07-28-08 Community & Economic Development Committee

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Richard Deahl, Attorney at Law, Barnes & Thornburg, representing Foxtrot Realty Holding and GTA stated that they currently have 31 employees of which 29 are minority. This project is anticipated to employee nine (9) to sixteen (16) employees. Councilmember Karen White asked how many African American Employees? Mr. Deahl responded none. Councilmember White asked why there were not any African-American employees. Mr. Deahl responded that hiring is by word of mouth. Vacancies are paid $11.90 per hour and up to $15.00 with bonuses. The Department of Defense has granted two five-year contracts for the U.S. Army. GTA Containers manufactures collapsible pillow tanks for fuel or water storage. The containers range in size from 3,000 to 210,000 gallons. He stated that 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. Mr. Deahl noted that this business is very competitive and on each order they are required to submit a new bid. GTA submitted pricing on this contract last October and it is a fixed price contract. Since last October there have been a lot of increases in the cost of their raw materials. He stated that they are not able to recover those increases in cost, so they have to look at a variety of different cost savings and productivity improvements during the five years, so the abatement is critical. Councilmember Puzzello made a motion for no recommendation to full Council. Councilmember Henry Davis seconded the motion which carried. BILL N0.08-66 -TAX ABATEMENT 1840 N. COMMERCE DRIVE ISTANZ FOOD Robert Mathia, Economic Development, 12th Floor County-City Building, 227 W. Jefferson Blvd., South Bend, Indiana, presented the report from the Economic Development Department. Mr. Mathia advised that Stanz Foodservice is a full-line, food service distribution business. He noted that Stanz is asking for a five (5) year personal property tax abatement. Mr. Richard Deahl, Attorney, Barnes & Thornburg, 100 N. Michigan Street, South Bend, Indiana, stated that he is speaking on behalf of Mr. Mark Harmon, President, Stanz Foodservice. He advised that Stanz uses its warehouse and distribution facility to store dry, refrigerated, and frozen goods to facilitate the transfer and delivery of such goods to customers throughout Northern Indiana and Southern Michigan. The proposed project consists of the acquisition and installation of new logistical distribution and information technology equipment. This equipment will complete Stanz's investment in real estate improvements and its commitment to growing its distribution headquarters and business in South Bend. He stated that the entire cost for the proposed project is estimated between $300,000 to $700,000 for logistical distribution equipment and between $50,000 and $150,000 for information technology equipment. He noted that it is estimated that the project, by itself, will no create additional full-time and part-time permanent jobs within the first year of the project, but will enable Stanz to maintain 162 existing permanent full-time jobs and 9 existing permanent part-time jobs with an annual payroll of $7,251,439, including existing permanent full-time minority employment of 12 positions. Councilmember White made a motion to recommend this bill to the full Council with a favorable recommendation. Citizen Member Mark Smith seconded the motion, which carried.