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HomeMy WebLinkAbout03-07-88 Human Resources & Economic Development ,aatt Rood • tip Mammon Miouzutl of t1, Oittg of ftmdi Human Resources and Economic Development Committee The March 7, 1988 meeting of the Human Resources and Economic Development Committee was called to order at 5:20 p.m. by its Chairman, Councilman Steve Luecke in the Council Informal Meeting Room. Persons in attendance included Councilmen: Zakrzewski, Niezgodski, Slavinskas, Puzzello, Coleman, Duda, Soderberg, and Voorde; Sandy Combs, Jeff Gibney, Ann Kolata, Hedy Robinson, Max Moore, Jim Wensits, and Kathleen Cekanski- Farrand. Councilman Luecke noted that three of the four members of the Committee were present namely Councilman Slavinskas, Vice-Chairman, Councilman Coleman, himself as Chairman, and that Councilman Duda would be joining the meeting shortly. Councilman Luecke then introduced the two citizen members to the Committee namely: Sandy Combs and Jeff Gibney. Councilman Luecke noted that there were three items on the agenda to review namely tax abatement procedures, tax increment finance procedures, and the redevelopment authority. - Ann Kolata, acting Executive Director of the Department of Economic Development then gave a detailed presentation to the Committee on each of the three topics. She handed out a comprehensive paper addressing each of the topics (copy attached) . Mrs. Kolata's presentation began with a review of tax abatement procedures and she reviewed pages 1 through 19 of her handout. She noted that tax abatement primarily was an incentive for individuals to locate within the City rather than a financing mechanism. She traced the early history of tax abatement and noted that the redevelopment commission had the authority to grant five year abatements on land assessed valuation. Later in the later 1970's it was revised for a ten year tax abatement procedure with authority being shifted to the Common Council. The overall theory behind tax abatement was the definition of "blight" which was set forth in detail in the handout. Several changes in the State law continued from 1979 through the present. It was noted that currently there is a five year personal property tax abatement procedure on new manufacturing equipment and that State law currently allows for real property tax abatement for three, six, or ten I'll •0• ••••• ..0e446. •u.,∎.N•NO CO years. Mrs. Kolata then showed two maps addressing tax abatement namely one which depicted the "tax abatement impact areas" and the second one which depicted the "central and neighborhood business districts in tax abatement areas". It was further noted that current tax abatement policies are basically targeted to two components: 1. Industrial and warehousing projects anywhere within the City. 2 . Housing, retail commercial mixed use g. , projects within specific geographic areas. The overall length of the abatement depends on meeting various criteria set forth in the City ordinance. Councilman Luecke had several questions with regard to the "Standard Industrial Classification Manual" and was advised that if there were questions with regard to whether a specific petitioner met the major group classification that this would be proper questioning of the Common Council. Mrs. Kolata then briefly highlighted some of the 1988 legislation which is to be signed shortly by the Governor. Some of the changes include the elimination of the requirement to calculate the impact of the abatement on the tax rate; that the Council may limit the dollar amount on deductions for real property after September 1, 1988; that there is an adjustment procedure of the deduction following a general reassessment; and that "residentially distressed areas" can now be created. The "Statement of Benefits" formed from the State Board of Tax Commissioners was reviewed as well as the petition procedure for both real and personal property tax abatement. Mrs. Kolata then reviewed Tax Increment Financing and summarized pages 20 through 29 of her handout. The overall concept underlying "TIF" legislation is that the public will ultimately benefit from revitalization of blighted areas and that the resulting increase will be in assessed valuation. It was also noted that "TIF" is the reallocation of local property tax money so that overlapping taxing jurisdictions would share in the cost of improvements by foregoing taxes related to those improvements until such time as the public improvements are paid for. Mrs. Kolata noted that currently there are four "TIF" areas within the City namely: South Bend Central Development Area, the Rum Village Industrial Park, The Studebaker Corridor Development Area, and The West Washington/Chapin Development Area. 2 TX It was also "TIF" noted that currently there are three TIF revenue bonds which have been sold, the first to cover the skywalk and Michigan Street improvements, the ' second which was a "Parity Bond" in the amount of $1,750, 000.00 for Michigan Street improvements and river walkway and park improvements, and the third which was also a "Parity Bond" in the amount of $1,800, 000.00 which was used for the Niles Avenue public improvements, property acquisition, Union Station, general public works, and parking improvements. It was stressed that "TIF" is not a taxing mechanism but rather a reallocation of taxes. Following much discussion it was recommended that the third topic namely the "Redevelopment Authority" be delayed to a future meeting and that the "Urban Enterprise Zone" also be discussed at a later meeting. Following further discussion and review of the material presented to the Committee, the meeting was adjourned at 6: 50 p.m. Respectfully Submitted, Councilman Steve Luecke, Chairman Human Resources and Economic Development SL:srk Attachment 3