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01-13-14 Council Agenda & Packet
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01-13-14 Council Agenda & Packet
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City Council - City Clerk
City Council - Document Type
Agendas
City Counci - Date
1/13/2014
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As evidenced by the investments made in equipment and payroll, Soma remains committed to its <br />business in South Bend. However, while the payroll requirement will be met in terms of payroll <br />dollars, it is apparent that SBG will not meet both of the original requirements of an estimated <br />$15,600,000 of equipment by February 14, 2014 and $641,000 of payroll /26 employees by <br />February 13, 2014. The difficulty in reaching the requirement is primarily due to four factors: <br />1) delays in bringing its initial manufacturing line into production; 2) delays in bringing on the <br />second line of manufacturing; 3) transition of ownership with the departure of Schafer Gear <br />Works, Inc. in December 2012, and 4) reduction in orders from a major customer. The initial <br />manufacturing line is now producing at acceptable levels and the transition of ownership has <br />been completed as of November 30, 2012. In February of this year, it was anticipated that the <br />second line of manufacturing would begin functioning in the third quarter of this year. While the <br />equipment has been purchased, it has not yet been placed in service due to economic factors <br />beyond the company's control. The original filing for the personal property tax abatement was <br />predicated on this second manufacturing line. From Soma's perspective, the second line of <br />manufacturing is not a question of "if' but "when ". The deployment of the second <br />manufacturing line continues to be critical to Soma's overall business plan. <br />We understand through conversations with you that the appropriate course of action is to request <br />an extension of time to enable Soma to meet its commitments. Accordingly, Soma hereby <br />requests an extension of twelve months until February 14, 2015 within which to meet its <br />commitment to invest in the manufacturing equipment and new jobs, as specified in the <br />Memorandum of Agreement dated February 21, 2011. If the South Bend Common Council <br />would like Soma to appear at a meeting in order for the extension to be granted, please advise of <br />the preferred meeting date at your earliest convenience. <br />Soma firmly believes that the extension will provide the company the necessary additional time <br />to meet its commitments to South Bend. Soma remains firmly committed to South Bend. <br />Thank you for your consideration. <br />Very, tr y yours, <br />.'M <br />And Scanavim <br />CEO <br />Somaschini North America, LLC <br />cc: <br />Mr. Pete Buttigieg, Mayor <br />City of South Bend <br />
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