HomeMy WebLinkAboutDesignating Tax Abatement - Vacant Land Adjacent to 3305 Lathrop Drive - Gateway Plaza Real Estate, LLCRESOLUTION
3928-08
Passed by the Common Council of the City of South Bend, Indiana
December 8, 08
20
Attest:
City Clerk
President of Common Council
Presented by me to the Mayor of the City of South Bend, Indiana
December 9, 20 08
Approved and signed by me December 10, 2008
City Clerk
RESOLUTION NO. ~ ~ 2~ ~g
A RESOLUTION CONFIRMING THE ADOPTION OF A
DECLARATORY RESOLUTION DESIGNATING CERTAIN AREAS
WITHIN THE CITY OF SOUTH BEND, INDIANA, COMMONLY
KNOWN AS
Vacant Land Adjacent To 3305 Lathrop Drive
AS AN ECONOMIC REVITALIZATION AREA FOR PURPOSES OF A
THREE-YEAR REAL PROPERTY TAX ABATEMENT FOR
Gateway Plaza Real Estate, LLC
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
Vacant Land Adjacent To 3305 Lathrop Drive, South Bend, Indiana, and which is more
particularly described as follows:
Lot 2 Total Industries Lathrop St-Minor-04/05 New Replat Trans
14822-2/06/04
and which has Key Number 25-1010-0409.01 presently, 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 three (3) 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.
Member of the C on Council
rP.ESf.P{lEC ~Z-~-~~
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Find !n Cleri~'~ Q~;ice
NOV 1 9 2008
JONhIVOOADE
CITY CLEI;K, d0. BEND, IM,
1200 COUNTY-CITY BUILDING
227 W. JEFFERSON BOULEVARD
SOUTH BEND, INDIANA 46601-1830
PHONE 574/ 235-9371
FAx 574/235-9021
TDD 574/ 235-5567
CITY OF SOUTH BEND STEPHEN J. LUECKE, MAYOR
COMMUNITY ~ ECONOMIC DEVELOPMENT
JEFFREY V. GIBNEY
October 29, 2008 EXECUTIVE DIRECTOR
Council Member Derek D. Dieter, 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:
GATEWAY PLAZA REAL ESTATE, LLC
Dear Council Member Dieter:
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 construction of a new facility to
be located on vacant property adjacent to 3305 Lathrop Drive. Also attached is a copy of the petition,
Statement of Benefits form, and supporting information.
The report contains the Department's findings relative to the above petition. The petitioner, Gateway Plaza
Real Estate, LLC. proposes to construct an approximate 31,819 square foot combination warehouse/flex
building. Please note that the petitioner is asking for a special exception because the petition does not
meet the general standards for a real property tax abatement as set forth in the City's Ordinance
The petitioner is seeking a (3) three-year real property tax abatement, and a representative of the petitioner
will be available to meet with the Committee on Monday, November 24, 2008.
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 235-5835.
Sincerely,
~~~~~;~
Bob Mathia
Assistant Director,
Economic Development
Attachments
cc: South Bend Common Council Members
Mayor Stephen Luecke
Jeff Gibney
Don Inks
COMMUNITY DEVELOPMENT ECONOMIC DEVELOPMENT FINANCIAL LC PROGRAM
PAMELA C. MEYER DONALD E. INKS MANAGEMENT
574/235-9660 574/235-9371 ELIZABETH LEONARD
FAX: 5741235-9697 574/235-9371
1200 COUN'T'Y-CTTY BUILDING
227 W. JEFFERSON BOULEVARD
SOUTH BEND, INDIANA 46601-1830
PHONE 574/ 235-9371
FAx 574/235-9021
TDD 574/ 235-5567
CITY OF SOUI`H BEND STEPHEN J. LUECKE, MAYOR
COMMUNITY ~L ECONOMIC DEVELOPMENT
JEFFREY V. GIBNEY
EXECUTIVE DIRECTOR
TAX ABATEMENT REPORT
TO: SOUTH BEND COMMON COUNCIL
FROM: BOB MATHIA
SUBJECT: REAL PROPERTY TAX ABATEMENT PETITION FOR:
GATEWAY PLAZA REAL ESTATE, LLC
DATE: October 29, 2008
On August 12, 2008, a petition for real properly tax abatement consideration for vacant property
located adjacent to 3305 Lathrop Drive was filed with the City Clerk by Gateway Plaza Real Estate,
LLC. Please note: The petitioner is asking for a special exception because the project does not
meet the general standards for real property tax abatement set forth in Chapter 2, Article 6,
Sections 2-77 through 2-83.3 of the Municipal Code of the City of South Bend. Pursuant to
Chapter 2, Article 6, Section 2-82 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, investigated
the area, and makes the following report.
PROJECT SUMMARY
Gateway Plaza is proposing to construct a combination warehouse/flex building. The building will
be approximately 31,819 square feet in size and can be demised to seven units of approximately
4,320 square feet each. The building will become Phase IV of the adjacent Gateway Plaza and will
be of similar construction. Tenants in the building are likely to be primarily warehouse users, but
with some need for front-office space or showroom areas. All suites will have grade-level overhead
door access, with at least four slated for dock access as well. The building site covers approximately
1.94 acres. The estimated cost of Phase IV construction is $1,480,180.
COMMUNITY DEVELOPMENT ECONOMIC DEVELOPMENT FINANCIAL A' PROGRAM
PAMELA C. MEYER DONALD E. INKS MANAGEMENT
574/235-9GG0 574!235-9371 ELIZABETH LEONARD
FAX: 574/235-9697 574/235-9371
South Bend Common Council
RE: Gateway Plaza Real Estate, LLC.
October 29, 2008
Page 2
Total taxes to be abated during the (3) three-year abatement period are estimated at $79,214. Total
taxes to be paid during the (3) three-year abatement period are estimated at $56,076.
EMPLOYMENT IMPACT
Per the petition, it is estimated that the project, by itself, will not create additional full-time or part-
time permanent jobs within the first year of the project, but will enable a tenant, Memorial Health
Systems, to move and allow for future growth. Memorial will maintain 14 existing permanentfull-
timejobs with an annual payroll of $858,924 including one existing permanent full-time minority
employee with an annual payroll of $170,000.
The total possible gains in employment resulting from construction of the building will depend on
the kinds of businesses that locate in it and cannot be estimated at this time, therefore, the petitioner
has not presented any projections on jobs created. As a result, no points were awarded for job
creation in the Public Benefit Points Summary. However, much like the State of Indiana's Shovel
Ready Industrial Park Program, the building will facilitate job creation by providing the necessary
infrastructure for new investments to be made quickly and easily by businesses looking to start-up or
expand.
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 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. 9394-03 finds that the petitioner does not meet
the qualifications for a real property tax abatement under the general standards for tax abatement
in the City of South Bend. However, the Ordinance does provide for an exception to the general
standards, at the South Bend Common Council's discretion. A (3) three-year real property tax
abatement is being sought as a special exception.
29-Oct-08
Gateway Plaza Real Estate, LLC
Public Benefit Points Summary
Qualify Earned Available
Public Benefit Item: Y or N Points Points
Proiect 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 N 0 36
Sub-total Project Related: 0 120
2. Super Size Proiects (point values are cumulative):
A. 100% to 199% N 0 25
B. 200% to 299% N 0 68
C. 300% to 399% N 0 65
D. 400% and Over N 0 52
Sub-total Super Size Projects: 0 210
3. Construction Related:
A. Employ Local Companies Y 20 20
B. Purchase Materials from Local Companies Y 20 20
C. Require Employees vs. Independent Contracts Y 19 19
D. Require Target Wage Levels N 0 22
E. Require Health Benefits N 0 22
F. Require Pension Benefits N 0 18
G. Maintain Affirmative Action Plan Y 20 20
Sub-total Construction Related: 79 141
4. Wage 8~ 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 N 0 15
F. Provide Transportation Assistance N 0 14
G. Provide Employer Assisted Housing program N 0 9
Sub-total Wage 8 Benefit Related: 124 162
5. Workforce Related:
A. Create New Jobs Y N 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: 76 152
6. Pav for Municipal Infrastructure: (point values are cumulative):
A. Pay for Oversizing or Upgrading N 0 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: 0 131
7. Support a Municipal Facility:
A. Support a Municipal Facility N 0 84
Total Public Benefit Points: 279 1000
' Qualification for each Public Benefit Item based on best available information at time of application or
good faith determination if no information available.
Gateway Plaza Real Estate, LLC
Additional Years of Abatement
Multi-family 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 1000 7
Subtotal from Points Summary: 279
Base Years of Abatement
Additional Years of Abatement:
Total Years of Abatement:
3 YEAR
Gateway Plaza Real Estate, LLC
South Bend German Township
Real Property Tax Abatement Schedule*
Tax Key Number
Current Assessed Value:
Estimated Project Cost:
25-1010-0409.01
13,000
1,480,180 100.00%
29-Oct-08
Current Without 100% 66% 33%
Assessed Value: AV & Tax Abatement Year 1 Year 2 Year 3
Current Assessed Value 100% 13,000 13,000 13,000 13,000 13,000
Base Assessed Value 85% 1,258,153 1,258,153 1,258,153 1,258,153
Less Abatement Deduction 0 (1,258,153) (830,381) (415,190)
Net Assessed Value 13,000 1,271,153 13,000 440,772 855,963
Property Taxes:
Assume constant tax rate of 4.2815% 4.2815% 4.2815% 4.2815% 4.2815%
Gross Tax (tax rate x net assessed value)
Less Circuit Breaker Credit
Net Tax
Circuit Breaker Cap
Circuit Breaker
Debt Service
Circuit Braker Cap
557 54,424 557 18,872 36,648
(95) (9,328) 0 0 0
461 45,097 557 18,872 36,648
3.0000% 390 38,135 38,135 38,135 38,135
0.5477% 71 6,962 71 2,414 4,688
461 45,097 38,206 40,549 42,823
New Combined Net
Existing Project Existing & New Tax Tax
Year Taxes Taxes Taxes Abated Paid
1 461 44,635 45,097 44,540 557
2 461 44,635 45,097 26,225 18,872
3 461 44,635 45,097 8,449 36,648
Totals 1,384 133,906 135,290 79,214 56,076
`'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.
ESTIMATED TOTAL TAX REVENUE
Gateway Plaza Real Estate, LLC
REAL PROPERTY -THREE YEARS
LAND" BUILDINGS"* TOTAL
Year1 $513 $44 $557
Year 2 513 18,359 18,872
Year 3 513 36,135 36,648
Total $1,539 $54,538 $56,077
'Current tax levy.
C B R ~ Bradley
CB RICHARD ELLIS
October 29, 2008
City of South Bend Common Council
Suite 400S County-City
227 West Jefferson Boulevard
South Bend, Indiana 46601
P.O. Box 540
South Bend, IN 46624
574 237 6000 Tel
574 237 6001 Fax
www.cbre.com/southbend
Re: Gateway Plaza Real Estate, LLC (the "Petitioner") Application for Real
Property Tax Abatement
Dear Ladies and Gentlemen:
On behalf of the above referenced Petitioner, we are requesting, pursuant to Section 2-84
of she South Bend Municipal Code, a Special Exception to the Real Property Tax
Abatement definition for Warehouse Development contained within the South Bend
Municipal Code. 'The definition for Warehouse Development refers to: "economic
activities described in major groups 421, 422, and 493 of the North American Industry
Classification-United States, 2002 manual published by the United States Office of
Management and Budget's Economic Classification Policy Committee, which manual is
hereby incorporated by reference..." However, in the 2002 version of the manual the
economic activities described in groups 421 and 422 were moved to other groups. Due to
scrivener's errors the group numbers were not revised when reference to the 2002 version
of the manual was incorporated into the Municipal Code. Group 493 is very limited in
scope and dots not include the type of activities to be carried out in the building as
proposed by the F~etitiotter. Groups 4'21 and 422 include many of those activities.
Further, those activities have been included in groups 423, 424, and 425 of the 2002
manual.
In view of the above explanation, and the considerable amount of additional investment
proposed in the City, the Petitioner is requesting a Special Exception for the Project.
Thank you very much for your consideration of this request. If you have any questions,
please feel free to con-tact us.
Sincerely,
J ie Ruiz,
I:ichard Ellis/Bradley
as f~gent fir Gateway Plaza Deal Estate, LLC
Fii~d in ~'teC'~~ ~ ~-fi~e
NOV 1 0 2008
~oHr~ vso gt ~, tx.
cm c1.r-.F:~.,
' CITY OF SOUTH BEND
PETITION FOR REAL PROPERTY TAX ABATEMENT CONSIDERATION
' The undersi ned owner(s) of real property, located within the City of South Bend, hereby
9
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 se .and South Bend Municipal Code
Sec. 2-76 et seq., for this petition states the following:
1. 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 your business:
' Please see attached Exhibit D.
' Land Size approximately 1.94 acres; Building Size approximately31,819 square feet,
yet to be determined.
' 2. Describe the overall nature of the business and of the operations occurring at the
Property (attach additional sheet if more space is needed):
' Tenants in the building are likely to be primarily warehouse users, but with
some need for front-space office or showroom (similar to existing Gateway
tenants). All suites will have grade-level overhead door access, with at least 4
' slated for dock access, as well.
3. Estimate the dollar value of the project (excluding land): X1,480,180
' 4. The current assessed valuation of the real property before rehabilitation,
redevelopment, economic revitalization, or improvement: $13,000 (land only: 2007
' German Township assessment).
' 5. (a) The real property forwhich 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 (%)
Gatewa~Plaza Real Estate, LLC 202 S. Michigan, Ste. 200 100%
c/o CB Richard Ellis ~ Bradley South Bend, IN 46601
' (Rev 8/11/08)
1
1
(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(%)
Memorial Health System Inc. 2301 Bendix Drive. Ste. 500 ±6.480 SF
The owner, via its appointed broker, will aggressively market the property to
increase leasing activity and secure additional tenants for the building so as to
retain and expand job opportunities.
6. The commonly known address of the Property is: Vacant Land
7. The Key Number(s) of said property is: 25-1010-0409.01
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 14 full-time and
0 part-time permanent jobs within the first year, representing a new annual payroll
of $858.924 and will maintain 14 existing permanent full-time and 0 existing
permanent part-time jobs including existing permanent full-time minority employment
of 1 and existing permanent part-time minority employment of 0 with an
annual payroll of $170.000. This project will maintain the existing personnel.
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):
No immediate new positions will be created with Memorial's expansion,
however they have requested that build-out plans include an additional
doctor's office to plan for future growth.
13. Provide current employment wage information including; base rate, cost-of-living
allowances, hazardous-duty pay, incentive pay including commissions and production
(Rev 8/11/08)
2
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 $ 15.00 $ N/A
Technical $ 36.00 $ N/A
Managerial $ 0 $ N/A
Administrative $ 24.11 $ N/A
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)
_N_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)
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 25-1010-0409.01
2006 pay 2007 $513.00 (Land Only)*
'
2005 pay 2006 $522.76 (Land Only)*
2004 pay 2005 $496.42 (Land Only)*
1
Per the St. Joseph County Treasurer's office (5/21/08), there is no record of taxes
paid prior to 2004 pay 2005, as there were no assessments.
*Real Property Taxes only; Personal Property Taxes not applicable.
16. Please list the number of full-time and part-time minority employees for each of the
last three years:
3
(Rev 8/11/08)
Year 2008 2007 2006
Full Part Full Part Full Part
Black 0 0 N/A N/A
' Hispanic 0 0
Asian 1 1
Indian 0 0
Other 0 0
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:
Diversity mandatory training and education meetings for all staff yearly.
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):
N Conversion to residential use of a commercial Eligible Building as designated
' by the Community & Economic Development Dept.
N Rehabilitation of a building that is either designated as a National 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.
N Rehabilitation and reuse of a property that is designated a Problem Property
' by the Community and Economic Development Department
N Pays for the cost of cleaning up a Brownfield, which is any site, building facility
or complex that has been designated a brownfield by the Community and
Economic Development Department.
N 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):
' N/A
20. Does your business financially support a Municipal Facility (i.e. municipally owned
park, recreation center, cultural, arts, or entertainment facility)?
N/A
' (Rev 8/11/08)
4
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 o.
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).
Please see attached.
' 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).
' Please see attached.
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 (NAILS) major group within which the proposed project would be classified,
' by number and description:
67999905 Real Estate Investors
26. The Internal Revenue Service Code of Principal Business Activity by which the
proposed project would be classified, by number and description:
531120 Lessors of Non-Residential Buildings
27. The current use of the Property is Vacant Land and the current zoning is LI-Light
Industrial.
' 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,
(Rev 8/11/08)
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.
30. The following person(s) should be contacted as Petitioner's agent regarding additional
information and public hearing notifications:
1
1
Name: Jamie Ruiz
Address: 202 S. Michiqan Street. Ste. 200
City, State, Zip: South Bend. IN 46601
Telephone: (574)_237-6000
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: Jamie Ruiz (as authorized by interested tenants)
Address: 202 S. Michiqan Street, Suite 200
City, State, Zip: South Bend. IN 46601_
Telephone: X574) 237-6000
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.
_ Name of Property Owner(s):
~t'0`'--`=---f- Gateway Plaza Real Estate, LLC
~ -; .
~`~: ~.~
By:
JGiiN VQGRD'c
CITY GIE;,;;, Ea• 3E"G~ iN. Jamie Ruiz, CB Richard Ellis ~ Bradley
as Agent for Gateway Plaza Real Estate, LLC
(Rev 8/11/08)
6
In the following chart please list the companies that will be used for the construction associated with the project. Indicate the name and address of each company; list the dollar amount of the
work to be provided by each company; indicate whether or not 100°I° of the workers are employees of that company and not independent contractors; indicate whether or not the company pays
workers wages that meet the wage rates for each classification of laborers and mechanics published by the U.S. Department of Labor; indicate whether or not the company contributes to a
health plan for its employees; indicate whether or not the company contributes to a pension plan for its employees; and indicate whether or not the company maintains an affirmative action plan
or other similar plan to achieve racial diversity. Local companies include those located in St. Joseph County, Additional information may be requested for verification of this information.
Local Companies*
'y. ~~ ..~~, f2,i:.IAJG.' ~.)lal Xlrly:,:~;J,..;_ r~(}: tj :..};,-
. >,~I, l~.)eZ ~._~.:.,_1i~i•aiiV .~i~~'i:- •i ~1 [.;qt
~ tR
~`~~. ,i~ii{i~~ '3::j u.,i.^~i _f~ue n.=i~~~i:
Ma'orit Builders, Inc. 62900 US 31 South South Bend IN 46614 $819,650 es no es es es
Rieth-Rife Construction PO Box 1775 South Bend IN 46634 $73,440 es es es es es
Overhead Door Co 58745 Executive Dr Mishawaka IN 46544 $62,540 es es es es es
Tri Valle Glass Co., Inc. 50820 US 33 North South Bend IN 46637 $26,880 es no es es es
Lambie's Paintin ,Inc. 23430 Madison Rd South Bend IN 46614 $6,260 es no es es es
VFP Fire S stems 3725 Cleveland Rd South Bend IN 46628 $51,150 es es es es es
Pritchard Mechanical, Inc. 23978 State Road 2 South Bend IN 46619 $36,610 es no es es es
Campbell Electric Co., Inc. PO Box 1142 Mishawaka IN 46546 $70,200 yes no yes yes yes
Total Local $1,146,730
Total for Project $1,320,530
Percentage of Project 87%
*Companies located within St. Joseph County, IN
Non-Local Companies**
°° ,,,~., ~,~,'R ~ ilC-.
~~ ~.~ ~i1~Jii • 3"i `!:1~ ~ =K
r ,x ,E ~.rr~...~-~ ~~iS''
~ ~; `'S~~.~
.. '~-~'
_ ~~£li i'ra~~~'[ii ~ ~ ~
~. I~u~ i[i r~:, ; ~'iE~i~ ~~ r
~
111. 81t's 'l r~. . bf:
~,
4~1. ~,1 • ~ .X t :~ti~~- a:~~~..~:~~ ~siit'~ }~r,:
Overholt Mason 12340 Coun Road 4 Middlebu IN 46540 $65,800 es no no no es
Michiana Steel Erectors, Inc. 25416 Coun Road 6 Elkhart IN 46514 $108,000 es no es es es
Total Non-Local $173,800
Total for Project $1,320,530
Percentage of Project 13%
**Companies located outside of St. Joseph
~~l~t~ 1 i ~~~ F-
.~, Y{ ~ ~f~~ce
~~~,, ~
~~
JCiftd JCO~tC~
In the following chart(s) please indicate companies that were used for purchasing materials used in the construction or rehabilitation associated with the project. Include the
location of the company, description of the materials, and cost of the materials. Local companies include those located in St. Joseph County. Additional information may
be re uested for verification of this information.
Local Companies*
'sr!l:l:ll~t/~-1~~ILI_~ r6i IR~.'r~.fl"F~:'~~ _M~'}iay1= ~, r'J 'e~.-i'l~+il;j„!,~•It .j Ii" t.ji,:i.~:j, ~ y,.t~:jF. .j ~.~.,~i 't.}o:j:.
Aggre ate Industries 24423 State Road 23 South Bend IN 46614 Concrete $110,000 $110,000
CMA Su I Co., Inc. 910 West Ireland Rd South Bend IN 46614 Concrete & accessories $44,000 $44,000
JW Werntz & Son, Inc. 1002 Kerr Street South Bend IN 46601 Doors and Trim $5,650 $5,650
Total Local $159,650 $159,650
`COmpanRes locatetl within St. Joseph County, IN
Non-Local Companies**
ti:~'el M,1!~.l l"l1-~~117c:' '!~!~Il,l!~.I l~"f C:l,i. 'I~~'~~: :~If'! ~~~~.~.;. ~I.-i ~' C~.~=~t~.'~iI!ll^^,.• e'it1.;5''~. r.i c;.}i-..} 'i'~j~,_ie~, i! .j Eifl:~Rtl~ '3'~:~.I.
Total Non-Local 0 0
"COmparnes locatetl outside of 5t. Joseph County, IN
Fl~~s 9 7., •1!{
~ ~; ~ r9 ~;°, ~, z.; R ~;ce
~~~~~~ ~
,~
JO~if! VCROc
CITY CLcf;K, S0. E~?!R, !N.
1
1
EXHIBIT A
Legal Descriptions
Parcel 25-1010-0409.01
Lot 2 Total Industries Lathrop St-Minor-04/05 New Replat Trans 14822-2/06/04
C~er~t ~ t3~~~~e
F~`~~,1n
pU6 1 2 2pOB
~~EFK S 8E O,~N'
cm
EXHIBIT B
J
2004
^..ow wrNw
~[ nornL earr~n
sc~~e: ~' • ioo'
3-28H
I~u u, ....,. --
AUG 1 2 2008
JOt~N SO BEND, ItS.
GC1Y CI~hK,
- - 3 ,P
GERMAN TWP.
E~/2 S.E~/a SEC. 28 T.38N. R2E.
EXHIBIT C
Property Photographs Taken August 7, 2008
_..~
,~.~ ;M ice. _ ;_._~; . ..~
Standing east, shooting northwest
Filc~~' ~~ Ol~ris'~ Offilre
AUG 1 2 2008
JOi~tJ Vt?ORDr:
CITY CLEhi<, S0. DE;~D, IN.
Standing east, shooting west
Standing northeast, shooting southwest
Standing northeast, shooting northwest
Standing southeast, shooting southwest
Standing northeast, shooting southeast
1
1
-~
- _ _ -s'
___._
Standing southeast, shooting southwest
Standing southwest, shooting southeast
Filed Ira ~ie:~'.'~ C~~°ice
AUG 1 2 2008
~or~r~ vooR~
CITY CLERK, So. 6~~l~, Ir1,
Standing southeast, shooting northwest
Standing west, shooting east
Standing southwest, shooting northeast
1
1
1
EXHIBIT D
Proposed Redevelopment & Improvements
The owner intends to construct a new building, comprised of approximately 31,819 square feet,
as Phase 1V of its adjacent Gateway Plaza development. The new building will be of similar
construction as the existing Gateway buildings and can be demised to 7 units of approximately
4,320 square feet each.
The new construction will bring additional industrial/office flex space to the South Bend market, a
product type that has shown demand in recent months, with low to moderate availability in terms
of supply. The building will also accommodate tenants, such as Memorial Health System, with
expansion needs, thus justifying their relocation out of the existing Gateway buildings. Adding
space on-site to fulfill these needs will enable tenants to remain at the property and consequently,
carry out longer lease terms.
~~{rCly
AUG 1 2 2003
CfTy CLERK V00F{pE
S0. EE1~D, IN.
(10/22/2008) Janice Talboom - Re: Tax Abatement Petition From Gateway Plaza Real Estate, Inc. Page 5
»> Robert Mathia 10/14/08 2:00 PM »>
Hello Derek & Rev. Rouse,
I am requesting your permission to submit the subject tax abatement petition to the Common Council as a
Special Exception.
BACKGROUND: The petitioner is proposing to build a 31,819 Sq. ft. building that can be demised to 7
units of approximately 4,320 sq. ft. each. The project's estimated cost is $1,480,180. This will be the fourth
building constructed as part of Gateway Plaza which is located on the northwest corner of Bendix and
Lathrop and which is in the Airport Economic Development Area. The petitioner's description of the
proposed building is confusing. In one section of the petition it is described as an "industrial flex building"
In another section it is called a "multi-tenant building with up to 7 units." Finally, in a third section it is
stated that the "Tenants in the building are likely to be primarily warehouse users, but with some need for
front-space office or showroom (similar to existing Gateway tenants). All suites will have grade-level
overhead door access, with at least 4 slated for dock access as well."
I made a windshield inspection of the three current buildings in Gateway Plaza and found the following
tenants there: Wood Temporary Staffing; Memorial Center for Occupational Health; Paul Davis
Restoration; GCS EcoLab; Now Courier; Cardinal Health Nuclear Pharmacy Services; Harry Alter Carrier,
HVAC Parts and Service; and Trane HVAC Parts & Service. In a meeting on September 9, 2008, the
petitioner stated that Cardinal Health, Carrier HVAC and Trane HVAC were all engaged in the wholesale
trade. Further, Wood Staffing, Memorial Occupational Health and Now Courier provide services to
surrounding businesses. Based on the mix of tenants I found, and the petitioner's description of the
businesses, I concluded that the proposed abatement would best fit under the warehouse classification for
tax abatement.
PROBLEM: The definition for warehouse development contained in the City's ordinance on tax abatement
states that it includes economic activities in major groups 421, 422 and 493 of the North American
Industry Classification System -United States 2002 (NAICS). When 1 consulted that reference I found
that only group 493 was listed. The description for that group did not fit the type of economic activity
proposed for the new building. It was limited to storage and warehousing of goods. I researched earlier
versions of the NAICS and found all three groups listed in the 1997 version. The descriptions for groups
421 and 422 in that version cover wholesale trade activities for both durable and nondurable goods. They
cover many of the kinds of activities occurring in the original three buildings at Gateway Plaza and what is
planned for the new building. It appears that during a prior revision of the City's ordinance on tax
abatement the reference to the NAICS year of publication was updated but the changes in the group
numbering system were not made. The Council clearly intended to continue including the activities
contained in groups 421 and 422 because the groups continue to be listed in the ordinance. In the 2002
version of the NAICS the activities included in group 421 were moved into groups 423 and 425 and the
activities listed in group 422 were moved to groups 424 and 425.
DISCUSSION: The proposed project would benefit the City. The three existing Gateway buildings are
full. There is additional demand for the type of building proposed. The project as currently proposed
would qualify for up to a five year abatement. If the property is left vacant over the five year term the City
would collect a total of only $2,306 in property taxes. If the project is constructed, the City would collect an
additional $108,213 in taxes over the five year tax abatement term for a total of $110,213. In addition,
because the site is located in an area of the City that is already developed, it will not create a major
additional burden on the police and fire departments. However, because of the confusion generated by
the changes in the NAICS group numbering system I am suggesting that we consider the petition as a
Special Exception. Please advise whether or not you are willing to consider the petition for a Special
Exception. Thanks!
Bob Mathia
Assistant Director,
»> Timothy Rouse 10/15/2008 9:00 AM »>
Bob, in my opinion post HEA 1001 tax abatements must be viewed one by one and based on the
economic impact to the community. This opinion was re-enforced by attending the TACT workshops this
week. I was surprised and somewhat disappointed that you and Don were not in attendance. Do we have
a pro}ection on the economic impact? Thanks.
Tim
,•
i
»> Robert Mathia 10/16/08 9:58 AM »>
Hi Rev. Rouse,
The impact of the proposed project can be looked at in two ways. First, one can look at the financial
impact of the project on City revenues. If the project is not completed the City would continue to collect
$461 per year in tax revenue on the vacant property. If the project is completed as planned the City will
collect, during the tax abatement's projected five-year term, an average of $22,043 per year. The net
increase in tax revenue to the City is $21,582 per year. At the end of the five-year tax abatement term the
City would begin receiving $45,097 per year in revenue. The net increase here is $44,636 per year. As
an incentive the City is abating an average of $22,993 per year in tax revenue over the five-year
abatement term. The abatement is in effect the investment the City is making to increase its tax flow.
The total the City is investing in the form of the abatement over the five-year term is $144,965. Assuming
the project has a useful life of only 20 years (most projects of this type have 30-year or longer life spans)
the City will receive a total of $777,450 in increased revenue as a result of that investment. If you look at
the present value of each of these funding streams, and assuming a 6% rate of return, the amount of
increased revenue the City will receive is approximately 4.28 times its investment ($90,911 +
$323,948/$96,855 = 4.28). That is for each dollar the City invested in the form of abated taxes, valued in
today's dollars, the City will receive ,over the twenty-year life of the project, the equivalent of $4.28 in
increased revenue valued in today's dollars. Further, as noted in my previous a-mail, the City will incur
very little in the way of increased costs for police and fire protection because the project is in an area that
is already well built up. So, the increased revenue is clear profit for the City.
On the economic impact side of things, the funds spent on the project construction (estimated at
$1,480,180) will generate employment in the construction trades. It will also provide business to various
firms that supply materials for construction. But the money used for the project is not just spent once in
the local economy. The economic impact conservatively can provide a boost to the local economy in the
form of a multiplier of at least 2 times the initial cost of the project as funds spent on the project move
through the local economy and are re-spent. The construction workers and material suppliers spend the
money they earn to buy items they need in the local economy and the money is then re-spent by those
receiving payment. The project's post construction impact on the economy in the form of employment is
difficult to forecast. However, a rough estimate follows. The equivalent of at least one-half time job will be
created just to manage and maintain the building. The building's plans call for it to be demised into seven
units. Businesses normally move because they need additional space to operate in. When they move
they tend to add new employees. Assuming the building is demised into only three units, it would be safe
to assume that at least one new, full-time job would be created by each of the companies moving into the
three units.
In response to a request for additional information, the petitioner surveyed the tenants in the existing
buildings at Gateway Plaza to determine employment levels and salaries. Four of the tenants responded.
Together they have 28 employees and their average annual salary is $53,533. If each of the three full-
time jobs pay just $45,000 per year and the half-time equivalent job pays $20,000 per year, a new total
annual payroll of $155,000 would be added to the local economy. One final note, just as the State of
Indiana has embarked on a program of establishing "shovel ready industrial parks" to facilitate the
establishment and expansion of businesses, the availability of the space provided by the proposed project
will also facilitate the growth of business in the local economy but on a smaller scale.
I hope the above answers your questions.
Bob Mathia
Assistant Director,
Economic Development
574-235-5835
rmathia@southbendin.gov
»> Timothy Rouse 10/17/2008 5:48 AM »>
Bob,
Your first point/assumption, continued~$461.00 per year, is based on a belief that they won't build unless
we give the special exception, I don't automatically make that assumption. I see the possibility of a
$44,636 tax increase from year one. The incentive to build should not be using tax abatements as bait, as
we have in the past, but to promote the numerous quality services offered by being in South Bend as well
the tremendous future of the City.
ti
I agree with your other points in paragraph one. But, as stated above I don't automatically assume that
they won't build without the abatement. From my perspective the abatement becomes a negotiating tool,
not bait to draw them in. I see South Bend as a desirable place to do business with great services and
future prospects.
In paragraph two you address the jobs per the construction of the building. I'm looking for commitments
(MOA) that benefit local workers and suppliers "specifically" not general statements/intents and here again
is where I think negotiating can aid south Bend residents. My final point addresses employees that live in
South Bend. We have a large unemployment rate in South Bend and the City Administration is
considering huge RIFs in the City's workforce. The Common Council is considering the possibility of
enacting new income tax legislation. So you see Bob, from my post HEA 1001 perspective; abatements
given by South Bend must be negotiated to benefit South Bend residents. I know this process requires
more work in the front end of the process, however t think the aggregate benefit to the residents require
and demand it.
We can discuss this further; I think it is time to rethink these request, so that they maximize the benefit to
the citizens of South Bend.
Sincerely,
Timothy A. Rouse, President
Common Council Member At-Large
227 W. Jefferson Blvd. 4th Floor
South Bend, IN 46601
574.235-5979
574.235-9173 (fax)
Your first point is a good one. Don Inks and I have discussed this issue many times. The real question is
how can you tell in an objective way whether or not a company needs the tax abatement. You can try to
look at their cost projections but those can be slanted various ways and, ultimately, you either accept their
figures or complete a lengthy market review yourself. Currently, we do not even ask for cost data to be
submitted and I am not proposing that we do so. However, this brings up a point I want to make and that
is businesses hate uncertainty. The current credit crunch is a prime example as banks are now unwilling
to lend, even to each other, because they are uncertain they wilt get paid back. The same thing applies
when a business prepares to make an investment. If the business is not very certain that it will earn its
investment back it is not going to make the investment. The system we currently have is objective.
Basically it states that if you meet certain criteria as listed in our tax abatement ordinance you will receive
at least a three year abatement and possibly more if you meet additional criteria. Our system requires
quite a bit of investment in the form of several actions including the preparation of the construction plans,
the identification of suppliers, the preparation of cost estimates and the collection of information from the
various suppliers in order to meet the various criteria (such as provision for pensions and health
insurance) for awarding points in our tax abatement system. If there is no certainty that a business will
obtain a tax abatement after making the investment we require, it can very well move on to another
location and bypass us.
I agree with you that South Bend has numerous quality amenities and services but we do not stand out
from the crowd in that respect. There are other communities with equal attributes and businesses can
easily move on to them. We are clearly in competition with those communities and need to be able to
offer incentives, including tax abatement, that business owners can easily understand and factor into their
investment decisions. A specific case in point happened about six months ago. We worked hard to have
Bauer Soft Water relocate to the Blackthorn Industrial Park from Granger. They instead ended up moving
to Niles where they obtained more favorable financial incentives. In the case of Gateway I can only give
them a 50-50 chance that they will build without the tax abatement incentive. Because of the warehouse
issue I initially told them that they were not eligible for a tax abatement. The petitionePs representative,
Jamie Ruiz at CB Richard Ellis, wrote back and stated "Thanks for the follow up. I spoke with the client
and they can not make this project work without an abatement. At this juncture they have decided not
build. Thanks for your help!" They did not complain or request additional consideration. Our discussion
continued only because I did not want the City to lose the investment. I contacted them and in the process
discovered what happened with the reference to warehouse operations in our ordinance.
Regarding my paragraph two, I took a conservative, minimalist approach in estimating employment
because I did not want to overstate the potential benefit of the project to South Bend. Also, because the
proposed project involves a flex building that currently has just one potential tenant identified, it is difficult
to precisely determine the impact on employment.
I am unsure.what you are looking for in paragraph three of your last a-mail, in particular what do you mean
in the statement "abatements given by South Bend must be negotiated to benefit South Bend residents."
The abatements we have approved do increase the City's tax revenue which indirectly benefits all citizens.
In more direct fashion those abatements have increased employment opportunities for the City's residents
through the creation of new jobs and the retention of existing ones thereby helping to reduce the high
unemployment that you mentioned. Also, through our system of awarding points, abatements encourage
petitioners to use local firms for the construction of their proposed projects. I understand your desire to
assist South Bend residents, that is all of our jobs, but putting additional requirements on tax abatement
petitioners interested in investing in the City is not a good way to go about it. Outside of raising taxes,
getting new investment into the City is the surest way of increasing tax revenue and at the same time it
has the added benefit of increasing employment. The best way to sustain those benefits and employment
gains over the long term is to assure the City has a reputation for offering incentives in a clear, fair and
objective manner and that it is open to and welcomes new investment without undue restriction.
I definitely agree with you that we should discuss this further (particularly your paragraph three).
However, because of the significance, any discussion should include other members of the Council and
the Mayors administration. Because this is well beyond my area for decision making t have taken the
liberty to copy the Mayor and Jeff Gibney on this a-mail in the hopes of getting a discussion started soon.
In the meantime I will inform the petitioner that their petition is on hold pending further discussion by the
City.
Bob Mathia
Assistanf Director,
Economic Development
574-235-5835
(10/22/2008) Janice Talboom - Re_ Tax Abatement Petition From Gateway Plaza Real Estate, Inc_ _ Page 1
From: Timothy Rouse
To: RMATHIA@SouthBendlN.Gov
Date: 10/22/2008 9:43 AM
Subject: Re: Tax Abatement Petition From Gateway Plaza Real Estate, Inc.
Attachments: City%20of%20Madison%20Tax%20Abatement%20Guidelines[1].doc
CC:
DDIETER@SouthBendlN.Gov,DINKS@SouthBendlN.Gov,JGIBNEY@SouthBendlN.
Gov,JT...
Bob,
You have raised some very good points that add credence to the on going discussion that our Tax
Abatement Ordinance needs review and updating. Also I agree that Banks have tightened their lending
practices, and it seems to me that this is not an in appropriate time to "loosen" the parameters of the
ordinance i.e. special exceptions. I don't believe the current requirements of our tax abatement ordinance
is any more restrictive that most documents of that nature. However, there may well be some serious
disagreement as to our objective that is the purpose, end in mind as to what we want to achieve in the
process. I would hope that we partner with businesses working to maximize economic development for
both business and the community (the City of South Bend); if that is not the case or is not possible all
parties may well be better off if they (petitioner) does "move on to another location and by pass us." Note,
there is a difference in economic development and economic growth. Although they are often related
economic development involves doing what we do better whereas, economic growth addresses economic
expansion.
What I mean by my statement "abatements given by South Bend must be negotiated to benefit South
Bend residents" is that I want to "maximize the benefits to residents; you made a point of the construction
project being estimated at $1,480.180.00 creating construction jobs in the area. From my point of view if
the construction project does not contract South Bend companies, the jobs that are created are not
employing South Bend residents then the process does not maximize the benefit to South Bend residents
and I think that this is too often over looked. I know there are very specific limitations in accomplishing
that, but I'm not convinced it is even on the table. There is a huge difference between "benefiting residents
and maximizing the benefits of residents."
In regards to the concept maximizing the benefits of tax abatements to South Bend Residents, I really
don't think it is currently part of the mindset of those representing the city to seek such requirements and I
think that it is greatly the way the ordinance is worded and structured.
I have attached an ordinance from Madison, Indiana my understanding is that many Indiana Economic
Development Experts consider this to be a model ordinance. 1 think they try to maximize the benefit the to
the residents of City of Madison and then Jefferson County, Indiana and then out of State. I know that
Jefferson County'is different than Saint Joseph County and I'm not suggesting that we should adopt their
ordinance verbatim. But I do believe it has some very good points we should look at. As I made mention of
before there has been two very good educational seminars presented at the Century Center in the last 3-4
weeks and I was surprised and disappointed that no one from our CED Dept. was in attendance.
I would like to see prompt discussion on this petition. Derek, will you arrange to address this on Monday
under miscellaneous matters? If so, Janice, please copy these emails to all Council Members. Bob,
thanks for your comments and research. Please don't take my comments to mean I don't appreicate the
work you do.
Tim
»> Robert Mathia 10/21/081:33 PM »>
Dear Rev. Rouse,
RESOLUTION NO. - 2007
A RESOLUTION OF THE COMMON COUNCIL OF THE
CITY OF MADISON, INDIANA APPROVING
TAX PHASE-IN (ABATEMENT) PROGRAM GUIDELINES
WHEREAS, the Common Council of the City of Madison, Indiana has determined that
economic development and the attraction of capital investment and the attraction and/or retention
of good paying jobs is beneficial to the economic welfare of its citizens; and
WHEREAS, the Common Council of the City of Madison, Indiana is permitted and has
the power pursuant to the provisions of Indiana Law to promote economic development by
offering certain financial incentives for the purpose of attracting new capital investment and
attracting and/or retaining good paying jobs: and
WHEREAS, this resolution provides a mechanism to objectively evaluate requests for
tax phase-in (abatement) and such procedures are set forth to promote and assist economic
development within the City of Madison, Indiana; and
WHEREAS, this resolution is in the best interest of the City of Madison, Indiana
NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of
Madison, Indiana, it is hereby ORDERED AND ORDAINED that the following guidelines are
approved and adopted with respect to the tax phase-in (abatement) program provided under
Indiana law in I.C.6-1.1-12.1 et seq:
CITY OF MADISON
TAX PHASE-IN (ABATEMENT) PROGRAM
DECISION GUIDELINES:
Tax phase-in (abatement) for both real and personal property (equipment) maybe made for new
and existing industrial or commercial property only within the current land use plan of the City
of Madison based on the amount of new investment in real property or equipment new to Indiana
and the number of jobs created or retained.
The Council hereby finds that there is a need to develop tax phase-in (abatement) procedures
which set forth the philosophy, regulations, procedures, and general standards, which the City of
Madison, Indiana, believes are necessary to encourage economic development within the city
limits.
The Council therefore declares that the following tax phase-in (abatement) procedures and
general standards shall govern tax phase-in (abatement) requests filed for consideration with the
City.
SCORING MATRIX:
CLASSIFICATION SCORE
Industrial/Manufacturing 8
Life Science 8
Research/Development 7
Technical Service Centers (call centers, back-office operations) 6
Warehousing/Distribution (minimum 30,000 square feet) 5
Commercial Development (Riverfront) 4
INVESTMENT
$12 million or greater 10
$7 million to 12 million 7
$2 million to $7 million 4
$1 million to $2 million 1
PERMANENT JOBS CREATED AND RETAINED (3 year maximum project timeline)
• 100% Points Value granted on wages above current avera eg hourlYwa~e for classification
based on Indiana Department of Workforce Development statistics for Southeastern Indiana.
• 50% Points Value granted on $9.50 per hour up to current average hourly wage for
classification based on Indiana Department of Workforce Development statistics for
Southeastern Indiana.
150 plus 14
125 to 149 12
100 to 124 10
75 to 99 8
50 to 74 6
25 to 49 4
lOto24 2
EXISTING INDUSTRYBUSINESS 3
EMPLOYEE HEALTH INSURANCE 5
(Min. 50°lo employer sponsored)
ANNUAL CONTRIBUTION TO:
Madison-Jefferson County Economic Development Corporation (existing or pledged)
$1,000 - $4,999 2
$5,000 - $9,999 5
$10,000 + 10
CUMULATIVE POINTS
25 to 45+
15-24
Less than 15 Points
REAL PROPERTY EQUIPMENT
PHASE-IN (ABATEMENT) DURATION
10 years 7 years
5 years 3 years
0 0
Indiana Workforce Development provides employment and training services in accordance with
the provisions of the Job Training Partnership Act of 1982, as amended and other applicable
federal, state, and local laws to eligible residents. As a part of the tax phase-in (abatement)
process, an applicant will be required to work with this agency for employment opportunities and
possible placement to qualified applicants first, from Madison, Second, from Jefferson County,
from Indiana, and, out of state.
The applicant for tax phase-in (abatement) or an authorized representative must attend all
meetings of the Common Council that deal with the petition for tax phase-in (abatement) and
enactment of a Resolution.
Property owners receiving tax phase-in (abatement) are required to file an annual report with the
City Clerk Treasurer no later than April 1St of each year during which tax phase-in (abatement) is
received. The Madison-Jefferson County Economic Development Corporation in collaboration
with the Clerk Treasurer will send a notice of the information required by February 1St, and it
shall include copies of Form 322 ERA/PP as prescribed by the State Board of Tax
Commissioners and required for filing with the Jefferson County Auditor. The annual report
shall include a statement from the company's (property owner) chief executive officer providing
verification of employment projections. The Madison-Jefferson County Economic Development
Corporation in collaboration with the Clerk Treasurer will verify the information prior to
presenting the annual report to the City Council.
REVOCATION OF TAX PHASE-IN (ABATEMENT) BY CITY COUNCIL
The City of Madison believes that the granting of a request for real and/or personal
property tax phase-in (abatement) under the terms and conditions established results in a
contractual arrangement between the City and the property owners granted phase-in (abatement.)
(A) An applicant who fails to file its Annual Report with the City Council as required
herein may have the tax phase-in (abatement) revoked by the City Council.
(B) An Applicant who complies with the Annual Report requirement, but fails to provide
evidence as to why it has not substantially complied with the estimates set forth in its documents
used by the Council when granting the phase-in (abatement,) may have the tax phase-in
(abatement) revoked by the City Council.
(C) An applicant who fails to substantially comply with the estimates set forth in its
original Petition for Tax Phase-In (Abatement) Consideration and its Statement of Benefits may
have its tax phase-in (abatement) revoked by the City Council.
GRANTING OF TAX PHASE-IN (ABATEMENT)
Any applicant who applies for a Building Permit for a proposed project or acquires new
manufacturing equipment prior to filing the appropriate tax phase-in (abatement) petitions will
not be eligible for tax phase-in (abatement.)
FINANCIAL INCENTIVES
It is the policy of the City of Madison not to offer financial incentives for economic development
projects that involve the relocation of a business from another Indiana jurisdiction to the City of
Madison. The City of Madison's decision to offer financial incentives to relocate an economic
development project from another Indiana jurisdiction to Madison will be based on the
following:
1) A letter or other written documentation from the jurisdiction where the business is
currently located that it has exhausted all resources available to keep the business in such
jurisdiction.
2) The business has exhausted its efforts to reach an agreement with the jurisdiction in
which it is located.
3) The business has provided the City with a written financial incentive package from
another state to relocate to another state and such relocation of said business would be
detrimental to the City of Madison, the region and State of Indiana in terms of the loss of capital
investment and/or jobs.
This policy is not intended to apply with respect to an expansion of an existing Indiana
industry or business seeking to expand to an additional location, but is only applicable with
respect to a complete relocation of an Indiana industry or business.
These guidelines are adopted by the Madison City Council for the City of Madison; and,
as guidelines, the council reserves the right to make exceptions based upon applicants appearing
before the City Council to explain in detail why their project should be considered for tax phase-
in (abatement.)