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HomeMy WebLinkAbout18-54 Confirming Real Property Tax Abatement Petition for: National Distribution Centers, LLC SpUTH h \\ Filed in Clerk's Office \p�l�a/- aZ x x SEP 19 2018 1865 KAREEMr` H FOWLER CITY OF SOUTHBENO CITY CLERK,SOUTH BEND, IN COMMUNITY INVESTMENT JAMES MUELLER, EXECUTIVE DIRECTOR September 19, 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 Petition for: National Distribution Centers, LLC Dear Council Member Ferlic: Please find attached the Department of Community Investment's report on a real 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 construction of a new warehouse and distribution facility, located at the intersection of Dylan Drive and Parkland Drive, South Bend, IN. The report contains the Department's findings relative to the above petition. The total amount of private investment for the new building construction and land purchase is estimated at$14M. The project meets the qualifications for a nine-year real property tax abatement.A representative from a parent company, NFI Industries, will be available to meet with the Committee on Monday, September 24th,2018. 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 235-5838. Sincerely, Velinao Business Development Manager Department of Community Investment DANMLJ. aeunrt.n ivuian iuvi v�a�.�uuv BUSINEss DEVELOPMENT ENGAGEMENT&ECONOMIC EDIPOIVERMENT NEIGHBORHOOD DEVELOPMENT PLANNING&.COM4uNm RESOURCES EXCELLENCE I ACCOUNTABILITY( INNOVATION I INCLUSION EMPOWERMENT 1400S County-City Building 1227 W.Jefferson Blvd.I South Bend,Indiana 466011 p 574.235.93711 www.southbendin.gov Filed in Clerk's Office t City of South Bend 2018 Petition for Incentives v-, . ". 4 i W R t Petition must Include a$250 flung fee payable to the City Clerk's Office or online via the City's website at -_, L24C, 0 tJ.H BFND,IN http://southbendln.gov/government/content/tox-abatement before processing can be complete General Information Project Name Project Number Legal name as registered with Secretary of National Distribution Centers, LLC ("NFI") Business structure Limited Liability Company Company webslte www.nfiindustries.com Proposed Project Information Proposed project address Dylan Drive Parent company name NFI City,State,Zip South Bend, IN 46628 Legal owner NFI Site acreage or acreage required --20.0 acres Is the real estate owned or owned Square feet of facility 232,000 If leased by whom Primary Contact Information Primary company contact name Troy Adams Title Director of Real Estate Address of company contact 1515 Burnt Mill Road Phone (0)856-552-3178 (C)267-872-24 City,State,Zip Cherry Hill, NJ 08003 Email Itrov.adams@nfiindustries.com Senior Official Information Company senior official name same as above Title Address of company contact(If different from Phone City,State,Zip Email Consultant Information/Agent Hired business consultant/agentname JBradley Company/m. Ne Consultant release(y/N) Y Address 112 W. Jefferson Blvd,Suite 30 local economiccdoe/vaelo mN'ntpartners n/a City,State,Zip South Bend, IN 46601 Email Imneal@bradleyco.com Project Overview Brief description of your NFI is a leading international third party logistics provider offering company,project,and why the property Is necessary for services in distribution, transportation, logistics and real estate. NFI economic growth operates more than 40 million square feet of distribution and logistics real estate and employs more than 10,000 people throughout the US and Canada. NFI is entering its 86th year in business as a privately held, family-owned company. The project is precipitated by the strong growth of its client which requires a significant expansion (and its current subleased facility is inadequate). Seeking a new project site of at least 20 acres to construct (using local GC, subs and materials) its own 232,000 sq ft hl lilriinn tha nano h nnci P P(i I r.ati nc in S th anti c well Certified Technology Park appropriate n/a Is the project In a Tax Incremental Financing Yes, River West Development TIF Certify that the Buliding Permit has not been y Number of residential units crested by I� .,o rural �'d If this Is a petition for personal property tax abatement,has N o the equipment been Installed Investment Details Public Infrastructure needs(Cff- Has any 504 funding been What is the value of any equipment being purchased In What Is the value of any equipment being slte of project In dollars) received? Indiana for the project? purchased from out of state for the project? To be discussed No TBD - —$1.0 million TBD - —$3.0 million New Proiect Investments Calendar Year 2018 2019 2020 2021 2022 2023 2024 2025 Land Acquisition $1,000,000 Building Lease Payments Building Purchase Costs New Building Construction $2,000,000 $11,000,000 Existing Building Improvements New Machinery&Equipment $4,000,000 Special Tooling/Retooling New Furniture/Fixtures $25,000 New Computer/IT Hardware $25,000 New Software $50,000 On-site Rail Infrastructure On-site Fiber Infrastructure TOTAL $3,000,000 $15,100,000 1 $01 $01 so! so! $0 $0 Full-Time Permanent Indiana-Resident Positions by Calendar Year Calendar Year Jobs retained Total hourly Cumulative#of net NEW full time Hourly average wage,w/o Total training Total#to be wage w/o permanent jobs created at project benefits or bonuses,of expenditure- trained-not fringe or cumulative net new jobs not cumulative bonuses cumulative 2018 108 S1825 or S4.1M 2019 2020 2021 2022 2023 2024 2025 2026 2025 2028 2029 Provide hourly wage information for new employees in the following positions. Full time Part time Laborers Technical Managerial Administrative w o w—IFFe—tFe—Inarviclual responsible tor coordinating with WorkOne on recruiting? Does your company have an EEO hiring policy?I Yes Are you an EEO employer? Yes Please list the number of full time and part time minority and/or female employees for each of Please describe your commitment to the last three years: diversity and inclusion by detailing your outreach and recruitment efforts for the last Year 2018 2018 2018 three years as well as current policies. Full Time Part Time Full Time Part Time Full Time Part Time Black 54 Hispanic 5 Asian 1 Indian Female 39 Other Complete below for Real or Personal Property Tax Abatement only. Please sign for all requested incentives. Public Benefit Item: Information is required on both the construction companies and the companies which will provide materials purchased for this project. Please complete the table below with the appropriate information. If Qualify(Yes or No) Earned Points Available Points you qualify for the points,please enter the full amount of available points. 1 Construction Related icontractorsL, A. Employ Local Companies(75%) Yes 20 20 B. Purchase Materials from Local Companies(75%) Yes 20 20 C. Require Employees vs.Independent Contractors Yes 19 19 D, Require Prevailing Wage(Davis Bacon) No 22 E. Require Health Benefits Yes 22 22 F. Require Pension Benefits Yes 18 18 G. Maintain Affirmative Action Plan Yes 20 20 Sub-total Construction Related: 1 1 9 141 2 Wage&Benefit Related(Owner): A. Pay Target Wage Levels Yes 33 33 B. Provide Health Benefits Yes 34 34 C. Provide Pension Benefits Yes 29 29 D. Provide Training Yes 28 28 E. Provide Child Care No 15 F. Provide Transportation Assistance No 14 G. Provide Employer Assisted Housing program No 9 Sub-total Wage&Benefit Related: 124 162 3 Workforce Related: A. Create New Jobs No 42 B. Retain Existing Jobs Yes 41 41 C. Maintain Affirmative Action Plan Yes 35 35 D. Provide Targeted Hiring Preference No 34 Sub-total Workforce Related: 76 152 4 Support a Municipal Facility: Support a SB Municipal Facility(donations to the A, Yes zoo,conservatory,museum,etc) e. Name of Facility Sub-total Municipal Facility: R4 24 Sub-total from Above: Troy Ad 539 The undersigned owner(s)of real property,located within the City of South Bend,herby petition the Common Council of the City of South Bend for a real and/or personal lir tax abatement consideration and pursuant to I.C.,6-1.1-12.1-1,et seq.,and South Be unic ode ec.2-76 et sey_,for this petition state the abovg. Submitted By: Date: For Staff Use Only Below This Line What Is the current assessed value? Real Property: l Property: What Is the projected assessed value? Real Property: •G Personal Property: What Is the tax key number for this project? O��^ OC)„J(�^O 57A O What is the six digit NAICS code? 6Y Please attach a Gocgle map and street view of the location. Please list the amount of real and personal property taxes Real Property Taxes: Personal Property Taxes: paid for the last five years when applicable. Year One Year Two Year Three Year Four Year Five Please fill out the following Public Benefit Summary Information and add to total from above. Y or N Points Points Public Benefit Item: Project Related: 5 A. Redevelop a Site that has Special Needs 49 B. Develop Based on Local University Research 35 C. Achieve a Physical Element of a Plan 36 Sub-total Project Related: 120 6 Super Size Projects Ipolnt values are cumulative): A. 100%to 199% 25 B. 200%to 299% 6 68 C. 300%to 399% �p 65 D. 400%and Over 52 Sub-total Super Size Projects: 210 7 Pay for Municipal Infrastructure: A. Pay for Oversizing or Upgrading 14 B. Pay for 26-50%of Extension Cost 26 C. Pay for 51-75%of Extension Cost 39 D. Pay for 76-100%of Extension Cost 52 Sub-total Infrastructure Related: 131 Total from Applicant Section: (�3 539 Total from Staff Section: 'p 461 Total Public Benefit Points: 1000 Filed in Clerk's Office BILL NO. 18-54 SEP 19 2018 RESOLUTION NO. KAREEMAH FOWLER CITY rR._FRK, 901JTH REND, ?r A RESOLUTION CONFIRMING THE ADOPTION OF A DECLARATORY RESOLUTION DESIGNATING CERTAIN AREAS WITHIN THE CITY OF SOUTH BEND, INDIANA, COMMONLY KNOWN AS Lot 5 U S 31 Industrial Park Phase Ii AS AN ECONOMIC REVITALIZATION AREA FOR PURPOSES OF A NINE (9) YEAR REAL PROPERTY TAX ABATEMENT FOR National Distribution Centers, LLC 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 the intersection of Dylan Drive and Parkland Drive, South Bend, Indiana described as follows: Lots 5 U S 31 Industrial Park Phase Ii 02-03 New Replat Tr 8044 10-9-01 and which has Key Number 025-1009-015209, and 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 real property tax abatement only and is limited to four (4) 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 real property tax deduction for a period of nine (9) years as shown by the schedule outlined below as well as 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. Year 1 - 100% Year 2 - 90% Year 3 - 90% Year 4 - 80% Year 5 - 80% Year 6—70% Year 7—70% Year 8—60% Year 9—60% 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. Tim Scott, Council President South Bend Common Council FiClerk's Office P 19 2018 STATEMENT OF BENEFITS 20 PAY 20 REAL ESTATE IMPROVEMENTS iV5AH F(JWLER State Form 51767(R6110-14) � SOUTH BEND IN FORM SB•1 f Real Property Prescribed by the Department of Local Government _ K.__.. PRIVACY NONCE This statement is being completed for real property that qualifies under the following Indiana Code(check one box): Any information concerning the cost Q Redevelopment or rehabilitation of real estate improvements(IC 6-1.1-12.1-4) of the property and specific salaries paid to individual employees by the ❑Residentially distressed area(IC 6-1.1-12.1-4.1) proparty owner is confidential per INSTRUCTIONS: IC 6-1.1-12.1-5.1. 1. This statement must be submitted to the body designating the Economic Revitalization Area prior to the 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 designating body BEFORE the redevelopment orrehabilitation ofreal property for which the person wishes to claim a deduction. 2. The statement of benerits form 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 County Auditor before May 10 in the year in which the addition to assessed valuation is made or not later than thirty(30)days after the assessment notice is mailed to the property owner ifit was mailed after April 10. A property owner who failed to file a deduction application within the prescribed deadline may file an application between March 1 and May 10 of a subsequent year 4. A property owner who files for the deduction must provide the County Auditor and designating body with a Form CF-1/Real Property. The Form CF-1 1Real Property should be attached to the Form 3221RE when the deduction is first claimed and then updated annually for each year the deduction is applicable. IC 6-1.1-12.1-5.1(b) 5. For a Form SB-1/Real Property that is approved after June 30, 2013, the designating body is required to establish an abatement schedule for each deduction allowed. For a Form SB-1/Real Property that is approved prior to July 1, 2013, the abatement schedule approved by the designating body remains in effect. IC 6-1.1-12.1-17 SECTION INFORMATION Name of taxpayer r ational Distributions Center, LLC (NFI) Address of taxpayer(number and street,city,state,and ZIP code) 1515 Burnt Mill Road, Cherry Hill, NJ 08003 Name of contact person Telephone number E-mail address toy Adams ( ) roy.adams@nfiindustries.corr SECTION 2 LOCATION AND DESCRIPTION OF PROPOSED PROJECT Name of daslgnatlng body Resolution number ity of South Bend Location of property County DLGF taxing district number Description of real property improvements.redevelopment,or rehabilitation(use eddiNonal sheets llnecessary) Estimated start date(month,day,year) ecember 1, 2018 232, 000 sq ft Concrete block/Pre-cast concrete building with 32'clear heights, docks with I Estimated completion date(month,day,year) ctober 31, 2019 SECTION 3 ESTIMATE OF EMPLOYEES AND SALARIES AS RESULT OF PROPOSED PROJECT Current number Salaries Number retained Clries Number additional salaries 4.1 million 108 4.1 million i SECTION 4 ESTINIATED TOTAL COST AND VALUE OF PROPOSED PROJECT REAL ESTATE IMPROVEMENTS COST I ASSESSED VALUE current values 11,000,000 3.500 Plus estimated values of proposed project 117,100,000 Less values of any property being replaced 0 Net estimated values upon completion of project 118,100,000 SECTION . r AND .THER BENEFITS PROMISED B Estimated solid waste converted(pounds)0 Estimated hazardous waste converted(pounds)0 Other benefits Maintain 108 employees with—$5.0 million payroll with full company benefits(healthcare, retirement savings,training, pal CERTIFICATION SECTION 6 TAXPAYER I hereby certify ntations in this statement are true. Signature o au ed repre I Date sign (mon ,day,year) Printed name of authorized represents' e IT'Ite �j� lye C/l[/Z Page 1 of 2 FOR USE OF THE DESIGNA11011 136DY We find that the applicant meets the general standards in the resolution adopted or to be adopted by this body. Said resolution,passed or to be passed under iC 6-1.1-12.1,provides for the following limitations: A. The designated area has been limited to a period of time not to exceed calendar years*(see below). The date this designation expires is B. The type of deduction that is allowed In the designated area Is limited to: 1.Redevelopment or rehabilitation of real estate Improvements ❑Yes ❑No 2.Residentially distressed areas ❑Yes ❑No C. The amount of the deduction applicable Is limited to$ D. Other limitations or conditions(specify) E. Number of years allowed: ❑Year 1 ❑Year 2 ❑Year 3 ❑Year 4 ❑ Year 5 (*see below) ❑Year 6 ❑Year 7 ❑Year 8 ❑Year 9 ❑ Year 10 F. For a statement of benefits approved after June 30,2013,did this designating body adopt an abatement schedule per IC 6-1.1-12.1-177 ❑Yes ❑No If yes,attach a copy of the abatement schedule to this form. If no,the designating body is required to establish an abatement schedule before the deduction can be determined. We have also reviewed the Information contained In the statement of benefits and find that the estimates and expectations are reasonable and have determined that the totality of benefits is sufficient to Justify the deduction described above. Approved(signature and title of authorized member of designating body) Telephone number Date signed(month,day,year) Printed name of authorized member of designating body Name of designating body Attested by(signature and title ofaffesfe� Printed name of attester *If the designating body limits the time period during which an area is an economic revitalization area,that limitation does not limit the length of time a taxpayer is entitled to receive a deduction to a number of years that is less than the number of years designated under IC 6-1.1-12.1-17. A. For residentially distressed areas where the Form SBA/Real Property was approved prior to July 1,2013,the deductions established In IC 6-1.1-12.1-4.1 remain in effect.The deduction period may not exceed five(5)years. For a Form SB-1/Real Property that is approved after June 30, 2013,the designating body Is required to establish an abatement schedule for each deduction allowed. The deduction period may not exceed ten (10)years. (See IC 6-1.1-12.1-17 below.) B. For the redevelopment or rehabilitation of real property where the Form SBA/Real Property was approved prior.to July 1,2013,the abatement schedule approved by the designating body remains In effect.For a Form SBA/Real Property that is approved after June 30,2013,the designating body Is required to establish an abatement schedule for each deduction allowed.(See IC 6-1.1-12.1-17 below.) IC 6-1.1-12.1-17 Abatement schedules Sec.17.(a)A designating body may provide to a business that is established In or relocated to a revitalization area and that receives a deduction under section 4 or 4.5 of this chapter an abatement schedule based on the following factors: (1) The total amount of the taxpayer's investment in real and personal property. (2) The number of new full-time equivalent jobs created. (3) The average wage of the new employees compared to the state minimum wage. (4) The infrastructure requirements for the taxpayer's Investment. (b) This subsection applies to a statement of benefits approved after June 30,2013. A designating body shall establish an abatement schedule for each deduction allowed under this chapter- An abatement schedule must specify the percentage amount of the deduction for each year of the deduction. An abatement schedule may not exceed ten(10)years. (c) An abatement schedule approved for a particular taxpayer before July 1,2013,remains in effect until the abatement schedule expires under the terms of the resolution approving the taxpayer's statement of benefits. Page 2 of 2 Filed in Clerk's Office TAX ABATEMENT REPORT SEA' 19 2018 TO: SOUTH BEND COMMON COUNCIL KAREEWA_k F(_UVLER NS ,!RI FROM: ANGELINA BILLO CITY CLERK,SOUTH BE °"°'-° SUBJECT: REAL AND PERSONAL PROPERTY TAX ABATEMENT PETITION FOR: National Distribution Centers, LLC DATE: September 19,2018 On Monday September 17r'', 2018, a petition from National Distribution Centers, LLC was received and subsequently filed with the City Clerk for real property tax abatement consideration for property to be located at the intersection of Dylan Drive and Parkland Drive, South Bend, IN. 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. j 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 ➢ Construction of the approximately 232,000 sq. ft. new warehouse and logistic s distribution building ➢ Building is designed as a concrete block/precast masonry construction, with 32' clear ceiling heights; cross dock design and office space 5,000 sq. ft. ➢ $14,000,000 private investment in the building construction and land purchase ➢ A parent company, NFI Industries, is a leading international third-party logistics ' provider offering services in distribution, transportation, logistics and real estate. NFI operates more than 40 million square feet of distribution and logistics real estate and employs more than 10,000 people throughout the US and Canada. ➢ The project is precipitated by the strong growth of the company's client base which requires a significant expansion. The current subleased facility on Sample Street in South Bend is inadequate. ➢ The company has considered locations in South Bend as well as east central Indiana (I-69 corridor) which would be more centrally located to expand its distribution and fulfillment commitments for product delivery in the upper Midwest (IN, OH,MI&IL) an&possibly in KY and MO. ➢ Estimated taxes being paid during the nine-year abatement period—$1,138,755 ➢ Estimated taxes being abated during the nine-year abatement period—$1,675,590 t E EMPLOYMENT EWPACT Per the petition, currently,there are 108 employees with an—$4.1 million annual payroll. The average hourly wage is $18.25. The company's commitment is to retain all existing jobs. ABATEMENT QUALIFICATION 1. A review of the tax abatements previously granted, finds that the petitioner has not been granted or associated with any previous abatements. 2. 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