06-23-14 Council Agenda & Packet

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RE: Tax Abatement for J.J. White, Incorporated June 3, 2014 Page 2 efforts. Improvements to the building will total $85,000 and will include a minor office buildout as well as new painting throughout the interior and exterior of the building. There will also be a new monument sign, new site fence, and parking lot improvements. PLEASE NOTE: The applicant, J.J. White, Incorporated , 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 $2.96 per square foot for the 26,959 square foot building. The maximum rent generated would be $79,799 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 oil the assessed valuation are estimated at $25,527. Total taxes to be pjiLd during the two -year (2) abatement period on the assessed valuation are estimated at $14,696. EMPLOYMENTIMPACT The project will retain 6 office and 42 field employees. The average hourly wage is $25 per hour. This is a payroll of approximately $2,496,000. The project will create 5 office and 25 field positions in the first two years with a payroll of $1,560,000.