HomeMy WebLinkAbout5038-23 Confirming - 1202 S. Lafayette Blvd, SB, IN 46624 10-Year Tax Abatement RESOLUTION
No. 5038-23
Passed by the Common Council of the City of South Bend, Indiana
July 10, 20 23
Attest: //- ,� City Clerk
Dawn M. Jones
Attest; h h�� ` "'(L�- President of Common Council
Presented by me to the Mayor of the City of South Bend, Indiana
July 11 , 23
20
dL.(:?,, City Clerk
Dawn M. Jones
Jfrii, IZ Z3
Approved and signed by me / 20
Mayor.
BILL NO. 23-41
RESOLUTION NO. 5038-23
A RESOLUTION CONFIRMING THE ADOPTION OF A DECLARATORY
RESOLUTION DESIGNATING CERTAIN AREAS WITHIN THE CITY OF
SOUTH BEND, INDIANA, COMMONLY KNOWN AS
1202 South Lafayette Boulevard, South Bend, IN 46624
AN ECONOMIC REVITALIZATION AREA FOR PURPOSES OF A
TEN-YEAR (10) REAL PROPERTY TAX ABATEMENT FOR
KCG Companies, LLC
WHEREAS, the Common Council of the City of South Bend, Indiana, has adopted a
Declaratory Resolution designating certain areas within the City as an Economic Revitalization
Area for the purpose of tax abatement consideration; and
WHEREAS, a Declaratory Resolution designated the areas described as:
Key Number: 71-08-13-152-001.000-026
Commonly Known As: 1202 S. Lafayette Boulevard
Legal Description: Lots 18& 19 Stulls 1st
Key Number: 71-08-13-152-002.000-026
Legal Description: Lot 17& North 44'Lot 16 Stulls 1st Addn
be designated as an Economic Revitalization Area under the provisions of Indiana Code 6-1.1-
12.1 et seq., and South Bend Municipal Code Sections 2-76 et seq.; and
WHEREAS, notice of the adoption of a Declaratory Resolution and the public hearing
before the Council has been published pursuant to Indiana Code 6-1.1-12.1-2.5; and
WHEREAS, the Council held a public hearing for the purposes of hearing all
remonstrances and objections from interested persons; and
WHEREAS, the Council has determined that the qualifications for an economic
revitalization area have been met.
NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of South
Bend, Indiana, as follows:
SECTION I. The Common Council hereby confirms its Declaratory Resolution designating the
area described herein as an Economic Revitalization Area for the purposes of tax abatement. Such
designation is for multi-family residential development real property tax abatement only and shall
expire on December 31, 2026.
SECTION II. The Common Council hereby determines that the property owner is qualified for
and is granted real property tax deduction for up to a period of ten (10) years as shown by the
schedule outlined below as well as the attachment pursuant to Indiana Code 6-1.1-12.1-17 and
further determines that the petition, the Memorandum of Agreement between the Petitioner and
the City of South Bend, and the Statement of Benefits comply with Chapter 2, Article 6, of the
Municipal Code of the City of South Bend and Indiana Code 6-1.1-12 et seq.
Year 1 - 100%
Year 2 - 100%
Year 3 - 100%
Year 4 - 95%
Year 5 - 95%
Year 6 - 90%
Year 7 - 90%
Year 8 - 85%
Year 9 - 80%
Year 10 - 75%
SECTION III. This Resolution shall be in full force and effect from and after its adoption by the
Common Council and approved by the Mayor.
ril(3'/((t:
Sharon McB ' e, Council President
South Bend Common Council
Attest:
AMe., ' /X. Jones, City Clerk
Office of the City Clerk
Presented by me, the undersigned Clerk of the City of South Bend, to the Mayor of the
City of South Bend, Indiana, on the 1/ day of , 2023, at 3
o'clock p
.m.
Dawn M. Jones, City Clerk
Office of the City Clerk
h
Approved and signed by me on the 1 Z t day of J"
7
t
, 2023, at 3 o'clock
.m.
Jaes Mueller, Mayor
Ci y of South Bend
,,cu Ui t✓IerK s Office
STATEMENT OF BENEFITS
i�t • JUN 2 2023 2023 PAY 2024
ra; REAL ESTATE IMPROVEMENTS
State Form 51767(R7 t 1-21) — ------ FORM SB-1 I Real Property
_ ' Prescribed by the Department of Local Government Finan eCl�CLERK.SOUTH
JONES
ER'Coae h,. i? b ,,IN PRIVACY NOTICE
This statement is being completed for real property that qualifies under th fiNov�inq-�diarla- Any informetbn concerning the cost
ElRedevelopment or rehabilitation of real estate improvements(IC 6-1.1-12.1-4) of the property and specific salaries
paid to individual employees by the
Q Residentially distressed area(IC 6-1.1-12.1-4.1) properly owner is confidential per
C13.1 1.12 1-5.1
INSTRUCTIONS:
1. This statement must be submitted to the body designating the Economic Revitalization Area prior to the public hearing if the designating body requires
information from the applicant in making its decision about whether to designate an Economic Revitalization Area. Otherwise.this statement must be
submitted to the designating body BEFORE the redevelopment or rehabilitation of real property for which the person wishes to claim a deduction.
2 The statement of benefits form must be submitted to the designating body and the area designated an economic revitalization area before the initiation of
the redevelopment or rehabilitation for which the person desires to claim a deduction.
3. To obtain a deduction,a Form 322/RE must be filed with the county auditor before May 10 in the year in which the addition to assessed valuation is
made or not later than thirty(30)days after the assessment notice is mailed to the property owner if it was mailed after April 10 A property owner who
failed to file a deduction application within the prescribed deadline may file en application between January 1 and May 10 of a subsequent year
4. A property owner who files for the deduction must provide the county auditor and designating body with a Form CF-1/Real Property The Form CF-t/Real
Property should be attached to the Form 322/RE when the deduction Is first claimed and then updated annually for each year the deduction is applicable.
IC 6-1.1-12.1-5.1(b)
5. For a Form SB-1/Real Property that is approved after June 30, 2013, the designating body is required to establish an abatement schedule for each
deduction allowed. For a Form SB-1/Real Property that is approved prior to July 1, 2013, the abatement schedule approved by the designating body
remains in effect. IC 6-1.1-12.1-17
SECTION 1 TAXPAYER INFORMATION
Name of taxpayer
KCG Companies, LLC
Address of taxpayer
Number and Street: 9311 N. Meridian St, Ste. 100 city: Indianapolis Stat: IN ZIP: 46260
game of contact person Telephone number E-mail address
. First Name:Todd Lasr v.nrr Jensen (317) 688-1729 Todd jensenoikcgcomparies.com
SECTION 2 LOCATION AND DESCRIPTION OF PROPOSED PROJECT
Name of designating body Resolution number
Common Council of the City of South Bend
Location of propertyCounty DLGF taxing district number
Number and Street: 1202 S Lafayette Blvd. City:South Bend State: IN ZIP:46624 St. Joseph 026(South Bend-Portage)
Description of real property improvements,redevelopment,or reriabilitation(use additional sheets If necessary) Estimated start date(month.day,year)
KCG Development is proposing a 50-unit, multifamily affordable housing 5/1/2024
development consisting of 30 one-bedroom & 20 two-bedroom units. Estimated completion date(month,day yew,'
8/1/2025
SECTION 3 ESTIMATE OF EMPLOYEES AND SALARIES AS RESULT OF PROPOSED PROJECT
Current Number Snlanes Number Retained Salaries Number Additional 'Sa are
0 $ 0 0 $ 0 1 s
$ 40,000
SECTION 4 ESTIMATED TOTAL COST AND VALUE OF PROPOSED PROJECT
REAL ESTATE IMPROVEMENTS
COST ASSESSED VALUE
Current values s•3 $,)
Plus estimated values of proposed project $12,323,616 1 3 477,u17
Less values of any property being replaced $o
$:1
Net estimated values upon completion of project $12,323,616 $472,3 7
SECTION 5 WASTE CONVERTED AND OTHER BENEFITS PROMISED BY THE TAXPAYER
Estimated solid waste converted(pounds) 0 Estimated hazardous waste converted(pounds) 0
Other benefits
SECTION 6 TAXPAYER CERTIFICATION
I hereby certify that the representations in this statement are true.
Signature of authorized representative Date signed(month,day,year)
av,..,:l _.(2)52-_, f 6/20/2023
Printed name of authorized representative Title
Todd Jensen Vice President of Development- Midwest
Page 1 of 2
FOR USE OF THE DESIGNATING BODY
We find that the applicant meets the general standards in the resolution adopted or to be adopted by this body Said resolution,passed or to be passed
under IC 6-1.1-12.1,provides for the following limitations:
A. The designated area has been limited to a period of time not to exceed N/A calendar years'(see below). The date this designation
expires is 12/31/2026 . NOTE:This question addresses whether the resolution contains an expiration date for the designated area.
B. The type of deduction that is allowed in the designated area is limited to:
1.Redevelopment or rehabilitation of real estate improvements ®Yes ❑No
2.Residentially distressed areas ❑Yes ®No
C. The amount of the deduction applicable is limited to$ N/A
D. Other limitations or conditions(specify) N/A
E. Number of years allowed: ❑Year 1 O Year 2 ❑Year 3 0 Year 4 ❑ Year 5 ('see below)
❑Year 6 ❑Year 7 ❑Year 8 ❑Year 9 [xi Year 10
F. For a statement of benefits approved after June 30,2013,did this designating body adopt an abatement schedule per IC 6-1.1-12.1-17?
K]Yes 0 No
If yes,attach a copy of the abatement schedule to this form.
If no,the designating body is required to establish an abatement schedule before the deduction can be determined.
We have also reviewed the information contained in the statement of benefits and find that the estimates and expectations are reasonable and have
determined that the totality of benefits is sufficient to justify the deduction described above.
Approv nalur and title of authorized member of designating body) Telephone number Date signed(month,day,year)
Printe a of authorized member of designating body Name of designating body
11 e /'b ✓✓1 Common Council of the City of South Bend,Indiana
Attested y ignature9pd rr o/errf fr.er) /f, Print name of alta` 4:4„ i
. eilitem 1-4f
•If the designating body f the time pe iod d r' which an area is an economic revitalization area,that limitation does not limit the length of time a
taxpayer Is entitled to rec- e a deduction to a number of years that is less than the number of years designated under IC 6-1.1-12.1-17.
A. For residentially distressed areas where the Form SB-1/Real Property was approved prior to July 1,2013,the deductions established in IC
6-1.1-12.1-4.1 remain in effect.The deduction period may not exceed five(5)years. For a Form SB-1/Real Property that Is approved after June 30,
2013,the designating body Is required to establish an abatement schedule for each deduction allowed. Except as provided in IC 6-1.1-12.1-18,the
deduction period may not exceed ten(10)years. (See IC 6-1.1-12.1-17 below.)
B. For the redevelopment or rehabilitation of real property where the Form SB-1/Real Property was approved prior to July 1,2013,the abatement
schedule approved by the designating body remains In effect.For a Form SB-1/Real Property that is approved after June 30,2013,the designating
body is required to establish an abatement schedule for each deduction allowed.(See IC 6-1.1-12.1-17 below.)
IC 6.1.1-12.1-17
Abatement schedules
Sec.17.(a)A designating body may provide to a business that is established in or relocated to a revitalization area and that receives a deduction under
section 4 or 4.5 of this chapter an abatement schedule based on the following factors:
(1) The total amount of the taxpayer's investment in real and personal property.
(2) The number of new full-time equivalent jobs created,
(3) The average wage of the new employees compared to the state minimum wage.
(4) The infrastructure requirements for the taxpayer's Investment.
(b)This subsection applies to a statement of benefits approved after June 30,2013. A designating body shall establish an abatement schedule
for each deduction allowed under this chapter, An abatement schedule must specify the percentage amount of the deduction for each year of
the deduction. Except as provided in IC 6-1.1-12.1-18,an abatement schedule may not exceed ten(10)years.
(c)An abatement schedule approved for a particular taxpayer before July 1,2013,remains in effect until the abatement schedule expires under
the terms of the resolution approving the taxpayer's statement of benefits.
Filed in Clerk's Office
LJ2020J23
DAWN M.JONES
CITYCLERK,SOUTH BENDIN
,
Page 2 of 2
MEMORANDUM OF AGREEMENT
(MULTI-FAMILY RESIDENTIAL DEVELOPMENT REAL PROPERTY TAX
ABATEMENT)
This Memorandum of Agreement (Agreement) dated as of June 29, 2023, serves as
confirmation of a commitment by KCG Companies,LLC and its affiliates(the"Applicant"),pending
a July 10,2023, public hearing, to comply with the project description,job creation and retention (and
associated wage rates and salaries) figures contained in its petition, Statement of Benefits, and
attachments and this Agreement.
1. Property Associated with the Abatement and Responsibilities of the Applicant. At the time of
this Agreement,the property is located at 1202 South Lafayette Boulevard,South Bend, IN 46624,and
has Key Numbers 71-08-13-I52-001.000-026 and 71-08-13-152-002.000-026. Throughout the
duration of the abatement, the Applicant shall promptly report any changes in the address or Key
Number of the property receiving the abatement to the Department of Community Investment and to
the Office of the City Clerk. Moreover, the Applicant also shall report any material changes or
improvements made to the property subject to the abatement including changes as the result of
subdividing,replatting,or otherwise. The Applicant agrees that failure to promptly report changes can
result in a finding of noncompliance on behalf of the Applicant under the commitments of this
Agreement.
2. Commitments of City and Applicant. Subject to the adoption of a Declaratory Resolution and
a Confirmatory Resolution by the South Bend Common Council(the"SBCC"),the City of South Bend,
Indiana, (the "City") commits to provide a ten-year(10) multi-family residential development real
property tax abatement for the Applicant, based on the Applicant's commitment set forth in its
Application. The Applicant commits to the following(the "Commitments"):
(a) making total combined real property' expenditures of no less than Twelve Million Five
Hundred Thousand dollars($12,500,000.00)for the construction of a new affordable housing building
totaling approximately fifty thousand (50,000) square feet with a minimum of fifty (50) residential
units at property identified in Section 1 of this Agreement; and
(b)acting in good faith to complete the project as described in its Application.
3. Applicant's Compliance with City and State Laws. During the term of the abatement, the
Applicant shall comply with Chapter 2, Article 6, of the South Bend Municipal Code, entitled "Tax
Abatement Procedures," and all governing provisions of the Indiana Code. During the term of this
abatement,the City may annually request information from the Applicant concerning the nature of the
Project, the approved capital expenditure of the Project, the number of full-time permanent positions
newly created by the Project, and the average wage rates and salaries(excluding benefits &overtime)
associated with the positions, and the Applicant shall provide the City with adequate written evidence
thereof within fifteen (15) days of such request (the "Annual Survey"). The City shall utilize this
information and the information required to be filed by the Applicant in the CF-i Compliance with the
Statement of Benefits form to verify that the Applicant has at all times complied with the Commitments
after the Commitment Date and during the duration of the abatement and for no other purpose. The
1
Applicant further agrees to provide the City with such additional information as requested by the City
to determine Applicant's compliance with the Commitments and with local and state requirements
within twenty (20)days following any such request. Notwithstanding anything herein to the contrary,
the Applicant acknowledges that the City may be required to disclose certain documents provided by
the Applicant as required by a court order or applicable law.
4. Substantial Compliance and Rights of Termination. The City, by and through the SBCC,
reserves the right to terminate the Economic Revitalization Area designation and associated property
tax abatement deductions if it reasonably determines that the Applicant has not made reasonable efforts
to substantially comply with all the Commitments, as defined in Section 2 of this Agreement,and the
Applicant's failure to substantially comply with the Commitments was not due to factors beyond its
reasonable control,as described in Section 5 below.
5. Factors Beyond Control. As used in this Agreement, factors beyond the control of the
Applicant shall only include factors not reasonably foreseeable at the time of designation application
and submission of Statement of Benefits which are not caused by any act or omission of the Applicant,
and which materially and adversely affect the ability of the Applicant to substantially comply with this
Agreement. Applicant has the burden to communicate to the City any such factors in which it believes
is beyond its control and impacting its ability to fulfill the terms ofthis Agreement or any tax abatement
benefit provided to the City. The City reserves the right to investigate the factors cited by Applicant
under this Section 5 to the fullest extent possible and may deny Applicant's request upon the
completion of the City's investigation.
6. Repayment of Tax Abatement Savings. If at any time during the term of this Agreement the
Applicant shall: (a) be delinquent or in default with respect to any tax payment in St. Joseph County,
Indiana;or(b)cease operations at the facility for which the tax abatement was granted;or(c)announce
the cessation of operations at such facility, then the City may immediately terminate the Economic
Revitalization Area designation and associated tax abatement deductions, and upon such termination,
require Applicant to repay all of the tax abatement savings received through the date of such
termination.
7. Notice/Hearing of Termination. In the event that the City determines that the Economic
Revitalization Area designation and associated tax abatement deductions should be terminated or that
all or a portion of the tax abatement savings should be repaid, it will give the Applicant notice of such
determination, including a written statement calculating the amount due from the Applicant, and will
provide the Applicant with an opportunity to meet with the City's designated representatives to show
cause why the abatement should not be terminated and/or the tax savings repaid. Such notice shall
state the names of the person with whom the Applicant may meet and will provide that the Applicant
shall have thirty (30) days from the date of such notice to arrange such meeting and to provide its
evidence concerning why the abatement termination and/or tax savings repayment should not occur.
if,after giving such notice and receiving such evidence, if any, the City determines that the abatement
termination and/or the tax repayment action is proper, the Applicant shall be provided with written
notice and a hearing before the SBCC before any final action shall be taken terminating the abatement
and/or requiring repayment of tax benefits. The Applicant shall be entitled to appeal that determination
to a St. Joseph County Superior or Circuit Court.
2
8. Repayment. In the event the City requires repayment of the tax abatement savings as provided
hereunder, it shall provide Applicant with a written statement calculating the amount due (the
"Statement"), and Applicant shall make such repayment to the City within one hundred twenty (120)
days of the date of the Statement. If the Applicant does not make timely repayment, the City shall be
entitled to all reasonable costs and attorneys' fees incurred in the enforcement of this Agreement and
the collection of the tax abatement savings required to be repaid hereunder.
9. Modification/Entire Azreement. This Agreement and the schedules attached hereto as Exhibit
A contain the entire understanding between the City and the Applicant with respect to the subject
matter hereof, and supersede all prior and contemporaneous agreements and understandings,
inducements, and conditions, expressed or implied, oral, or written, except as herein contained. This
Agreement may not be modified or amended other than by an agreement in writing signed by the City
and the Applicant. The Applicant understands that any and all filings required to be made or actions
required to be taken to initiate or maintain the abatement are solely the responsibility of the Applicant.
10. Waivers. Neither the failure nor any delay on the part of the City to exercise any right,remedy,
power, or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power, or privilege preclude any other or further exercise of the
same or of any other right, remedy, power, or privilege with respect to any occurrence or be construed
as a waiver of such right, remedy, power,or privilege with respect to any other occurrence. No waiver
shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.
11. Governing Laws of Indiana. This Agreement and all questions relating to its validity,
interpretation, performance, and enforcement shall be governed by the laws and decisions of the courts
of the State of Indiana.
12. Applicant's Consent to Jurisdiction. The Applicant hereby irrevocably consents to the
jurisdiction of the Courts of the State of Indiana and of the St.Joseph County Circuit or Superior Court
in connection with any action or proceeding arising out of or relating to this Agreement or any
documents or instrument delivered with respect to any of the obligations hereunder, and any action
related to this Agreement shall be brought in such County and in such Court.
12. Notices. All notices, requests, demands, and other communications required or permitted
under this Agreement shall be in writing and shall be deemed to have been received when delivered by
hand or by facsimile (with confirmation by registered or certified mail) or on the third business day
following the mailing,by registered or certified mail, postage prepaid,return receipt requested,thereof,
addressed as set forth below:
If to Applicant: KCG Companies, LLC
9311 N. Meridian Street, Suite 100
Indianapolis, Indiana 46260
Attn: R.J. Pasquesi, President
3
If to the City: City of South Bend. Indiana
227 W. Jefferson Boulevard, Suite 1400S
South Bend, Indiana 46601
Attn: Executive Director of Community
Investment
13. Assignment and Transfer Prohibited. This Agreement shall be binding upon and inure to the
benefit of the City and the Applicant and their successors and assigns, except (a) that no party may
assign or transfer its rights or obligations under this Agreement without the prior written consent of
the other party hereto, in which consent shall not be unreasonably withheld, and (b) Applicant may
assign and transfer its rights under this Agreement to the Permitted Assign without prior written
consent. "Permitted Assign" means the affiliated single purpose entity created for purposes of
designing, constructing, owning, operating, and maintaining the project which is the subject of this
Agreement.
14. Valid and Binding Agreement. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original as against any party whose signature
appears thereon,and all of which shall together constitute one and the same instrument. By executing
this Agreement, each person so executing affirms that he has been duly authorized to execute this
Agreement on behalf of such party and that this Agreement constitutes a valid and binding obligation
of the party.
15. Severability. The provisions of this Agreement and of each section or other subdivision herein
are independent of and separable from each other,and no provision shall be affected or rendered invalid
or unenforceable by virtue of the fact that for any reason any other or others of them may be invalid or
unenforceable in whole or in part unless this Agreement is rendered totally unenforceable thereby.
16. No Personal Liability. No official, director, officer, employee, or agent of the City shall be
charged personally by the Applicant, its employees, or its agents with any liabilities or expenses of
defense or be held personally liable to the Applicant under any term or provision of this Agreement or
because of the execution by such party of this Agreement or because of any default by such party
hereunder.
[Remainder of page intentionally blank.[
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IN WITNESS WHEREOF,the parties hereto have executed this Agreement as of the day and year first
above written.
"Applicant" "City"
KCG Companies, LLC Fity of South Bend, Indiana
i
1-1/44;1
By: .4._ By:
R.J. ` : quesi Sharon McBride
President President, South Bend Common Council
KCG Companies, LLC, a duly authorized
member of KCG Companies, LLC, and
its affiliates 0„„,,
By: Gw✓,
V
Approved as to Legal Adequacy and Form this Rachel Tomas Morgan
Chairperson, Community Investment
/6111 day of --)117 , 2023. Committee
-Ni
Counsel, South Bend Common Council
By:
1/ Erik
2r,44"�\ DepaGlavrtment
h
Department of Community Investment
!Counsel for Applicant
By:
Jai es Mueller
Mayor
5
EXHIBIT A
Abatement Schedule
Subject to the adoption by the SBCC of a resolution confirming the adoption of Declaratory Resolution
No. 5032-23, the property owner is qualified for and is granted a multi-family residential
development real property tax abatement for a period of ten (10)years as shown by the schedule
outlined below.
Year I - 100%
Year 2 - 100%
Year 3 - 100%
Year 4 - 95%
Year 5 -95%
Year 6 -90%
Year 7 - 90%
Year 8 - 85%
Year 9 - 80%
Year 10 - 75%
6