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HomeMy WebLinkAbout05-24-04 Community & Economic Development eommittez SP tt: ,. Cf_! _ .. •L•!L_ •r 1L • ,.�.� The May 24, 2004 meeting of the Community and Economic Development Committee was called to order by its Chairperson,Council Member Roland Kelly at 4:07in the Council Informal Meeting Room. Persons in attendance included Council Members Dieter,Pfeifer,Kelly,Puzzello,Varner, Kuspa,Coleman,Kirsits and White;Mayor Stephen J. Luecke, City Clerk John Voorde, City Attorney Charles Leone,Terry O'Brien, Community and Economic Development Director Sharon Kendall, City Controller Rick 011ett,Ray Konc,Dan Stikowski,Phil Panzica,Gladys Kopola,John Cower,Police Chief Thomas Fautz,Robert Henry,Michael Beitzinger,Randy Rompola,members of the South Bend Fire Department,Tiberius Mihalache and Kathleen Cekanski-Farrand,Council Attorney. Council Member Kelly noted that the first item on the agenda was to review Bill No. 04-52 which is a proposed resolution which would designate the property located at 3902 West Sample Street as an economic revitalization area for purposes of a five(5)year personal property tax abatement for Hubbell Electrical Products,a division of Hubbell,Incorporated(Delaware). Mayor Luecke made the presentation. He began by introducing the new Executive Director of Community and Economic Development, Sharon Kendall. Terry J. O'Brien,an Economic Development Specialist with the Department of Community& Economic Development reviewed his report dated May 17,2004(copy attached). He noted that the petitioner proposes to purchase manufacturing equipment to relocate a steel box line from Arden,North Carolina to South Bend. The project is estimated to be$5,000,000. No new full-time jobs would be created however the project will retain 260 full-time jobs with an annual payroll of$13,500,000. The report concluded that the petitioner meets the qualifications for a five(5)year personal property tax abatement under Section 2-84.2 of the South Bend Municipal Code addressing tangible personal property tax abatement. Mr. John Cower,Vice-President of Hubbell Incorporated made the presentation. He noted that they have operations located in England, Scotland,and St. Louis. When he was hired he was to close the RACO operation,however management focused on major competitive restructuring of operations in the hope of regaining work and retaining jobs at this facility. They focused on work skill enhancement,work reorganization, and facility improvements all of which are aimed at expanding work and employment in South Bend During their turn-around they have gone from a 4-day work week with limited hours to significant increased work-days and more lines being added. He noted that the employee,manufacturing,and warehousing plans which have been implemented are further addressed in the handouts. All of the initiatives in the restructuring of the South Bend operations have focused on internal and external growth opportunities. He noted that they have worked closely with the unions who have supported the new initiatives. Ray Konc,President of the local union representing the workers at the South Bend plant noted that he is a 2nd generation worker at the plant,with his father having worked there for 33 years. Committ . �omnzwzit� and Economia EVtfofimunt eommittzz -may 24. 2004-fraga 2 They have worked well together and requested the support of the Common Council on this tax abatement request. Dan Stikowski,the Skilled Trades Chairperson of the local union noted that he represents 44 skilled laborers who are all in support of this tax abatement request. There was no one present from the public to speak against the tax abatement request. Following discussion, Council Member Coleman made a motion, seconded by Council Member Pi»zello that Bill No. 04-52 be recommended favorably to Council. The motion passed. Council Member Kelly then called for a report on Bill No. 04-53 which would designate the property located at 1218 and 1226 South 34th Street as a residentially distressed area for purposes of a five(5)year residential real property tax abatement request for Tiberius Mihalache. Terry J. O'Brien,an Economic Development Specialist with the Department of Community& Economic Development reviewed his report dated May 17,2004(copy attached). He noted that the petitioner proposes to construct two(2)single family homes each of 1,450 square feet. The estimated value of the project is $200,000. The report concluded that the petitioner meets the qualifications for a five(5)year personal property tax abatement under Section 2-77.lof the South Bend Municipal Code addressing single family real property abatement. The petitioner,Tiberius Mihalache,made the presentation. He noted that he is replating three (3)lots which are currently 44' x 120' so that there would be two(2)lots of 66' x 120'. He circulated pictures of the surrounding homes in the area. He noted that this will be a good investment in the Riverpark Neighborhood. No one from the public spoke in favor or in opposition to the Bill. Following discussion, Council Member Coleman made a motion,seconded by Council.Member Kuspa that Bill No. 04-53 be recommended favorably to Council. The motion passed. Council Member Kelly called for a report on Bill No. 04-54 which would designate the property located at 5550 West Cleveland Road as an economic revitalization area for purposes of a seven (7)year real property tax abatement for USF Holland, Inc. Terry J. O'Brien,an Economic Development Specialist with the Department of Community& Economic Development reviewed his report dated May 19,2004(copy attached). He noted that a new distribution center is proposed. This would include the construction of a 63,000 square foot center on 26.43 acres located by the Indiana Toll Road,Cleveland Road and Mayflower Road. . The report concluded that the petitioner meets the qualifications for a five(5)year personal property tax abatement under Section 2-83 of the South Bend Municipal Code addressing warehouse development city-wide. eommitt Aloat: Mr. Robert Henry with corporate offices at 404 South Francis made the presentation. He noted that they have been in business thirty(30)years. The current terminal with 54 doors has 20-25 trucks waiting every night to get in,therefore there is an urgent need for the new construction. Site engineering is taking place and the construction would be directly across from Ameritech. The project tallied up 528 points under the city's new tax abatement program. The Council Attorney noted that on page 2 of the resolution in Section III there is a specific reference to the Memorandum of Agreement. Similar language will be included in future resolutions which acknowledge that the petitioner and the city are entering into a contractual arrangement. No one from the public spoke in favor or in opposition to the Bill. Following discussion,Council Member Kuspa made a motion, seconded by Council Member Coleman that Bill No. 04-54 be recommended favorably to Council. The motion passed. Council Member Kelly called for a presentation on Bill No. 04-55 which is a resolution providing for prelimina approval of the issuance of bonds for the purpose of providing certain economic development facilities. Randy Rompola,a local attorney,made the presentation on the inducement resolution for the construction of an airfreight terminal for Airborne Express/DHL near the South Bend Regional Airport. The project will retain 88 jobs and create 5 new jobs. Attorney Kenneth Fedder noted that this is not a general obligation bond and that section 6-10 of the resolution set forth the language protecting the City of South Bend from any liability. Phil Panzica,a local architect,with offices at 422 East Monroe noted that this is his company's 50th year of service to the community. He spoke in favor of the Bill which will be located off of Lathrop. He added that the structure will have 48,750 square feet and will have DC-9 jets in service at the facility. Council Member Coleman noted that this location will be near Rosetta as a leased facility. No one spoke against the Bill. Following discussion, Council Member Puzzello made a motion, seconded by Council Member Coleman that Bill No. 04-55 be recommended favorably to Council. The motion passed. Council Member Kelly then invited Michael Beitzinger,Assistant Director of the Division of Economic Development to review the 2003 Tax Abatement Annual Report dated May 19,2004 (copy attached). He noted that the report is divided into five(5)parts: Tax Revenue Impact, General Information,Employment Impact,Tax Delinquencies, and Approved Abatements earizmillzz c zkozL: During 2003. Among the information highlighted included the fact that 95%of those receiving tax abatement are in compliance. There was a$62.5 million impact in new assessed value and $2.5 million paid in new taxes. 1,878 new jobs were created in the 63 real tax abatements and 39 personal tax abatements. There were 27 residential real property tax abatement approved resulting in 206 new homes with a total investment value of$34.5 million. The Council Attorney inquired whether any of this information is posted on the City's website, noting that with so much mis-information on tax abatement,that there is much positive information set forth in the report. Mr. Beitzinger stated that this information is not on the City's website and would look into it. Dr. Varner suggested that Mr. Beitzinger contact Bob Allen so that the information would be posted in such a manner so that it would be easily accessible. Dr. Varner also suggested that a possible point of reference would be"What is tax abatement all about?"as a topic on the City's website. Council Member Kelly noted that the idea to post the tax abatement report on the internet website was an excellent idea. There being no further business to come before the Committee, Council Member Kelly adjourned the meeting at 4:38 p.m. Respectfully submitted, Council Member Roland Kelly,Chairperson Community and Economic Development Committee KCF:kmf Attachments