01-13-14 Council Agenda & Packet

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OSOMASCHINI NORTH 4601 Nimtz Parkway South Bend, IN 46628 Phone 574. 968.0273 December 16, 2013 Janice Talboom Office of the Clerk 227 W. Jefferson Boulevard, Suite 400 S South Bend, IN 46601 -1830 ' s "Hed RB CEC 2 3 2913 CITY CLJERK,�$ UTH BEND. IN ` Re: Somaschini North America, LLC, Personal Property Tax Abatement Dear Ms. Talboom: South Bend Gear, LLC ( "SBG ") received a five -year personal property tax abatement from the South Bend Common Council (see enclosed copy of Memorandum of Agreement dated February 21, 2011 and enclosed copy of Statement of Benefits form SB -1 /PP dated January 28, 2011 and related attachments). The abatement was based on the estimate that SBG would expend $15,600,000 over a two -year period ended February 14, 2013 on manufacturing equipment and related expense items. In addition, it was estimated that SBG would create at least twelve new, permanent, full - timejobs with an annual payroll estimated at $550,000 by February 15, 2012, and would create at least fourteen new, permanent, full -time jobs with an annual payroll estimated at $641,000 by February. 13, 2013. In February 2013, the time frame to meet the abatement projections was extended to February 13, 2014. In the most recent form CF -I /PP filed on May 10, 2013 (see enclosed copy of CF- I /PP), Somaschini North America, LLC (formerly known as SBG) reported actual equipment costs of $9,642,214 (compared to the total estimated commitment of $15,600,000) and actual annual payroll of $477,683 (compared to the total estimated commitment of $641,000). With the exception of $367,886 of equipment costs that were acquired in January and February of 2013, those actual amounts on the CF -1//PP represented the equipment costs and payroll as of December 31, 2012. Somaschini North America, LLC ( "Soma ") has continued to invest in equipment and payroll in 2013. As of November 30, 2013, Soma has made additional investments in equipment of $2,820,000 for a total investment of approximately $12,462,000 and incurred payroll in excess of $650,000.