01-24-83 Council Meeting Minutes

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I 41, REGULAR MEETING JANUARY 24, 1983 SECTION IV. This Resolution shall be in full force and effect from and after its adoption y the Common Council and approval by the Mayor. /s/ Beverlie J. Beck Member of the Common Council A public hearing was held on the resolution at this time. Kathy Cekanski, Council Attorney, indicated that a substitute resolution was on file with the City Clerk, however, there were two minor changes to the substitute resolution; in Section II, it should read Airport Industrial Park, instead of Industrial Foundation, Inc., and in sub - section (20) change Urban Development area to Tax Abatement Impact area. Council Member Taylor made a motion to accept and amend the substitute resolution, seconded by Council Member Serge. The motion carried. She indicated that the basic purpose of this resolution would be to designate all five phases of the Airport Industrial Park as a tax abatement area. She asked that the following letter be incorporated into the minutes: Members of the Common Council 441 County -City Building South Bend, IN 46601 Ladies and Gentlemen: Over the last few months the Common Council has been giving consideration to the granting of an Urban Developmetn Area designation to the Industrial Park complex of the South Bend Industrial Foundation. By this letter, on behalf of Project Future, I am adding my support to the request of the Industrial Foundation that these Parks be so designated, in total. It is our sincere hope that such a declaration will not only make this area more competitive for new industries but, equally important, that it will encourage existing manufacturing firms to commence with planned expansions. In the course of the debate over this issue, a number of questions have been raised which I believe require comment. They are: 1. Can this area be declared "blighted "? Yes. The blighted language in the statute is somewhat ambiguous, at best. A strong argument can be made for this declaration, based upon the severe decrease in employment in the manufacturing sector, and the lack and cessation of normal growth in both facilities and employment. Since 1979, in just three years, we have experienced a loss of 5600 manufacturing jobs (of 34,600 - 160). The "classic" manufacturing multiplier unfortunately works in reverse in this instance; our area has seen a loss of 13,600 total jobs since 1979, from a base of 116,700 (a negative multiplier of 2.43). 2. Is tax abatement a substantial incentive to relocate or expend? Yes; in two different ways. Tax abatement will not in and of itself, cause a firm to decide to relocate. Once the decision is made, however, it does play a major role in determining where a firm will choose to go, within a limited geographical area. With respect to expansion, the change in cash flow which will result can change a marginal stituation into a good one; moving forward the date which other economic factors may be holding back. Our present unemployment picture cries out for such encouragement. 3. Should a local program such as Tax Abatement be used to offset the impact of national economic factors? Yes. I submit that it makes little difference why a man is unemployed or business growth has slowed or ceased; if a local program has any potential to have a positive effect, then it should be pursued. 4. Can the designation of this program lead to abuse by others? Not if the Council uniformly sets guidelines which are used to review requests for abatement on a case -by -case basis. I agree with the suggestion that it be restricted to only certain uses. The Council may wish to restrict approvals to only those businesses operating within Major Groups 20 through 39, and Major Group 42 of the Standard Industrial Classification Manual, published by the Statistical Policy Division of the Office of Management and Budget. (See attached listing.) 5. What if the economy should suddenly improve? The Council may wish to establish a sunset provision for the Urban Development Area which would make it available only for the next three (3) years, through 1985. The present Indiana