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HomeMy WebLinkAbout03-22-04 Community & Economic Development South Bend Common Council Community and Economic Development Committee Minutes from Meeting of March 22, 2004 The March 22, 2004 meeting of the Council's Community and Economic Development Committee was called to order by its Chairperson,Council Member Roland Kelly,at 3:30 p.m.in the Council Informal Meeting Room. Persons in attendance included Council Members Dieter, Pfeifer, Kelly, Puzzello, Varner, Kuspa,Coleman,Kirsits and White. Among those also present were City Clerk John Voorde,Attorney Kenneth Fedder, Attorney Randy Rompola, Michael Beitzinger (Community and Economic Development), Jim Frick (South Gateway Association), Terry Bland (South Bend Tribune), and Aladean M. DeRose substituting for Kathleen.Cekanski-Farrand, Council Attorney. A full quorum of the Committee existed in that all members were present, namely, Council Members Kelly, Kirsits, Coleman, and Kuspa. A. Presentation on Bills Numbered 04-35 (Waiver) and 04-36 - Tax Abatement for real property located at 3310 William Richardson Court- Trinet Essential Facilities X, Inc.,for the benefit of Cequent Towing Products,Inc. The Committee Chair called for a presentation of Substitute Bills 04-35 and 04-36. Mike Beitzinger from the City Division of Economic Development informed the Committee that the tax abatement is for real property located at 3310 William Richardson Court owned by Trinet Essential Facilities and leased to Cequent Towing Products,Inc. Cequent Towing Products is a subdivision of Cequent Accessories Design Group located in the Goshen,Elkhart area,and the location of the South Bend facility is part of its strategy to consolidate its operations. The amount of improvements is in the range of$860,000(which assumes$54,000 of tax abatement). The new business will provide 83 new jobs in the City and create an annual payroll of$1.9 million dollars. Mr.Beitzinger further added that. this owner has had no prior abatement,however,the building was originally constructed and approved in 1994 for a ten year tax abatement. The real estate is located in the Airport Economic Development Area, a Tax Incremental Allocation Area. Accordingly,the petition for property tax abatement must first be approved by the South Bend Redevelopment Commission which passed a resolution approving the tax abatement on Friday,March 19, 2004. Mr. Beitzinger pointed out that the tax abatement petition technically does not meet the requirements of Indiana Code § 6.1-1-12.1-3 because the owner obtained a building permit and proceeded with a portion of the project representing about $12,800 in construction value. This is contrary to I.C.6.1-1-12.1-11.3(a)(3). For this reason,the petitioner has requested,and the Council is required to approve a waiver of non-compliance in order for the project to be qualified for tax abatement. Council Chair Kelly asked whether Council's rejection of the requested waiver would prevent the grant of benefits and Council Member Puzzello asked why the owner's pulling of a building permit could result in loss of tax abatement qualification. Aladean DeRose advised the Committee that Indiana Code prohibits an owner from commencing development or rehabilitation before an area is designated as an economic revitalization area,that is,before the Common Council approves the petition for designation as an economic revitalization area. Council Member Coleman asked the owner to explain why the building permit was pulled. S, John Haughton,Project Manager and Manager of Logistics for Cequent,stated that he was not the individual who actually filled out forms to request a tax abatement,and that it"just made[him]sick to learn"that the building permit had been pulled prematurely. Council Member Coleman stated that it was a good thing that he was not the same individual who was part of the application process because this demonstrates communication breakdown, not intentional misconduct. Council Member Kelly stated that the size of the project and the benefit to the community must be considered when determining the waiver. Mr.Jeff Kelsey of Price Waterhouse,then stated that it was Larry Cramer from the Cleveland office who worked with the Redevelopment Department to submit the application for tax abatement. This occurred in December 2003 and early winter after which Mr. Cramer suddenly terminated his employment, and the Price Waterhouse staff"scrambled to pick it up from him." Mr. Kelsey believes this may have caused the"crossed wires"because the Price Waterhouse offices were in two different locations. Mr. Kelsey further explained that the permit that was pulled was for a $12,800 project improvement. Council Member Varner suggested that the Council eliminate tax abatement for that portion of the project as to which the building permit was pulled, i.e. $12,800, and grant the waiver and tax abatement for the remainder of the project. It was moved and seconded that Bill No.04-35 (waiver)be approved as amended to authorize waiver as to all but$12,800 of the total project. It was further moved and seconded that Bill No.04-36 be approved as substituted to approve tax abatement as to all but$12,800 assessed property valuation which would not qualify for abatement due to non-compliance with Indiana Code. Both motions passed unanimously. B. Bill 15-04- The Pointe at St. Joseph Apartments-Multi-Family Housing Attorney Randy Rompola, Baker and Daniels, made the presentation to the Committee and stated that Attorney Ken Fedder would make the evening presentation to the full Council at its public hearing. Mr.Rompola explained that these were refinancing tax exempt bonds which were originally issued in 1988 and were later re-funded in 1994 and 1999. This is a request to refinance yet another time. Mr.Rompola recently spoke with the borrower and if all works according to plan,the financing can be closed around the first of April 2004. It was moved and seconded that Bill No. 15-04 go to the full Council with a favorable recommendation. This motion passed unanimously. There being no further business to come before the Committee,the meeting was adjourned at 3:54.p.m., Respectfully submitted, Council Member Roland Kelly, Chairperson Community and Economic Development Committee AMD/cw Attachments Page-2-