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~4' -• COMMUNITY AND ECONOMIC DEVELOPMENT COMMITTEE
October 5, 2010
Chairperson Timothy Rouse called the Community and Economic Development Committee
meeting to order at 5:00 p.m.
Committee Members Present: Timothy Rouse, Ann Puzzello, Karen White (5:20 p.m.), Henry
Davis (5:25 p.m.)
Other Councilmember's Present: David Varner (5:15 p.m.), AI Kirsits, (5:10)
Oliver Davis (5:25)
Other's Present: (See Attached Sign-In Sheet)
Agenda: Bill No. 61-10 Tax Abatement Filed by Project Future
Chairperson Rouse noted that he and Committee Member Ann Puzzello were present. By 5:25
the other two committee members had arrived along with three other Council Members.
Chairperson Rouse opened the hearing by briefly recounting the Council's efforts to craft an
abatement ordinance that would both welcome new investment in the city as well as hold
petitioners accountable for commitments to local hiring not only for construction; but ongoing
employment as well. The Council correlates granting abatements for investments with
investment in human capital.
Chairperson Rouse then introduced pat McMahon head of Project future, who in turn introduced
Phil Newbold who provided some framework for the business community's approach to
abatements reflected in Bill No. 61-10 which he said would lay out the welcome mat for new
investments, albeit with caveats for "corporate responsibility" in the community.
After Newbold's opening remarks Pat McMahon distributed a four page handout summarizing the
main philosophy found in the "business" bill. He described the four criteria considered for a tax
"phase-in" as he preferred to describe it as opposed to abatement. The basic criteria McMahon
described were 1.) the $ amount of the investment 2.) the number of jobs created 3.) the type of
jobs and 4.) whether the business was currently local. Tied to these basics would be incentives
for businesses to be good corporate citizens in the community. He said these "bonus
opportunities" would make the bill unique in Indiana. In this approach the petitioner's benefits
would have to be earned every year with comparisons made to previous year attainment. This
approach would create a "carrot" for business to induce good corporate behavior. A business
could only claim what it earned. It was felt this elimination of a sea of paperwork, objective
criteria superseded subjective judgment and a lack of airing "dirty laundry" would create and
foster a business friendly climate.
To support the approach Bill No. 61-10 advocated McMahon added that petitioners should pay a
living wage or they need not apply. He also suggested new businesses be given a three year
grace period to get their feet under them before paybacks are counted.
Further testimony of support came from Paul Cafiero speaking for the Chamber Board of
Directors and Jeff Rea newly appointed leader of the Chamber of Commerce who hoped
common ground and cooperation could be found.
Chairperson Rouse moved to Council questions, Ann Puzzello was told that as yet the county
had not been contacted about the 61-10 approach.
Councilmember Oliver Davis was told "phase-in" petitioners could receive additional benefits by
locating in certain target areas to be determined by the Council.
Councilmember Henry Davis expressed a range of concerns including a more direct, benefit for
hiring South Bend residents. He also felt downtown small businesses did not get adequate
support from the Chamber or the City.
Responding, McMahon cautioned that the 61-10 phase-in bill was not a panacea; but one of
many ways to help small business. Bill No. 61-10 sole focus was to incent investment by a tax
phase-in.
Councilmember Henry Davis maintained more needs to be done for existing businesses.
Jeff Rea said the Chamber's mission was to educate and assist entrepreneurial efforts and to
help formulate good public policy.
Councilmember Varner made the point that the large sizes of TIF areas already provide location
incentives now needed in other non-TIF areas.
Chairperson Rouse then provided Marti Wolfson an opportunity to comment. Wolfson is the
spokesperson for the Coalition for Responsible Tax Abatement made up of representatives of 16
organizations with a vested interest in the discussion of appropriate abatement policy. This
coalition he indicated supports an abatement approach supported by the Mayor who has offered
Bill No. 25-10 for an alternative abatement policy. Marti Wolfson said Bill No. 25-10 is built on
more social justice criteria trying eligibility for abatement to wages, affirmative action, and location
in distressed areas. He felt Bill No. 61-10 lacked a monitoring process creating an enforcement
dilemma and also compromises the Council's priorities. He felt Bill No. 61-10, as proposed, does
not provide the council any leverage or assurance their policy goals are reflected in the process.
McMahon said Bill No. 61-10 indeed had an annual monitoring requirement in its benefit
application.
There being no further business to come before the Committee, Chairperson Rouse adjourned
the meeting at 6:10 p.m.
Respectfully Submitted,
Timothy A. Rouse, airperson
Community an onomic Development Committee