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HomeMy WebLinkAbout09-23-19 Community Investment 4Sp13TH fie\ d w y PEACE 1865 OFFICE OF THE CITY CLERK KAREEMAH FOWLER, CITY CLERK COMMUNITY INVESTMENT SEPTEMBER 23, 2019 3:01 P.M. Committee Members Present: Gavin Ferlic, Sharon McBride Committee Members Absent: Regina Williams-Preston, Dr. Oliver Davis Other Council Present: Tim Scott,Jo M. Broden, John Voorde, Karen White Other Council Absent: Jake Teshka Others Present: Lisa Horton, Dawn Jones, Bob Palmer Presenters: Jitin Kain, Mike Noland, Andrew Kostielney Agenda: Update: South Shore: Jitin Kain- Interim Executive Director, Department of Community Investment Bill No. 19-57- Designating Real Property Tax Abatement for Five Corners, LLC Bill No. 19-59- Designating Real Property Tax Abatement for R. Ray Real Estate, LLC Bill No. 19-61- Designating Vacant Building Tax Abatement for 3602 Sample, LLC Bill No. 19-63- Designating Personal Property Tax Abatement for Kruger Plastic Products, LLC dba Springboard Manufacturing Update: South Shore: Jitin Kain- Interim Executive Director, Department of Community Investment Jitin Kain, Interim Director of City of South Bend Community Investment Department, with offices on the 14th floor of the County-City building stated, Quick overview of the South Shore project. As, it began in May 2017, the Redevelopment Commission and the County signed an MOU. The objective of this MOU was for both parties to work together to make the trip from Chicago to South Bend shorter. That can be done in two (2) ways. One (1) was for the County to INTEGRITY' SERVICE'ACCESSIBILITY JENNIFER.M.COFFMAN BIANCA L.TD&ADo JOSEPH R.MOLNAR CHIEF DEPUTY/DIRECTOR OF OPERATIONS DEPUTY/DIRECTOR OF POLICY ORDINANCE VIOLATION CLERK EXCELLENCE I ACCOUNTABILITY I INNOVATION I INCLUSION EMPOWERMENT 455 County-City Building 1227 W.Jefferson Blvd.I South Bend,Indiana 46601 I p 574.235.9221 I f 574.235.9173 I www.southbendin.gov ®CITY OF SOUTH BEND ' OFFICE OF THE CLERK assist with a double tracking project that's estimated at eighteen (18) million dollars. The Commission was to commit towards rerouting the tracks to the approach to the airport, and that was a twenty-five (25) million-dollar commitment. Subsequently, towards the end of that year in November,the City Council passed a resolution also in support of the double tracking project, and the impact that it would have on South Bend's economy of shortening the trip between South Bend to Chicago. Here are some of the changes. Over the last several weeks there's been communication between the City and County, as well as the State about redoing this MOU and developing a new MOU. So, this process is now underway. More details on the State mandate and how the Federal funding for this project, the double tracking project has been put together can be shared by Mike Nolan and Andy Kostielney. In this new MOU the County has asked the City to split the cost of double tracking. So, the cost of double tracking is 18.25 million. We expect the cost, the City, RDC, Redevelopment Commission would issue TIF bonds in the amount of 9.125 million. The County would commit the same amount, 9.125 million towards the cost of the station, where the station and its destination is made and the location is determined, the County would make City whole by committing that amount towards the station and I think that's important to note. We are making progress on this MOU, but we've also asked NICTD to step in and offer a commitment for twenty (20) years, which they have agreed to have a station in South Bend for twenty (20) years. So, our MOU that is now in the process of getting approval through the City's Redevelopment Commission says that this MOU's only contingent on NICTD signing a twenty (20) year commitment towards maintaining a station in South Bend. Mr. Kain continued, That's a separate agreement that will go to NICTD and perhaps Mike Nolan can share a couple of things about that. The issuance schedule for the bond which we are contemplating would really begin with the Redevelopment Commission meeting which is on October 26th, and then the Commission would set a date for public hearing. Subsequently, there would be meetings for the Redevelopment Authority. Then the City Council would hear the bond resolution on October 28`h. Following the October 28th meeting, November 14th is when the RDC and RDA would meet again to adopt resolutions authorizing the issuance of the bonds. The bonds would then be issued in December 2019. Just a quick update on the study. As you know,the City's been working with ACOM to do further engineering analysis on the downtown South Shore station. As you know, the Mayor announced last year that this work is underway. The work essentially involved three (3) components. Survey work along the routes to downtown, structure analysis with all of the structures along the route and then coordination with Norfolk Southern because they have maintained more civil ridership along that route. Much of this work has been completed. The structure analysis is wrapping up, but the survey work has been done in coordination with Norfolk Southern. ACOM is also developing an economic impact analysis of the airport cargo master plan project. As you know, this is something that came after the five (5) sites that the City had studied, addressed and looked at the economic impact. This came later, so now,this is being added to that previous economic impact analysis.We expect both of these studies to be completed this fall, and then we will be back to you with more updates. With that, I'd like to invite Mike Noland to share a few details about the Federal funding. Mike Nolan, 2711 Floral Trail, Long Beach, IN, stated, Thank you for having me here today, and I'm happy to share with you where we are with the double tracking project. Right now, it's about a 420-million-dollar project. It encompasses a twenty-five(25)mile section between Gary, IN and EXCELLENCE I ACCOUNTABILITY INNOVATION I INCLUSION EMPOWERMENT 455 County-City Building 1227 W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 I I D574.235.5567 www.southbendin.gov 2 CITY OFSOUTH BEND OFFICE OF THE CLERK Michigan City, IN, where primarily we're single track territory. We'll be adding a second track along the entire route in that area with a number of what we call high speed cross overs so trains can go from one(1)track to another,back and forth. Basically,and essentially passing lanes.We'll be upgrading three (3) stations so that they have high level platforms like we have here at the airport. So, passengers can board at level. So, it's positive not only for riders with disabilities, but for those who want to take bikes. It also speeds up the ingress and egress tremendously. So,there's a number of reasons why this section of track of twenty-five (25) miles is important to the South Bend community, because it's a bottleneck until we get to Chicago. So, it's a two (2) part process that we have to try to speed up the trains from South Bend to Chicago. Our goal is ninety (90) minutes, ninety(90) miles. The first (1st) part is to do double tracking. The second (2nd) part will be figuring out an alternative location to going into the eastside of the airport. So, both of those things are necessary in order to get to that ultimate goal. This will get us to about an hour and forty-five minutes to Chicago,and the remaining time savings would be whatever decision is made on the relocation of the airport. From a progress stand point, we submitted to the Federal Government in June, a financial plan and a request to enter the engineering phase of the Federal Governments Capital Investment Grant process.The Fed's originally started off in a fifty-fifty(50- 50) share mode. The new Administration has decided they'd like to see a higher local share. So, they've asked us to come up with sixty-two percent (62%) of the funds on this project. So, the State of Indiana share has gone up. Initially, the ask of the Counties was 18.25 million. The State came up with the other half of that amount. So, now we've had to come up with additional funds and I'll leave it up to my colleague here from the Indiana Finance Authority, Mark Pasquarella to describe what the State did to address that issue. We submitted our financial plan and request to enter engineering in June. We hope to hear a decision by the end of this year,which would include a project rating. Mr. Noland continued, We expect a medium-high project rating, which is one (1) of the higher g � ratings the Federal Government will give with these kinds of projects. Our goal is to start construction in 2021 and revenue service in 2023. Why is it important in this area? Well, for one (1)thing, it will triple our ridership out of South Bend. South Bend becomes part of the commute. Now, it's at the longer end of the commute,but it still becomes part of a commuter's travel to and from Chicago. If you look across the lake over in Milwaukee, when Amtrak drove it's time down, ninety (90) miles, they got down to about an hour and a half(1 '/2). They're now serving about eight-hundred and fifty thousand (850,000) rides a year to and from Chicago. There are people who commute. There are also people who go in two (2)or three(3) days a week and it strengthens the business communities. Its a job connector. As much as it is a connector for people who are commuting to jobs, it's also a business to business connector. So, both economies in Milwaukee and Chicago thrive, and we can see the same thing here for South Bend. In addition to that, a lot of times when you have, and I've heard this from over at Notre Dame when they talk about recruiting professionals and professors to the campus, they always talk about how when they recruit for their positions, but the spouse or the partner that is coming along, the question is, well what do I do?Well,with faster access to Chicago, and it's the third largest economy in the country, that opens up an entire new job market as you're trying it for recruiting tools, as you're trying to attract new talent here to the South Bend area. So, we're excited about this project. We're looking forward to taking it to the next step. One (1) of the things that we need to do is complete our financial plan. That financial plan calls for the four (4) counties to make their contributions one EXCELLENCE ACCOUNTABILITY INNOVATION INCLUSION EMPOWERMENT 455 County-City Building 227 W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 TTD 574.235.5567 www.southbendin.gov 3 CITY OF SOUTH BEND OFFICE OF THE CLERK hundred-twenty(120)days after the Indiana Finance Authority passed the finance plan which was in June. So, at this point and time, I'm going to turn it over to Mark Pasquarella whose joined us today from Indianapolis to talk about that aspect of it, and I'll certainly be here to answer any questions you may have. Mark Pasquarella, Indiana Finance Authority, One (1) North Capitol Avenue, Suite 900, Indianapolis, IN 46204, stated, So, as Mike was eluding to, I come here from the Indiana Finance Authority because we represent the State portion of the funds that are going to be coming in. So therefore, we wanted to come up here to (A), to kind of give you just the big picture of how this project is going to be financed. (B), to also go through the approvals that were necessary. Also, to talk about the importance of the project.We'll start first with the funding of the project. So,to give a big picture,you really have three(3)major funding sources. You have what we deem as the local share, which are the counties. Saint Joseph County and LaPorte County, as you are well aware of Then there's the State portion that's coming in, and then there's the Federal portion. When this project originally started, we were looking at a fifty-fifty (50-50) split between the Federal Government, and then the locals and the State. However, as Mike eluded to, they moved the ball if you will, and wanted to see more of an over match, which would be sixty-two percent (62%) coming from the locals, which would be the locals and then the State as well, and then thirty-eight percent (38%) coming from the Federal Government. Obviously, it lessens the amount of money that they are putting into the project. This is not Indiana specific. This is actually just nationwide. In order to do that, as you can imagine with the way that the math and the percentages work, that means more money had to be kicked in. So, at that point, the State really stepped up and within two (2) weeks we were able to get the legislation down in Indianapolis. I'm sure several representatives from up here had a big say in that to be able to approve an additional $205 million dollars to be put into this project and the Westlake project.That was very important because at that point that is just going to be cash contribution coming in, and that's what enabled us to close the funding gap and allow us to come here and say we're not asking the counties for any additional funds. Mr. Pasquerella continued, So, the amount that we originally started out at, the 18.25 million for each county will stay at the 18.25 million and then the State of Indiana funds will come in. The other thing that I would like to note is that it was supported throughout the State. That was another thing that I thought was really interesting. It wasn't just the localized portion that voted for it. The entire State, basically, voted for it. So, there is a lot of momentum and a lot of excitement in Indianapolis about this project. What that ends up doing is that the locals will come in at about$73 million and the State will be coming in at about $180 million. Originally, it was supposed to be fifty-fifty(50-50).Again, I say that because that's how much excitement is coming from the whole state for this project. Another question that I often get is ok, once we put the money in, meaning local Saint Joseph, LaPorte, which of course, includes Michigan City and then South Bend, when that money comes in we all just want to make sure that people understand that money will be protected. So, as that money comes in, it will be placed into a trust account for monies that can only be used for this specific project. So,the money can't be used for anything else. I always think that's important when we're dealing with this amount of money. So, the last thing that I wanted to talk a little bit about is the support from the Governor and from the State, but I think really, when we start talking about the passing of the $205 million, I think that really says all there is to say EXCELLENCE I ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building 227 W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 TTD574.235.5567 www.southbendin.gov 4 CITY OFSOUTH BEND OFFICE OF THE CLERK about it. There's a lot of excitement and a lot of support from Indianapolis. I just covered a lot of information, so I would be happy to take any questions. Mr. Andrew Kostielney, President of Saint Joseph County Board of Commissioners, with offices on the 7th floor of the County-City building stated, I'd like to give a little update from a County stand point as to where we are with the MOU and the funding. One(1)thing with the MOU is that the County is committing to the first (1st) $9 million dollars that gets spent. So, even now the money is getting prorated. So, in the event that the money gets returned, we would expend all of the$9 million dollars of the County's funds before we would spend any of the City of South Bend's money. So, that one(1) extra layer of protection. Since there is uncertainty as to where the station relocation could be, we kind of moved that off and thought it made more since for us to partner together on the initial spend for the double tracking and then come back and revisit where the station might be. Countywide where we are is, the County has passed, both through our Redevelopment Commission and through our County Council,the bonding phase. So that funding should be in hand and to the State by the middle or the end of October, and then the Board of Commissioners passed the MOU at our meeting last Tuesday, so that's waiting to go back to the City of South Bend. One (1) of the questions that we always answered for our Council and other folks is why are we spending local tax dollars on a project where there is no money being spent here in Saint Joseph County? My answer to that is,it's kind of like the US thirty-one(31)roadway from here to Indianapolis. Even though the money is not spent directly here, we certainly get one of the largest benefits. In fact, I feel kind of bad saying this out loud,but LaPorte and Saint Joseph County get such a better return on this investment than Lake and Porter County. They're putting in the same 18 million dollars and they're not getting much investment. They're ridership is not going to be increased because of the work that's being done in LaPorte County whereas the ridership here in Saint Joseph County will. Mr. Noland stated, Jitin asked me to talk about the twenty(20) year commitment. It's a minimum twenty(20) year commitment that we are bringing to the Safety Board that Andy serves on at the end of September. I anticipate that there will be no issues passing it. I mentioned it at our last Board meeting, and they know it's coming. It's merely a commitment that will run service for at least twenty(20) years. In addition to that, once you put Federal dollars into an investment, if you stop service you have to pay that back. So, in addition to the commitment which we'll make, there's also a financial obligation back to the Federal Government. So, it's insurance that we give to Michigan City. When they allowed us to put a second track through the middle of downtown Michigan City, we committed to keeping service there for twenty (20) years, and so then we're doing the same thing for South Bend. That's where that originated. Councilmember Tim Scott stated, Thank you. Today, in the paper, Porter and Lake County had their Economic Development Zone agreement to take advantage of the Federal Funding. Are we missing out on anything on the Federal Funding between us and Lake County? Mr. Noland replied, I believe that it's the Economic Development Zone, their MPO, NRPSY is now able to tap into it. It really has nothing to do with our project. It's a separate economic development zone that NRPSY has. I don't know if MACOG has the same opportunities as well to provide for something like that. EXCELLENCE I ACCOUNTABILITY INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building 227 W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f574.235.9173 1 11)574.235.5567 www.southbendin.gov 5 ®CITY OF SOUTH BEND OFFICE OF THE CLERK Mr. Kostielney stated, We do have transit development possibilities out by the airport. So, if the station was where the track comes in there, that is a possibility of the way the station ends up looking. With the double track project as well, we also put language in so you could capture revenues generated in those areas to be spent. Committee Chair Gavin Ferlic stated,seeing no more questions, and this is only an update,we will close this portion and move on the Bill No. 19-57. Bill No. 19-57- Designating Real Property Tax Abatement for Five Corners, LLC Dan Buckenmeyer, Director of Business Development for the City of South Bend Community Investment Department,with offices on the 14th floor of the County-City building stated, I'm going to very quick,and let some of our petitioners, several of which are here, several will be presenting today. Just a few things in broad scope. One (1), Councilmember White asked me to designate between what is a tax phase in and what is a tax abatement. Really, completely interchangeable. I believe it was former Councilmember Varner that asked us to make delineations when it's a phase in and it's not one-hundred percent (100%) across the board. For example, the amount of taxes abated diminishes over a year. So, that's the reason for the term phase ins. In this case, we've got a great range of different types of companies that we're speaking with and representing today all over town.West,Northwest, Southwest,North downtown and south Ignition Park.Over 10 million dollars in private investment represented by these today, and over two-hundred and forty (240) jobs represented. So, I'm going to dive right into them. The first one(1) we're going to talk about is Five (5) Corners, LLC a real property tax abatement or phase in. It is representative of this building,which will be a 4 million dollar plus investment. It will bring in eighty-seven(87)indirect jobs.Because we have the developer here,the company who is a proposed tenant is not represented here, but I can tell you that they are a South Bend native start up. We are thrilled to see them building headquarters here. We were a little worried that they might become a flight risk to Indianapolis because they've got some employees and management down there. So, we're thrilled to see them build kind of a new headquarters here in town. Just at a very high level, a seven (7) year real property tax abatement will be saving them about four-hundred seventy thousand ($470,000)dollars over the course of that,but they'll still be paying about two-hundred sixty-three thousand dollars ($263,000) during the abatement. So, I'll stop there and allow our petitioners to come up and tell you about the project. Mo Miller, 814 Marietta Street, South Bend, IN stated, I represent Five Corners, LLC. We are very excited to have this opportunity. This is a point six five (.65) acre parcel located south of Eddy Street Commons, at the intersection of Eddy Street and South Bend Avenue between Corby and Howard Street. After owning and maintaining these parcels for over fifteen(15) years, we're very excited to be partnering with Five Corners, LLC to construct this office building that will complement the architecture of Eddy Street Commons.This is the first viable project that has come to us in the whole time that Five (5) Corners has owned this property. We've been waiting for a very long time. We feel that we've been very good neighbors, maintaining the property, mowing the property etc., over a number of years. So, we're very excited to have this opportunity. The property has already been rezoned, and the site is supported by the NNRO. We believe that this EXCELLENCE I ACCOUNTABILITY INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building 227W.Jefferson Bvld South Bend.Indiana 46601 p 574.235.9221 f 574.235.9173 I I L)574.235.5567 www.southbendin.gov 6 CITY OFSOUTH BEND OFFICE OF THE CLERK project will jump start development at this intersection and offer opportunities to expand job growth in this corridor between the University of Notre Dame and downtown South Bend. Dur to the fact that construction costs are currently very high, and the very restrictive guidelines of the NNZO,that just adds additional building costs to this project. The site has also been quite difficult to develop due to its odd shape. We want to,with this project,attract startup companies so we need to keep the lease rates reasonable. We believe that this project will contribute not only to the commercial tax base, but also to the vitality of our City. For these reasons, we are asking for this tax abatement. And now I would like to introduce Pat Matthews, the developer to get into a little bit more of the details about the project, unless anyone has any questions for me. Councilmember Karen White stated, I just have one(1) question. Can you speak to, or maybe this is something for the developer but, the residential piece, and what that's going to look like? Also, as we are looking at rolling out our disparity study here shorty from the City, what are your plans to utilize minority contractors in the overall development? Mr. Patrick Matthews,52127 Fall Creek Drive, Granger, IN stated, I'll just cover a couple of bullet points, and then I'll follow up on all your questions. I'm one (1) of the project developers. This project will be a signature building, and complimentary to the Eddy Street corridor. Some highlights include twenty-eight thousand (28,000) square feet, with off street parking. Four (4) stories, two (2) residential units on the top floor. We're working with several proposed tenants. We're experiencing a high demand for office space from university-based research companies that have graduated from their incubator space in Innovation Park. This will be class A office space. It will be sufficient enough to house multiple companies with five (5) to thirty (30) employees in high tech and local university research. We expect these jobs to average sixty-five thousand dollars ($65,000) with a diverse group of employees representing the community as a whole. This is an exciting project, but there a plethora of hardships that we will encounter. The project will be difficult to build due to the unsightly, adjacent high power lines, which are not represented in this beautiful rendering. We're encountering additional construction costs due to the non-uniform shape of the parcel. It' a very tight triangle, and due to the shape of the building. Water retention will become an excessive cost due to the lot constraints. Underground utilities and easements further constrict the site and add additional time and cost to the project. Additionally, we're competing with other projects that have already received incentives from the City. This will be an owner-occupied building. This development will bring new companies and jobs to the area. By granting the tax abatement, this project will jump-start development on the southside of South Bend Ave. We will most likely be unable to proceed if we're unable to receive a tax abatement, and we appreciate your consideration. Did that answer your questions? Councilmember Karen White replied,Yes, it did answer the first part, and I appreciate that,but in terms of building the actual building, what is your commitment to using minority contractors? Mr. Matthews replied, The construction company will put out the bids to all available contractors who would like to bid on the contract. Committee Chair, Gavin Ferlic asked if there was anyone from the public wishing to speak either in favor of or against Bill No. 19-57. EXCELLENCE I ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building 227 W.Jefferson Bvld!South Bend,Indiana 46601 p 574.235.9221 f574.235.9173 TTD 574.235.5567 www.southbendin.gov 7 •CITYOFSOUTHBEND OFFICE OF THE CLERK Mr. Joseph Shabazz, 208 Rue Flambeau, South Bend, IN stated, We keep looking at these tax abatement applications, and we see where people are getting eighty-one (81) points for donating to a museum. That's almost triple of what you would get if you did targeted hiring, concentrating on minorities. For the past three (3) decades we have complained about how this is skewed for developers like yourself to go around us and use whoever you want. It's kind of tiresome, it's kind of tired. Committeemember John Voorde stated, The City has done a lot of work lately on identifying qualified contractors. Minority men and women, so you might want to make sure that you're contacting all of the potential contractors. Committee Chair Gavin Ferlic stated, I should note that Committeemember Sharon McBride has joined us,but we still do not have a quorum. So, all bills will go forward, but we cannot provide a recommendation at this time. Bill No. 19-59- Designating Real Property Tax Abatement for R. Ray Real Estate, LLC Dan Buckenmeyer, Director of Business Development for the City of South Bend Community Investment Department, with offices on the 14th floor of the County-City building stated, I'll note that I didn't highlight this in my last slide, but this is a vacant parcel. This next one (1) is on a vacant parcel. The previous one (1) was paying minimal taxes because it was vacant because it's just grass. This one is paying zero (0). So, we will be selling and then activating into the tax rolls what was formerly just a blank property. This one is exciting. It's a company that's been in South Bend for over sixty(60) years. So, second(2nd) and third(3rd) generation. In any event, it's going to combine a business that they've had down on Walnut and Western for a while, along with some others that have been purchased in the last year or so into a new forty-thousand ($40,000) square foot Light Industrial building at the corner of Indian and Kimbell, and what we call Ignition Park South if you will. It's located on the south side of the tracks. At least a 2-million-dollar private investment. Thirty-two (32) new and retained jobs there, but we know that Rob and his company is experiencing significant growth, and we're confident that there will be more. I know he did reach out to you to provide more detail. In a high level, the taxes that will be phased in or will be discounted is about two-hundred sixty thousand ($260,000) or two-hundred sixty-one thousand ($261,000), but he will be paying one hundred-twenty-three thousand ($123,000) as those taxes phase in over the eight (8) year real property tax abatement. I think that sums up the high level, and I'll let Rob jump in and share some more details on Masterbuilt. Rob Mahalik,President of Masterbuilt,325 South Walnut Street, South Bend, IN stated, So,we've been on Walnut Street for about going on sixty (60) years. I've been here for some equipment abatements,but last year we experienced some significant growth. I purchased the shares from my father's portion of the business. So, he had purchased it with a partner from someone else's father and that's why it changed families. Then,towards the end of last year, Precision Piece Parts was a long-standing business in Mishawaka. I met the owner, and he didn't have a succession plan. I acquired the assets of that business at the end of last year. One (1) in Mishawaka, and then the Walnut Street site. So, I need a plan to come together. The first time Dan and I spoke about this to keep us on the near west side. I have employees who bike to work from the west side. So,it would EXCELLENCE ACCOUNTABILITY INNOVATION j INCLUSION EMPOWERMENT 455 County-City Building 227W Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235 9173 TfD574.235.5567 w w.southbendin.gov 8 CITY OF SOUTH BEND OFFICE OF THE CLERK keep us in that community and also it wouldn't be too far from the Mishawaka employees that would stick with us. So, this is ideal for me,but it is my most expensive option. I acquired two (2) businesses within the past year, so this is my ideal scenario to create a center of excellence. I've worked as many angles as I can to reduce the amount of cost even in designing this with Purdue Technology Extension. So, I'm really hopeful that I can actually pull this off because we've experienced significant growth, and I see the potential for more, but right now we're limited at each site. So, if there are any questions at this time, I'd be happy to answer them. Councilmember Karen White asked, I'm looking at part of your application, you make mention that the majority of your employees currently are minorities and the majority of them are women. What is your average salary range for your employees? Mr. Mahalik replied, I think it's about twenty-two, when you take the full hourly rate, it's about ($22)dollars per hour. I projected in one(1)of the applications up to twenty-four($24)dollars per hour just because with more advancement in the equipment we're using. We're making more complex parts now on more complex equipment. So,we're investing in employees and raising the rates. Councilmember Karen White replied, Going back to this chart, I noticed that you don't have any African-Americans working there. Mr. Mahalik replied, We do in fact. Councilmember Karen White replied, Ok, maybe this is not correct. Mr. Mahalik replied, It's not correct. Even at Walnut Street. I will update that. Councilmember Karen White replied, Well, I'm very pleased with your salary range. Committemember Jo M Broden asked, Are you getting any assistance in terms of your training of these new individuals? Mr. Mahalik replied, Yes. So, we've worked with Purdue Technology Extension where I've been able to send a couple employees at different projects. We've had them visit into a LEAN event at Logan Street in Mishawaka to prepare for getting to a site and being able to lay out a LEAN operation prior to moving. So, we've had some significant support that's really helped us even right now. We've moved equipment around on Logan Street based on the Skies End event, and that's through Pathways. Committee Chair, Gavin Ferlic opened the floor for public comment to speak either in favor or in opposition of Bill No. 19-57. Mr. Shabazz stated, That's a Common Council issue the fact that people get more money for donating to the City to put an I Love South Bend sticker on their car than they get for achieving racial diversity. There's something wrong with that, and this is not the first time that we've asked the Council about that. I don't get why they do that. That's all I have to say. Committee Chair Gavin Ferlic asked if there was anyone else from the public wishing to speak. Seeing none, Committee Chair Gavin Ferlic stated, Again, we do not have a quorum. So, all bills will go forward, but we cannot provide a recommendation at this time. EXCELLENCE j ACCOUNTABILITY I INNOVATION INCLUSION EMPOWERMENT 455 County-City Building 227W.Jefferson Bvld,South Bend,Indiana 46601 p 574.235 9221 f 574.235 9173 TTD 574.235.5567 www.southbendin.gov 9 0CITY OF SOUTH BEND OFFICE OF THE CLERK Bill No. 19-61- Designating Vacant Building Tax Abatement for 3602 Sample, LLC Dan Buckenmeyer, Director of Business Development for the City of South Bend Community Investment Department, with offices on the 14th floor of the County-City building stated, This is not a greenfield, but a vacant building. A building down on Sample Street that's been vacant for quite some time. Some of you may know it as the former Jupiter Aluminum building. It's 3602 Sample Street. So just a few blocks west of Olive and Sample. Huge building. One hundred-eleven thousand (111,000) square feet. Their initial investment, So, this is their opportunity to create a foot print in South Bend. We're real excited about it.Where they are operating out of and surveying Indiana companies, in the RV industry and others is in Illinois. So, this gets them a lot closer to their customer base. We're thrilled that they've chosen South Bend over other options. These investments and jobs, we think are really just initial estimates as they ramp up and kind of cautiously look at our current economy and where the RV industry is going in the near term. Three hundred-fifty thousand ($350,000) dollar private investment. Twelve (12) new jobs to do warehousing and distribution. I'll let Chris talk about what they think the future might bring in terms of new potential manufacturing on that site or in that building. The five (5) year vacant building tax abatement will give them a discount of about $71,000 to $72,000 dollars in order to reinvest. There's a lot to be done in any building that's been vacant for as long as that has been. Retool and so on,but they'll still pay nearly ten-thousand($10,000) in taxes over the five(5) year period before they are at the full amount. So, I'll turn it over to Chris. Christopher Capsaskis, 808 North Central Avenue, Wood Dale, Illinois stated, I represent 3602 Sample LLC. A little bit about our company. I sent you all an email primer just because I know that we're on a tight time schedule. So, we're a RV and Marine parts manufacturer. So, currently we do our manufacturing in China, and our distribution headquarters and facility is in Wood Dale, Illinois currently. We're looking to move that operation here in our first phase,and then the second phase is actually to bring some manufacturing production line within a few years. As Dan had mentioned,our next building located there is over one hundred-ten thousand(110,000)square feet. It's been vacant for some time. It's going to require a lot of work and a lot of investment. The initial private investment there is just to get it semi-operational. The true figures over the lifetime of the building are going to be significantly higher. So, in order to move, we're going to need this investment just because currently our headquarters in Wood Dale, Illinois, we're going to be moving our whole operation, and as you know, a major part of our product line is RV products. From last year,the RV industry was down by twenty(20)percent unfortunately. So,as the industry is contracting,we're trying to expand. So,that causes some financial hardships, especially if we're going to be rebuilding a building of this size and this scope. Essentially, we're looking forward to pursuing this building,but we would need your help in order to make a significant investment like this. I'm not sure if you're exactly familiar with the Jupiter Aluminum building on Sample Street, but that general road there is an older industrial area. I believe it was built in the twenties (20's), most of the buildings there. This one's been vacant for quite some time, and time's really taken a toll on it. So, really, the truth of the matter is, if nothing is done somewhat soon to correct the condition that it's in, the building is just going to become unusable in a couple of years. So, if you have any questions for me, please feel free to ask. EXCELLENCE ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building 1227 W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 TTD 574.235.5567 www.southbendin.gov 10 CITY OF SOUTH BEND OFFICE OF THE CLERK Dan Buckenmeyer stated, You might recall, we did an abatement for Greysteel back in the February, March time frame, which was just a few doors down. So, this is the second (2nd) long vacant industrial building that's been reactivated on Sample Street. Committeemember John Voorde asked, Which one was that? Do you remember? Mr. Buckenmeyer replied, Thirty-nine(39). Twenty-ninth (29th). Committeemember John Voorde replied, Yeah, most of those buildings along there, I think were mostly Studebaker support businesses at one time, but how many people are employed in Wood Dale, Illinois? Mr. Capsaskis replied, So, employees would be six (6), and then upper management positions would be four(4). So, we're going to try to retain as many as possible on the move,but obviously, it is a two and a half hour(2 1/2)hour difference. So, people leaving their families and what not. I love it here. We do a lot of business here, and I'm always traveling here. So, I love the City, and I've seen it transform over the last few years. Committee Chair Gavin Ferlic asked if there was anyone from the public wishing to speak either in favor of or against Bill No. 19-61. Seeing none, Committee Chair Gavin Ferlic stated,the public portion of this meeting is now closed. Again, we do not have a quorum. All bills will go forward, but we cannot provide a recommendation at this time. Bill No. 19-63- Designating Personal Property Tax Abatement for Kruger Plastic Products, LLC dba Springboard Manufacturing Dan Buckenmeyer, Director of Business Development for the City of South Bend Community Investment Department,with offices on the 14th floor of the County-City building stated,This one is exciting as it brings a few different locations of a Michigan company to consolidate here in South Bend. This is not a real property tax abatement.They're leasing the space that they are going into. It is a personal property tax abatement. So, it's an abatement on capital equipment that is being purchased, about 4 million dollars of that. One hundred-twenty (120) new jobs will be retained or created here in town. They serve some markets where it makes it convenient for us and for them. Five (5) years is the norm for a personal tax abatement. In this case, we estimate that about $173,000 or $174,000 dollars will be saved allowing them to reinvest and create more of those jobs and so on. The taxes paid over that term will be about forty thousand($40,000)dollars. So,we have a few representatives,including the CEO of the parent company,Mr. Doug Constable. So, I'll let him say a few words. Mr. Doug Constable,2935 Windsor Road,Winston Salem,North Carolina, stated,First(1St)of all, thank you for your time today. We are excited about this move. We recently acquired, about two (2)years ago,a company called Kruger Plastics Products based in Bridgeman,Michigan with three (3) locations that are very disjointed, outdated and very inefficient. We put them as part of our bigger company which operates under the name of Springboard Manufacturing. So,if you see that name, that's just a DBA that we use for this. We have a total of about two hundred-fifty (250) employees in the country right now. All of our manufacturing is made in the USA, and we're determined to keep it that way as much as we possibly can. This particular phase will instantly, EXCELLENCE I ACCOUNTABILITY I INNOVATION I INCLUSION EMPOWERMENT 455 County-City Building 227W.Jefferson Bvld South Bend.Indiana 46601 p 574.235.9221 f 574.235.9173 I 10574.235.5567 www.southbendin.gov 11 CITY OF SOUTH BEND OFFICE OF THE CLERK day one of opening we'll have one hundred(100) employees here in South Bend in the Northwest portion of South Bend. Which we think will quickly grow to about one hundred-fifty (150) over the next twenty-four (24) to thirty-six (36) months. We do injection molding, so there is a big capital equipment need. The 4-million-dollar investment really just gets the doors open. We have an annual budget of about 2 million dollars to spend in that location every year just for maintenance, and that doesn't count the growth projects that we'll be going after. We've got one in particular in the med-device sector that we're very close to getting awarded that would be a significant investment by itself in addition to this significant job. So, the one (1) problem that we have is that it's a sizable facility, it's 165,000 square feet. One(1) of the biggest problems that we have at the facility that we were able to find here;the floor depth thickness is not sufficient to hold our machinery and the electric service is not sufficient to service our machinery. So, close to 700,000 or$800,000 dollars of that investment that we're going to make is just to jack hammer up the floor, pour deeper and put in electrical service that will meet the needs of our machines. I'd be happy to answer any questions. Committee Chair Gavin Ferlic asked if there was anyone from the public wishing to speak either in favor of or against Bill No. 19-63. Seeing none, Committee Chair Gavin Ferlic stated,the public portion of this meeting is now closed.Again,we do not have a quorum. So,all bills will go forward, but we cannot provide a recommendation at this time. With that, we are adjourned. Respectful Submitted, Gavin Ferlic, Committee Chair EXCELLENCE ACCOUNTABILITY INNOVATION INCLUSION EMPOWERMENT 455 County-City Building 227 W.Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 TTD574.235.5567 www.southbendin.gov 12