01-13-14 Council Agenda & Packet

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MEMORANDUM OF AGREEMENT This Memorandum of Agreement (Agreement) dated as of the wl day of fEBQwrav, 2011, serves as confirmation of a commitment by South Bend Gear, LLC (the "Applicant "), pending a February 28, 2011, public hearing, to comply with the project description, job creation and retention (and associated wage rates and salaries) figures contained in its petition, Statement of Benefits, and attachments and this Agreement (Commitments). 1. Commitments of City and Applicant. Subject to the adoption of a Declaratory Resolution and a Confirmatory Resolution by the South Bend Common Council (the "SBCC "), the City of South Bend, Indiana (the "City ") commits to provide a (5) five -year personal property tax abatement for the Applicant, based on the Applicant's commitment set forth in its Application addressing 3849 Showerlux Drive, South Bend, IN 46628 (Key No. 71- 03- 21 -300- 001.000 -009). The Applicant commits to a capital expenditure of no less than $15,600,000 over a two year period associated with the acquisition and installation of several pieces of turning, gear cutting and gear finishing equipment as well as robots and automation equipment (the "Project ") which will create at least twelve (12) new, permanent full -time jobs with an annual payroll estimated at $550,000 by February 15, 2012, and fourteen (14) additional new, permanent full -time jobs with an annual payroll estimated at $641,000 by February 13, 2013. 2. Potential Impact of State of Indiana Circuit Breaker Law The parties note that the calculations regarding the affect of the tax abatement in question are based on the State of Indiana's tax rates currently in effect at the time of entering into this Memorandum of Agreement. The complete impact of the State of Indiana's Circuit Breaker law on the City's property tax revenues is unknown at this time. To assure that the City receives the projected amount of property tax revenues, which amount was calculated at the time of granting the tax abatement for the Applicant, the parties to this Memorandum of Agreement agree to adjust the length of the abatement and /or the percentage of deduction if the tax revenues due under the Circuit Breaker Law are less than what was initially projected and represented to the Common Council, as evidenced by the supporting documentation submitted to the Council with the Applicant's tax abatement petition. However, in no case will the adjustments cause the property taxes to be paid to exceed the tax payments as initially projected and represented to the Common Council by the aforementioned supporting documentation.