HomeMy WebLinkAboutConfirming Tax Abatement - 1801 Commerce Dr. Michael J. Morris (8 Year Real Property)Attest:
RESOLUTION
3554 -06
Passed by the Common Council of the City of South Bend, Indiana
January 23,
20 06 .
City Clerk
President of Common Council
Presented by me to the Mayor of the City of South Bend, Indiana
January 24, 20 06
Approved and signed by me January 24, 20—ML.
City Clerk
0
RESOLUTION NO. 3 S S`E - 0 u
A RESOLUTION CONFIRMING THE ADOPTION OF A
DECLARATORY RESOLUTION DESIGNATING CERTAIN AREAS
WITHIN THE CITY OF
SOUTH BEND, INDIANA, COMMONLY KNOWN AS
1801 COMMERCE DRIVE
AS AN ECONOMIC REVITALIZATION AREA FOR
PURPOSES OF AN EIGHT (8) YEAR REAL
PROPERTY TAX ABATEMENT FOR
MICHAEL J. MORRIS
WHEREAS, the Common Council of the City of South Bend, Indiana, has
adopted a Declaratory Resolution designating certain areas within the City as Economic
Revitalization Areas for the purpose of tax abatement consideration; and
WHEREAS, a Declaratory Resolution designated the area commonly known as
1801 Commerce Drive, South Bend, Indiana, and which is more particularly described as
follows:
E PT LOT 25 AIRPORT INDUSTRIAL PARK PHASE II- SEC 33- 38 -
2E CONT .40 ACRES + / -.
W 287 FT OF LOT 25 AIRPORT INDUSTRIAL PARK PHASE II SW 1-
4 SEC. 33 -38 -2E 1.57 ACRES
S 80.5 FT OF LOT 24 SW AIRPORT INDUSTRIAL PARK PHASE II
SEC 33 -38 -2E
and which has Key Number 025- 1008 - 033502; 025 -1008- 033508; 018 - 2183- 688612;
018 - 2183 - 688603, as an Economic Revitalization Area; and
WHEREAS, notice of the adoption of a Declaratory Resolution and the public
hearing before the Council has been published pursuant to Indiana Code 6 -1.1- 12.1 -2.5;
and
WHEREAS, the Council held a public hearing for the purposes of hearing all
remonstrance's and objections from interested persons; and
WHEREAS, the Council has determined that the qualifications for an economic
revitalization area have been met.
NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of
South Bend, Indiana, as follows:
SECTION I. The Common Council hereby confirms its Declaratory Resolution
designating the area described herein as an Economic Revitalization Area for the
purposes of tax abatement. Such designation is for Real property tax abatement only and
is limited to two (2) calendar years from the date of adoption of the Declaratory
Resolution by the Common Council.
SECTION II. The Common Council hereby determines that the property owner is
qualified for and is granted Real property tax deduction for a period of eight (8) years,
and further determines that the petition, the Memorandum of Agreement between the
Petitioner and the City of South Bend, and the Statement of Benefits comply with
Chapter 2, Article 6, of the Municipal Code of the City of South Bend and Indiana Code
6- 1.1 -12 et sea.
SECTION III. This Resolution shall be in full force and effect from and after its
adoption by the Common Council and approved by the Mayor.
(- 2 3 ^O\°
PRESENTED
NOT APPROVED
ADOPTED.
O�
Member oft Common Council
Filed In _ rk OTce
DEC 19 2005
1200 COUNTY -CITY BUILDING
227 W. JEFFERSON BOULEVARD
SOUTH BEND, INDIANA 46601 -1830
PRONE 574/235 -9371
FA 574/235 -9021
TDD 574/ 235 -5567
CITY OF SOUTH BEND STEPHEN J. LuFcKE, MAYOR
COMMUNITY & ECONOMIC DEVELOPMENT
December 16, 2005 SHARON T. KENDALL
EXECUTIVE DIRECTOR
Council Member Ann Puzzello, Chairperson
Community & Economic Development Committee
South Bend Common Council
4th Floor, County City Building
South Bend, IN 46601
RE: Commercial Real Property Tax Abatement Petition for:
MIKE MORRIS (Owner of Enzyme Research Laboratories, Inc. and R2Diagnostics)
Dear Council Member Puzzello:
Please find attached the Department of Community & Economic Development's report on a
commercial real property tax abatement petition for the above referenced petitioner, for rehabilitation
of a facility located at 1801 commerce Drive. Also attached is a copy of the petition, Statement of
Benefits form, and supporting information. The total project also calls for the acquisition of
equipment. A separate petition is being submitted to the Council for that equipment.
The report contains the Department's findings relative to the above petition. The petitioner, Mike
Morris, proposes to rehabilitate an existing 25,423 sq. ft. building. The total cost is estimated to be
$1,000,000. Mike Morris is seeking eight (8) year real property tax abatement and Mr. Morris or his
representative will be available to meet with the Committee on Monday, January 9, 2006.
Should you or any of the other Council members have any questions concerning the report or need
additional information, please feel free to call me at 235 -5826.
Sincerely,
Robert Mathia
Assistant Director,
Economic Development
Attachments
cc: South Bend Common Council Members
Mayor Stephen Luecke
Sharon Kendall
Don Inks
COMMUNITY DEVELOPMENT ECONOMIC DEVELOPMENT FINANCIAL & PROGRAM
PAMELA C. MEYER DONALD E. INKS MANAGEMENT
574/235 -9660 574/235 -9371 ELIZABETH LEONARD
FAX: 5741235 -9697 5741235 -9371
1200 COUNTY -CITY BUILDING
227 W. JEFFERSON BOULEVARD
SOUTH BEND, INDIANA 46601 -1830
PHONE 574 /235 -9371
Far 574/235 -9021
TDD 574/ 235 -5567
CITY OF SOUTH BEND STEPHEN J. LUECKE, MAYOR
COMMUNITY & ECONOMIC DEVELOPMENT
SHARON T. KENDALL
EXECUTIVE DIRECTOR
TAX ABATEMENT REPORT
TO: SOUTH BEND COMMON COUNCIL
FROM: BOB MATHIA
SUBJECT: REAL PROPERTY TAX ABATEMENT PETITION FOR:
1► I Rim► 1 WI _ _
DATE: December 16, 2005
On December 15, 2005, a petition for real property tax abatement consideration for property
located at 1801 Commerce Drive was filed with the City Clerk by Mike Morris (owner of Enzyme
Research Laboratories, Inc. and R2Diagnostics). Pursuant to Chapter 2, Article 6, Section 2 -77 of
the Municipal Code of the City of South Bend, this petition was referred to the Department of
Community and Economic Development for purposes of investigation and preparation of a report
determining whether the area qualifies as an Economic Revitalization Area pursuant to
I.C.6 -1.1 -12.1 and whether all zoning requirements have been met.
The Department of Community and Economic Development has reviewed the petition (a copy of
which is attached), investigated the area and makes the following report.
PROJECT SUMMARY
The project encompasses the relocation and expansion of two biotechnology companies,
Enzyme Research Laboratories, Inc., (ERL) and R2Diagnostics (R213). ERL is a primary
supplier of coagulation and fibrinolytic proteins for research. R21) manufacturers and sells clot
based diagnostic kits that are used for bleeding and clotting disorders. Both companies are
wholly owned by Mike Morris who is acquiring a larger facility to house them. The total project
includes the acquisition and rehabbing of the larger facility and the purchase of additional
COMMUNITY DEVELOPMENT ECONOMIC DEVELOPMENT FINANCIAL$' PROGRAM
PAMELA C. MEYER DONALD E. INKS MANAGEMENT
574/235 -9660 574/235 -9371 ELIZABETH LEONARD
FAx: 574/235 -9697 574/235 -9371
equipment for the move and expansion. This petition relates to only the rehabilitation of the
larger facility. A separate petition is being submitted for the purchase of the equipment.
South Bend Common Council
RE: Tax Abatement for Mike Morris
December 16, 2005
Page 2
Currently, both firms are housed in a 9,000 sq. ft. building located at 412 S. Lafayette Blvd. The
larger facility is a 25,423 sq. ft. building located at 1801 Commerce Drive. That building sits on
a 2.64 acre site. The project will result in increased production capacity and an expanded product
line. The estimated cost for the building's rehabilitation is $1,000,000. This tax abatement
petition is for the rehabilitation costs only.
EMPLOYMENTIMPACT
Per the petition, it is estimated that the total project will create six (6) new, permanent, full -
time jobs representing anew annual payroll of $300,750. The project will also maintain eleven (11)
existing permanent full -time jobs representing an annual payroll of $324,200.
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 abatement.
2. The building commissioner has reviewed the petition and finds the property to be properly zoned
for the proposed project.
S. A review of the South Bend Redevelopment designation areas finds that the property is located in
the Airport Economic Development Area, which is a Tax Incremental Allocation Area, therefore,
the petition for real property tax abatement must first be approved by the South Bend
Redevelopment Commission.
4. A review of the Tax Abatement Ordinance (no. 8065 -90) finds that the petitioner does meet the
qualifications for an eight (8) year real property tax abatement under Section 2 -82 (Industrial
Development City - Wide).
7. Support a Municipal Facility:
A. Support a Municipal Facility N 0 84
Total Public Benefit Points: 540 921
Qualification for each Public Benefit Item based on best available information at time of application or
good faith determination if no information available.
17- Dec -05
Mike Morris
Public Benefit Points Summary
Qualify
Earned
Available
Public Benefit Item:
fY or N
Points
Points
Protect Related:
1.
A.
Redevelop a Site that has Special Needs
N
0
49
B.
Develop Based on Local University Research
N
0
35
C.
Achieve a Physical Element of a Plan
Y
35
36
Sub -total Project Related:
35
120
2.
Super Size Projects (point values are cumulative):
A.
100% to 199% (choose only one)
N
0
25
B.
200% to 299%
Y
93
68
C.
300% to 399%
N
0
65
D.
400% and Over
N
0
52
Sub -total Super Size Projects:
93
210
3.
Construction Related:
A.
Employ Local Companies
Y
20
20
B.
Purchase Materials from Local Companies
Y
20
20
C.
Require Employees vs. Independent Contract(
Y
19
19
D.
Require Target Wage Levels
Y
22
22
E.
Require Health Benefits
Y
22
22
F.
Require Pension Benefits
Y
18
18
G.
Maintain Affirmative Action Plan
Y
20
20
Sub -total Construction Related:
141
141
4.
Wage & Benefit Related:
A.
Pay Target Wage Levels
Y
33
33
B.
Provide Health Benefits
Y
34
34
C.
Provide Pension Benefits
Y
29
29
D.
Provide Training
Y
28
28
E.
Provide Child Care
Y
15
15
F.
Provide Transportation Assistance
N
0
14
G.
Provide Employer Assisted Housing program
N
0
9
Sub -total Wage & Benefit Related:
139
162
5.
Workforce Related:
A.
Create New Jobs
Y
42
42
B.
Retain Existing Jobs
Y
41
41
C.
Maintain Affirmative Action Plan
Y
35
35
D.
Provide Targeted Hiring Preference
N
0
34
Sub -total Workforce Related:
118
152
6.
Pay for Municipal Infrastructure: (not cumulative, choose only one)
A.
Pay for Oversizing or Upgrading
Y
14
14
B.
Pay for 26 -50 % of Extension Cost
N
0
26
C.
Pay for 51 -75% of Extension Cost
N
0
39
D.
Pay for 76 -100% of Extension Cost
N
0
52
Sub -total Infrastructure Related:
14
52
7. Support a Municipal Facility:
A. Support a Municipal Facility N 0 84
Total Public Benefit Points: 540 921
Qualification for each Public Benefit Item based on best available information at time of application or
good faith determination if no information available.
Mike Morris
Additional Years of Abatement
Mulitfamily Development Projects:
From
To
Additional Years
0
141
0
142
183
1
184
225
2
226
267
3
268
309
4
310
351
5
352
393
6
394
& over
7
Other Development Projects:
From
To
Additional Years
0
300
0
301
357
1
358
414
2
415
471
3
472
528
4
529
585
5
586
642
6
643
921
7
Subtotal from Points Summary: 540
Base Years of Abatement
Additional Years of Abatement:
Total Years of Abatement:
Tax Abatement Schedule prepared for:
Mike Morris
South Bend German Township 8 Year Real Property Abatement Schedule*
17- Dec -05
Total estimated Project Cost:
$1,000,000
Base Assessed Value:
$850,000
(base assessed value is estimated at 85% of project cost)
Assume constant tax rate of:
4.8740%
Assume constant SRTC of:
21.6527%
Assessed Gross Less
Net
Percent
Tax
Tax
Year Value Tax SRTC
Tax
Abated
Abated
Paid
1 $850,000 $41,429 $8,970
$32,459
100%
$32,459
$0
2 850,000 41,429 8,970
32,459
88%
28,564
3,895
3 850,000 41,429 8,970
32,459
75%
24,344
8,115
4 850,000 41,429 8,970
32,459
63%
20,449
12,010
5 850,000 41,429 8,970
32,459
50%
16,230
16,229
6 850,000 41,429 8,970
32,459
38%
12,334
20,125
7 850,000 41,429 8,970
32,459
25%
8,115
24,344
8 850,000 41,429 8,970
32,459
13%
4,220
28,239
$259,672
$146,715
$112,957
Total Taxes Due During Abatement:
$259,672
Total Taxes Abated During Abatement:
146,715
Total Taxes Paid During Abatement:
112,957
- This schedule is for estimation purposes only and assumes constant tax rates.
The true tax values will ultimately be determined by the actual
assessed valuation and the then current tax rates.
CITY OF SOUTH BEND
PETITION FOR REAL PROPERTY TAX ABATEMENT CONSIDERATION
The undersigned owner(s) of real property, located within the City of South Bend,
hereby petition the Common Council of the City of South Bend for real property tax
abatement consideration and pursuant to I.C. 6 -1.1- 12.1 -1, et seq., and South Bend
Municipal Code Sec. 2 -76 et seq.• for this petition states the following:
Describe the proposed redevelopment or rehabilitation project, including
information about physical improvements to be made, the proposed use of the
improvements, and a general statement as to the importance of the project to
yourbuslness: This project encompasses the expansion and relocation of two biotechnology companies,
Enzyme Research Laboratories, Inc. (ERL) has been located in the South Bend area for 24 years. It is an ISO
9001 -2000 registered company. R2Diagnostics (R2D) has been in the South Bend area for 8 years and is an
ISO 13485 registered company. Presently the companies are housed in a 9,000 sq. ft. building located at 412
S. Lafayette Blvd. This petition is for the purchase and rehabilitation of the 25,000 sq. ft. building located at
1801 Commerce Drive. This building is located in the Economic Development Area of the Airport Corridor and
will require significant renovation to meet the needs of these companies. This expansion will result in the
increased production capacity of the purified protein product line manufactured by ERL and an increase of
product offerings by R2D. The purchase of this building will include the acquisition of manufacturing machinery
and equipment, along with the hiring of additional laboratory technical specialists to increase production. These
two separate and unique are owned and operated by Michael Morris of South Bend. The companies are
housed in the same facility to take advantage of the overlapping technologies and knowledge within each lab
specialist. There will be minimal sharing of employees but the expertise in the purification and handling of
proteins will be readily available to both companies.
Land Size 2.64 acres; Building Size 25.423 sq.ft.
2. Describe the overall nature of the business and of the operations occurring at
the Property (attach additional sheet if more space is needed): ERL is a primary
supplier of coagulation and fibrinolytic proteins for the research community. Since inception in 1982, ERL has
become the world leader for quality and value within the industry. The Company's products are distributed
worldwide to researchers and pharmaceutical companies to aid in the development of novel therapeutic
compounds and assays to diagnose and treat coagulation /hemostasis disorders. R21) manufactures and sells clot
based diagnostic kits that test for bleeding and clotting disorders. R2D uses the proteins produced by ERL to
insure the highest quality final products with no lot -to -lot variation. These two points are critical to testing labs
such as the South Bend Medical Foundation who rely on our quality for patient care.
3. Estimate the dollar value of the project (excluding land): $ 1,666.000
4. The current assessed valuation of the real property before rehabilitation,
redevelopment, economic revitalization, or improvement: $ 666.000
(Rev 8/11/03)
5. (a) The real property for which tax abatement consideration is petitioned (Property) is owned
or to be owned by the following individuals or corporations (if the business organization
is publicly held, indicate also the name of the corporate parent, if any, and the name under
which the corporation has filed with the Securities and Exchange Commission):
NAME ADDRESS INTEREST ( %)
Michael Morris 1801 Commerce Drive 100%
South Bend IN
(b) The following other person(s) lease, intend to lease, or have an option to buy the Property
(include corporate information as required in 5(a) above, if applicable);
NAME ADDRESS INTEREST(%)
Enzyme Research Laboratories, Inc. 1801 Commerce Drive 50%
South Bend IN
R2 Diagnostics, Inc 1801 Commerce Drive 50%
South Bend IN
6. The commonly known address of the Property is: 1801 Commerce Drive
7. The Key Number(s) of said property is: 025 - 1008 - 033502; 025 - 1008 - 033508;
018 - 2183 - 688612; 018 - 2183 - 68809.
8. A legal description of the above address is attached hereto, marked Exhibit A,
and incorporated herein.
9. A map and /or plat describing the Property is attached hereto, marked Exhibit
B, and incorporated herein.
10. Photographs of the property, taken within two (2) weeks of filing of this petition,
are attached hereto, marked Exhibit C. and incorporated herein.
11. The redevelopment or rehabilitation project itself will create 6 full -time
and 0 part -time permanent jobs within the first year, representing a new
annual payroll of $ 300.750 and will maintain 11 existing
permanent full -time and 0 existing permanent part-time jobs including
existing permanent full -time minority employment of 2 and existing
permanent part-time minority employment of 0 with an annual payroll of
$ 324.200 ,
(Rev 8/11103)
12.The projected annual salaries for each new position indicated above are
estimated to be as follows (If more space is needed, please attach a separate
sheet): Lab Tech — ERL - $33,800 - $46,200
Lab Tech — R2D - $33,800 - $46,200
Research Chemist — R2D - $91,000 - $110,500
These wages are computed using the average hourly rate including fringe
benefits.
13. Provide current employment wage information including; base rate, cost -of-
living allowances, hazardous -duty pay, incentive pay including commissions
and production bonuses, on -call pay and tips. Do Not Include; back pay, jury
duty pay, overtime pay, severance pay, shift differentials, non - production
bonuses, and tuition reimbursements (average hourly rate or range):
Full -Time Part -Time
Laborers $ $17.44 $
Technical $ $22.20/$53.12 $
Managerial $ $
Administrative $ $
14. Indicate whether your company provides the following benefits (use Y /N):
Y Health Care Benefits
Y Pension Plan
Y_ Employer Provided Training (recognized or certified
training /educational courses or programs)
_Y Day Care (provide or contribute to the cost of child day care for its
employees)
_N_ Transportation Assistance (provide direct or indirect support and
assistance to its employees without private transportation to get
back and forth from residence to place of employment)
_N_ Employer- Assisted Housing Program (provide an employer- assisted
home ownership program)
_N_ Targeted Hiring Preference (provide hiring preference for
residents of Census Tracts designated by the Community &
Economic Development Dept. that have the highest
unemployment or the highest percentage of low and moderate
income individuals).
(Additional information may be requested for verification of the above
items)
(Rev 8/11/03) 3
15. List the real and personal property taxes paid at the location during the
previous five years, whether paid by the current owner or a previous owner:
Year Real Property Taxes Personal Property Taxes
2004 30.457.54
2003 30,477.91
(this information may be obtained from the St. Joseph County Treasurers office 235-
9531)
16. Please list the number of full -time and part -time minority employees for each
of the last three years:
Year 2005 2004 2003
Full Part Full Part Full Part
Black 1 _
Hispanic
Asian 1 1
Indian _
Other
17. Does your business maintain an affirmative action plan or other similar plan
in order to achieve racial diversity? If yes, please briefly indicate specific
goals, objectives, and means as designated by your plan: ERL and R 2 D are equal
opportunity employers, who does not discriminate in hiring, promotion, discharge, pay, fringe benefits and
other aspects of employment on the basis of race, color, religion, sex or national origin. With the new building
and anticipated growth, the companies will fill all openings with qualified individuals regardless of race, color,
religion, sex or national origin.
18. Indicate whether or not your project meets any of the following criteria
(contact Community & Economic Development Dept. 235 -9335 for information on
this section):
Conversion to residential use of a commercial Eligible Building as
designated by the Community & Economic Development Dept.
Rehabilitation of a building that is either designated as a National
(Rev 8/11/03) 4
Register or local landmark or is eligible for nomination as one, located
in a National Register or local landmark district, or rated as
Outstanding or Significant in the most recent Historic Preservation
Commission county wide survey.
Rehabilitation and reuse of a property that is designated a Problem
Property by the Community and Economic Development Department
Pays for the cost of cleaning up a ABrownfield,c which is any site,
building facility or complex that has been designated a brownfield by the
Community and Economic Development Department.
X Achieves a physical element identified in a development or revitalization
plan that has been approved by the Council
19. Is your business based upon licensing intellectual property from research
conducted at a public or private university, college, or community college located
within St. Joseph County, Indiana? If yes, please include a description of the
research based aspects of the business (attach additional sheet if more space is
needed): No
20. Does your business financially support a Municipal Facility (i.e. municipally
owned park, recreation center, cultural, arts, or entertainment facility)?
No
21. Is your company incurring any of the cost of extension or oversizing of municipal
infrastructure serving the project site? This includes water, sewer, drainage
facilities, wastewater treatment facilities, road and street improvements, street
lighting, traffic control and related public improvements (attach additional sheet if
more space is needed):
N/A
22. Information is required on the companies through which construction materials
will be purchased for the project. (Please complete the table on page 8 of this
application).
23. Information is required on the construction companies that will be utilized for
construction of the project. (Please complete the table on page 9 of this
application).
(Rev 8/11/03) 5
24. No building permit has been issued for construction on the property in
connection with the improvement in question as of the date of filing of this
petition. (The Property Owners signature at the end of this application is
verification of this statement).
25. The Standard Industrial Classification (SIC) or North American Industry
Classification Systems (NAICS) major group within which the proposed project
would be classified, by number and description:
26. The Internal Revenue Service Code of Principal Business Activity by which the
proposed project would be classified, by number and description: Same as #25
27. The current use of the Property is Light Industrial
and the current zoning is LI (use) and N/A (height and
area).
(This information may be obtained from the Building Department 235 - 9554).
28. Has your business been granted previous tax abatement(s)? If yes, please
provide type (real and /or personal property) and date of approval. No
29. Other anticipated public financing for the project including, if any, industrial
revenue - bonding to be sought or already authorized, assistance through the
United States Department of Housing and Urban Development funds from the
City of South Bend, Small Business Association Sections 503 and 504 financing
through the Business Development Corporation of South Bend, Mishawaka, and
St. Joseph County, Indiana, Industrial Revolving Fund, Neighborhood Business
Development Corporation, Corporation for Entrepreneurial Development; or
other public financial assistance, including but not limited to public works
improvements.
None
(Rev 8/11/03) 6
30. The following person(s) should be contacted as Petitioner =s agent regarding
additional information and public hearing notifications:
Name: Jeffrey M. McGowan CPA and /or Renee M Haves EA
Address: 210 S. Michigan St. Suite 200
City, State, Zip: South Bend, IN 46601
Telephone: 574 - 289 -4011
31. Please indicate the name, address, and telephone number of the person who
will work with Employment Training Services (ETS) for employee recruitment,
and sign the ETS form attached to the petition if the real tax abatement is for
warehouse or industrial developments.
Name: Michael J. Morris
Address:_ 412 S. Lafayette Street
City, State, Zip: South Bend, IN 46601
Telephone: 574 - 288 -4377
WHEREFORE, Petitioner requests that the Common Council of the City of South
Bend, Indiana, adopt a declaratory resolution designating the area described herein
to be an economic revitalization area for purposes of tangible real property tax
abatement consideration, and after publication of notice and public hearing,
determine qualifications for an economic revitalization area have been met, and
confirm such resolution. Petitioner herein hereby verifies that the required $250.00
filing fee to cover processing and administrative costs pursuant to Section 2 -84.7 of
the Municipal Code of the City of South Bend has been paid in full.
(Rev 8/11/03) 7