HomeMy WebLinkAboutConfirming Tax Abatement - 1710 North Sheridan Street - Hoosier Tank and Manufacturing, Inc. - Five Year Personal PropertyRESOLUTION
4008-10
Passed by the Common Council of the City of South Bend, Indiana
January 11, 2010
Attest:
Presented by me to the Mayor of the City of South Bend, Indiana
January 12, 2010
City Clerk
President of Common Council
Approved and signed by me January 14, 20 10 .
City Clerk
RESOLUTION NO. `~,~~'~~
A RESOLUTION CONFIRMING THE ADOPTION OF
A DECLARATORY RESOLUTION DESIGNATING CERTAIN AREAS
WITHIN THE CITY OF SOUTH BEND, INDIANA, COMMONLY
KNOWN AS
1710 North Sheridan Street
TO BE AN ECONOMIC REVITALIZATION AREA FOR PURPOSES OF
A FIVE (S) YEAR PERSONAL PROPERTY TAX ABATEMENT FOR
Hoosier Tank and Manufacturing, Incorporated
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
1710 North Sheridan Street, South Bend, Indiana, and which is more particularly
described as follows:
Parcel of land beginning approximately 889.84 feet south and 40 feet
east of NW'/4 SE'/4 and known as Gibbs Wire and Steel Company,
Inc. minor sub section 33-38-2E cont appx AC
and which has Tax Key Number 18-2184-693803 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
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,
and further determines that the petition complies with Chapter 2, Article 6, of the
Municipal Code of the City of South Bend and Indiana Code 6-1.1-12 et seg.
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.
ember of the Common Council
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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. LUECICE, MAYOR
COMMUNITY $L ECONOMIC DEVELOPMENT
JEFFREY V. GIBNEY
EXECUTIVE DIRECTOR
November, 24, 2009
Council Member Timothy Rouse, Chairperson
Community & Economic Development Committee
South Bend Common Council
4th Floor, County City Building
South Bend, IN 46601
RE: Personal Property Tax Abatement Petition for:
HOOSIER TANK AND MANUFACTURING, INCORPORATED
Dear Council Member Rouse:
Please find attached the Department of Community & Economic Development's report on a personal
property tax abatement petition for the above-referenced petitioner. Also attached is a copy of the petition,
Statement of Benefits form, and supporting information. The project calls for the acquisition and installation
of various kinds of used equipment and machinery as well as a new powder coating system to be located at
1710 North Sheridan Street. All of the used equipment will come from outside the State of Indiana.
The report contains the Department's findings relative to the above petition. The total cost for the
equipment is estimated at $950,000. The project meets the qualifications fora (5) five-year personal
property tax abatement and a representative from Hoosier Tank and Manufacturing will be available to meet
with the Committee on Monday, December 14, 2009.
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,
y~ ~
D~~~~ ~ ~ " - ~-
Bob Mathia
Assistant Director,
Economic Development
Attachments
cc: South Bend Common Council Members
Mayor Stephen Luecke
Jeff Gibney
COMMUNITY DEVELOPMENT ECONOMIC DEVELOPMENT FINANCIAL HL PROGRAM
PAMELA C. MEYER DONALD E. INKS MANAGEMENT
574!235-9660 574/235-937[ ELIZABETH LEONARD
FAX: 574/235-9697 5741235-9371
1200 COUNTY-CITY BUILDING
227 W. JEFFERSON BOULEVARD
SOUTH BEND, INDIANA 46601-1830
PFIOxE 574/ 235-9371
FAx 574/235-9021
TDD 574/ 235-5567
CITY OF SOUTH 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: PERSONAL PROPERTY TAX ABATEMENT PETITION FOR:
HOOSIER TANK AND MANUFACTURING, INCORPORATED
DATE: NOVEMBER 24, 2009
On November 18, 2009, a petition for personal property tax abatement consideration for property located
at 1710 North Sheridan Street was filed with the City Clerk by Hoosier Tank and Manufacturing,
Incorporated. 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 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
Hoosier Tank manufactures air pressure reservoirs for OEM truck and trailer manufacturers nationwide
and internationally. They perform metal forming, welding and painting operations to make tanks that can
hold air and other gases under pressure. The company has the opportunity to purchase the assets
(machinery, tooling, etc.) of a large competitor located in Missouri. The company also wants to install a
state of the art powder coat system. This additional equipment will allow increased production to
accommodate the company's increased customer base. It will also position Hoosier Tank to be the leader
in their industry and to be ready for the economic upturn ahead.
The equipment to be purchased is made up of various metal forming and metal working machines
including laithes and hand welders, resistance and robot welders and seamers, testers, various head and
COMMUNITY DEVELOPMENT ECONOMIC DEVELOPMENT FINANCIAL & PROGRAM
PAMELA C. MHYER DONALD E. INKS MANAGEMENT
574/235-9660 574/235-9371 Ecluserx LeoNaaD
Fax: 5741235-9697 574/235-9371
South Bend Common Council.
RE: Tax Abatement for Hoosier Tank and Manufacturing, Incorporated
November 24, 2009
Page 2
bracket dies and a powder coating system. The equipment coming from the competitor is used and all of
it will come from outside the State of Indiana. The powder coat system is new. The total estimated cost
of the equipment is $950,000.
Total taxes to be abated during the (5) five-year abatement period are estimated at $17,243. Total
additional taxes to be ,paid as a result of the project during the five-year abatement period are estimated at
$48,141.
EMPLOYMENT IMPACT
Per the petition, it is estimated that the project will create six to ten (6 - 10) new, permanent full-time
positions with an annual payroll of $200,000 to $335,000. The project will also maintain fifty-two (52)
existing permanent full-time positions with a total annual payroll of $1,800,000.
ABATEMENT QUALIFICATION
1. A review of the tax abatements previously granted, finds that the petitioner has been associated
with or granted the following previous abatements:
Term/Tyne Resolution No. Date
5 year personal property 2013-93 2/22/1993
5 year personal property 3213-03 7/28/2003
10 year real property 3234-03 8/25/2003
5 year personal property 3843-OS (Reconfirm & Inc.) 6/27/2005
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 personal property tax deduction 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 meets the
qualifications fora (5) five-year personal property tax abatement under section 2-84.2, Tangible
Personal Property Tax Abatement.
5 YEAR
Hoosier Tank and Manufacturing, Inc.
South Bend Portage Township
Personal Property Tax Abatement Schedule*
Tax Key Number
Current Assessed Value:
Estimated Project Cost:
018-2184-693803
846,550
950,000
24-Nov-09
40% 56% 42% 32% 24%
Current 100% 80% 60% 40% 20%
Assessed Value: AV & Tax Year 1 Year 2 Year 3 Year 4 Year 5
Current Assessed Value 100% 846,550 846,550 846,550 846,550 846,550 846,550
Base Assessed Value 380,000 532,000 399,000 304,000 228,000
Less Abatement Deduction (380,000) (425,600) (239,400) (121,600) (45,600)
Net Assessed Value 846,550 846,550 952,950 1,006,150 1,028,950 1,028,950
Property Taxes:
Assume constant tax rate of 4.3015% 4.3015% 4.3015% 4.3015% 4.3015% 4.3015%
Gross Tax (tax rate x net assessed value)
Less Circuit Breaker Credit
Net Tax
Circuit Breaker Cap
Circuit Breaker
Debt Service
Circuit Braker Cap
36,414 36,414 40,991 43,280 44,260 44,260
(6,381) 0 0 (402) (4,108) (6,388)_
30,033 36,414 40,991 42,877 40,152 37,872
3.0000% 25,397 36,797 41,357 37,367 34,517 32,237
0.5477% 4,637 4,637 5,219 5,511 5,636 5,636
30,033 41,433 46,576 42,877 40,152 37,872
New Combined Net
Existing Project Existing & New Tax Tax
Year Taxes Taxes Taxes Abated Paid
1 30,033 13,481 43,514 7,100 36,414
2 30,033 18,874 48,907 7,916 40,991
3 30,033 14,155 44,188 1,311 42,877
4 30,033 10,785 40,818 666 40,152
5 30,033 8,089 38,122 250 37,872
Totals 150,165 65,384 215,549 17,243 198,307
*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
TANGIBLE PERSONAL PROPERTY TAX ABATEMENT CONSIDERATION
The undersigned owner(s) of new manufacturing equipment, personal property,
located within the City of South Bend, hereby petitions the Common Council of the
City of South Bend for personal property (new manufacturing equipment) tax
abatement consideration and pursuant to I.C., 6-1.1-12.1, et seq., and South Bend
Municipal Code Section 2-84.2, et seg•, for this petition states the following:
1. Describe the proposed project, including information about the new
manufacturing equipment personal property (AequipmentC) to be installed, the
amount of land to be used, if any, the proposed use of the equipment, and a
general statement as to the value of the project to your business.
In April, Hoosier Tank purchased the assets (machinery, tooling,
intellectual property) of their competitor, Quest Manufacturing. This
increased the customer base, and select equipment has been put in service
to date, mire will he added in h iitirP. A N w state of the art powder
C^.at~^g,ai'''~-~'^° YT3~1~ r0~~.c'tir'e the BYlStlll~Zc'tlnt r~rnrc~ccAC cri~~ina NOOSler
Tank a superior coating that will open opportunities in new markets.
2. The project will create 6-10 new, permanent jobs within the first year,
representing a new annual payroll of $ ~ nn ,nnn r ~ ~ ~ 5 _ nn~nd will maintain
52 existing permanent full-time and 0 existing part-time jobs
representing an annual payroll of $1, 800 , 000 .The projected annual salaries
for each new position created are estimated to be as follows:
,,,~L1 nrnr7~in t i nn Tunrkr~rc (d ~~n nnn
3.
Estimate the total cost of the Equipment: $950,000
4. (a) The Equipment 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
Hoosier Tank 1710 No. Sheridan South Bend, IN
Thomas Kinnucan Jr 51930 Juniper Rd South Bend, IN 50%
William Welsch 23750 Davis Lake St Edwardsburg, MI 50%
(Revised 8/2/02) 1
(b)The following other persons lease, intend to lease, or have an option to buy
this Equipment (include corporate information as required in (4)(a) above, if
applicable):
NAME ADDRESS INTEREST
5. Give a brief description of the overall nature of the business and of the
operations occurring at the location for which tax abatement is requested:
Manufacturer of air pressure reservoirs for OEM truck and trailer
manufacturers nationwide and internationally. We perform metal
forming, welding, and painting operations.
6. The commonly known address of the property where the Equipment is to be
located ls: 1710 North Sheridan Street South Rend, TN 4hh~R
7. The Key Number of said property is:
018-2184-693803
8. Attach the legal description of the property where the equipment is to be
located, marked AExhibit A,@ and is hereby incorporated herein.
9. Attach a map and/or plat describing the property where the equipment is to be
located, marked AExhibit B,@ and is hereby incorporated herein.
10. Attach photographs of the property, taken within 30 days of filing of this
petition, marked AExhibit C,@ and hereby incorporated herein.
11. The current assessed valuation of the tangible personal property to be replaced
by the new manufacturing equipment is $ 0
(This information may be obtained from the St. Joseph County Assessors office 235-9523)
12. The current use of the real property where the Equipment is to be installed is
manufacturing and the current zoning is
L-1 (use) and A (height and area).
(This information may be obtained from the Building Department 235-9553)
(Revised 8/2/02) 2
13. 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
2003 39,834.26 16,139.61
2 , .
2 0 5 t~~ 5LL a Q ' ~-~ 4T-o•'
2006 44 173.67 12 68
2 , 99.17 5,373.50
2 ( his information may be'o tained from the St. Josep o easurers office 235-9531)
14. Describe the commitment made within the past five years by your firm to hiring
minority individuals, including number of minorities employed during each of
the past five years, specifying whether full time or part-time and whether
permanent or temporary employees. The Petitioner shall also list the current
number of total employees (full and part-time) and the current number of
minority individuals (full and part-time). numbers based on 12-31 totals
12-31-04 24/66 36% minorities/total full time employees
1 2-~1 -05 ~~,/7R ~R~
1~-31-07 1R/h9 ~h~
12-31 -08 1 OJ46 ~~%
15. Describe on-site child care or day care facilities, services or benefits currently
offered or proposed to be offered by the Petitioner for children of employees.
16. What is your best estimate of the market value of the new Equipment after
installation? $ 950 , 000
17. What is your best estimate of the amount of taxes to be abated during each of
the five years after installation? $2009-$7,000 2010-$8300 2011-$1300
2012-$700 2013-$300 Total=$17,600
18. What is the commitment your firm will make to minority employment during
the five years of tax abatement?
Our history of minority hiring has been good and we fully ;nrPn~l
to continue this committment to our community.
(Revised 8/2/02) 3
19. The Equipment has not been installed as of the date of filing of this petition.
(The signature at the end of this Petition is verification of this statement)
20. The standard Industrial Classification Manual major group within which the
proposed project would be classified, by number and description:
SIC # 3443-manufacturing of air pressure tanks
21. The Internal Revenue Service Code of Principal Business Activity by which the
proposed project would be classified, by number and description:
#3440-fabricated structural metal products
22. The real property where the Equipment will be installed is located in the
following .Allocation Area, if any, declared and confirmed by the South Bend
Redevelopment Commission:
Hoosier Tank is currently located in the Airport Economic Development
Area.
23. 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; or other public financial assistance, including
but not limited to public works improvements.
Funding for these projects has been obtained from the Industiral
Revolving Fund and Old National Bank.
24. Describe how and why the manufacturing equipment to be replaced or the
facility in which Equipment will be added is currently technologically,
economically or energy obsolete and how and why that obsolescence may lead to
a decline in employment and tax revenues:
Hoosier Tank is not proposing to replace any equipment. This additional
~~i,;=ment will be used to increase production and quality for continued
growth.
25. The new manufacturing equipment will be used in the direct production,
manufacture, fabrication, assembly, extraction, mining, processing, refining, or
finishing of other tangible personal property and that the equipment was never
before used by its owner for any purpose in Indiana. The signature at the end
of this Petition is verification of this statement.
(Revised 8/2/02) 4
26. The following person(s) should be contacted as Petitioner=s agent regarding
additional information and public hearing notifications:
Name' Sue A. Kinnucan
Address: 1710 North Sheridan Street
City, State, Zip Code: South Bend, IN 46628
Telephone: 574-232-8368
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 personal 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):
Hoosier Tank and Manufacturing Incorporated
By: ~. ~~ ~ /C~,c r
(Signed Name)
Sue A. Kinnucan, Controller/Treasurer
(Typed or printed name and capacity of signor if signed
by an agent or representative of the owner)
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(Revised 8/2/02) 5
Exhibit A
Legal Description
Par of land beg appx 889.84' So. & 40' East of NW % SE % and known as
Gibbs Wire & Steel Company, Inc. minor sub sec 33-38-2E cont appx AC
raw 4n`;ee%NL
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Exhibit B
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rp rt Economic Development Area Expansions
Expansion History
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Res965_Exp 2_11/09/90
t ? i Res1058 Exp 3_0522/92
~Res1349 E~4_07/07/95
Res1545_E~ 5_1121/97
0 Res1667_E xp 6_02/19/99
Res1667_E xp 7_02/19/99
Res1667_E~ 8_02/19/99
Res1796_E xp 9_1020/00
Res1796_Exp 10_10/20100
Res1827_Exp 11_02/16/01
Res1916_Exp 12_11/01/02
Res1916_Exp 13 11/01/02
Res1916_E~ 14_11/01/02
Res1916_Exp 15_11/01/02
Res1977_E~ 16_07/18/03
Res2006_E~ 17_07/07/03
Res2019_E~ 18_12/19/03
Res2090_E~ 19_03/04/05
Res2144_Exp 20_07/21/06
Res2254_E~21_0825/O6
~~ Res2279_E~ 22_12/15/06
~~ Res2351_E~ 23 07/20/07
Res2351_Exp 24_07/20107
Res2351 E~ 25_0720107
Res2456_E~26_0625/08
Q South Bend City Limits
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South Bend Department of
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Map of Hoosier Tank & Manufacturing (574) 232-8368
Map of Hoosier Tank & Manufacturing (574) 232-
8368
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