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HomeMy WebLinkAbout03-11-91 Human Resources & Economic Development Tt:rrvort HUMAN RESOURCES AND ECONOMIC DEVELOPMENT COMMITTEE can the Tuntnwn &until of tip (Mg of*Huai Send: The March 11, 1991 meeting of the Human Resources and Economic Development was called to order by its Chairperson Council Member Steve Luecke at 4:33 p.m. in the Council Informal Meeting Room. Persons in attendance included Council Members Duda, Zakrzewski, Coleman, Puzzello, Niezgodski, Luecke, Slavinskas, and Ladewski; Kevin Butler, James Kronk, Jeff Gibney, Mr. James Lawlor, Hedy Robinson, and Kathleen Cekanski-Farrand. Council Member Luecke noted that the first item on the agenda was to review Resolution No. 91-17 which is a Confirming Tax Abatement Resolution for the property located within the Airport Industrial Park Phase III, lots 4-2. Council Member Luecke noted that typically, this Committee does not review confirming Resolutions. However, in this instance the Petitioner was last before the Common Council in June of 1989, where the Declaratory Resolution was approved. At that time, the Council deferred taking further action on the Confirming Resolution until a tenant was available for the building in question. The type of tenant in the leased facility would be important to the duration of tax abatement involved. Council Member Luecke further noted that after conferring with the Council Attorney, that the Ordinance in effect at the time of the last action taken by the Common Council, would be the law used by the Council determining the duration for the tax abatement this evening. Council Member Luecke noted that a lease has been signed for the building, and that he had received a letter in support of the tax abatement from Kevin Hughes of Project Future. Mr. Kevin Butler, the attorney on behalf of the Petitioner, then briefly updated the Committee. He noted that Mr. James Lawlor, one of the two owners, was also present. Mr. Butler noted that the developer had a single tenant for 1 1/2 years for approximately 2, 000 square feet of the building. The balance of the building, or approximately 17, 000 square feet, will be leased to Pittman Moore, Inc. , which has worldwide sales. The facility will be used for distribution, therefore will be a warehouse center for the Midwest. The building was originally a "spec building" with the cost of construction totalling $470,000.00. He noted that Pittman Moore will invest between $200,000.00 to $250, 000. 00 for specialized equipment. The construction of the building was completed in the fall of 1989 and the new tenant will be operational by April 1, 1991. Mr. Butler noted that tax abatement is critical in light of pricing. There will be a Human Resources and Economic Development Committee March 11, 1991 Page 2 between 5 to 7 employees at the facility, therefore qualifying the project for a 3 year tax abatement. Council Member Luecke noted that in light of the information provided, that the building project would qualify for a 3 year real property tax abatement. He further noted that amendments to Resolution No. 91-17 would be necessary to strike the word "six" in the title and in Section II, and to replace "three" in each instance. Following further discussion, Council Member Slavinskas made a motion seconded by, Council Member Duda, that amended Resolution No. 91-17 be recommended favorably to Council. The motion passed. Council Member Luecke noted that the next item on the agenda was to review Resolution No. 91-18 which is a request for a 10 year real property tax abatement for Historic Dunbar Corner. Council Member Luecke noted that the property owner, Historic Dunbar Corner Partnership L.P. , is a limited partnership registered in the State. The general partner of this partnership is Historic Dunbar Corner Corporation, a wholly owned subsidiary of the South Bend Heritage Foundation. This corporation is an Indiana for Profit corporation. The limited partner is National Equity Fund. He also noted that the project developer is the South Bend Heritage Foundation, and will also be the project contractor. Council Member Luecke stated that he brings all of this information to the Committee's attention, in light of the fact that he is an employee of South Bend Heritage Foundation. He further noted that he had discussed this situation with the Council Attorney, and it has been determined that he does not have a conflict of interest since he would realize no financial gain from the proposed project if it is granted real property tax abatement. Hedy Robinson then reviewed the report from the Department of Economic Development, dated February 21, 1991 (copy attached along with the petition) . It was noted that the Petitioner proposed to renovate 7 houses at the corner of Colfax and LaPorte. Two of the houses are fire damaged and have remained vacant for at least 15 years. A third house is also vacant. Once the Human Resources and Economic Development Committee March 11, 1991 Page 3 renovation is completed, the project will provide 15 apartments for low and moderate income tenants. The proposed improvements will contribute to the rejuvenation of the West Washington-Chapin Revitalization area as well as to continue to provide affordable housing within the area. The project cost is estimated at $677,500.00. She noted that the property qualifies for a 10 year real property tax abatement under Section 2-77(d) (2) of the South Bend Municipal Code. Mr. Jeffery V. Gibney, the Executive Director of South Bend Heritage Foundation, then provided additional information with regard to the proposed project. He noted that the appearance of the southeast corner of LaPorte and Colfax will change dramatically, as the aluminum and asphalt sidings are removed and the traditional porches are recreated and the original style of the homes are restored. He further noted that this project will be financed in part through the syndication of Low-Income Tax Credits and Historic Preservation Tax Credits. The owners are committed to renting the apartments to low-income tenants for 30 years, and thus will result in controlled rents over that period of time. He noted that over 14 attorneys are involved in reviewing the various legal documents involved in the transaction. A maximum income to live in the apartments would be $20,700.00. He noted that Society Bank and Standard Federal Bank are two local banking institutions involved in the project. Council President Niezgodski congratulated South Bend Heritage for undertaking this project, which he believes will be a definite compliment to this historic area. Council Member Slavinskas questioned the formula used by the Department of Economic Development in determining the amount of taxes to be abated. He was advised that the Department utilizes the 1/3 formula to show the maximum amount of taxes that could be abated. Following further discussion, Council President Niezgodski made a motion seconded by Council Member Duda, that Resolution No. 91-18 be recommended favorably. The motion passed. Council Member Luecke then questioned whether the Council Members each desired to continue to receive an individual copy of the tax abatement reports from the Department of • Human Resources and Economic Development Committee March 11, 1991 Page 4 Economic Development. He was advised that that policy should remain in effect. There being no further business to come before the Committee, the meeting was adjourned at 4:50 p.m. Respectfully Submitted, Council Member Steve Luecke, Chairperson Human Resources and Economic Development Committee attachments