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HomeMy WebLinkAbout6A (2)( 1� ( 0 RESOLUTION NO. 3020 A RESOLUTION APPROVING AN APPLICATION FOR REAL PROPERTY TAX DEDUCTION WHEREAS, I.C. 6 -1.1- 12.1 -2(1) provides that an application for property tax deduction may not be approved when the property is located in an allocation area as defined in I.C. 36- 7- 14 -39, unless the Redevelopment Commission which designated that allocation area adopts a resolution approving that application; and WHEREAS, the South Bend Common Council has received a petition for four (4) or five (5) years of real property tax abatement consideration from Lock Joint Tube, LLC for real property located at 1217 South Walnut Street in the South Bend Airport Economic Development Area, the legal description of which is attached hereto, marked Exhibit "A" and incorporated herein; and WHEREAS, this Commission declared the South Bend Airport Economic Development Area by Resolution No. 1222, adopted February 4,1994, and in the same resolution declared the South Bend Airport Economic Development Area, Allocation Area No. 1; and WHEREAS, the property located at 1217 South Walnut Street is located within the South Bend Airport Economic Development Area, Allocation Area No. 1; Zone; WHEREAS, the property located at 1217 South Walnut Street is located within the Urban Enterprise NOW, THEREFORE, BE IT RESOLVED by the South Bend Redevelopment Commission as follows: 1) The Commission finds that the application from Lock Joint Tube, LLC for four (4) or five (5) years of real property tax abatement consideration for property located at 1217 South Walnut Street in the South Bend Airport Economic Development Area, Allocation Area No. 1, should be and is hereby approved. 2) Should the Company receive the Enterprise Zone Investment Deduction under I.C. 6- 1.1 -45 for the same property, this Tax Abatement designation shall become null and void. The Company may not receive an economic revitalization area deduction if it receives an enterprise zone investment deduction under I.C. 6 -1. I - 45 for the same property. 3) That a copy of this resolution be forwarded to the South Bend Common Council to indicate the Commission's approval of the petition for real property tax abatement for Lock Joint Tube, LLC. Approved this 10th day of April 2012 at the regularly scheduled meeting of the South Bend Redevelopment Commission. SOUTH BEND REDEVELOPMENT COMMISSION Marcia Jones, President ATTEST: Donald Alford, Secretary EXHIBIT A LEGAL DESCRIPTION Description: A tract of land in the City of South Bend, County of St. Joseph, and State of Indiana, situated in the Northwest'/ of Section 14, and the Northeast'/ of Section 15, Township 37 North, Range 2 East, bounded by the following described line: Beginning at a point in the West line of Walnut Street, 1239.70 feet south of the South line of Sample Street, which point is 587.95 feet South of the South line of the Sanders and Egbert Tract, as conveyed by deeds recorded in Deed Record 118, Page 428 and Deed record 121, Page 320; thence on an assumed bearing of South 0 °00'49" East along said West line of Walnut Street, 479.91 feet; thence South 89'54'12" West, 725.03 feet; thence South 61'54'12" West, 42.91 feet: thence South 892332" West, 437.13 feet; thence North 00 00'49" West parallel with said West line of Walnut Street 504.26 feet, thence North 89 55'05" East, 1200 feet to the place of beginning. Tax Key No.: 18- 8021 - 084503 a/k/a 71- 08 -15- 276 - 003.000 -026 Address: 1217 South Walnut Street, South Bend, Indiana I200 COUNTY -CITY BUILDING 2.2.7 W JEFFERSON BOULEVARD SOUTH BEND, INDIANA 466oI -1830 PHONE 574/ 235 -9371 FAX 574/235-9021 CITY OF SOUTH BEND PETE BUTTIGIEG, MAYOR COMMUNITY & ECONOMIC DEVELOPMENT TAX ABA TEMENT REPORT TO: SOUTH BEND REDEVELOPMENT COMMISSION FROM: KATHY HAHN SUBJECT: PERSONAL PROPERTY TAX ABATEMENT PETITION AND REAL PROPERTY TAX PETITION FOR: LOCK JOINT TUBE, LLC; 1217 S. WALNUT STREET DATE: March 29, 2012 On March 29, 2012, petitions for personal property tax abatement and real property tax abatement consideration for property located at 1217 South Walnut Street were filed with the City Clerk by Attorney Richard Deahl, agent for Lock Joint Tube, LLC. Pursuant to Chapter 2, Article 6, Section 2 -77 of the Municipal Code of the City of South Bend, these petitions were 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 petitions (copies of which are attached), investigated the area, and makes the following combined report. PROJECT SUMMARY The company will invest between $8.0 and $9.0 million in the purchase and installation of new manufactu- ring, information technology, and logistical distribution equipment to expand its production capabilities at its Walnut Street facility. This equipment will increase the length, wall thickness, and width of steel tubing that can be manufactured as well as enhance the coating, weld capabilities, and overall quality control standards for production of finished goods. These increased capabilities will expand the types of products the Petitioner can manufacture and will expand its existing markets, plus open new markets such as automotive axles, roll -over production systems and other heavy structural applications. Total taxes abated during the five -year abatement period range from $285,808 to $329,933, depending upon the final amount the company will invest in the new equipment. The taxes paid will range from $663,675 to $706,631. Zone Inves1iRWj4Q'j�Wfi- This is a 10 -year deduction which covers 574/235-966o FAX: 574/235-9469 5741235-9371 value from new RE: Tax Abatements for Lock Joint Tube, LLC March 29, 2012 Page 2 investment, but requires the company to contribute 25% of savings to the Urban Enterprise Association. South Bend Redevelopment Commission The department recommends that should the company receive the UEZ designation, the Tax Abatement designation shall become null and void. The real property tax abatement petition describes new investment in two primary building projects. First, there will be the removal and reconstruction of a new and raised roof structure (raised from 15 feet to 40 feet) covering approximately 60,000 square feet of manufacturing space. Second, they will construct a new 30,000 square foot addition for additional manufacturing, storage, and shipping space. These real estate investments will cost between $1.0 million and $1.6 million. Please note that the contractor information (on the real estate petition) is largely unknown at this time although they do want to use MidStates Construction as the primary contractor, and they know that a prefabricated metal building (which is not available locally) will be a large purchase. Based on the preliminary information, they should qualify for a four or five year real property tax abatement. The term that they qualify for will be known by the date set for obtaining the confirming resolution. Based on a project cost of $1.0 million with a four or five year year term, the taxes abated would range from $34,436 to $40,871 based on the approved term. The taxes paid will range from $223,469 to $281,511. Based on a project cost of $1.6 million with a four or five year term, the taxes abated would range from $70,895 to $82,397 based on the approved term. The taxes paid would range from $258,514 to $329,364. EMPLOYMENT IMPACT Per the petitions, it is estimated that the projects will create seven to eleven new, permanent, full -time jobs within the first year of production representing a payroll of $210,000 to $330,000; and, the projects will maintain (56) fifty six existing, permanent full -time and no existing, part-time jobs representing an annual payroll of $2,300,000. ABATEMENT QUALIFICATION A review of the tax abatements previously granted finds that the petitioner has been granted or associated with (3) three previous tax abatements. Term /Type Resolution No. Date 5 -year personal property 3621 -06 08/14/06 5 -year personal property 3308 -04 03/08/04 10 -year real property 2952 -00 11/27/00 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 Airport Economic Development Area, which is a Tax Incremental Allocation Area; therefore, the petitions for personal property and real property must first be approved by the South Bend Redevelopment Commission. 4. A review of the South Bend Urban Enterprise Zone finds that the property is located in the Zone Area; therefore, it is recommended that should the company receive the UEZ designation, the Tax Abatement designation shall become null and void. The Company may not receive an economic revitalization area deduction if it receives an enterprise zone investment deduction under I.C. 6 -1.1- 45 for the same property. 5. A review of the Tax Abatement Ordinance No. 9394 -03 finds that the petitioner meets the qualifications for a (5) five -year personal property tax abatement under section 2 -84.2, Tangible Personal Property Tax Abatement. The real property project will qualify for a four or five year property tax abatement pending further information on the contractors.