RM 01-16-81 - Laserfiche WebLink

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South Bend Redevelopment Commission Regular Me ting - January 16, 1981 7. PROGREJS REPORTS (continued) Mr. Mc ahon; It has been basically weatherproofed from t e elements during the period it has been unoccu ied. Mrs. Olata: Right. I don't see that there is any furthet deterioration. Mr. Ci6 : Is the roof still leaking? Mrs. K�lata: From the best of our knowledge that was re aired a year ago. Mr. Mc ahon: We haven't received any request to do any ad itional items from the gentleman who is check- ing it for us. Mrs. H$rnandez: I don't understand how tax increment works hen someone has tax abatement also. Mr. McMahon: Tax abatement and tax increment both start off from the position that whatever your taxes are when the program begins, you continue to pay those. The old taxes you have been paying, the existing tax base that you have before you get into either program still tays the same. The abatement and the increment only a plies to what you do over and above.the new im- provem nts. In the case of an abatement situation, the increm nt would be less and the increment would build up ove a number of years as opposed to becoming im- mediat ly available in the full amount. So in the first year, the first time when they pay their increased tax, if the abatement process would be in effect they only would iave to pay 5% taxes, and the increment would only be 5% 6f what we would have seen otherwise. Mr. Ni tz: Five percent of the new taxes, not of the old. Mr. Mc ahon: As an example, let's suppose a business previo sly was paying $20,000.00 a year in taxes and now as a r sult of the new development they will be paying, without abatement or increment, $50,000.00 a year in taxes. If they had abatement granted and they started paying the $20,000.00, the abatement only would apply to the $3D,000.00 difference. So in the case of the tax increm nt program, the money would build up over a long period of time as opposed to becoming immediately avail- able. NEI