11-26-12 Community & Economic Development

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COMMUNITY & ECONOMIC DEVELOPMENT NOVEMBER 26,2012 5:15 P.M. Committee Members Present: Henry Davis, Karen White, Gavin Ferlic, Dr. Fred Ferlic Other Council Members Present: Tim Scott, Val Schey, Dr. David Varner, Oliver Davis, Derek Dieter Other Present: Pam Meyer, Lee Slavinskas Agenda: Bill No. 12-85 —Renewing the UEZ Pam Meyer, UEZ—20 yrs. State Law allowed 5 yr. extension 12-1-13 to 12-1-18, 12 positions on UEZ designated by State Law. • One of 13 of original 28 zones. • Income was 1 million year, now 150K year. • Incubator is major program—negative cash flow 35-38 businesses/now for sale Chairperson Henry Davis with full CED Committee present opened the meeting with one scheduled item on the agenda Bill No. 12-85. This bill would renew and extend the term of the South Bend Urban Enterprise Zone for five years. Henry recognized Pam Meyer from the Community Investment Department to make the presentation. Pam acknowledged the presence of two UEZ Board Members present, Councilmember Karen White and long-time member and former Councilmember Lee Slavinskas. Pam then provided some background to UEZ. She said state law 20 years ago allowed local communities to designate UEZ's. Businesses' in these economically challenged areas would receive a variety of tax breaks ranging from the elimination of inventory taxes to tax credits for job training for zone residents. A portion of these savings would be paid back to the UEZ to fund its activities governed by an appointed board made up of business owners and residents in the zone. Appointments would be made by the Mayor and Council following state guides including political balance. By far the biggest tax break and subsequent source of revenue for the UEZ was the inventory tax break. However since the inventory tax was eliminated statewide the payback to UEZ's has fallen sharply as has the number of zones statewide. Pam said South Bend was one of the original 28 zones, only 13 of which exist today. Our UEZ income once over a million dollars a year is now around $150,000. Nonetheless, the major program of our UEZ, the business incubator, still houses and collects rents from 35-38 businesses. Because of high operating costs,however there is a negative cash flow and the building is listed for sale.