04-18-88 Human Resources & Economic Development

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in effect. She explained that registration of businesses within the zone began in 1987. She stated that the Urban Enterprise Association locally has recommended a 15% contribution of each business tax savings attributable to the zone program. She further noted that other communities require 25%. Prior to the 15% contribution rate being established the average locally contributed was approximately 10%. She further noted that the Urban Enterprise Association is made up of eleven members which report quarterly to the State board. Members are appointed by the governor, the Mayor, and the Common Council. She also noted that South Bend has had two relocations into the Urban Enterprise Zone namely Lehmann Gas & Oil, Inc. located at 2205 West Sample and The Tire Rack located at 3300 West Sample. She then briefly highlighted some of the possible incentives for businesses to locate within the Urban Enterprise Zone. Such incentives include: inventory tax credits, adjusted gross income tax credits up to $7,500, employee credits, and deductions for Urban Enterprise Zone residents working at the facility. Legislation provides for industrial recovery site tax credit commonly known as "Dinosaur legislation" as well as investment cost credit. She then briefly reviewed the procedure which must be followed for boundary changes and a detailed hand-out outlined the exact procedure. Currently three square miles are allowed by State law and the City of South Bend has approximately 2 .95 square miles designated which makes it the largest Urban Enterprise Zone in the State of Indiana. Regarding contributions, approximately $200,000.00 has been pledged and the Urban Enterprise Association is hoping for approximately $250, 000. 00 to be pledged. Typically the disqualification procedures are utilized for businesses who do not respond to requests made by the U.E.A. She further noted that the State Board is not eager to disqualify, however, the first four disqualifications took place last month in the City of Evansville. Three businesses in South Bend have been pending for approximately two years on the disqualification list. These disqualifications would be pursued by the U.E.A. It was also noted that the larger businesses are also the biggest contributors within the zone. To date 125 of 240 businesses have responded. Councilman Slavinskas noted that in some circumstances businesses are not making a profit and may not be responding at all. He noted that his business is located within the Urban Enterprise Zone and that the most positive incentive is the inventory tax credit. With this, expansion has been possible. 3