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HomeMy WebLinkAboutConfirming Tax Abatement - 850 S. Marietta Street, Suite 300 - Endeavor Machined Products, Inc. - 5 Year Personal PropertyRESOLUTION 4012-10 Passed by the Common Council of the City of South Bend, Indiana February 8, 20 10 Attest: City Clerk President of Common Council Presented by me to the Mayor of the City of South Send, Indiana February 9, 20 10 Approved and signed by me February 10 . 201Q_ . //~~ City Clerk ~Y'~' RESOLUTION NO. ~`~lZ lD A RESOLUTION CONFIRMING THE ADOPTION OF A DECLARATORY RESOLUTION DESIGNATING CERTAIN AREAS WITHIN THE CITY OF SOUTH BEND, INDIANA, COMMONLY KNOWN AS 850 S. Marietta Street, Suite 300 TO BE AN ECONOMIC REVITALIZATION AREA FOR PURPOSES OF A FIVE (5) YEAR PERSONAL PROPERTY TAX ABATEMENT FOR Endeavor Machined Products, 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 850 S. Marietta Street, Suite 300, South Bend, Indiana, and which is more particularly described as follows: Lot lettered "Q" as shown on the recorded plat of Monroe Sample Replat, recorded January 31, 1990, as document number 9002533 in the Office of the Recorder of St. Joseph County, Indiana and which has Tax Key Number 71-08-12-454-003.000-026 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 seq. 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 o t e ommon ouncil ADOPTEL? ~ (~'"~~ FdlC~i !~l ~I~3'ii'~ ~'s~4ii~~ ~ ~,"! 2 0 2010 J(ii!'JcuR~~ rrTY G1_c'itC. ~D. 3~NJ,14l. 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 ~L ECONOMIC DEVELOPMENT JEFFREY V. GIBNEY EXECUTIVE DIRECTOR January 11, 2010 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: ENDEAVOR MACHINED PRODUCTS, INC. 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 precision machining equipment to be located at 850 South Marietta Street, Suite 300. The report contains the Department's findings relative to the above petition. The total cost for the equipment is estimated at $437,500. The project meets the qualifications fora (5) five-year personal property tax abatement and a representative from Endeavor Machined Products, Inc. will be available to meet with the Committee on Monday, January 25, 2010. 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, p ~ J~,~, ~~1ar~h~..x./ 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 & PROGRAM PAMELA C. MEYER DONALD E. INKS MANAGEMENT 574!235-9660 574!235-9371 ELIZABETH LEONARD FAX: 5741235-9697 574/235-9371 1200 COUNTY--CITY BUILDING 227 W. JEFFERSON BOULEVARD SOiTI'I I 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 BL 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: ENDEAVOR MACHINE PRODUCTS, INC. DATE: January 11, 2010 On January 11, 2010, a petition for personal property tax abatement consideration for property located at 850 S. Marietta Street, Suite 300 was filed with the City Clerk by Endeavor Machined Products, 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 Endeavor Machined Products, Inc. is a new start-up company that plans to begin production in the near future. They will manufacture precision machined parts for the wind power, petroleum exploration, aerospace and orthopedic industries. The equipment the company intends to procure will be used to manufacture prototype parts to demonstrate their design and production integrity in order to eventually release them for production at the company. The company will fabricate the parts based on their clients' designs. The equipment to be purchased includes a CNC five axis machining center, a CNC lathe, coordinate measuring machine, general shop equipment, software, computers, office furniture, inspection equipment, a fork lift and an air compressor. The total cost of the equipment is estimated to be $437,500. COMMUNITY DEVELOPMENT ECONOMIC DEVELOPMENT FINANCIAL HC PROGRAM PAMELA C. MEYER DONALD E. INKS MANAGEMENT 574/235-9660 574/235-9371 ELIZABETH LEONARD FAX: 574/235-9697 574/235-9371 South Bend Common Council RE: Tax Abatement for Endeavor Machined Products, Inc. January 11, 2010 Page 2 Total taxes to be abated during the (5) five-year abatement period are estimated at $17,618. Total additional taxes to be paid as a result of the project during the five-year abatement period are estimated at $12,493. EMPLOYMENT IMPACT Per the petition, it is estimated that the project will create five (5) new, permanent full-time positions with an annual payroll $205,021. Because the petitioner is a new start-up no existing jobs will be maintained. ABATEMENT QUALIFICATION 1. A review of the tax abatements previously granted finds that the Petitioner, Endeavor Machined Products, Incorporated, 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. A review of the South Bend Redevelopment designation areas finds that the property is located in the South Bend Central 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 11-Jan-10 ENDEAVOR MACHINED PRODUCTS, INC. South Bend Portage Township Personal Property Tax Abatement Schedule* Tax Key Number 71-08-12-454-003.000-026 Current Assessed Value: 0 Estimated Project Cost: 437,500 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% 0 0 0 0 0 0 Base Assessed Value 175,000 245,000 183,750 140,000 105,000 Less Abatement Deduction (175 000) (196,000) (110,250) (56,000) (21,000) Net Assessed Value 0 0 49,000 73,500 84,000 84,000 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) 0 0 2,108 3,162 3,613 3,613 Less Circuit Breaker Credit 0 0 0 0 0 (3) Net Tax 0 0 2,108 3,162 3,613 3,610 Circuit Breaker Cap Circuit Breaker 3.0000% 0 5,250 7,350 5,513 4,200 3,150 Debt Service 0.5477% 0 0 268 403 460 460 Circuit Braker Cap 0 5,250 7,618 5,915 4,660 3,610 New Combined Net Existing Project Existing & New Tax Tax Year Taxes Taxes Taxes Abated Paid 1 0 6,208 6,208 6,208 0 2 0 8,692 8,692 6,584 2,108 3 0 6,519 6,519 3,357 3,162 4 0 4,967 4,967 1,354 3,613 5 0 3,725 3,725 115 3,610 Totals 0 30,111 30,111 17,618 12,493 "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 sea•, and South Bend Municipal Code Section 2-84.2, et se .for this petition states the following: 1. Describe the proposed project, including information about the new manufacturing equipment personal property 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. (see exhibit "D' for listing of equipments .Endeavor Machined Products (EMP is new start up Manufacturer of machined parts for the Wind Power, Petroleum Exuloration, Aerospace and Orthopaedic Industries. The equipment located in South Bends. Park Center will be used to manufacture prototype parts to_ demonstrate their design and production integrity eventually releasing them for. production at EMP. This request will enable EMP to provide our clients suaerior Quality, Deliverv and Service while providing them our best value for their investment. 2. The project will create 5 new, permanent jobs within the first year, representing a new annual payroll of $ 205021.00. The projected annual salaries for each new position created are estimated to be ~ 41004.20 31,s~~ 3. Estimate the total cost of the Equipment: 0 `{ ~ ~_ ~ l 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 Endeavor Machined Products. Inc. 850 S. Marietta Street, Suite 300, South Bend. IN 46601 (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 Endeavor Machined Products, Inc 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: Endeavor is a ,precision parts machining facility, fabricating items per our clients design. Machine Programming, Fixture Design and build. parts machining, and assembly will occur at this location. 6. The commonly known address of the property where the Equipment is to be located is: 850 S Marietta Street, Suite 300, South Bend 46601. 7. The Key Number of said property is: 71-08-12-454-003.000-026 8. Attach the legal description of the property where the equipment is to be located, marked "Exhibit A," and is hereby incorporated herein. 9. Attach a map and/or plat describing the property where the equipment is to be located, marked "Exhibit B," and is hereby incorporated herein. 10. Attach photographs of the property, taken within 30 days of filing of this petition, marked "Exhibit C," and hereby incorporated herein. 11. The current assessed valuation of the tangible personal property to be replaced by the new manufacturing equipment is $0.00 NEW BUSINESS. (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 Vacant and the current zoning is D (use} and (height and area). (This information may be obtained from the Building Department 235-9553) (Revised 8/2/02) '4L 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 2006 paxable 2007: RE taxes $24223.63 Assessed value $614,600 2007 paxable 2008: RE taxes $24769 71Assessed value $595,200 2008 paXable 2009• RE taxes $239b2.10 Assessed value $598,200 (This information may be obtained from the St, Joseph County Treasurers 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). NEW COMPANY - NO HISTORY. 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. Due to the limitations in size of this site~and safety concerns regarding the manufacturing_arocesses we will not be able to assure day care at this time. 16. What is your best estimate of the market value of the new Equipment after installation? $$435,00; 17. What is your best estimate of the amount of taxes to be abated during each of the five years after installation? $ 18. What is the commitment your firm will make to minority employment during the five years of tax abatement? Endeavor as a new company -will provide Equal Opportunitx, to all employees and applicants for emploxment in accordance with all applicable Equal Employment Opportunity Affirmative Action laws, directives and regulations of_ Federal, State and Local governing bodies or agencies thereof, specifically (Revised 8/2/02) (4 ~ including Indiana Civil Rights Ordinance IC 1971, 22-9-1. As a start up com^,pany Endeavor will activelyseek out qualified employees in the South Bend area where a rich diversity of minority candidates thrive. The five veer Tax Abatement will assure Endeavors presence and growth in South Bend. 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: NAICS #'s 336413 Aircraft Product and Parts Manufacturing, 339112 Surgical and Medical Instrument Manufacturing, 332710 Machine Shops. 21. The Internal Revenue Service Code of Principal Business Activity by which the proposed project would be classified, by number and description: #'s 336410 Aerospace Products and Parts Mfg.,L339110 Medical Equipment and Supplies Mfg., 332710 Machine Shoff Turned Product and Screw, Nut, Bolt Mfg. 22. The real property where the Equipment will be installed is located in the following Allocation Area, if any, declared and conf rmed by the South Bend Redevelopment Commission: " South Bend Central Development Area" 23. Other anticipated public financing for the project including, if any, industrial revenue-banding 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. None 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: (Revised 8/2/02) ~`"~ The Business is new, no equipment will be replaced. 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. 26. The following person(s) should be contacted as Petitioner's agent regarding additional information and public hearing notifications: Name: Jim Duszynski Address: 2674 S. Nowak Dr. City, State, Zip Code: Laporte In. 46350 Telephone: 219-877-4650 E-mail: jimd.endeavorna,gmail.com 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 5250.00 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 Owners}: (Revised 8/2/02) ~ ) igned Name) James R Duszynsld President (Typed or printed name and capacity of signor if signed by an agent or representative of the owner) J AN ~ ~ 2010 ~ ,~oll~ voo~~`- ~ ~ gFNO, IN. GIl { CI.E`~'~`~1-~ (Revised 8/2/02) '~~ Exhibit A January 8, 2010 Endeavor Machined Products Inc. 850 S. Marietta Street South Bend, Indiana 46601 Legal Description of Real Estate: Lot lettered "Q" as shown on the recorded Plat of Monroe Sample Replat, recorded January 31, 1990, as document number 9002533 in the Office of the Recorder of St. Joseph County, Indiana. `~G`v~~ ~t~wd 1 ~ ~p~0 ~P`~ v~a~~~~~o ~~' G Exhibit B January 8, 2010 Endeavor Machined Products Inc. 850 S. Marietta Street South Bend, Indiana 46601 Property Location: The property is located just east of the St. Joe River near where Sample St. and Lincolnway meet. It is Suite 3001ocated in the Park Center complex. f~t~~ t~ J R`` ~ ~ 2p10 CU ca t ~ ~ ~' ~ ._v. G ~` I L w<; `^~ _._, ~ 6 C>, cam: ~;:. r,a L} `+ Map of 850 Marietta St ~~ ~ South Bend, IN 46801-3214 ~ ~ `=} ~ _ - . „ ~, ~:, =~ .~ -- ~- 'r:, > cs i ~.7 ~~ O 1'~S~S~Q~f~sY. ~ano ii ;s o . !, t. i~ 6 r v L^i `emit ~1.,. , :. 'r'~ ~ c_~.. _. - i ~ c~ rp Jt , ~~ ~~ E Rion;at 51 .. Eeimcn+ i'~ ~c ;t . rf r'~~h r, ~~ ~. ,~.~ N ~ ~ C Tutl 5l -r f ~ ~'t'i ~ N ~ ea to ~ 23~ 933 J ~ ~b' - - v -~-, ~ 933 ) . _ , . __.. S ~ ^ ~~ ~ ,~rn ~Ic t E c~ i ~~". ~ < C 'n ~ .V. .4otyi ~l ' K~~aeey tit' I .. `rte ~ ~: (ksn Johnson E(vd ~. i C, lip 7EC;f P.,I end Ct - - G 37.[:i L: n:+ _ r;.2C~9t.SapCucatlrc. WlnpCcta *.D29D9aV;nvTEQ or tRl^hCes A Wald- ~ t-,d_ U ut e~Y L Lictn,e, i ir!nhF. ~ P ,~~ Le,l?nd_ piredions and maps are It>fronnauonal only. We make no warrertHes on fhe axuracy of Nair corkent, road corditlons or roub usabiAty or e>4aeditiousness. You assume aA rlsk of use. AAapQuest and its auppkere shaA rrot be Aable to you for any bss or delay resuAlrg from your 1 oft I 1/11/20106: Exhibit C January 8, 2010 Endeavor Machined Products Inc. 850 S. Marietta Street South Bend, Indiana 46601 Front of building showing Suite 300 ~,} K 4~:7 .. ~ 4 5'~', w~-'..& a w. 'l'~ - .. .... _ ~-. c7 - ~~~v^ {t•'•,. _ f gyn.. .~~ ~ ?i ~ , ~ i ,` _ ~ ~ At ~ ~ ~' ~~;'~ii ~ji: Jl+u Inside office as you enter through the front door ~. . _m, ~--~. ;~"`r° .- jj 7 -~ # F ' 1 ~ i C ... , ~ ~~. ,,,~`- ~- -,.__ 1 ~ , ..,,;w. . . , } Manufacturing area looking toward office i~ ~~~~„!1i?.010 t'sb'~d ~~~n~t~i Quality Control Room Manufacturing area as seen from mezzanine _ . ~. . "' - ~_. e•. _ .- ~', i 1 1 i:~',J Exhibit D January 8, 2010 Endeavor Machined Products Inc. 850 S. Marietta Street South Bend, Indiana 46601 Description of Manufacturing Equipment: • CNC Five Axis Machining Center (1) - $175,000.00 • CNC Lathe (1) - $100,000.00 • Coordinate Measuring Machine (1) - $ 65,000.00 • General Shop Equipment {manual Machines) - $32,000.00 • Soft Ware - $20,000.00 • Computers - - $ 3,500.00 • Office Furniture - $ 3,500.00 • Inspection Equipment - $25,000.00 • Forklift - $ 6,000.00 • Air Compressor - $ 7,500.00 ~~ ;~,~ Ic ~ ~~~49 t;d9i ~~ ~ ' >i 'I ~ (~', ,.