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HomeMy WebLinkAboutConfirming Tax Abatement - 4201 Linden Avenue - GTA Containers, INCRESOLUTION 3892-08 Passed by the Common Council of the City of South Bend, Indiana August 11, Attest: 08 20 City Clerk President of Common Council Presented by me to the Mayor of the City of South Bend, Indiana August 12, 20 08 Approved and signed by me August 13, ~,~~~ 20 ~ 8 City Clerk RESOLUTION NO. 3 g~ ~ - ~~ A RESOLUTION CONFIRMING THE ADOPTION OF A DECLARATORY RESOLUTION DESIGNATING CERTAIN AREAS WITHIN THE CITY OF SOUTH BEND, INDIANA, COMMONLY KNOWN AS 4201 LINDEN AVENUE TO BE AN ECONOMIC REVITALIZATION AREA FOR PURPOSES OF A FIVE (5) YEAR PERSONAL PROPERTY TAX ABATEMENT FOR GTA CONTAINERS, INC. WHEREAS, the Common Council of the City of South Bend, Indiana, has adopted a Declaratory Resolution designating certain areas within the City as Economic Revitalization Areas for the purpose of tax abatement consideration; and WHEREAS, a Declaratory Resolution designated the area commonly known as 4201 Linden Avenue, South Bend, Indiana, and which is more particularly described as follows: "A part of the east half of the southwest quarter of Section 4, Township 37 North, Range 2 East, South Bend, Indiana, more particularly described as follows, viz: Beginning at a point on the south line of said Southwest quarter 578.67 feet west of the southeast corner of said southwest quarter; thence continuing westerly along said south line of southwest quarter with an assumed bearing of North 89°42'30" West, 741 feet more or less to the west line of the east half of said southwest quarter, 1344 feet more or less to the southerly right-of--way line of the New York Central Railroad Company; thence South 79°18'30" East along said southerly right-of--way line 758.3 feet, more or less to a point which is North 00°08' 15" East 1207.34 feet to the place of beginning, excepting from the above described tract a strip of land 40 feet in width, north and south, taken off of and from the entire width of the south and thereof for Linden Avenue and which has Key Number 018-2193-7257, as an Economic Revitalization Area; 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 Personal property tax abatement only and is limited to two (2) calendar years from the date of adoption of the Declaratory Resolution by the Common Council. SECTION II. The Common Council hereby determines that the property owner is qualified for and is granted Personal property tax deduction for a period of five (5) years, and further determines that the petition complies with Chapter 2, Article 6, of the Municipal Code of the City of South Bend and Indiana Code 6-1.1-12 et seq.; provided however, the Petitioner may not receive an economic revitalization area deduction if it receives an enterprise zone investment deduction under I.C. 6-1.1-45 for the same property. 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. Member of the C mon Council i~~ ~~~o.~r~ r`: Filed nl Clerk's Office JUL 2 3 2008 JO"N VOOADE CITY C~-L~~+ A0~ BEND, IN. TO THE COMMON COUNCIL OF THE CITY OF SOUTH BEND: Your Committee of the Whole, to whom was referred: BILL NO. 08-73 A RESOLUTION CONFIRMING THE ADOPTION OF A DECLARATORY RESOLUTION DESIGNATING CERTAIN AREAS WITHIN THE CITY OF SOUTH BEND, INDIANA, COMMONLY KNOWN AS 4201 LINDEN AVENUE AN ECONOMIC REVITALIZATION AREA FOR PURPOSES OF A FIVE (5) YEAR PERSONAL PROPERTY TAX ABATEMENT FOR GTA CONTAINERS, INC. Respectfully report that they have examined the matter and that in their opinion, this bill is being recommended to the full Council with a favorable recommendation. Oliver Davis Chairperson, Committee of the Whole 1200 COUNTY-CI'I'Y BUILDING 227 W. JEFFERSON BOULEVARD SOUTH BEND, INDIANA 46601-1830 PHONE 574/235-9371 FAx 574/235-9021 TDD 574/ 235-5567 CITY OF SOUTH BEND STEPHEN J. LUECKE, MAYOR COMMUNITY ~ ECONOMIC DEVELOPMENT JEFFREY V. GIBNEY EXECUTIVE DIRECTOR July 15, 2008 Council Member Derek D. Dieter, Chairperson Community & Economic Development Committee South Bend Common Council 4th Floor, County City Building South Bend, IN 46601 RE: Personal Property Tax Abatement Petition for: GTA Containers, Inc. (Foxtrot Realty Corporation) Dear Council Member Dieter: Please find attached the Department of Community & Economic Development's report on a personal property tax abatement petition for the above-referenced petitioner. Also attached is a copy of the petition, Statement of Benefits form, and supporting information. The project calls for the acquisition and installation of new equipment as part of the company's planned expansion of its facility for manufacturing collapsible pillow tanks for fuel or water storage. The facility is located at 4201 Linden Avenue. Foxtrot Realty Corporation, the real estate holding company of GTA Containers will lease the facility to GTA containers and GTA will own the new equipment. The report contains the Department's findings relative to the above petition. The total cost for the equipment is estimated at $250,000 to $400,000. The project meets the qualifications fora (5) five-year personal property tax abatement and a representative from GTA Containers, Inc. (Foxtrot Realty Corporation) will be available to meet with the Committee on Monday, July 28, 2008. Should you or any of the other Council members have any questions concerning the report, or need additional information, please feel free to call me at 235-5835. Sincerely, .~ ~~ B~b Mathi~~ Assistant Director, Economic Development Attachments cc: South Bend Common Council Members Mayor Stephen Luecke Jeff Gibney Don Inks COMMUNITY DEVELOPMENT ECONOMIC DEVELOPMENT FINANCIAL LL PROGRAM PAMELA C. MEYER DONALD E. INKS MANAGEMENT 5741235-9660 574/235-9371 ELIZAEETH LEONARD FAX: 574/235-9697 574/235-9371 1200 ~'.oIINTY-CITY BUILDING 227 W. ,JEFFERSON BOULEVARD SOLT11-I BEND, INDIANA 46601-1830 PxoNE574/235-9371 FAx 574/235-9021 TDD 574/ 235-5567 CITY OF SOUTH BEND STEPHEN J. LUECKE, MAYOR COMMUNITY HL ECONOMIC DEVELOPMENT JEFFREY V. GIBNEY EXECUTIVE DIRECTOR TAX ABATEMENT REPORT TO: SOUTH BEND COMMON COUNCIL FROM: BOB MATHIA SUBJECT: PERSONAL PROPERTY TAX ABATEMENT PETITION FOR: GTA CONTAINERS, INC. (FOXTROT REALTY CORPORATION) DATE: July 15, 2008 On July 9, 2008, a petition for personal property tax abatement consideration for property located at 4201 Linden Avenue was filed with the City Clerk by GTA Containers, Incorporated. Pursuant to Chapter 2, Article 6, Section 2-84.2 of the Municipal Code of the City of South Bend, this petition was referred to the Department of Community and Economic Development for purposes of investigation and preparation of a report determining whether the area qualifies as an Economic Revitalization Area pursuant to I.C.6-1.1-12.1 and whether all zoning requirements have been met. The Department of Community and Economic Development has reviewed the petition (a copy of which is attached), investigated the area, and makes the following report. PROJECT SUMMARY GTA Containers, Inc. and Foxtrot Realty Corporation (the real estate holding company for GTA Containers) are proposing to construct and equip a 90,000 square foot building on an undeveloped portion of a 2 t acre site that they already own. The building will be owned by Foxtrot Realty and leased to GTA Cont :rs. The project will enable GTA to more than double its current manufacturing capacity, allowing the company to bid on large, multi-year contracts with eh U. S. Department of Defense and also have the capacity for non-military contracts. GTA Containers manufactures collapsible pillow tanks for fuel or water storage. The containers range in size from 3,000 to 210,000 gallons. The estimated cost of the building is $2,200,000 - $2,800,000. GTA Containers will own the equipment placed on the site. COMMUNITY DEVELOPMENT ECONOMIC DEVELOPMENT FINANCIAL HC PROGRAM PAMELA C. MEYER DONALD E. INKS MANAGEMENT 574/235-9660 574/235-9371 ELIZABETH LEONARD FAX: 574/235-9697 574/235-9371 South Bend Common Council RE: Tax Abatement for GTA Containers, Inc. (Foxtrot Realty Corp.) July 15, 2008 Page 2 The new equipment to be installed on the site has a total estimated cost of $250,000 to $400,000. It includes, without limitation, automated fabric cutting equipment and various machines for fabric seam sealing using hot air and Radio Frequency (RF) technologies used in the manufacturing operation. Equipment will also be purchased to transfer and handle raw materials and finished goods inventories. GTA was recently offered two five-year contracts from the U.S. Army. They had been expecting only one. With either one of the contracts they could have handled production in their current facility, but both contracts together generate the need for additional space. One contract was executed on July 11, 2008. The second contract arrived on July 14 and was executed today (July 15, 2008). Due to testing requirements contained in the second contract, time is of the essence in completing construction of the new building and installation of necessary equipment. Total taxes to be abated during the (5) five-year abatement period are estimated at $5,725. Total taxes to be paid during the (5) five-year abatement period are estimated at $81,228. EMPLOYMENT IMPACT Per the petition, it is estimated that the total project will create six to eleven (6 -11) new, permanent, full- timejobs within the first year representing a riew annual payroll of $160,000 to $260,000. The project will retain thirty-one (31) existing permanent, full-time j obs (of which 29 are minority employees) with an annual payroll of $1,125,000. ABATEMENT QUALIFICATION 1. A review of the tax abatements previously granted finds that the petitioner has been granted or associated with four (4) previous tax abatements and it has applied for asix-year real property tax abatement along with this application. Term/Type 10-year real property 5-year personal property 6-year real property 5-year personal property 2. The Building Commissic for the proposed project. Resolution No. Date 3008-01 5/14/2001 (Foxtrot) 3009-01 5/14/2001 (GTA) 3173-03 3/24/2003 (Foxtrot) 3174-03 3/24/2003 (GTA) ner has reviewed the petition and finds the property to be properly zoned South Bend Common Council RE: Tax Abatement for GTA Containers, Inc. (Foxtrot Realty Corp.) July 15, 2008 Page 2 3. A review of the South Bend Redevelopment designation areas finds that the property is located in the Airport Economic Development Area, which is a Tax Incremental Allocation Area; therefore, the petition for personal property tax deduction must first be approved by the South Bend Redevelopment Commission. 4. A review of the Tax Abatement Ordinance No. 9394-03 finds that the petitioner meets the qualifications fora (5) five-year personal property tax abatement under section 2-84.2, Tangible Personal Property Tax Abatement. 5 YEAR GTA Containers South Bend Portage Township Personal Property Tax Abatement Schedule* Tax Key Number Current Assessed Value: Estimated Project Cost: 18-35174' 30,930 400,000 14-Jul-08 40% 56% 42% 32% 24% Current 100% 80% 60% 40% 20% Assessed Value: AV & Tax Year 1 Year 2 Year 3 Year 4 Year 5 Current Assessed Value 100% 330,930 330,930 330,930 330,930 330,930 330,930 Base Assessed Value 160,000 224,000 168,000 128,000 96,000 Less Abatement Deduction (160,000) (179,200) (100,800) (51,200) (19,200) Net Assessed Value 330,930 330,930 375,730 398,130 407,730 407,730 Property Taxes: Assume constant tax rate of 4.3015% 4.3015% 4.3015% 4.3015% 4.3015% 4.3015% Gross Tax (tax rate x net assessed value) Less Circuit Breaker Credit Net Tax Circuit Breaker Cap Circuit Breaker Debt Service Circuit Braker Cap 14,235 14,235 16,162 17,126 17,539 17,539 (2,495) 0 0 (217) (577) (577) 11,740 14,235 16,162 16,908 16,961 16,961 3.0000% 9,928 14,728 14,728 14,728 14,728 14,728 0.5477% 1,813 1,813 2,058 2,181 2,233 2,233 11,740 16,540 16,786 16,908 16,961 16,961 New Combined Net Existing Project Existing & New Tax Tax Year Taxes Taxes Taxes Abated Paid 1 11,740 5,676 17,417 3,182 14,235 2 11,740 6,027 17,767 1,605 16,162 3 11,740 5,720 17,461 552 16,908 4 11,740 5,501 17,241 280 16,961 5 11,740 5,326 17,066 105 16,961 Totals 58,702 28,250 86,952 5,725 81,228 'This schedule is for estimation purposes only and assumes constant tax rates. The true tax values will ultimately be determined by the actual assessed valuation and the then current tax rates. Tax Abatement Schedule prepared for: GTA Containers South Bend Portage 5 Year Personal Property Abafement Schedule* TTV Year TTV% Year 1-5 1 0.40 $160,000 2 0.56 $224,000 3 0.42 $168,000 4 0.32 $128,000 5 0.24 $96,000 Existing AV 330,930 Total estimated Equipment Cost: 400,000 Assume constant tax rate of: 4.9205% Assume constant SRTC rate of: 6.4091 11-JuI-08 Assessed Gross Less Net Percent Tax Tax Value Tax SRTC Tax Abated Abated Paid $160,000 $7,873 $505 7,368 $224,000 $11,022 $706 10,316 $168,000 $8,266 $530 7,737 $128,000 $6,298 $404 5,895 $96,000 $4,724 $303 4,421 $38,183 $2,447 $35,736 Total Taxes Due During Abatement: Total Taxes Abated During Abatement: Total Taxes Paid During Abatement: $35,736 $23,505 $12,231 100% $7,368 $0 80% $8,252 $2,063 60% $4,642 $3,095 40% $2,358 $3,537 20% $884 $3,537 $23,505 $12,231 Total Taxes Existing Old & New Tax Paid 15,240 15,240 15,240 17,303 15,240 18,334 15,240 18,777 15,240 18,777 $76,199 $88,430 -This schedule is for estimation purposes only and assumes constant tax rates. The true tax values will ulimately be determined by the actual assessed valuation and the then current tax rates. GTA Containers Comparison of Taxes Abated & Paid Before HEA 1001 & After 1001 Existing AV 330,930 New Project Cost 400,000 New Project AV 160,000 Before HEA 1001 New Combined Net Existing Project Existing Tax Tax Year Taxes Taxes & New Taxes Abated Paid 1 15,240 7,368 22,608 7,368 15,240 2 15,240 10,316 25,555 8,252 17,303 3 15,240 7,737 22,976 4,642 18,334 4 15,240 5,895 21,134 2,358 18,777 5 15,240 4,421 19,661 884 18,777 Totals 76,199 35,736 111,935 23,505 88,430 After HEA 1001 New Combined Net Existing Project Existing Tax Tax Year Taxes Taxes & New Taxes Abated Paid 1 11,740 5,676 17,417 3,182 14,235 2 11,740 6,027 17,767 1,605 16,162 3 11,740 5,720 17,461 552 16,908 4 11,740 5,501 17,241 280 16,961 5 11,740 5,326 17,066 105 16,961 Totals 58,702 28,250 ~ 86,952 5,725 81,228 CITY OF SOUTH BEND PETITION FOR TANGIBLE PERSONAL PROPERTY TAX ABATEMENT CONSIDERATION The undersigned owner(s) of new manufacturing equipment, personal property, located within the City of South Bend, hereby petitions the Common Council of the City of South Bend for personal property (new manufacturing equipment) tax abatement consideration and pursuant to I.C. 6-1.1-12. 1-1 et seg., and South Bend Municipal Code Section 2-84.2 et sec., for this petition states the following: 1. Describe the proposed project, including information about the new manufacturing equipment personal property ("equipment") to be installed, the amount of land to be used, if any, the proposed use of the equipment, and a general statement as to the value of the prof ect to your business. In conjunction with the building of a 90, 000 square foot manufacturing facility which GTA Containers, Inc. plans to lease and occupy in the late fall of 2008, the Company plans to purchase equipment to be used in its manufacturing operation in the new building, including without limitation, automated fabric cutting equipment and various machines for fabric seam sealing, using hot air and Radio Frequency (RF) technologies. Equipment will also be purchased to transfer and handle raw materials and finished goods inventories. The building and equipment will allow GTA Containers, Inc. to more than double its current manufacturing capacity, thereby, enabling the Company to bid on large, multi year contracts with the U.S. Dept ofDefense and also have capacity for non-military related contracts. 2. The project will create at least 6-11 new, permanent, jobs within the first year, representing a new annual payroll of at least $160, 000-$260.000 and will maintain 31 existing permanent full-time and 0 existing part-time job with an annual payroll of $1.125,000 .The projected annual salaries for each position are as follows: 3. Production Worker -$20, 000, Quality Control/Engineer - $60, ODO 4. Estimate the cost of the Equipment: $250, 000-$400.000 5. (a) The Equipment is owned or to be owned by the following individuals or corporations (if the business organization ispublicly-held, indicate also the name of the corporate parent, if any, and the name under which the corporation has filed with the Securities and Exchange Commission): NAME ADDRESS INTEREST GTA Containers, Inc. 4201 Linden Ave 100% South Bend, IN 46619 (b) The following other persons lease, intend to lease, or have an option to buy this equipment (include corporate information as required in (4)(a) above, if applicable): NAME ADDRESS INTEREST N/A 6. Give a brief description of the overall nature of the business and of the operations occurring at the location for which tax abatement is requested: GTA Containers, Inc. manufactures collapsible pillow tanks for fuel or water storage. The containers range in size from 3,000 gallons to 210,000 gallons. GTA's primary customer is the United Stated Department of Defense. GTA has also recently built emer ency safety tents for the underground minim industry. The new buildin ag nd equipment will allow the Company to expand its manufacturing capacity. 7. The commonly known address of the property where the Equipment is located is: 4201 Linden Ave, South Bend, IN 46619 8. The Key Number of said property is: 018-35174-85744 (Personal), 018-2193-7257 (Real) 9. Attach the legal description of the property where the equipment is to be located, marked "Exhibit A," and is hereby incorporated herein. Please see Exhibit A attached hereto. 10. Attach a map and/or plat describing the property where the equipment is to be located, marked "Exhibit B," and is hereby incorporated herein. Please see Exhibit "B" attached hereto and made a part hereof. 11. Attach photographs of the property, taken within 30 days of filing of this petition, marked "Exhibit C," and hereby incorporated herein. Please see Exhibit C attached hereto. 12. The current assessed valuation of the tangible personal property to be replaced by the new manufacturing equipment $ no property is being replaced 13. The current use of the real property where the Equipment will be installed is unimproved land - a new buildin,~ is proposed for the site ,and the current zoning is GI (general industrial) (use) and (height and area). (This information maybe obtained from the Building Department 235-9553.) 14. List the real and personal property taxes paid at the location during the previous five years, whether paid by the current owner or a previous owner: YEAR REAL PROPERTY TAXES 2007 27,392.98 2006 17, 422.32 2005 7,227.62 2004 2, 772.88 2003 2,121.82 PERSONAL PROPERTY TAXES 8,172.72 185, 219.10 145, 885.74 65, 959.24 3,103.80 (This information may be obtained from the St. Joseph County Treasurer's office 235-9531.) 15. Describe the commitment made within the past five years by your firm to hiring minority individuals, including number of minorities employed during each of the past five years, specifying whether full time or part-time and whether permanent of temporary employees. The Petitioner shall also list the current number of total employees (full and part-time) and the current number of minority individuals (full and part-time). Year Total Minority Minority Minority Employees Total Full-Time Part-Time July'08 31 29 29 0 2007 23 22 22 0 2006 39 38 38 0 2005 34 33 33 0 Describe on-site child care of day care facilities, services or benefits currently offered or proposed to be offered by the Petitioner for children of employees. 16. What is your best estimate of the market value of the new Equipment after installation? $250.000-$400, 000 17. What is your best estimate of the amount of taxes to be abated during each of the five years after installation? [Projection based on $350,000 and tax rate of 3%] Year Estimated Dollar Amount 1 $4,200 2 $4 700 3 $2,650 4 $1,350 5 $630 18. What is the commitment your firm will make to minority employment during the five years of tax abatement? GTA Containers, Inc. is an equal opportunity employer. Applicants are considered for employment without regard to age, race, color, religion, sex, national origin, sexual orientation or disability, which would not prevent the performance of essential job duties, with, or without reasonable accommodation. GTA uses a variety of sources to locate job applicants, including written advertisements, word of mouth and WorkOne. 19. The Equipment has not been installed as of the date of filing of this petition. The signature at the end of this Petition is verification of this statement. 20. The standard Industrial Classification Manual major group within which the proposed project would be classified, by number and description: 326299 21. The Internal Revenue Service Code of Principal Business Activity by which the proposed project would be classified, by number and description: manu acturin 22. The real property where the Equipment will be installed is located in the following Allocation Area, if any, declared and confirmed by the South Bend Redevelopment Commission: Airport Economic Development Area 23. Other anticipated public financing for the project including, if any, industrial revenue- bonding to besought oralready authorized, assistance through the United States Department of Housing and Urban Development funds from the City of South Bend, Small Business Association Sections 503 and 504 financing through the Business Development Corporation of South Bend, Mishawaka, and the St. Joseph County, Indiana; or other public financial assistance, including but not limited to public works improvements. Real estate tax abatement on proposed new building 24. Describe how and why the manufacturing equipment to be replaced or the facility in which Equipment will be added is currently technologically, economically or energy obsolete and how and why that obsolescence may lead to a decline in employment and tax revenues: Not applicable. No equipment being replace 25. The new manufacturing equipment will be used in the direct production, manufacture, fabrication, assembly, extraction, mining, processing, refining, or finishing of other tangible personal property and that the equipment was never before used by its owner for any purpose in Indiana. The signature at the end of this Petition is verification of this statement. 26. The following person(s) should be contacted as Petitioner's agent regarding additional information and public hearing notifications: Name: Address: City, State, Zip Code: Telephone: Richard J. Deahl Barnes & Thornburg LLP 100 North Michigan, Suite 600 South Bend, 1N 46601 574-233-1171 ~!!ed !n Clerl~'s a~;lce JUL - 8 2008 JONPJ VOQR'JE CITY CLERK, S0. AEtJD, IN. WHEREFORE, Petitioner requests that the Common Council of the City of South Bend, Indiana, adopt a declaratory resolution designating the area described herein to be an economic revitalization area for purposes of tangible personal property tax abatement consideration, and after publication of notice and public hearing, determine qualifications for an economic revitalization azea have been met, and confirm such resolution. Petitioner herein hereby verifies that the required $250.00 filing fee to cover processing and administrative costs pursuant to Section 2-84.7 of the Municipal Code of the City of South Bend has been paid in full. Name of Property Owners(s): GTA Containers, Inc. _ j/ 1 (Sig t Yatish J. Joshi, President Dated: July 8, 2008 t°IE~'f~ l~~ ~~~!'~~'~ ~i`~E~ J U L - 8 2008 J0~#P~ ~'aCiF~E CITY CLsR;t, wC. ~W`,•rD, lid. EXHIBIT A EXHIBIT A LEGAL DESCRIPTION OF REAL PROPERTY "A part of the east half of the southwest quarter of Section 4, Township 37 North, Range 2 East, South Bend, Indiana, more particularly described as follows, viz: Beginning at a point on the south line of said Southwest quarter 578.67 feet west of the southeast corner of said southwest quarter; thence continuing westerly along said south line of southwest quarter with an assumed bearing of North 89°42'30" West, 741 feet more or less to the west line of the east half of said southwest quarter, 1344 feet more or less to the southerly right-of--way line of the New York Central Railroad Company; thence South 79°18'30" East along said southerly right-of--way line 758.3 feet, more or less to a point which is North 00°08' 15" East 1207.34 feet to the place of beginning, excepting from the above described tract a strip of land 40 feet in width, north and south, taken off of and from the entire width of the south and thereof for Linden Avenue. SBDS02 RJD 376636v1 ~ ! ~itiL4 ~i~r~ 6;~ ~i~9'st JUL - 8 2008 Jc~.4ii~! VGCIILE CITY GLER~:, S0. ~;tiD, IlV.