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Home My WebLink AboutReconfirming Tax Abatement - South Bend Gear LLC RESOLUTION 4229-1:3 Passed by the Common Council of the City of South Bend, Indiana January 14, 13 20 Attest: .!:� City Clerk Attest %_1 . :� . Alkiv President of Common Council Presented by me to the Mayor of the City of South Bend, Indiana . January 15, 201.E •+— 4.•• City Clerk Approved and signed by me 20 L 3 . Mayor RESOLUTION NO. 1/4(2 2L9 �(3 A RESOLUTION RECONFIRMING THE ADOPTION OF A DECLARATORY RESOLUTION DESIGNATING CERTAIN AREAS WITHIN THE CITY OF SOUTH BEND, INDIANA, COMMONLY KNOWN AS 3849 SHOWERLUX DRIVE A.K.A. AS 3801 Schafer Gear Drive TO BE AN ECONOMIC REVITALIZATION AREA FOR PURPOSES OF EXTENDING THEIR FIVE (5) YEAR PERSONAL PROPERTY TAX ABATEMENT FOR SOUTH BEND GEAR, LLC WHEREAS,the Common Council of the City of South Bend, Indiana,has adopted a Declaratory Resolution designating certain areas within the City as Economic Revitalization Areas for the purpose of tax abatement consideration; and WHEREAS, a Declaratory Resolution designated the area commonly known as 3801 Schafer Gear Drive, South Bend, Indiana, and which is more particularly described as follows: This real estate is commonly described as: vacant land North of and adjacent to 4701 Nimtz Parkway, said property having frontage on Schafer Gear Drive, South Bend, Indiana 46628 and is legally described as follows: that part of the Southeast Quarter of Section 20 and the Southwest quarter of Section 21, both in Township 38 North, Range 2 East, German Township, City of South Bend, St. Joseph County, Indiana which is described as: Lot # 10A as shown on the plat of"H.G. Baus Centre-Phase One First Replat" subdivision recorded by Document No. 0746267 in the records in the Office of the Recorder of St. Joseph County, Indiana. Containing 5.54 acres more or less. Subject to all legal highways, easements and restrictions of record, and which has Key Number 71-03-21-300-001.000-009, as an Economic Revitalization Area; and WHEREAS, notice of the adoption of a Declaratory Resolution and the public hearing before the Council has been published pursuant to Indiana Code 6-1.1-12.1-2.5; and WHEREAS,the Council held a public hearing for the purposes of hearing all remonstrances and objections from interested persons; and WHEREAS,the Council has determined that the qualifications for an economic revitalization area have been met; and WHEREAS,the Council issued a Confirmatory Resolution confirming the adoption of the Declaratory Resolution as Resolution No. 4085-11 on February 28, 2011; and WHEREAS,the Petitioner will exceed the two year designation period granted in the Confirmatory resolution, which will expired on February 28, 2013; and WHEREAS,the Petitioner has requested an additional period of time to complete construction of the planned project. NOW, THEREFORE,BE IT RESOLVED by the Common Council of the City of South Bend,Indiana, as follows: SECTION I. The Common Council hereby confirms its Declaratory Resolution designating the area described herein as an Economic Revitalization Area for the purposes of tax abatement. Such designation is for Personal property tax abatement only and is limited to two (2) calendar years from the date of adoption of the Declaratory Resolution by the Common Council. SECTION II. The Common Council hereby determines that the property owner is qualified for and is granted Personal property tax deduction for a period of five (5) years, and further determines that the petition complies with Chapter 2,Article 6, of the Municipal Code of the City of South Bend and Indiana Code 6-1.1-12 et seq. SECTION III. This Resolution shall be in full force and effect from and after its adoption by the Common Council and approved by the Mayor. I Member of the Common Council � _. Filed in Clam's Off ice JAN 1013 RESENT' - VOOF4PE O� AP d 3 CITY CLERK,SOUTH BEND,IN cop Ec, t— iii-13 TO THE COMMON COUNCIL OF THE CITY OF SOUTH BEND: Your Committee of the Whole, to whom was referred: BILL NO. 13-03 A RESOLUTION RECONFIRMING THE ADOPTION OF A DECLARATORY RESOLUTION DESIGNATING CERTAIN AREAS WITHIN THE CITY OF SOUTH BEND, INDIANA, COMMONLY KNOWN AS 3849 SHOWERLUX DRIVE A.K.A. 3801 SCHAFER GEAR DRIVE TO BE AN ECONOMIC REVITALIZATION AREA FOR PURPOSES OF EXTENDING THEIR FIVE (5) YEAR PERSONAL PROPERTY TAX ABATEMENT FOR SOUTH BEND GEAR, LLC Respectfully report that they have examined the matter and that in their opinion, this bill is being recommended to the full Council with a favorable recommendation as amended by changing the title. This bill was heard by the Community & Economic Development Committee. Karen L. White Chairperson, Committee of the Whole •'•pU T$8'' �/ 1400S COUNTY-CITY BUIL \DING \ �j ' PHONE 574/235-9371 227 W.JEFFERSON BOULEVARD W ��r i,, FAx 574/235-9021 SOUTH$END,INDIANA 46601-1830 . e" r� '_ al l fir. 18615 .. CITY OF SOUTH BEND PETE BUTTIGIEG,MAYOR COMMUNITY & ECONOMIC DEVELOPMENT SCOTT FORD, DIRECTOR December 27, 2012 Council Member Henry Davis, Chairperson Community&Economic Development Committee South Bend Common Council 4th Floor, County City Building South Bend, IN 46601 RE: Personal Property Tax Abatement Petition for: South Bend Gear,LLC Dear Council Member Davis: South Bend Gear, LLC was approved for a personal property tax abatement on February 28, 2011. They would like to receive a one year extension on the abatement. They have already exceeded their projected payroll amount of$641,000. The company has made investments in equipment in excess of$9,000,000. They intend to ivest a total of$15,600,000.The project is expected to create 14 new jobs. South Bend Gear, LLC meets the qualifications for a five year personal property tax abatement, and a representative of the company will be available to meet with the Committee on Monday, January 14, 2012. To accomplish this request, a tax abatement recipient must notify the Council in writing and submit a revised Statement of Benefits (Form SB-1). Attached you will find a letter from the company's representative, Andrea Scanavini, requesting the one year extension of the abatement. I have included a copy of the original SB-1 and Memorandum of Agreement along with their letter. Should you or any of the other Council members have any questions concerning the report or need • additional information,please feel free to call me at 235-9278. Sincerely, /icttitd F11,. Clerk's Office Kathy Hahn a Z O 12 Economic Development Specialist -00N14 NIRDE Attachments L Cm CLERK. fi 4d ND,IN c: South Bend Common Council Members COMMUNITY DEVELOPMENT ECONOMIC DEVELOPMENT PAMELA C.MEYER - DONALD E.INKS 574/235-9660 574/235-9371 FAX:574/235-9469 Mayor Pete Buttigieg Scott Ford Don Inks • SOUTH BEND SBG GEAR, LLC 3801 Schafer Gear Drive South Bend,IN 46628 Phone 574-968-0273 December 21, 2012 Don Inks, Economic Development Director City of South Bend Community&Economic Development 1200 County-City Building 227 W. Jefferson Boulevard South Bend, IN 46601-1830 Re: South Bend Gear, LLC, Personal Property Tax Abatement Dear Mr. Inks: South Bend Gear, LLC ("SBG")received a five-year personal property tax abatement from the South Bend Common Council (see enclosed copy of Memorandum of Agreement dated February 21, 2011 and enclosed copy of Statement of Benefits form SB-1/PP dated January 28, 2011 and related attachments). The abatement was based on the estimate that SBG would expend $15,600,000 over a two-year period ended February 14, 2013 on manufacturing equipment and related expense items. In addition, it was estimated that SBG would create at least twelve new,permanent, full-time jobs with an annual payroll estimated at$550,000 by February 15, 2012, and would create at least fourteen new,permanent, full-time jobs with an annual payroll estimated at$641,000 by February 13, 2013. In the most recent form CF-1/PP filed on April 19, 2012 (see enclosed copy of CF-1/PP dated April 19, 2012), SBG reported actual equipment costs of$8,413,683 (compared to the total estimated commitment of$15,600,000) and actual annual payroll of$220,566 (compared to the total estimated commitment of$641,000). With only a minor exception of under$89,000 of equipment costs that were acquired in January and February of 2012,those actual amounts on the CF-1//PP represented the equipment costs and payroll as of December 31, 2011. SBG has continued to invest in equipment and payroll in 2012. As of November 30, 2012, SBG has made total investments in equipment in excess of$9,000,000; as of the eleven months ended November 30, 2012, SBG has incurred payroll in excess of$650,000. As evidenced by the investments made in equipment and payroll,SBG remains committed to its business in South Bend. However,while the payroll requirement will be met,it is apparent that SBG will not meet both of the original requirements of an estimated$15,600,000 of equipment by February 14,2013 and$641,000 of payroll by February 13,2013. The difficulty in reaching the requirement is primarily due to three factors: 1)delays in bringing its initial manufacturing line into production;2)delays in bringing on the second line of manufacturing;and 3)a recent ownership transition. While the initial manufacturing line is now producing at acceptable levels and the ownership transition has been completed as of November 30,2012,it is anticipated that the second line of manufacturing will not begin until the third quarter of 2013. The original filing for the personal property tax abatement was predicated on this second manufacturing line. From SBG's perspective,the second line of manufacturing is not a question of"if'but"when". The deployment of the second manufacturing line continues to be critical to SBG's overall business plan. We understand through conversations with you that the appropriate course of action is to request an extension of time to enable SBG to meet its commitments. Accordingly,SBG hereby requests an extension of twelve months until February 14,2014 within which to meet its commitment to invest in the manufacturing equipment and new jobs,as specified in the Memorandum of Agreement dated February 21,2011. If the South Bend Common Council would like SBG to appear at a meeting in order for the extension to be granted,please advise of the preferred meeting date at your earliest convenience. While the day-to-day operations of SBG are managed locally,the ownership of SBG and its CEO reside in Italy,and we request adequate time to make any necessary travel plans. SBG firmly believes that the extension will provide the company the necessary additional time to meet its commitments to South Bend. SBG remains firmly committed to South Bend. Thank you for your consideration. Ye truly yours, rea Scanavini CEO South Bend Gear,LLC cc: Mr.Stephen J. Luecke,Mayor City of South Bend