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HomeMy WebLinkAboutBill No. 16-65 Designating Personal Property Tax Abate for 3B Tech, Inc.227 W. JEFFERSON BOULEVARD SUITE 1400 S. SOUTH BEND, IN 46601 -1830 August 17, 2016 CITY OF SOUTH BEND PETE BUTTIGIEG, MAYOR COMMUNITY INVESTMENT Council Member Gavin Ferlic, Chairperson Community Investment Committee South Bend Common Council 4th Floor, County City Building South Bend, IN 46601 RE: Personal Property Tax Abatement Petition for: 311 Tech, Inc. Dear Council Member Ferlic: PHONE: 574/235 -9371 FAx:574/235 -9021 Filed in Clerk's Office AUG 17 2016 KAREE-l"MiAiH FOWLER CITY G E RKI. SOUTH BEND, IN Please find the attached information pertaining to a personal property tax abatement petition for 3B Tech, Inc.: ➢ Department of Community Investment's summary report ➢ Copy of the petition ➢ Statement of Benefits form ➢ Supporting information. The report contains the Department's findings relative to the above petition. 3B Tech, Inc. will be purchasing and renovating the old Invacare facility. This will enable them to continue to grow their brand and e- commerce businesses, remain in South Bend, and expand their workforce. 3B Tech plans to renovate the existing warehouse with new racking, automation, and support equipment. At the same time, they plan to expand the existing tech room and add a lab to support in house R &D for new products. 3B Tech, Inc. plans to spend approximately $640,000 on the purchase of new equipment along with $200,000 towards building improvements. The project meets the qualifications for a (5) five year personal property tax abatement. A representative from 3B Tech, Inc. will be available to meet with the Committee on Monday, August 22, 2016. 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 -5823. Sincerely, ,,,-4 /C-e� Aaron Kobb Director of Economic Resources PLANNING NEIGHBORHOOD ENGAGEMENT BUSINESS DEVELOPMENT ECONOMIC RESOURCES TIM CORCORAN PAMELA C. MEYER BRIAN PAWLOWSKI AARON KOBB TAX ABATEMENT REPORT TO: SOUTH BEND COMMON COUNCIL FROM: AARON KOBB File in Clerk's Office FAUG 17 2016 CITY CLERK, SOkJT€ BEND., IN SUBJECT: PERSONAL PROPERTY TAX ABATEMENT PETITION FOR: 3B Tech, Inc. DATE: August 17, 2016 On Wednesday, August 17, 2016, a petition from 3B Tech, Inc. was received and subsequently filed with the City Clerk for personal property tax abatement consideration for property to be located at 7250 Vorden Pkwy, South Bend, IN 46628. Pursuant to Chapter 2, Article 6, Section 2 -84.2 of the Municipal Code of the City of South Bend, this petition was referred to the Department of Community Investment 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 Investment has reviewed the petition (a copy of which is attached), investigated the area, and makes the following report. PROJECT SUMMARY ➢ Purchase of approximately $640,000 of new equipment enabling them to continue to grow their brand and e- commerce businesses, remain in South Bend, and expand their workforce. 3B Tech plans to renovate the existing warehouse with new racking, automation, and support equipment. At the same time, they plan to expand the existing tech room and add a lab to support in house R &D for new products. ➢ Estimated total taxes on new equipment over the five abatement period — $54,904 ➢ Estimated taxes abated on new equipment over the five abatement period — $25,200 ➢ Estimated taxes to be paid on new equipment over five year abatement period — $29,704 EMPLOYMENT IMPACT Per the petition, it is estimated that the total project will: ➢ Create 100 permanent, full -time jobs within the five year abatement period, representing a new estimated annual payroll of $3,536,000 PLANNING NEIGHBORHOOD ENGAGEMENT BUSINESS DEVELOPMENT ECONOMIC RESOURCES TIM CORCORAN PAMELA C. MEYER BRIAN PAWLOWSKI AARON ROBB ABATEMENT QUALIFICATION l . A review of the tax abatements previously granted, finds that the petitioner has not been granted or associated with any previous 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 River West Development Area. 4. A review of the Tax Abatement Ordinance No. 9394 -03 finds that the petitioner meets the qualifications for a (5) five -year personal property tax abatement under section 2 -84.2, Tangible Personal Property Tax Abatement. RESOLUTION NO. A RESOLUTION OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND DESIGNATING CERTAIN AREAS WITHIN THE CITY OF SOUTH BEND, INDIANA, COMMONLY KNOWN AS 7250 Vorden Pkwy, South Bend, IN 46628 AN ECONOMIC REVITALIZATION AREA FOR PURPOSES OF A (5) FIVE -YEAR PERSONAL PROPERTY TAX ABATEMENT FOR: 3B Tech, Inc. WHEREAS, a petition for personal property tax abatement consideration has been filed with the City Clerk for consideration by the Common Council of the City of South Bend, Indiana, requesting that the area commonly known as 7250 Vorden Pkwy, South Bend, IN 46628 and which is more particularly described as follows: Business Personal Property and which has a Key Number to be assigned be designated as an Economic Revitalization Area under the provisions of Indiana Code 6 -1.1 -12.1 et sM., and South Bend Municipal Code Sections 2- 76 et sew., and; WHEREAS, the Department of Community Investment has concluded an investigation and prepared a report with information sufficient for the Common- Council to determine that the area qualifies as an Economic Revitalization Area under Indiana Code, 6 -1.1 -12.1, et sue., and South Bend Municipal Code Sections 2 -76, et sec ., and has further prepared maps and plats showing the boundaries and such other information regarding the area in question as required by law; and WHEREAS, the Community Investment Committee of the Common Council has reviewed said report and recommended to the Common Council that the area qualifies as an Economic Revitalization Area. NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of South Bend, Indiana, as follows: SECTION I. The Common Council hereby determines and finds pursuant to Indiana Code 6 -1.1- 12.1 -4.5 et SeMc ., that: a. The estimate of the cost of the new manufacturing equipment is reasonable for equipment of that type; b. That the estimate of the number of individuals that will be employed or whose employment will be retained by the Petitioner can reasonably be expected to result from the proposed installation of new manufacturing equipment; C. That the estimate of the annual salaries of those individuals that will be employed or whose employment will be retained by the Petitioner can be reasonably expected to result from the proposed installation of new manufacturing equipment; d. Any other benefits about which information was requested are benefits that can be reasonably expected to result from the proposed new manufacturing equipment; and e. The totality of benefits is sufficient to justify the deduction requested. SECTION H. The Common Council hereby determines and finds that the proposed new equipment can be reasonably expected to yield the benefits identified in the Statement of Benefits as set forth in Sections 1 through 3 of the Petition for Personal Property Tax Abatement Consideration and that Statement of Benefits form completed by the petitioner, said form being prescribed by the State Board of Accounts, are sufficient to justify the deduction granted under Indiana Code 6 -1.1- 12.1 -4.5. SECTION III. The Common Council hereby accepts the report and recommendation of the Department of Community Investment, and the Community Investment Committee's favorable recommendation, that the area herein described be designated as an Economic Revitalization Area for purposes of personal property tax abatement and hereby makes such a designation. SECTION IV. The Common Council determines that such designation is for personal property tax abatement only and shall be limited to two (2) .calendar years from the date of the adoption of this Resolution by the Common Council. SECTION V. The Common Council hereby determines that the property owner is qualified for and is granted property tax deduction for a period of (5) five years as shown by the attachment pursuant to Indiana Code 6 -1.1- 12.1 -17. SECTION VI. The Common Council directs the City Clerk to cause notice of the adoption of this Declaratory Resolution for Personal Property Tax Abatement to be published pursuant to Indiana Code 5 -3 -1, said publication providing notice of the public hearing before the Common Council on the proposed confirming of said declaration. SECTION VII. This Resolution shall be in full force and effect from and after its adoption by the Common Council and approval by the Mayor. Member of the Common erk's Office AUG 17 2016 2 Kt�l�sv�.��fi�AH FO��d�.t:: CITY CLERK, SOS,, T 8'-"' $D; Its, RESOLUTION NO. A RESOLUTION CONFIRMING THE ADOPTION OF A DECLARATORY RESOLUTION DESIGNATING CERTAIN AREAS WITHIN THE CITY OF SOUTH BEND, INDIANA, COMMONLY KNOWN AS 7250 Vorden Pkwy, South Bend, IN 46628 AS AN ECONOMIC REVITALIZATION AREA FOR PURPOSES OF A FIVE (5) YEAR PERSONAL PROPERTY TAX ABATEMENT FOR 3B Tech, Inc. 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 7250 Vorden Pkwy, South Bend, IN 46628 and which is more particularly described as follows: Business Personal Property and which has Key Numbers to be assigned be designated 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 remonstrances 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 personal 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 personal property tax deduction for a period of five (5) years as shown by the attachment pursuant to Indiana Code 6 -1.1- 12.1 -17 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 se q. 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 Common Council Filed in Clerk's Office F AUG1'�� 6 Z1 O -! CIT`f CLEP,K, S 0 1, 4 @ F3, NI! D, IN1 h 6 10I N O O 0 N W N O r M N N aD c V 00 M N r r } d N V 00 O N 00 h- r �O o'o°1! 0o000 o vOd' C00 ore- «.0000 N (x6� oU)I�} o r LO m 000 O N N 00 co c0 �t 0D V -t hr (001- Z� R —P! a N tom- V: N N F' O v ai rn ee -i x0) 0 Z Ca OD O Qa Nrr 04 to v r � ca �" 0) M N O 00 sp t0 ccoo n co Cl) r U cm r r r 0 o M) 00000 o hOh OMM NI CO OItr0 tn0 ca p 000 N N N (O H� NcOOO�N LOO 0 y N O N co co h h coo co �t } Cq co h h O r Q O) 0 t0 M a N `o: C00 0 o N «.0000 o to0tO O(O0 3 y 100 CO, t0 V' F' O (0O 000 NI N O N 000 000 N N LO W Z Ca N OOi_ ti VN' t1 O }, W 0 p .'0 v r � ca �" 0) M N O 00 sp t0 ccoo n co Cl) LO U cm r r r to c V ^ 3 p a o r h0000 0 000 000 00 00 3 i O O coo to C) (OO N h O > > +.. 00 V O p 00 N 0 0 N aD (0 0 X Z 'O N N O) h 'V_ to 0 X N a3 O r} corn v h ti aH oi��oao 0 m� d N N LO 0) X Qi r c !- a ~ M O O N 0 0 0 0 0 0 0 0 0 0 0 O C oa` �� �m �M a �w 0 Q�j ai U p W N .8 i 3B Tech, Inc corporation 7250 Vorden Pkwy South Bend, IN 46628 4 Acres m 80,000 Brett Barbour May-3431 William Richardson Dr South Bend, IN 46628 Johnny Zhu Bruce Huntington MMINEMEMM 105 E Jefferson Blvd #400 South Bend IN 46601 Johnny Zhu Owned Vice President 574 - 968 -3355 brett@3btech.net Vice President bdh @bhlawyers.net 3B Tech, Inc provides Branding solutions to a variety of customers, including our own subsidiaries. We also host E- Commerce solutions providing 1326 and 132C solutions to our customers. Currently in South Bend, IN we host a variety of positions that support these activities. We currently support over 10 unique brands in house, and are working on many more. In addition we warehouse and distribute products out of our existing 40,000 sq. foot facility. We provide web hosting, advertising support, advanced customer care, and a tech lab that provides repair and refurbishing services. We also house executive, administrative and accounting support in South Bend, IN. As we continue to grow our Brands, E- Commerce business, and continue to expand our business distribution models we simply need more space. The purchase and renovation of the old Invacare facility would provide us the needed space, and allow us to expand in South Bend, IN while maintaining our existing employee base. We will renovate the warehouse with new racking, automation, and support equipment needed for our expanding warehouse needs. At the same time we will expand our Brand support, customer care, E- commerce management and support teams. We will also expand our existing tech room and add a lab to support in house Research and Development for new products in the space gained in our existing facility. With the added space the warehouse supports we anticipate creating an additional 100 jobs over the next five years, with immediate needs of over thirty employees just this year alone. We are a growing company with nearly two decades of history in South Bend, IN. The property will allow us the needed space to grow locally, while serving a customer base spanning any countries. This expansion will allow us to provide employment to as many as 150 employees in South Blackthome West Business Park im 9 Yes, Airport Economic Development Area 1 No 1 900,000 1 150,000 av Ma r 1) How do I pay my petition filing fee? Your petition filing fee can be paid either in person or via mail to: Or online via paypal at. City Clerk's Office http: / /southbendin.gov /government/ Attn: Deputy City Clerk content /tax - abatement 227 West Jefferson Blvd. • Suite 400 S South Bend, Indiana 46601 2) Certified Technology Park appropriate? (Page one, under project overview) In the South Bend area there are only two Certified Technology Parks, Innovation Park and Ignition Park. If your property is not located in either then the answer would be no. 3) Is your project in a Tax Incremental Financing (TIF) area? (Page one, under project overview) A map of the TIF areas can be found at: http: / /southbendin.gov /sites /default /files /files /dci /CT Development areas- map03l5.pdf 4) Has any 504 funding been received? (Page one, under investment details) 504 Funding is a loan that come from the Small Business Administration. This funding must be applied for to be received. 5) Total training expenditure - not cumulative (Page two, under full time Indiana resident positions) The amount of money to be spent per year on training over the course of the project. 6) Total number to be trained - not cumulative (Page two, under full time Indiana resident positions) The amount of people that you will train per year over the length of the project. If you have any additional questions that are not addressed by this document, please contact Sarah Heintzelman in the Department of Community Investment at 574.235.5842 or email at sheintze@southbendin.zov Filed in Clerk's fi ce- STATEMENT OP °BENEFITS PERSONAL. PROPERTY AUG % 2016 FORM SIB-1 / PP `= 4tate'ssrtn 51784 - {R4 711 =15) Prescribed by,tt a Departnlenf of Locai "Government Fi ance t g t PRIVACY NOTICE ies R°a< n FO Inh > a ,.,: v CIT C. �. I L r �� lid Any information concerning the cost s• of the property and specific „salaries paid -- — to individual employees by the property owner is confidential per IC INSTRUCTIONS _. y, This statement must be submitted to the body designating the Economic Revitalization Area prior to thg:public hearing if the, designating body, requires: -, information from the, applicant in, making its decision about =whether to designate an Economic Revitalization Area ­Otherwise this: statement;must be submitted to, the, des /gnati{rgbody',84fPRE a per'son,Installs the new manufacturing equipment and /or,research and deve %pment equipment, and /or log {stice(distributign equipment and /oi information'technology cquipmentfor which the person wisFies to claim a deduction.' 2. The statement of benefits form must be submitted to the designating body and the area designated an economic revitalization area before the installation of qualifying abatable equipment for which the person desires to claim a deduction. - 3. To obtain a deduction a person must file a certified deduction schedule with the person's personal:prgperty return on a certified - deduction , schedulp - (Font 103 ERA) wit h fne Cownship assessor of'the township where the property is situated or with the county assessor if there is no township assessor for the township. The 103 -ERA must be filed between January 1 and May -15 of the” assessrrientyear /n" which new- manufacturing-equipment and /or research and development equipment and /or logistical disfibutign, equipment and /or information technology equipment Is, )ristalled; and .fully, functional, unless a filing extension has been obtained: A person who obtains a flung extension must tile'tlie form between 'January-1 and theektended due date of that year. 4. Property owners whose Statement. of Benefits was approved„ must submit Form CF -,1/PP annually to show compliance wiih "the Statement of Benefits. ,,. S. For a Form SB -1/PP that is approved after June 30, 2013, the designating body Is' required to establish an abatement schedule for -each deduction a/ /owed. For a Form SB 1 /PP that is approved priorto July 1, 2013, the abatemenf schedule approved by the designating body remains in effect. (IC 6 1 1- 12.1 -17) SECTION - INFORMATION Name of taxpayer Name of contact person 3B Tech, Inc _ Brett. Barbour Addressoft"payer(numberandsfroet city,-s tap, andZIPcode. ) Telephone number: _ 7250 Vorden Pkwy _ ,; ( 574_)968r3355 SECTION 2 LOCATION AND DESCRIPTION OF PROPOSED PROJECT No of designating body _ - t Resolution number (s) ' Location of property County DLGF taxing district number 7250 Vorden pkwy St Joseph Description of manufacturing' equipment and /or research and development equipment ESTIMATED' and /or logistical distribution equipment and /or- information,; technology. equipment. START DATE '`` CoMFLETioN`DATE (Use additional sheets if necessary.) _. Manufacturing: Equipment , R & D Equipment Logist'Dist Equipment 09/2016 09/2018 IT Equipment 0912016: 09/2018 SECTION 3 ESTIMATE • • • AND - OF - a -• -• . PROJECT Current number Salaries Numbdrretained Salaries Number additional `' Salaries 42 15hr _ 42._ _ ___..; . 100 _. _. _. _._ ... _ _.1,5 SECTION . TOTAL COST AND VALUE OF PROPOSED • -• i MANUFACTURING LOGIST DtST NOTE: Pursuant to IC 6 1.1 =12.1 5.1 (d) (2) the EQUIPMENT R & D EQUIPMENT IT EQUIPMENT E ._EQUIPMENT COST of the property is confidential. COST ASSESSED COST ASSESSED COST ASSESSED COST ASSESSED VALUE VALUE VALUE VALUE Current values 30,000 10,000 s Plus estimated values of proposed project 750.000 100,000 Less values of any'property being replaced Net estimated values upon completion of project I I u,vuV SECTION 5 WASTE CONVERTED AND OTHER BENEFITS PROMISED BY THE TAXPAYER Estimated solid waste converted (pounds) Estimated Ftazardous waste converted `(pounds) Other benefits:. SECTION - I hereby , ify that the representations in this statement are true. Signature zed representative Date signed (month, day, year) 08/03/16 Printediiame of authorized representative Title Brett Barbour Executive Vice President fi- 4, ` ry c a x A: We have reviewed our prior actions relating to the designation of this economic revitalization area and find that the - applicant meets the general standards adopted rn the resolution previously: approved by this body Said" resolution, passed under IC, 6-1.1.-12.1 -2,5, provides for thq.fgliow.ng limitations as authorized under7C 6 1,1- 12 .1 -2. A Tlie. psignated area has been limited to a period of time not to exceed calendar years (see below). The date this designation expires Is' . NOTE. This question addresses whether the resolution contains an expiration date for the designated are B The--type of deduction that is allowed in thsdesignated weai s limited to ' 1 : Filed in Clerk's C ill Ica KtFL t5 A 1 C IIVIF'KW V!ItIIC,IY =J - State Forth 51767 (116 / 10 -14) KAFR zli UM . Prescribed by the Department of Local Government Finance This statement is tieing completed for real property that qualifies under the following Indiana Code(check one box): ❑ Redevelopment or rehabilitation of real estate improvements (IC 6 -1.1- 12.1 -4) ` 0 Residentially distressed area (IC 6 -1.1- 12.1 -4.1) 20 ` PAY'20 l — FORM SB 1 t Real Property PRIVACX.NOTICE Any informatiori,00nceming the cost of -the property' and specific salaries; paid to individual employees by the o erty. p owner is.confde0al per ICr�1:1�1316.11.1 , INSTRUCT IONS. _ 1. This statement must be submitted to the body designating.the Economic Revitalization Area prior to the public hearing ifthe designating.bodyrequires information from the applicantin making its decision about whether to designate an Economic Revitalization Area., Otherwise, this statement must be submitted to the designating body BEFORE the redevelopment or rehabilitation of real property for whop the - person, wishes to claim a:deducton. 2. The statement of benefits than must be submitted to the designating-body and the area designated an economic'revitalization area before the initiation of the redevelopment or rehabilitation for which the person desires to claim a deduction. 3. To obtain a deduction, a Form 3221RE must be -filed with the GountyAuditor before May 10 in the year in which the addition`to assessed valuation is made or not later than thuty (30)_days after the assessment notice is mailed to the property owner if it was mailed after April 10 A property owner who failed to file a deduchon epphcation within the prescribed daadbne inay fJte an application between March 1 and May 10 of a subsequent year. 4. A property owner who Aes for the deduction must provide the County Auditor and designating'body with a Form OF- IlReal Property. The Form CF -1 /Real Property should be attached to the Form 322/RE when the deduction is first claimed and then updated annually for each year the deduction is applicable, IC 6-1.142.1- 5:1(b) 1 ?5. For a Form SB- IlReal Property that is approved after June 30, 2013s the designating body is required to establish an abatement sch'ed`ule for each deduction allowed. Fora Form SB- 1lReal Property that is approved prior to July 1,. 2013 ?the.abatementschedu /e. approved by.Ae designating body ' FOR USE OF:THE DESIGNATING Wei— n that-the,.applicant m4ets the general standards in the resolution adopted or to be ado bad by thi Swd res Ution,-passe or to be undbr:IC'6A.A. 1,11,-'prbvides for the following limitations: area has been limited to a p.prio -calerid r,y rs� The date thlsdes!qqatlq� a ea The'Vpd'p 06dubtl6rilhat Is allowed in the designated.area is limited to: or e 1, Redevelopment I ir� habilitation of real estate Improvements Yes No 2. R6sidentiallydistress6d areas C. D. Other limitations or conditions El F. For a staterne I of benefits approved after June 30, 2013, did this deslgnpt�rig body adqpAAri abatement schedule per IC 6-1j�12.1-17? If no, the designating bod Is n Q 0 ton can be determined. determined that the totality of benefits Is sufficient to justify the deduction described above. .phone number Printed name of authorized member of designating body -Name of designating body If the designating body limits the time period during which an area is an economic revitalization area, that limitation does not limit the length oftime a ded� dtion twa number of years that ls�t", than the nufhber'bf Vear�,d6signated Under IC 6A.1-12.1-:17. A. For residentially. distressed areas where the Form.SBA /Real Property, was -approved prior to.July 1, 2013, the. deductions established, In. Q 2013, the designgtlhg�li �.k required to establish an abatement schedule for each deduction allowed. The deduction period may not exceed ten B. For the redevelopment or-rehabliltation of real prop ,ierly where the Form 813-1/Real Properlywas approved prior to.July.1, 2013, the abatement schedule- a -_nlalns In effect-For-a Fqmn. SBA /Real Property. that Is approved after Jjjn�_,., 6? in griat1bg P-' Y may, In or relocated to a Italizatiom area and that receives a rev section 4,or4.5..of.t6�Ag�i�-�-�h-�ii-�tbnieiit:ichddUle based on.thefollowing factors: (2) The number of new full-time ec -jobs 6riAt Tfi%­ wag- -- f 66 co!p -to the state minimum wage. -(4) The: Infrastfrubturo requirements for tho-iaxpayers Investment. (b) This subsOptIoR.appli 'to a statement of benefits- approved after June 30, 2013.- Adesignaling body shall establish ai Qq (c) An abatement schedule approved for a particular taxpayer before July 1, 2013, remains In effect until the abatement schedule expires under Page 2 -of 2