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RM 01-16-81
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RM 01-16-81
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South Bend Redevelopment Commission <br />Regular Me ting - January 16, 1981 <br />7. PROGREJS REPORTS (continued) <br />Mr. Mc ahon; It has been basically weatherproofed <br />from t e elements during the period it has been <br />unoccu ied. <br />Mrs. Olata: Right. I don't see that there is any <br />furthet deterioration. <br />Mr. Ci6 : Is the roof still leaking? <br />Mrs. K�lata: From the best of our knowledge that <br />was re aired a year ago. <br />Mr. Mc ahon: We haven't received any request to do <br />any ad itional items from the gentleman who is check- <br />ing it for us. <br />Mrs. H$rnandez: I don't understand how tax increment <br />works hen someone has tax abatement also. <br />Mr. McMahon: Tax abatement and tax increment both <br />start off from the position that whatever your taxes <br />are when the program begins, you continue to pay those. <br />The old taxes you have been paying, the existing tax <br />base that you have before you get into either program <br />still tays the same. The abatement and the increment <br />only a plies to what you do over and above.the new im- <br />provem nts. In the case of an abatement situation, the <br />increm nt would be less and the increment would build <br />up ove a number of years as opposed to becoming im- <br />mediat ly available in the full amount. So in the first <br />year, the first time when they pay their increased tax, <br />if the abatement process would be in effect they only <br />would iave to pay 5% taxes, and the increment would only <br />be 5% 6f what we would have seen otherwise. <br />Mr. Ni tz: Five percent of the new taxes, not of the <br />old. <br />Mr. Mc ahon: As an example, let's suppose a business <br />previo sly was paying $20,000.00 a year in taxes and now <br />as a r sult of the new development they will be paying, <br />without abatement or increment, $50,000.00 a year in <br />taxes. If they had abatement granted and they started <br />paying the $20,000.00, the abatement only would apply to <br />the $3D,000.00 difference. So in the case of the tax <br />increm nt program, the money would build up over a long <br />period of time as opposed to becoming immediately avail- <br />able. <br />NEI <br />
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