Reconfirming Tax Abatement - South Bend Gear LLC

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SOUTH BEND SBG GEAR, LLC 3801 Schafer Gear Drive South Bend,IN 46628 Phone 574-968-0273 December 21, 2012 Don Inks, Economic Development Director City of South Bend Community&Economic Development 1200 County-City Building 227 W. Jefferson Boulevard South Bend, IN 46601-1830 Re: South Bend Gear, LLC, Personal Property Tax Abatement Dear Mr. Inks: South Bend Gear, LLC ("SBG")received a five-year personal property tax abatement from the South Bend Common Council (see enclosed copy of Memorandum of Agreement dated February 21, 2011 and enclosed copy of Statement of Benefits form SB-1/PP dated January 28, 2011 and related attachments). The abatement was based on the estimate that SBG would expend $15,600,000 over a two-year period ended February 14, 2013 on manufacturing equipment and related expense items. In addition, it was estimated that SBG would create at least twelve new,permanent, full-time jobs with an annual payroll estimated at$550,000 by February 15, 2012, and would create at least fourteen new,permanent, full-time jobs with an annual payroll estimated at$641,000 by February 13, 2013. In the most recent form CF-1/PP filed on April 19, 2012 (see enclosed copy of CF-1/PP dated April 19, 2012), SBG reported actual equipment costs of$8,413,683 (compared to the total estimated commitment of$15,600,000) and actual annual payroll of$220,566 (compared to the total estimated commitment of$641,000). With only a minor exception of under$89,000 of equipment costs that were acquired in January and February of 2012,those actual amounts on the CF-1//PP represented the equipment costs and payroll as of December 31, 2011. SBG has continued to invest in equipment and payroll in 2012. As of November 30, 2012, SBG has made total investments in equipment in excess of$9,000,000; as of the eleven months ended November 30, 2012, SBG has incurred payroll in excess of$650,000.