Confirming Tax Abatement - Lippert Components Manufacturing Inc. 1902 W. Sample St. ( 2 Year Real Property)

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South Bend Common Council RE: Tax Abatement for Lippert Components Manufacturing, hie. March 10, 2014 Page 2 also provide an efficient and effective means for storing, tracking, and distributing finished goods to customers. This centralized warehousing and distribution facility will reduce the need for space at the company's production facilities, space that can be more efficiently used to enhance the company's production capabilities. The centralized warehouse and distribution facility will make the management of the company's finished goods inventory more easily traceable and more efficient, resulting in more profitability. As the company's overall business continues to grow, the company will continue to add positions to operations. In addition to the direct company jobs that the warehouse and distribution operation will create, the company will sub -lease some of the space at the facility which will result in 80 new jobs being created by the company's tenant and $400,000 of capital investment. This sublease will be the tenant's first presence in the City of South Bend and the State of Indiana. Those net new jobs are included in page 2 of the petition. The building is 539,137 square feet of space. PLEASE NOTE: The applicant, Lippert Components Manufacturing, Inc., is respectfully requesting a special exception because the project does not meet the general standards for real property tax abatement as set forth in Chapter 2, Article 6, Sections 2 -77 through 2 -83.3 of the Municipal Code of the City of South Bend. Indiana State's legislation on tax abatement has a provision for the granting of tax abatements on properties that have been vacant for at least one year (IC 6 -1.1- 12.1 -4.8). However, because this is a relatively new provision, the City's code does not provide for it. The state legislation provides up to two years of tax abatement on the property subject to certain limitations on the amount of the property's assessed valuation that can be considered in calculating the abatement. The petitioner is respectfully requesting that the Common Council grant the two year exception under this IC exception. As noted this abatement only applies to a limited portion of the property's total assessed valuation. This portion is equivalent to the estimate annual rent that the property could generate. The building has been listed at $2.00 per square foot for the 539,137 square foot building. The maximum rent generated would be $1,120,000 and our estimate of the taxes abated for two years is less than that amount. Total taxes to be abated during the two -year (2) abatement period on the assessed valuation are estimated at $696,252. Total taxes to be Raid during the two -year (2) abatement period on th e assessed valuation are estimated at $400,839. EMPLOYMENT IMPACT Per the petition, it is estimated that the total project will create 380 new, permanent, full -time jobs representing a new annual payroll of $9,880,000 over a ten year period.