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HomeMy WebLinkAboutTax Exemption - Information Technology Equipment - Data Realty Northern Indiana, LLC - 1440 Ignition DriveAttes RESOLUTION 4174 -12 Passed by the Common Council of the City of South Bend, Indiana April 23, 20 12 Presented by me to the Mayor of the City of South Bend, Indiana April 24, 20 12 City Clerk ident of Common Council Approved and signed by me L-rr-\ Lr 20 LL City Clerk M.M-3 RESOLUTION NO. _l (-7 � — ( L DECLARATORY RESOLUTION OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AUTHORIZING A PROPERTY TAX EXEMPTION FOR CERTAIN ENTERPRISE INFORMATION TECHNOLOGY EQUIPMENT PURSUANT TO INDIANA CODE 6- 1.1 -10 -44 (DATA REALTY NORTHERN INDIANA, LLC PROJECT LOCATED AT 1440 IGNITION DRIVE SOUTH IN THE SIXTH COUNCIL DISTRICT) WHEREAS, Indiana Code 6- 1.1 -10 -44 (the "Act ") authorizes the Common Council (the "Common Council ") of the City of South Bend, Indiana (the "City ") to make a determination that certain qualified personal property owned by a eligible business is exempt from property taxation to the extent such property is located in the City; and WHEREAS, Data Realty Northern Indiana, LLC (the "Company "), has announced its plans to locate a computing, networking, and data storage facility (the "Project ") at 1440 Ignition Drive South in the City (the "Site "); WHEREAS, the jobs to be created by the Project will have an average employee wage of $28.36 per hour and the Project will result in a capital investment of $14.2 million in real and personal property improvements; and WHEREAS, the Company has presented to this Common Council a Letter Agreement, a form of which is attached hereto as Exhibit A and the terms of which are incorporated herein (the "Agreement "), in which Agreement the Company describes the Project, and pursuant to which the Company requests that this Common Council determine that (i) the Company is an 'Eligible Business" as defined herein and in the Act; and (ii) certain of the personal property to be owned by the Company and located at the Site listed at Exhibit A to the Agreement and including any equipment which may replace such equipment (the "Computer Equipment ") is "Qualified Property" as defined herein and in the Act and therefore qualifies for the property tax exemption provided by the Act; and WHEREAS, as used herein and as defined in the Act, "Qualified Property" means certain enterprise information technology equipment acquired after June 30, 2009, which would include any of the personal property listed below, but would not include computer hardware designed for a single user, workstation, or departmental level use: (a) Hardware supporting computing, networking, or data storage function, including servers and routers; (b) Networking systems having an industry designation as equipment within the "enterprise" or "data center" class of networking systems that support the computing, networking, or data storage functions; or BDDB01 65465180 (c) Generators and other equipment used to ensure an uninterrupted power supply to the equipment described in subparagraph (a) or (b) above; and WHEREAS, "Eligible Business" as used herein and defined in the Act means an entity that meets each of the following requirements: (a) The entity is engaged in a business that operates one or more facilities dedicated to computing, networking or data storage activities; (b) The entity is located in a facility or data center in Indiana; (c) The entity invests in the aggregate at least $10,000,000 in real and personal property in Indiana after June 30, 2009; and (d) The average employee wage of the entity is at least 125% of the county average wage for each county in which the entity conducts its business operations; and WHEREAS, the Company has certified in the Agreement that (i) it qualifies as an Eligible Business and (ii) the Computer Equipment constitutes Qualified Property; and WHEREAS, the Project and the real and personal property improvements to be made by the Company at the Site by the Company will benefit the welfare of all citizens and taxpayers of the City; NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of South Bend, Indiana, as follows: SECTION 1. The Common Council hereby makes the following findings based upon the information provided by the Company in the Agreement: A. The Company constitutes an Eligible Business; and B. The Computer Equipment constitutes Qualified Property. SECTION II. Subject to the completion of the procedures required by the Act and described below, the Common Council provisionally declares the Computer Equipment to be exempt from property taxation, which exemption will continue for an unlimited period of time, provided that the Company continues to qualify as an Eligible Business and the Computer Equipment continues to qualify as "Qualified Property" under the Act. SECTION III. The Common Council hereby authorizes a notice of the adoption and the substance of this Declaratory Resolution to be published in accordance with Subsection (g) of the Act and the Clerk is hereby authorized to cause to be filed a copy of the notice and this resolution with each taxing unit located in the County. Additionally, a copy of this Declaratory Resolution shall be filed with the St. Joseph County Assessor's office. The notice shall specify a date when the Common Council will receive and hear all remonstrances and objections from interested persons. Following such hearing, the Common Council will consider the adoption of a BDDB01 65465180 - 2 - confirming resolution to modify, confirm or rescind this Declaratory Resolution and authorize the execution of the Agreement by the Mayor and the Clerk, for an on behalf of the City, granting the property tax exemption authorized under the Act for the Qualified Property. SECTION IV. This Resolution shall be in full force and effect from and after its adoption by the Common Council and approval the May h """ 0110 ember of the Common Council PRESENTED . NOT APPROVE@ t,DOPTED 4- L-3 —QZ BDDB01 65465180 -3- Filed in d rk' APR 1 NJ E CITY OLE" ni BEND, IN TO THE COMMON COUNCIL OF THE CITY OF SOUTH BEND: Your Committee of the Whole, to whom was referred: BILL NO. 12 -35 A DECLARATORY RESOLUTION OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AUTHORIZING A PROPERTY TAX EXEMPTION FOR CERTAIN ENTERPRISE INFORMATION TECHNOLOGY EQUIPMENT PURSUANT TO INDIANA CODE 6- 1.1 -10 -44 DATA REALTY NORTHERN INDIANA, LLC PROJECT LOCATED AT 1440 IGNITION DRIVE SOUTH IN THE SIXTH COUNCIL DISTRICT Respectfully report that they have examined the matter and that in their opinion, this bill is being recommended to the full Council with a favorable recommendation. This bill was heard by the Community & Economic Development Committee. Karen L. White Chairperson, Committee of the Whole 1200 CouNTY -Crrr BUILDING 227 W. JEFFERSON BOULEVARD SOUTH BEND, INDIANA 46601 -1830 PHONE 574 /235 -9371 FAx 574/235 -9021 CITY OF SOUTH BEND PETE BUTTIGIEG' MAYOR COMMUNITY & ECONOMIC DEVELOPMENT April 16, 2012 Derek Dieter, President South Bend Common Council 435 County -City Building South Bend, Indiana 46601 RE:DECLARATORY RESOLUTION OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AUTHORIZING A PROPERTY TAX EXEMPTION FOR QUALIFIED ENTERPRISE INFORMATION TECHNOLOGY EQUIPMENT PURSUANT TO INDIANA CODE 6- 1.1 -10 -44 (DATA REALTY NORTHERN INDIANA, LLC PROJECT LOCATED AT 1440 IGNITION DRIVE SOUTH IN THE SIXTH COUNCIL DISTRICT) Dear President Dieter: Attached for filing please find the above - referenced Declaratory Resolution to be considered by the Common Council at its April 23, 2012 meeting. Approval of this Resolution would be the first step in providing property tax exemption for qualifying enterprise information technology equipment to Data Realty Northern Indiana, LLC. Attached as an Exhibit to the Resolution is a Letter Agreement wherein Data Realty states their project meets the requirements of State law in order to receive this exemption. Specifically, the project investment will be about $14.2 million, exceeding the required $10.0 million. $6.0 million of the investment is expected to be in equipment qualifying for the exemption. Additionally, the jobs to be created will have an average wage of $28.36/hour, exceeding the requirement that they be greater than 125% of the county average. The county average is about $18.50 /hour and 125% would be $23.13/hour. The Resolution and Letter Agreement are both in the form prescribed by Resolution 4089 -11 approved by the South Bend Common Council March 14, 2011. Don Inks will be presenting the Resolution. Your favorable consideration is requested. Please do not hesitate to contact me if you need additional information. COMMUNITY DEVELOPMENT PAMELA C. MPYER 574/235 -9660 FAx: 574/235 -9469 Sin erely4E.s D nirtor, ec Economic I (Filed- Inn Mae APR ? i voo CITY PLEh , sou 11 DE ECONOMIC DEVELOPMENT DONALD E. INKS 574/235 -9371 EXHIBIT A LETTER AGREEMENT (see attached) BDDBOI 65465180 LETTER AGREEMENT REGARDING ENTERPRISE INFORMATION TECHNOLOGY EQUIPMENT TAX EXEMPTION April 16, 2012 The Common Council City of South Bend, Indiana 227 West Jefferson Blvd. • Suite 400 S South Bend, Indiana 46601 Dear Honorable Council Members: Data Realty Northern Indiana, LLC (the "Company ") requests that the Common Council (the "Common Council ") of the City of South Bend, Indiana (the "City "), take such action as is necessary and required pursuant to Indiana Code § 6- 1.1 -10 -44 (the "Act ") in order to determine that certain enterprise information technology equipment of the Company is exempt from property taxation pursuant to the Act. The Company proposes to locate a project at 1440 Ignition Drive South (the "Site ") which is located within the boundaries of the City (the "Project ") which Project will result in a capital investment in real and personal property at the Site of $14.2 million. $6.0 million of the personal property improvements will be attributable to the installation at the Site of enterprise information technology equipment which will include but be not limited to the equipment listed at Exhibit A attached hereto and incorporated herein and also any enterprise information technology equipment which may in the future replace the equipment listed at Exhibit A. Additionally, the jobs created by the Project will result in an average employee wage of $28.36 per hour, which exceeds 125% of the county average wage for St. Joseph County, Indiana. On behalf of the Company, the undersigned hereby certifies that Company constitutes an "Eligible Business" as such term is defined in the Act because the Company meets each of the following requirements: (a) The Company is engaged in a business that, upon completion of the Project, will operate one or more facilities dedicated to computing, networking, or data storage activities; (b) The Company is located in a facility or data center in Indiana; (c) The Company will have invested upon completion of the Project in the aggregate at least $10,000,000 in real and personal property which investment will have occurred after June 30, 2009; and (d) The average employee wage of the Company at the Site is at least 125% of the county average wage for St. Joseph County, Indiana. BDDB01 65468270 The undersigned, for and on behalf of the Company, further hereby certifies that the enterprise information technology equipment listed at Exhibit A attached hereto and incorporated herein is Qualified Property because it has been or will be purchased after June 30, 2009, and it constitutes: (1) Hardware supporting computing, networking, or data storage function, including servers and routers; (2) Networking systems having industry designation as equipment within the "enterprise" or "data center" class of networking systems that support the computing, networking, or data storage functions; or (3) Generators and other equipment used to insure an uninterrupted power supply to equipment described subparagraph (1) or (2) above. The undersigned further certifies for and on behalf of the Company that none of the Qualified Property constitutes computer hardware designed for single user, workstation or departmental level use. The Company requests that all enterprise information technology equipment which would constitute Qualified Property as defined herein and in the Act be deemed exempt from property taxation as provided by the Act. The Company acknowledges and agrees that, to the extent that it no longer qualifies as an Eligible Business as defined herein and under the Act or to the extent that the enterprise information technology equipment for which the Company desires the tax exemption no longer qualifies as "Qualified Property" as defined herein or in the Act, said enterprise information technology equipment will no longer be subject to the tax exemption. Z/4 1.444, G CC ompany ") By: Printed Name: 1 I C A1W1 ,'C Its: ?/—,Ol r/ Gem I -2- BDDB01 65468270 CITY ACKNOWLEDGEMENT: The undersigned, acting for and on behalf of the City, enters into and acknowledges the terms of the foregoing Letter Agreement. The Common Council, having adopted a declaratory resolution (Resolution No. , adopted on , 20_,, provided notice as required by the Act, and adopted a confirming resolution (Resolution No. , adopted on 20__) determining to grant the tax exemption provided by the Act, has completed the actions necessary under the Act by the City to grant a property tax exemption for the Qualified Property of the Company for an unlimited term so long as the Company meets the requirements of this Agreement and the Act. , 20_ ATTEST: City Clerk CITY OF SOUTH BEND, INDIANA Mayor -3- BDDBOI 65468270 EXHIBIT A Oualified Property Listing Data Realty Northern Indiana (DRNI) will locate a Project that will result in a capital investment in real and personal property of $14,200,000 at 1440 Ignition Drive South at Ignition Park. DRNI will be purchasing Qualified Property pursuant to Indiana Code 6- 1.1 -10 -44 in an amount expected to equal $6,000,000. That property will include generators and other equipment used to ensure an uninterrupted power supply to both enterprise hardware and networking equipment located in the Data Center. An outline of the equipment is included below. Currently, the enterprise equipment is still being bid and so a more detailed list is not available at this time. Data Realty Northern Indiana is in the process of conducting a thorough analysis of all enterprise equipment being installed at the Data Center, including a cost segregation analysis, and it will provide a revised schedule with line item detail to the Council once that analysis is complete and prior to the Council's consideration of the Confirmatory Resolution giving final approval for this exemption. Filed in lemork': off dce O,Hm V", *Vr ,,i 3EN[), JN BDDB01 6546827x3