along an arc to the right having a radius of 4463.66 feet and subtended by a long chord having a bearing of North 54 degrees 36 minutes 59 seconds West and a distance of 549.80 feet; thence North 51 degrees OS minutes 08 seconds West 465.22 feet; thence North 0 degrees 56 minutes 57 seconds West 761.20 feet to the East-West half section line of said East half the point of beginning, and containing 26.203 acres, more or less and which has Key Number 25-1013-0218 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 fob 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 seg. 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. Member of the -o on Council PRESENTED ~ -L S-0~ NOT APPROVED ADOPTED ~ _L$-0~ Filcd In Gl~~'~'~ price AUG 2 3 2006 JO"'.t~ VCO~DE CTN Cte~K~ND~-.' 12()(1 COUNTY-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 ~L ECONOMIC DEVELOPMENT AUgUSt lO, 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: Federal Mogul Powertrain, 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 3605 West Cleveland Road. The report contains the Department's findings relative to the above petition. Federal Mogul will be purchasing and installing new equipment. The total project cost for the equipment is estimated at $4,779,000. The project meets the qualifications fora (5) five-year personal property tax abatement and a representative from Federal Mogul will be available to meet with the Committee on Monday, August 28, 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 Clerk's ~#~ice Fi1ed In AEG ~ ~ 2006 J04tt VSQRBtNp,1N. ~~ ~IERK, COMMUNITY DEVELOPMF,NT' ECONOMIC DEVELOPMENT FINANCIAL & PROGRAM PAMELA C. MEYER DONALD E. INKS MANAGEMENT 574/235-9660 574/235-9371 EuusErrt LEONARD Fnx: 574/235-9697 574/235-9371 1200 COUNTY-CITY BUILDING 227 W. JEFFERSON BOULEVARD SOUTH BEND, INDIANA 46601-1830 PHONE 5741235-9371 FAx 574/235-9021 TDD 574/ 235-5567 CITY OF SOUTH BEND STEPHEN J. LUECKE, MAYOR COMMUNITY ~ ECONOMIC DEVELOPMENT SHARON T. KENDALL EXECUTIVE DIRECTOR TAX ABATEMENT REPOR T TO: SOUTH BEND COMMON COUNCIL FROM: SHARON TERRELI~ SUBJECT: PERSONAL PROPERTY TAX ABATEMENT PETITION FOR: FEDERAL MOGUL POWERTRAIN DATE: August 10, 2006 On July 28, 2006, a petition for personal property tax abatement consideration for property located at 3605 West Cleveland Road was filed with the City Clerk by Federal Mogul Po~vertrain. Pursuant to Chapter 2, Article 6, Section 2-84.2 of the Municipal Code of the City of So11th Bend, this petition was referred to the Department of Community and Economic Development forpurposes of investigation and preparation ofa 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 of which is attached), investigated the area, and makes the following report. PROJECT SUMMARY Federal Mogul is a manufacturer of automotive pistons. Customers include most of the major foreign and domestic automotive manufacturers. Operations in South Bend began in 1987. The project will invest $4,779,000 in new manufacturing equipment which will be acquired and installed under four categories: 1) a new assembly cell line -Chrysler 4.7L (the Daimler Chrysler 4.7L is new business for Federal Mogul); 2) productivity improvement and safety; 3) research and development and 4) information technology. Total taxes to be abated during the (5) five-year abatement period is estimated at $291,161. COMMUNITY DEVELOPMENT' ECONOMIC DEVELOPMENT FINANCIAL SC PROGRAM PAMELA C. MEYER DONALD E. INKS MANAGEMENT 574/235-9660 574/235-9371 Euzaeerx LEONARD PAX: 574/235-9697 574/235-9371 South Bend Common Council RE: Federal Mogul Powertrain August 10, 2006 Page 2 EMPLOYMENT IMPACT Per the petition, it is estimated that the total project will not create any new, permanent, full-time jobs; however because the Daimler Chrysler 4.7L is new business for the facility, it will provide continued employment for approximately 60 full-time employees when the product is at full volume in 2008. The project will maintain 445 existing, permanent full-time jobs representing an annual payroll of $19,373,000. ABATEMENT QUALIFICATION 1. 2 A review of the tax abatements previously granted, finds that the petitioner has been granted or associated with 12 (twelve) previous tax abatements: Term/Type 5-year personal property 5-year personal property 3-year real property 5-year personal property 6-year real property 5-year personal property 5-year personal property S-year personal property 10-year personal property 5-year personal property 5-year personal property 10-year real property Resolution No. Date 3232-03 08/25/2003 3086-02 04/22/2002 3085-02 04/22/2002 2930-00 09/25/2000 2686-98 10/26/1998 2685-98 10/26/1998 2174-94 09/26/ 1994 2057-93 07/26/1993 2056-93 07/26/1993 1864-91 04/22/ 1991 #R07-86 05/13/1986 #R07-86 05/13/1986 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. Tax Abatement Schedule prepared for: 8/7/2006 FEDERAL MOGUL POWERTRAIN INC. South Bend German 5 Year Personal Property Abatement Schedule' Total estimated Equipment Cost: $4,779,000 Assume constant tax rate of: 5.1376 Assume constant SRTG rate of: 7.0636 TTV Assessed Gross Less Net Percent Tax Tax Year TTV% (Year 1-5) Value Tax SRTC Tax Abated Abated Paid 1 40% 1,911,600 1,911,600 $98,210 6,937 $91,273 100% $91,273 $0 2 56% 2,676,240 2,676,240 $137,495 9,712 $127,783 80% $102,226 $25,557 3 42% 2,007,180 2,007,180 $103,121 7,284 $95,837 60% $57,502 $38,335 4 32% 1,529,280 1,529,280 $78,568 5,550 $73,018 40% $29,207 $43,811 5 24% 1,146,960 1,146,960 $58,926 4,162 $54,764 20% $10,953 $43,811 $476,320 33,645 $442,675 $291,161 $151,513 Total Taxes Due During Abatement: $442,675 Total Taxes Abated During Abatement: $291,161 Tota! Taxes Paid During Abatement: $151,513 -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. ~ii~d AUG ~ ~ ~~Q6 ~t;pR^~ CR`f CLF"'`' CITY OF SOUTH SEND PETITION FOR TANGIBLE EERSQNAL PROPE1tT'Y TAX ABATEMENT CONSIDERATION The undersigned owners} 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, et sea~~and South Bend Municipal Code Section 2-$4.2, eta for this petition states the following: 1. Describe the proposed projecC, 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. If approved, new manufacturing equipment will be acquired and installed under four (4) main categories: 1) New Assembly Cell Line -Chrysler 4.7L 2) Plant cost and productivi improvements and safety 3) Research and Development Equipment, and 4) Information Technology Equi ment. Federal-Mo ul Powertrain, Inc. respectfully requests the South Bend Common Council approves a 10-Year abatement for the various equipment part of this a lication. 2~. The project will create o new, permanent jobs within the first year, representing a new annual payroll of $ o and will maintain 445 existing permanent full-time and o existing part-time jobs representing an annual payroll of $ ~ 9,373,000 ,The projected annual salaries for each new position created are estimated to be as follows: The Daimler Chrysler 4.7L is new business for our facility. This new business will provide continued employment for approximately 60 full time em to ees when the roduct is at full volume in 2008. Without this, employment levels would decrease to 380-390. The 445 jobs is the estimated __ employment level at the end of 2007. 3. Estimate the total cost of the Equipment: $4,779,000 ~-. (a) The Equipment is owned or to be owned by the following individuals or corporations (if the business organization is publicly' held, indicate also Cher name of the corporate parent, if any, and the name under which the corporation has filed with the Securities and Exchange Commission): NAME ADARESS YNTEREST Federal-Mogul Corporation 26555 Northwestern Hi hwa Southfield MI 48034 100% dba Federal-Mogul Powertrain, Inc. (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 ApDR~SS ~NTE~~T N/A 5. Give a brief description of the overall nature of the business and of the operations occurring at the location for which tax abatement is requested: Federal-Mogul Powetrain, Inc. is a manufacturer of automotive istons. Customers include most of the ma'or foreign and domestic autmotive manufacturers. Operations in South Bend, IN began in 1987. Federal-Mogul has maintained employment levels consistently well-over 400 full time positions in each of the past 5 years with total salaries in excess of $20 million. Total ross sales enerated from the South Bend facili exceed $119 million. 6. The commonly known address of the property where the Equipment is to be located 1S: 3605 W. Cleveland Rd., South Bend, IN 46628 '~. The Key Number of said property is: 25-1013-0218 $. Attach the legal description of the property where the equipment is to be located, rin.arked "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 lI]ariUfacturing equlpment IS $ only a small portion of older equipment is being replaced (This information may be obtained kom the St. Joseph County Assessors office 235-9523} 12. The current use of the real property where the Equipment is to be installed is Industrial -Manufacturing and the current zoning is Industrial (use) and 247,2355f (height and area). (This information may be obtained from the Building Department 235-9553) (Revised $IZI02) 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 REAP. PROPERTY TAXES PERSaNAL ~'RQl'ERTY TAKES 2005 Pay 2006 $237,382 $729,204 2004 Pay 2005 $229,746 $587,701 2003 Pay 2004 $217,696 $473,927 2002 Pay Zoos $190,468 _ $467,039 2ooi Pay 2002 $236,211 $781,341 (This information may be obtained from the 5t. roseph 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 f ve years, ~ specifying whether full time ar part-time and whether permanent ar temporary employees. The Petitioner shall also list the current number of total employees (full and part-time) and the current number of minority individuals (fu11 and part-time). Federal-Mogul Powertrain, Inc. will continue to comply with the Equal Employment Opportunity Commission. We will continue to be actively involved with the Indiana Department of Training Service and On The Job Training (OJT) program. Current total employees (full and part-time) is 62 out of 500 as of 12/31/05. Current number of minority individuals (full and part-time) is 57 out of 460 ro'ected as of 12/31/06. 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. Federal-Mogul Powertrain, Inc. offers a dependent child care benefit throu h a retax a roll deduction. 16. What is your best estimate of the market value of the new Equipment after installation? $ Per Indiana Form 103 Long, Schedule A, Pool 2, Year 1, TTV = $1,911,600 TTV=True Taxable Value calculated using cost multiplied by 40%. 17. What is your best estimate of the amount of taxes to be abated during each of the five years after iriStallatiOn? $ Approximately $242,000 in total will be abated the first five ears if the Common Council approves, as requested, a 10-Year abatement for ersonal roe .The average tax abated per year is $48,400 when considerin the additional affects of form P - 18. What is the commitment your firm will make to minority employment during the five years of tax abatement? (Revised 8/2102) 3 Federal-Mogul Powertrain, Inc. will continue to comply with the Equal Employment Opportunity Commission We will continue to be actively involved with the_ Indiana Department of Training Service and On The Job Trainin OJT ro ram. 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 Yndustrial Classification Manual major group within which the proposed project would be classified, by number and description: 7310 21. The Internal Revenue Service Code of Principal Business Activity by which the proposed project would be classified, by number and description: 3710 -Manufacturing for automotive parts 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: N/A 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. None 24. Describe how and why the manufacturir>g 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 $12/p2} 4 Approval of this application will allow continued capital investment in the South Bend facility -without additional investment and greater production efficiencies offered by newer processes and new product lines, some levels of existing production would be shifted outside of Indiana -most likely to another country -employment levels and resulting tax revenues would both decline accordingly. 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 Yndiana. 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 informatiari and public hearirtg notifications: Name: Ed Fain, Plant Manager, or Brent Kuhn, Plant Controller Address: 0605 W. Cleveland Rd. Ctty, State, Zip Code; South Bend, IN 46628 Telephone: (574) 272-5900 WHEREFORE, petitioner requests that the Common Council of the Gity of South Bend, Indiana, adapt 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 Ciry of South Bend has been paid in full. Name of Property Owner(s): Federal-Mogul Corporation, dba Federal-Mogul Powertrain, Inc. By: G%G/ u~,,M (Signed Name} Ed Fain, Plant Manger Federal-Mogul Powertrain, Inc. -South Bend, IN (Typed or printed name and capacity of signor iF signed by an agent or representative of the owner) (Revised 8/2!0?) Filed In Clerk's Office JUI. Z 8 2006 JOHiJ VOORDE CITY CLERK, 50. BEND, IN. • FEDERAL-MOGUL POWERTRAIN, INC. ~- .,. _LECAT, DESCRIPTION DF REAL PROPERTY E%HISIT g ~ tract of land in part of the East half of Section Z1, Township. 38 Nortfr, Range 2 East, 2nd P.M. St. Joseph County. Indiana, and more particularly described as follows: Begi,,,,i„g at a point on the East-West Half section line of said East Half North•88 degrees 53 minutes 36 seconds East 915.58'feet from the center•of said•Section 21; thence North 0 degrees 56 minutes 57 seconds West 338.80 .feet; thence North 88 degrees 53 minutes 36 seconds East; parallel with the East-Rest half section line of said Section, 800.00 'feet; thence South•0 degrees 56 minutes 57 seconds East 1726.13 feet; thence northwesterly 550.14 feet along• an •,arc to the right having a radios of 4463.66 feet and subtended .by a Long chord having a bearing of North 54 degrees 36 minutes 59 seconds West and a distance of 549.80 feet; thence North 51 degrees 05 minutes 08 seconds West 465.22 feet; thence North 0 degrees 56 minutes 57 seconds West 761.20 feet to the East-West half section line of said East half the point of beginning, and containing 26.203 acres,•more or Less. ~i1~~ In CIerI~'~ (~ffic2 ~~L 2 8 2006 JOHN VOORDE CITY CLERK, S0. BEND, IN. W1eM eeJe1 I.r w r+11 r .rnwru •erew 14~r . 1 0 O 0 l I e o l l inrrw 1 O 0 1 ~f1 ~ aw. '.. 1 a e / w w.1~ee+11a ~~,~ 1 O 0 1 y 1 O 0 1 1 O 0 1 .~ ~ ~ 1 1 • !` , 1rn i I b v e l l e v e l l e v e l I s o e l I o o e l { e 0 s 1 • Z GURH G T l e v e l ' a BOLLARD e „~ 1 e. o e 1 0 rr..r..r. e1 • 1nenw~nrrl 1 a o o l . I o a e l .~.~....., >~..~: r.. ~~~"'"" :: ~ 1 5TANCARD Df~Y WALL ~ ~ ]~ ~.. •M 1 +.H, ; ~. lenes~~re ~C:7~ `'~~'~-~-~ ~ i V ~ ~ ' , W.. r t .PH JC}tp8 DFiiVB , r _ -_.....,_ -•~- - -- - -- - -- - ' ' ~ ~ ~ ~ ~ ~ ~ RON 5@GT IOC ~Cg~1~-At ~ ~ ' ~~~ / r / ~ • ~ / iw 4 ' t; . pr ~ / ~i fi ~ ' 1 ~.• ~ eISAe /~ ~ 15 i '' ~ • .. r r - _ ~ ~. 1 ~ .'$. 1 i ~. ` ,' I~ /, ewe..... e4e _ Mee.L , _ % ' .si:~~~": tom N,vi.. i ~ ' ' ~ ewr • na U w• r1`ew en; . .,...... , • • 617E PLAN Q~ ~ e..,~... C17 ~Z~ ~eLVw1~ b (61 GUR~B. 6VTTGR AND S1DC1"tALK DET • 'rd9' _ 'NI `Qr~3J '~~ `;i;~31~ Ally ` =:~~ra~ r;i;or. 9ooz s z ~ n r ~• __ __,_ ~ p~ 1'„1 t~ w w•r ew e~j~ /ww r.../e+wti ~.. rw. r.~i~'a ' el .1YwaweM rlel LtC71S{1ilylee rw1 GJ ..,, ewrrA r ~ Ord ' ~u~w 1tilwW•• a -~ ~~ O 1w~r.w e..r. IeM 1111eMM1re e w ~ ~1l ee •~ } m rM M I N IMMM!( Q 111 e.A~l m ~~~4w~w1 r r ~ rMeA i '~1 m wM Zweree,r O MANYrrrr ~ w r r.+ 6 r~urellr.rfen t•/wclW TAEUV1f1oN ael .~1.. eLR/Eef .~iiw rw '~ rrw.: ~ww~. ~ I I 1 e~ 1 i' 1 10 1 J A Q Y ^y r~ G1.C ~Q 0.( i9ao pIY6t 1967 SIO'NELt- COI1pANY AE PISTON PRODUCTS, INC. TANGIBAgATEMENT APPLICATIONTAX PLAT EXHIBIT B o~ .. = ~ ., 1 ~ r' N t7Z1G10 ~ 1 { ct T" ^ ^f=~ ~ I I 19 I ~a s ~: . 1 ''Es ~, i ~ 1 1 I I 1 1 25-1010 M I l' o3sz 1 i til 1 1 z9 a3 .: 1 1 ~ 0363 1 1 I t1.00 I ~ 1 I 036• 7_0 Filed In Cl~:rk'v C~~ic~ ,~L 2 8 2005 gyp; N VOORDE CITY CIS~K, S0. BEhD, IN.