04-14-14 Council Agenda & Packet

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South Bend Common Council RE: Tax Abatement for Vida Realty LLC March 10, 2014 Page 2 The company intends to purchase the vacant ABC Supply building and make $100,000 of building improvements over the next two years. Over the next five years, they will make $250,000 in improvements. PLEASE NOTE: The applicant, Vida Realty LLC. , 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 $2.50 per square foot for the square foot building. The maximum rent generated would be $142,500 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 $13,187. Total taxes to be paid during the two -year (2) abatement period on the assessed valuation are estimated at $7,592. EMPLOYMENTIMPACT Per the SB -1, it is estimated that the total project will create five (5) new, permanent, full -time jobs representing a new annual payroll of $200,000. The project will retain nine (9) positions with a payroll of $500,000.