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Home My WebLink About06-27-05 Community & Economic Development Community and Economic Development Committee 2005 South Bend Common Council The June 27, 2005, meeting of the Community and Economic Development Committee was called to order by its Chairperson, Council Member Ann Puzzello at 4:17 p.m. in the Council Informal Meeting Room. Persons in attendance included Council Members Dieter, Pfeifer, Puzzello, Kelly, Varner, Kuspa, White, Kirsits and Rouse; Citizen Member Martha Lewis, Rita Kopala, City Clerk John Voorde, Tim Hernly, Jack Dillon, Don Inks, Tedd Schaffer, Mai Tran, Long T. Lam, Gerald F. Lerman, Sue A. and Thomas Kinnucan and Kathleen Cekanski-Farrand,Council Attorney. Council Member Puzzello noted that the committee consists of Citizen Member Martha Lewis, Council Members Kuspa,Kelly,Kirsits and herself. Council Member Puzzello called for a presentation on Bill No. 05-78 which is a five (5) year personal property tax abatement request for Triangle Machine,Inc. located at 3702 West Sample Street, Suite 1125 in South Bend. Tedd Schaffer, an Economic Development Specialist, reviewed his report dated June 14, 2005 (copy attached). He noted that the petitioner manufacturers precision machined components. They are interested in purchasing one (1) Citizen Cincom L32 Type VII which costs approximately $253,000. The report concluded that the petitioner meets the requirements for a five year residential tax abatement under Section 2-84.2 of the South Bend Municipal Code addressing tangible personal property tax abatement. He then introduced Mai Tran and Long T. Lam to the Committee. Mai Tran stated that there company utilizes precision machinery for the automotive and medical industries. They are in the top 5% of this industry with regard to accuracy and quality. The new machine will help them be more competitive and work faster. Council Member Rouse inquired about the information set forth on page 4, question number 18 addressing minority employment. Ms. Tran stated that both she and Long T. Lam are employees, plus one part-time employee. They advertised in the South Bend Tribune for qualified employees. Council Member Rouse complimented them for their dedication in bringing development to the city. Council Member Kirsits made a motion, seconded by Council Member Kelly that Bill No. 05-78 be recommended favorably to Council. The motion passed. Council Member Puzzello then called for a presentation on Substitute Bill No. 05-76 which would reconfirm the economic revitalization area deductions for Steel Warehouse Co, Inc. and its affiliates. She noted that there are three (3) separate reports from the Department of June 27,2005 Community and Economic Development Committee meeting of the 2005 South Bend Common Council -page 1- � L Community and Economic Development which she then asked Mr. Schaffer to briefly summarize. Tedd Schaffer, an Economic Development Specialist, first reviewed his report dated June 17, 2005 (copy attached) addressing "Real and Personal Tax Abatement Designation Increase for Steel Warehouse Co., Inc." He noted that the Council adopted Resolution No. 3381-04 on September 27, 2004 for a real property abatement addressing a 25,000 square foot addition to their operations at 2722 West Tucker Drive which would expire on September 13, 2006. he then summarized his June 17, 2005 report (copy attached) addressing the personal property tax abatement originally adopted on September 27,2004 (Resolution No. 3380-04) which addressed new equipment ranging from $638,000 to $$1,300,000 for their operation located at 2722 West Tucker Drive. The last report summarized was also dated June 17, 2005 and referenced the 5-year personal property tax abatement approved by the Council on September 27, 2004 (Resolution No. 3382-04) for the acquisition and installation of new machinery costing between $935,000 to $2,000,000. Timothy D. Hernly,an attorney with offices at 600 1st Source Building in downtown South Bend noted that he has filed three (3) amended Statement of Benefits forms along with the Substitute Reconfirming Resolution in light of the new investment by his client. Gerald F. Lerman of Steel Warehouse stated that if the resolution is adopted that their company will be able to purchase a new laser which will have one (1) new operator per shift; new plasma equipment which will have three (3) new operators per shift plus administrative personnel. As of 12-31-04 at the Riverside operation, they have gone from 11 employees to 34. Mr. Lerman stated that he believes this trend will continue since there are opportunities in this particular area. The Council Attorney noted that meetings were held prior to today's meeting with Don Inks, Tedd Schaffer,Janice Talboom, Council Member Pnz7ello and herself. In response to a question from Council Member White, the Council Attorney state that she also had numerous discussions with Mr. Hernly and that the substitute bill is the result of all of those discussions. Council Member Rouse thanked Mr. Lerman for his outstanding verbal report, and that this company is state of the art. However he noted that he does not have copies of signed SB-1's. The Council Attorney suggested that Mr. Hernly double check with the Office of the City Clerk to make sure that there are three(3) signed SB-1's on file before tonight's 7 p.m. meeting. Citizen Member inquired what the base pay would be for new employees. Mr. Lerman stated that each person's base pay would be $27,000, with the opportunity to earn gain share which could add up to 40%to their pay plus benefits. Dr. Varner stated that Mr. Lerman and his company are a great example of knowing when to purchase new equipment and keep it running to the max for the greatest amount of efficiency. June 27,2005 Community and Economic Development Committee meeting of the 2005 South Bend Common Council -page 2- , • Don Inks spoke in favor of all three(3)tax abatement resolutions coming before the Committee. He noted that Steel Warehouse is a long-term investor in our community which may have re-invested the most in South Bend. All three (3) abatements represent our community very well. Council Member Kuspa then made a motion, seconded by Council Member Kelly that Substitute Bill No. 05-76 be recommended favorably to Council. The motion passed. Council Member Punnello then called for a presentation on Bill No. 05-77 which would extend a five (5) year personal property abatement for Hoosier Tank & Manufacturing, Inc which is located at 1710 North Sheridan Street(copy attached). Tedd Schaffer reviewed his report dated June 15, 2005 (copy attached). He noted that the Council adopted Resolution No. 3213-03 on July 28, 2003; and that a reconfirming resolution was approved on April 11, 2005, in light of their new location. This resolution would extend the abatement for one(1)year. Thomas Kinnucan made the formal presentation. He noted that Hoosier Tank has continued to grow and gain market share in the trailer industry. As a result they needed more manufacturing space. At the end of 2004, the estimate of$250,000 of new equipment was actually $394,000 through February 28th. An additional $165,000 of equipment was put in place to date. Hoosier Tank anticipates spending an additional $400,000 in the next year. The year extension would permit all purchases to be made prior to July 28, 2006. They have grown from 54 employees to 71 employees with 8 more in training. Council Member Kelly made a motion, seconded by Citizen Member Lewis that Bill No. 05-77 be recommended favorably to Council. The motion passed. Under miscellaneous business, the Council Attorney noted that at the last Committee meeting Dr. Varner suggested that there be a process developed to help assure that accurate information on residential tax abatement be given out by developers to prospective home purchasers. Draft documents have been discussed, however they are still be revised. She will continue to work with Council Members Varner and Puzzello and the Department of Community and Economic Development on this. The Administration has agreed to update developers of this. There being no further business to come before the Committee, Council Member Puzzello adjourned the meeting at 4:47 p.m. Res■- tfully subm -d, MembeAnn 'di-llo Chi rson Community and Economic Development Committee KCF:kmf Attachments June 27,2005 Community and Economic Development Committee meeting of the 2005 South Bend Common Council -page 3-