03-24-14 Council Agenda & Packet

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RE: Tax Abatement Noble Americas South Bend Ethanol LLC February 20, 2014 Page 2 South Bend Common Council From 2013 through 2015 the company plans to spend $11 Mon new building construction, and $9M on existing building improvements. They have plans for investment going out five years. Because the designation given by the designating resolution only extends out for two years they will need to reapply for abatement at the end of that two year period for the next two year period. The overall cost over 5 years will be $24,000,000. DCI is recommending this petition as an exception. The petitioner has already pulled their building permit. All of their real estate was previously classified by the Assessor' s Office as personal property. There are no building permit restrictions in the local ordinance on personal property. Petitioner was advised they could pull the permit without sacrificing their potential tax abatement. A change in assessment type later occurred and what was once classified as personal property was changed to real property. DCI recommends this exception be considered and approved. The petitioner has not submitted their contractor information. They will have that information on the date of issuing the Confirming Resolution. Based on the petition, the petitioner qualifies for a six to eight year abatement. Total taxes to be abated during the (6) six -year abatement real property period for Phase 1 are estimated at $1,242,213.. Net tax paid is estimated at $3,137,812. For an eight year abatement, the taxes abated would be $1,562,658 and the new project taxes would be $4,443,409. EMPLOYMENT IMPACT Per the petition, it is estimated that the total project will create 50 permanent, full -time and 0 (zero) permanent, part-time jobs within the first year, representing a new annual payroll of $2,808,000. ABATEMENT QUALIFICATION 1. A review of the tax abatements previously granted, finds that the petitioner has not been granted or associated with any previous tax abatements: 2. The Building Commissioner has reviewed the petition and finds the property to be properly zoned for the proposed project. 3. A review of the Tax Abatement Ordinance No. 9394 -03 finds that the petitioner meets the qualifications for a (6) six -year personal property tax abatement under section 2 -76.4, Add -On Real Property Tax Abatement.