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HomeMy WebLinkAbout18-47 Modifying and reconfirming resolution for Imagineering Enterprises (Personal Property) 04 �d Filed in Clerk's Office SEP 0 5 2018 \y.,1865 X KAREEMAH FOWLER CITY OF SOUTHBENIY-ITY CLERK,SOUTH BENDIN COMMUNITY INVESTMENT JAMES MUELLER, EXECUTIVE DIRECTOR September 5, 2018 Council Member Gavin Ferlic, Chairperson Community Investment Committee South Bend Common Council 4th Floor, County City Building South Bend„IN 46601 RE: Real Property Tax Abatement Extensions for: Historic JMS Building LLC,JSK Development Inc., RDistrict One LLC,Imagineering Enterprises Inc., Tower at Washington Square LLC. Dear Council Member Ferlic: As part of our annual review process, we have found the need for several extensions to the designation period for previously approved tax abatements. These extensions would not alter the length of the abatement itself, however. It has been a general practice, when granting a tax abatement, to allow a two-year designation period for the project to get underway, be completed, and receive its higher reassessed value. The clock on the designation period starts when the abatement is granted by Council. Sometimes a project takes a bit longer to get underway and/or be completed, and sometimes the Assessor's office does not issue the reassessed value (and accompanying Form 11)within the two-year timeframe. For these situations (detailed below) the petitioners are asking Council to grant extensions of the designation period on the following tax ! abatements. Attached please find proposed forms of resolutions modifying and reconfirming the adoptions of declaratory resolutions for Historic JMS Building LLC,JSK Development Inc.,RDistrict One LLC, Imagineering Enterprises Inc., Tower at Washington Square LLC which combined were granted a total of eleven real property tax abatements. DANIEL J.BUCKE:wrEYER ALKEYNA ALDRIDGE PAMELA MEYER TIJI GoRCORAN BUSINESS DEVELOPMENT ENGAGEMENT&ECONObDC EMPOWERMENT NEIGHBORHOOD DEVELOPNIFNT PLANNING&COMMUNITY ITY RESOURCES EXCELLENCE ; ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 1400S County-City Building i 227W.Jefferson Blvd.I South Bend,Indiana 466011 p574.235.9371 I www.southbendin.gov CITY OF SOUTH BEND I COMMUNITY INVESTMENT These modifications are related to extending a designation period from the date of adoption of the original Declaratory resolutions. Some of above mentioned companies received a form 11 from the St.Joseph County Assessor Office in July 2018.Those companies filed appropriate forms with the St. Joseph County Auditor Office in a timely manner, but the designation period already expired. Other companies have completed their projects but never received a form 11 with a full assessment values and as a result have not submitted required forms to the St. Joseph County Auditor Office. Finally, two companies requested a designation period extension due to complexity of their projects that caused unanticipated delays. Historic JMS Building: The project was completed in March 2017. The company has invested$8.4 million and created 3 j new jobs. The JMS building now houses Centier Bank and apartments contributing to the density and vitality of downtown South Bend. The company received a form 11 from the St. Joseph County Assessor Office in July 2018 and filed appropriate forms to the St. Joseph County Auditor Office. The designation period expired on June 22,2017. JSK Development eland Hosptality/Holiday Inn Express): The project was completed in April 2018. The company has invested$6.5 million and created 17 new jobs. The Holiday Inn opened in May and is part of a revitalization of the South Side at Michigan and the Bypass. The company has never received a form 11 from the St. Joseph County Assessor Office. The designation period expired on July 13, 2017. r JSK Development(Southhold/Courtyard Marriott Downtown): The project was completed in April 2018. The company has invested $11 million and created 38 new jobs. The Marriott has truly enhanced our downtown streetscape and makes the Century Center a more viable option to bring in citywide tourism and revenues from small conferences and shows. The company has never received a form 11 from the St. Joseph County Assessor Office. The designation period expired on May 26,2018. JSK Development(Southhold/Hall of Fame): The future use of the former College Football Hall of Fame Building was directly tied to the construction and subsequent opening of the Courtyard Marriott Downtown Hotel. While those plans did not come to fruition,JSK maintained their commitment to purchase the vacant property. The hotel project was completed in April 2018 and JSK is requesting a designation period extension on the vacant hall of fame building. The designation period expired on May 26,2018. RDistrict One(Studebaker Building 84): The project was completed in May 2018. The company has invested$18.4 million and created 19 new jobs and retained 5 jobs.The company has not received a form 11 for a full assessment of the property from the St.Joseph County Assessor Office.The designation period expired on December 17,2017. i i� i Page 2 I i t CITY OF SOUTH BEND I CO M M U N ITY I NVESTM E NT Ima ineering Enterprises: The company was granted personal and real property tax abatements and proactively requested a designation period extension due to a significant increase in its strategic investments. The designation period will expire on September 26,2018. Tower at Washington(Hotel and Parking Garage): Two projects were completed in September 2017. The company has invested $38.5 million and created 45 new jobs. The company received a form 11 from the St. Joseph County Assessor Office in July 2018 but is still waiting for a full assessment of these properties. The designation period will expire on September 29,2018. Tower at Washington(Retail and Apartments): Two projects have,not been completed yet due to the size and nature of the project. The company is investing $15 million into the ongoing project. The company requested an extension of the designation period for these project elements.The designation period will expire on September 29, 2018 for the Retail elements and on October 26,2018 for the Apartments. The Department of Community Investment supports these requests for extension of the designation period. These companies have met or exceeded their other abatement milestones and commitments, generating visible growth and community impact. 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. i Since 1 , i Daniel J. uckenmeyer Director of Business Development i i i 1 i Page 3 IMAGINEERING"' Filed in Clerk's Office ®� N FINISHING T1sCI1N01,OGIFS ---� Vie lnJns lq•AlmnhvlA45nnrce'fivAlelal FlnlslJn.1Bnfu1iuui ESEPO 5 2018 May 15,2018 KAREEMAh9 FOWLER City of South Bend CITY CLERK,SOUTH BEND,IN Department of Community Investment 227 W.Jefferson Blvd. South Bend, IN 46601 Re: Real Estate and Personal Property Tax Abatements Over the past 60 years, Imagineering experienced phenomenal growth. We grew from a single facility with one major customer, into three fully occupied factories serving over 750 customers(two in South Bend and one in Indianapolis). We have reached 130,000 square feet under roof and increased the size and capacity for each of our product lines. We modernized our processing capabilities and added product lines.As a result of these improvements our sales doubled over just the past 10 years. This success is a direct result of our team's hard work and dedication. Without everyone's dedication to excellence, these achievements never could have been realized. As we continue to grow, our trajectory is on pace to exceed our previous accomplishments,tripling our size. We are at a point in our business where further investment is required for this additional growth to occur. We were awarded an abatement on September 26'x',2016 for expansion involving both real estate and personal property at 3722 Foundation Court. At that point in time,we expected to invest$500,000 in real estate expansion and$3,000,000 in personal property;creating approximately 25 positions($780,000 in payroll)over the next five years. Today,we expect to invest approximately$2,500,000 between both of our locations in South Bend(3722 Foundation Court and 1302 W. Sample Street). 3722 Foundation Court We intend on expanding the building by approximately 15,500 square feet;costing approximately$1,500,000. Along with expanding the building,we will expand our current process offering by adding"Passivation"capabilities to our portfolio; costing approximately$325,000-$550,000. 1302 W.Sample Street We intend on expanding our process offerings by adding "Anodize" capabilities to our portfolio; costing approximately $450,000. With this additional real estate and process expansion comes job creation; we expect these investments to create approximately 25 positions; adding an additional$780,000 to our payroll over the next five years. We are requesting the original abatement to be modified according the new business plans. Respectfully, 9" —�- Joseph Rowan CFONP of Finance Filed in Clerk's Office BILL NO. 18-47 SEP 0 5 2010 RESOLUTION NO. i RE Ef_IA_f F0JUVLER CITY CLERK,SOUTH SEND, IN A RESOLUTION MODIFYING AND RECONFIRMING THE ADOPTION OF DECLARATORY RESOLUTION NO. 4596-16 DESIGNATING CERTAIN AREAS WITHIN THE CITY OF SOUTH BEND, INDIANA, COMMONLY KNOWN AS 3722 Foundation Ct, South Bend, IN 46628 AN ECONOMIC REVITALIZATION AREA FOR PURPOSES OF A FIVE (5) YEAR PERSONAL PROPERTY TAX ABATEMENT FOR Imagineering Enterprises, Inc. WHEREAS, the Common Council of the City of South Bend has adopted Declaratory Resolutions designating certain areas within the City as Economic Revitalization Areas for the purpose of tax abatement consideration. WHEREAS, Declaratory Resolution No. 4596-16 designated the area located at 3722 Foundation Ct., South Bend, IN 46601 and certain business personal property therein, as more specifically set forth in Declaratory Resolution No. 4596-16, which has Key Numbers to be assigned, as an Economic Revitalization Area under the provisions of Indiana Code 6-1.1-12.1 et seq., and South Bend Municipal Code Sections 2-76 et seq.; and WHEREAS, upon proper notice, a public hearing was held, after which the Common Council issued a Confirming Resolution No. 4597-16 confirming the adoption of a Declaratory Resolution No. 4596-16 on September 28, 2016; and WHEREAS, the Petitioner was granted a two-year designation period in the Confirming Resolution No. 4597-16, which will expire on September 13, 2018; however, the project will not be completed until September 2019. WHEREAS, the Petitioner has requested an additional one year to complete the project. 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 that the extension of the designation is appropriate and meets the requirements of Indiana Code § 6-1.1-12.1 et seq. SECTION II. The Common Council hereby reconfirms its Declaratory Resolution No. 4596-16 and its Confirming Resolution No. 4597-16 designating the area described herein as an Economic Revitalization Area for the purpose of a personal property tax abatement. Such designation is limited to three (3) calendar years from the date of adoption of the Declaratory Resolution No. 4596-16 by the Common Council. SECTION III. The Common Council hereby determines that the property owner is qualified for and is granted property tax deduction for a period of five (5) years as shown below and further determines that the petition, the Statement of Benefits and the Memorandum of Agreement between the Petitioner and the City of South Bend comply with Chapter 2, Article 6, of the Municipal Code of the City of South Bend and Indiana Code 6-1.1-12 et seq. Year 1 — 100% Year 2— 80% Year 3 —60% Year 4—40% Year 5 —20% SECTION IV. This Resolution shall be in full force and effect from and after its adoption by the Common Council and approval by the Mayor. Tim Scott, Council President South Bend Common Council 2 1 RESOLUTION No. 4597-16 Passed by the Common Council of the City of South Bend, Indiana September 26, 2016 Attest: City Clerk Attest—: President of Common Council Presented by me to the Mayor of the City of South Bend, Indiana September 27, 20 16. --- -- --— - City Clerk Approved and signed by me Se f►Yt btr ��. 201 b MaYor RESOLUTION NO. H5 A RESOLUTION CONFIRMING THE ADOPTION OF A DECLARATORY RESOLUTION DESIGNATING CERTAIN AREAS WITHIN THE CITY OF SOUTH BEND, INDIANA, COMMONLY KNOWN AS 3722 Foundation Ct., South Bend, IN 46628 AS AN ECONOMIC REVITALIZATION AREA FOR PURPOSES OF A FIVE (5) YEAR PERSONAL PROPERTY TAX ABATEMENT FOR Imagineering Enterprises, 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 3722 Foundation Ct., 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 ti 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 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. 2ZoMember moron Council Fled in Clerk's Office PRESENTED q j I SEP 0 7 2016 NOT ,APPROVES'+ KAREEMAH FOWLER ADOQM `1`2�e (�, CITYCLERK,SOLMH`3EN0,IN �5q7 MEMORANDUM OF AGREEMENT This Memorandum of Agreement (Agreement) dated as of the 26th of September, 2016 serves as confirmation of a commitment by Imagineering Enterprises Inc. (the "Applicant"), to comply with the project description, job creation and retention (and associated wage rates and salaries) figures contained in its petition, Statement of Benefits, and attachments and this Agreement (Commitments). 1. Commitments of City and Applicant. Subject to the adoption of a Declaratory Resolution and a Confirmatory Resolution by the South Bend Common Council (the "SBCC"), the City of South Bend, Indiana (the "City") commits to provide a 5 year personal property tax abatement for the Applicant, based on the Applicant's commitment set forth in its petition for 3722 Foundation Ct. South Bend IN 46628, (025-1010-0400 18). The Applicant commits to a minimum capital expenditure of$3,000,000 associated with the expansion of their business by adding additional services to our current product offerings. Imagineering Enterprises Inc. believes that the addition of the Anodize process will allow them to grow to their next desired level. This personal property project will create at least 25 new, permanent full-time jobs with a total estimated annual payroll of$780,000 within the Five year abatement period. 2. Potential Impact of State of Indiana Circuit Breaker Law: The parties note that the calculations regarding the affect of the tax abatement in question are based on the State of Indiana's tax rates currently in effect at the time of entering into this Memorandum of Agreement. The complete impact of the State of Indiana's Circuit Breaker law on the City's property tax revenues is unknown at this time. To assure that the City receives the projected amount of property tax revenues, which amount was calculated at the time of granting the tax abatement for the Applicant, the parties to this Memorandum of Agreement agree to adjust the length of the abatement and/or the percentage of deduction if the tax revenues due under the Circuit Breaker Law are less than what was initially projected and represented to the Common Council, as evidenced by the supporting documentation submitted to the Council with the Applicant's tax abatement petition. However, in no case will the adjustments cause the property taxes to be paid to exceed the tax payments as initially projected and represented to the Common Council by the aforementioned supporting documentation. Memorandum of Agreement Page 2 of 6 3. Applicant's Compliance with City and State Laws. During the term of the abatement, the Applicant shall comply with Chapter 2, Article 6 of the South Bend Municipal Code entitled "Tax Abatement Procedures" and all governing provisions of the Indiana Code. During the term of this abatement, the City may annually request information from the Applicant concerning the nature of the Project, the approved capital expenditure of the Project, the number of full-time permanent positions newly created by the Project, and the average wage rates and salaries (excluding benefits & overtime) associated with the positions, and the Applicant shall provide the City with adequate written evidence thereof within 15 days of such request (the "Annual Survey"). The City shall utilize this information and the information required to be filed by the Applicant in the CF-1 Compliance with the Statement of Benefits form to verify that the Applicant has complied with the commitments contained in the Commitments at all times after the Commitment Date and during the duration of the abatement. The Applicant further agrees to provide the City with such additional information requested by the City related to the information provided in the Annual Survey and the CF-1 form within a reasonable time following any such additional request. 4. Substantial Compliance and Rights of Termination. The City, by and through the SBCC, reserves the right to terminate the Economic Revitalization Area designation and associated property tax abatement deductions if it determines that the Applicant has not made reasonable efforts to substantially comply with all the Commitments, and the Applicant's failure to substantially comply with the Commitments was not due to factors beyond its reasonable control. As used in this Agreement, "substantial compliance" shall mean the Applicant's compliance with the following: (a) A minimum investment of$3,000,000 for associated with the expansion of their business by adding additional services to our current product offerings. Imagineering Enterprises Inc. believes that the addition of the Anodize process will allow them to grow to their next desired level. (b a minimum of 25 permanent full-time jobs with a total estimated annual payroll of$780,000 within Six year abatement period. 5. Factors Beyond Control. As used in this Agreement, factors beyond the control of the Applicant shall only include factors not reasonably foreseeable at the time of designation application and submission of Statement of Benefits which are not caused by any act or omission Memorandum of Agreement Page 3 of 6 of the Applicant and which materially and adversely affect the ability of the Applicant to substantially comply with this Agreement. 6. Repayment of Tax Abatement Savings. If at any time during the term of this Agreement the Applicant shall: (i) be delinquent or in default with respect to any tax payment in St. Joseph County, Indiana; or (ii) cease operations at the facility for which the tax abatement was granted; or (iii) announce the cessation of operations at such facility, then the City may immediately terminate the Economic Revitalization Area designation and associated tax abatement deductions, and upon such termination, require Applicant to repay all of the tax abatement savings received through the date of such termination. 7. Notice/Hearing of Termination. In the event that the City determines that the Economic Revitalization Area designation and associated tax abatement deductions should be terminated or that all or a portion of the tax abatement savings should be repaid, it will give the Applicant notice of such determination, including a written statement calculating the amount due from the Applicant, and will provide the Applicant with an opportunity to meet with the City's designated representatives to show cause why the abatement should not be terminated and/or the tax savings repaid. Such notice shall state the names of the person with whom the Applicant may meet and will provide that the Applicant shall have thirty days from the date of such notice to arrange such meeting and to provide its evidence concerning why the abatement termination and/or tax savings repayment should not occur. If, after giving such notice and receiving such evidence, if any, the City determines that the abatement termination and/or the tax repayment action is proper, the Applicant shall be provided with written notice and a hearing before the SBCC before any final action shall be taken terminating the abatement and/or requiring repayment of tax benefits. The Applicant shall be entitled to appeal that determination to a St. Joseph County Superior or Circuit Court. 8. Repayment. In the event the City requires repayment of the tax abatement savings as provided hereunder, it shall provide Applicant with a written statement calculating the amount due (Statement), and Applicant shall make such repayment to the City within 30 days of the date of the Statement. If the Applicant does not make timely repayment, the City shall be entitled to all reasonable costs and attorneys' fees incurred in the enforcement and collection of the tax abatement savings required to be repaid hereunder. Memorandum of Agreement Page 4 of 6 9. Modification/Entire Agreement. This Agreement and the schedules attached hereto contain the entire understanding between the City and the Applicant with respect to the subject matter hereof, and supersede all prior and contemporaneous agreements and understandings, inducements, and conditions, expressed or implied, oral or written, except as herein contained. This Agreement may not be modified or amended other than by an agreement in writing signed by the City and the Applicant. The Applicant understands that any and all filings required to be made or actions required to be taken to initiate or maintain the abatement are solely the responsibility of the Applicant. 10. Waivers. Neither the failure nor any delay on the part of the City to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy,power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or privilege with respect to any occurrence or be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver. 11. Governing Laws of Indiana. This Agreement and all questions relating to its validity, interpretation, performance, and enforcement shall be governed by the laws and decisions of the courts of the State of Indiana. 12. Applicant's Consent to Jurisdiction. The Applicant hereby irrevocably consents to the jurisdiction of the Courts of the State of Indiana and of the St. Joseph County Circuit or Superior Court in connection with any action or proceeding arising out of or relating to this Agreement or any documents or instrument delivered with respect to any of the obligations hereunder, and any action related to this Agreement shall be brought in such County and in such Court. 13. Notices. All notices, requests, demands, and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been received when delivered by hand or by facsimile (with confirmation by registered or certified mail) or on the third business day following the mailing, by registered or certified mail, postage prepaid, return receipt requested,thereof, addressed as set forth below: Memorandum of Agreement Page 5 of 6 If to Applicant: Imagineering Enterprises Inc. 1302 W. Sample Street South Bend IN 46601 Attn: Joseph Rowan If to the City: City of South Bend, Indiana 27 West Jefferson Blvd. Suite 1400S South Bend, Indiana 46601 Attn: Aaron Kobb, Department of Community Investment 14. Assignment and Transfer Prohibited. This Agreement shall be binding upon and inure to the benefit of the City and the Applicant and their successors and assigns, except that no party may assign or transfer its rights or obligations under this Agreement without the prior written consent of the other party hereto, in which consent shall not be unreasonably withheld. 15. Valid and Binding Agreement. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original as against any party whose signature appears thereon, and all of which shall together constitute one and the same instrument. By executing this Agreement, each person so executing affirms that he has been duly authorized to execute this Agreement on behalf of such party and that this Agreement constitutes a valid and binding obligation of the party. 16. Severability. The provisions of this Agreement and of each section or other subdivision herein are independent of and separable from each other, and no provision shall be affected or rendered invalid or unenforceable by virtue of the fact that for any reason any other or others of them may be invalid or unenforceable in whole or in part unless this Agreement is rendered totally unenforceable thereby. 17. No Personal Liability. No official, director, officer, employee or agent of the City shall be charged personally by the Applicant, its employees or agents with any liabilities or expenses of defense or be held personally liable to the Applicant under any term or provision of this Agreement or because of the execution by such party of this Agreement or because of any default by such party hereunder. [Remainder of page intentionally blank.] Memorandum of Agreement Page 6 of 6 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. "Applicant" `City" magineering Enterprises Inc. City of Sou diana By: By: Josep owan CFO/VP of Finance Tim Scott President, South Bend Common Council Approved as to Legal Adequacy and Form y: I/—�� this day of yo hkik , 2017. Gavin Ferlic Chairperson, Community Investment Committee ladean DeRose Counsel, South Bend Common Council By: —� 8R 4 J PI►..✓�e.r+S Department of Community Investment Counsel for Applicant poll By: Pete Bu ' g Mayor SBDS02 RJD 326640v1