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Home My WebLink AboutSUBSTITUTE Bill No. 23-08 Tax Abatement Deductions & Waiver of Noncompliance for Property at 5245 Dylan Drive CITY OF SOUTH BEN Filed in C'nrk's Cffice COMM UNITY INVESTMENT --� FEB 2 2 2023 DAWN M.JONES February 22, 2023 CITY CLERK, SOUTH BEND,IN Council Member Rachel Tomas Morgan Chairperson, Community Investment Committee South Bend Common Council County City Building, 4th Floor South Bend, IN 46601 Dear Council Member Tomas Morgan, Attached please find a proposed form of resolution approving a waiver of noncompliance, pursuant to Indiana Code 6-1.1-12.1-11.3, for CBK Land Development LLC, who is the owner of real property at 5245 Dylan Drive in South Bend (Parcel number 71-03-18-330-011.000-009). CBK Land Development LLC is a wholly owned subsidiary of Chase Plastics, which occupies the building. Chase Plastics is requesting that the Common Council waive noncompliance with the filing deadline for tax deduction forms. In 2020 and 2021, the company filed Forms CF-1/RE and 322/RE with the City of South Bend and the County Assessor's office but inadvertently did not file the forms with the Auditor's office. As a result of this filing error, the company did not receive a tax abatement pursuant to Resolution No. 4779-19 for these years. The waiver of noncompliance to be presented to the Common Council for consideration is for two years of non-filing. The Department of Community Investment endorses and supports this waiver as the company has exceeded requirements associated with the abatement. The estimated project cost in 2019 was $3.50 million, and the company reported that the actual costs were $3.63 million. Despite challenges, including the pandemic, Chase Plastics has added one additional full-time position at the South Bend facility since completion of their project and is committed to supporting and expanding their South Bend-based workforce. We ask that the attached resolution be referred to the Community Investment Committee for an advisory recommendation and then heard at the Common Council meeting to be held on February 27, 2023. A representative from Chase Plastics will be present at the meetings. Should you require additional information, please contact me at (574) 235-5838. Sincerely, 71 Erik Glavich Director, Growth and Opportunity EXCELLENCE ACCOUNTABILITY INNOVATION INCLUSION EMPOWERMENT 14005 County-City Building 227 W.Jefferson Blvd. South Bend,Indiana 46601 p 574.235.9371 www.southbendin.gov chase Plastics' • Redefining Resin Distribution' 6467 Weldon Center Drive,Clarkston,MI 48346 248.620.2120 I ChasePtastics.cem Filed it f't , p February 17, 2023 FEB c : LS South Bend Common Council DAWN M. J-4 County City Building, 4th Floor CITY CLERK,SO:.� N BEND, !N South Bend, IN 46601 RE: Tax Abatement Waiver of Noncompliance Dear Common Council Members, On May 13,2019, CBK Land Development,LLC,a wholly owned subsidiary of Chase Plastics Services, Inc.,was granted a real property tax abatement for an extension to our facility at 5245 Dylan Drive in South Bend. The Common Council approved Resolution No. 4779-19, which established a 7-year abatement. At the time the petition for abatement was filed,estimated costs for the expansion project were$3.5 million. Construction began in June 2019 to add approximately 80,000 sq ft. to our facility. We completed the project in May 2020. As of today,Chase Plastics has committed $3.63 million to the project. As a result of the expansion,the company experienced significant growth. In 2020,the facility's combined shipping and receiving volume increased by eleven million pounds compared to 2019. This expansion has allowed us to reinvest in our employees by increasing our starting wage rate as market competitive- plus and increase our Variable Compensation Bonus plan 6%, which has deepened our employees' sense of job security. Since the project's commencement, Chase Plastics has retained 18 full-time jobs and added 1 new full-time job. With this retainage,we have increased the annual salary by $208,000,excluding benefits. Our investment in local businesses has grown, as well. The additional investment not only includes the initial movement and installation of equipment and racking but has also provided for the purchase of new equipment, along with creating a greater need for continuous support of maintenance for both the property and systems within the building. Today,we are requesting a waiver of noncompliance for failure to file Forms CF-1/RE and 322/RE for tax years 2020 and 2021. The forms were incorrectly filed with the personal property tax return with the assessor's office when they should have been filed with the auditor's office separately.This was a regrettable oversight that has been corrected for tax year 2022. We are requesting the Common Council approve a two-year waiver of noncompliance of filing tax deduction for tax years 2020 and 2021. ChasePlastics' Redefining Resin Distribution' 6467 Waldon Center Drive,Clarkston,MI 48346 I 248.620.2120 I ChasePlastics.com Thank you for your attention on this matter. Amanda Bertelsen Controller Chase Plastic Services,Inc. Fi' -•' ,' Cffice FEb C 400 DAWN M.JONES CITY CLERK, SOU1 BEND, IN r 'Ice EEb 2 2 [UJ BILL NO. 23-08 RESOLUTION NO. 5004-23 DAWN M.JONES CITY CLERK, SOUTH BEND, IN A RESOLUTION CONFIRMING THE GRANT OF CERTAIN REAL PROPERTY TAX ABATEMENT DEDUCTIONS AND WAIVING NONCOMPLIANCE FOR PROPERTY COMMONLY KNOWN AS 5245 Dylan Drive, South Bend, IN 46628 FOR CBK Land Development LLC WHEREAS, on May 13, 2019, the Common Council of the City of South Bend (the "Common Council")adopted Resolution No.4779-19(the"2019 Resolution"),approving a seven- year(7)real property tax deduction for the extension of a distribution center located at 5245 Dylan Drive. South Bend, IN 46628 (the"Building")by CBK Land Development LLC.(the"Taxpayer") within an area located in the City of South Bend that had been designated an economic revitalization area in accordance with Indiana Code § 6-1.1-12.1 et seq.; WHEREAS, as part of the Taxpayer's deduction application, the Taxpayer described for the Common Council that Chase Plastic Services, Inc. by the end of the three-year(3) designation period would (a) invest $3,500,000 to expand its current 126,000 square foot distribution center by an additional estimated 80,000 square feet and (b) create 5 new jobs and retain 18 jobs; WHEREAS, the Taxpayer completed construction of the 80,000 square foot extension and has met all objectives in its deduction application; WHEREAS, while the Taxpayer submitted its CF-1/RE and 322/RE forms to the City of South Bend Department of Community Investment in May 2020 and May 2021,the company may have inadvertently failed to timely and properly file the forms with the St. Joseph County Auditor; WHEREAS, the Common Council recognizes that the Taxpayer(a)has fulfilled its pledge to expand its distribution center; (b) has requested a waiver of its inadvertent oversight in failing to file the CF-1/RE and 322/RE forms for taxes due and payable in 2021 and 2022 with the St. Joseph County Auditor and instead filed forms with the wrong office to claim benefits of the tax deduction for the first two years of the tax deduction, which the Common Council has the power and authority to approve under Indiana law, and (c) would have been entitled to receive the tax deduction for the first two years of the deduction period had no noncompliance event occurred; WHEREAS, the Indiana General Assembly has expressed the policy of this State by enacting laws that expressly permit tax abatement noncompliance events such as the untimely or erroneous filing of an application form to be waived; and WHEREAS, the noncompliance event has been corrected, and a public hearing of the Common Council has been held on the subject of this Resolution. NOW, THEREFORE, IT IS HEREBY RESOLVED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND AS FOLLOWS: SECTION 1. The Taxpayer has presented testimonial and documentary evidence supporting the Taxpayer's (a) progress towards satisfying its obligations detailed in its original Statement of Benefits and its application for tax deduction related to the extension of a distribution center located at 5245 Dylan Drive. South Bend, IN 46628 (the "Property"), and (b) inadvertent oversight leading to a belated filing or filing in the incorrect office of the CF-1/RE and 322/RE forms to claim the benefits of a tax deduction for the January 1, 2020, and January 1, 2021, assessment dates of the Property. SECTION 2. The foregoing facts, taken together, lead the Common Council to conclude that the Taxpayer has substantially fulfilled its projected plans to improve and conduct operations at the Property contemplated as part of the 2019 Resolution (the "Deduction") and that its belated/errant filing of applications required to claim the benefits of the Deduction as of for taxes due and payable in 2021 and 2022 was inadvertent. SECTION 3. The Common Council hereby waives all matters of noncompliance that may be waived under State and local law regarding the late filing of applicable deduction applications in order for the Taxpayer to claim and receive the benefit of the Deduction on its investment contemplated as part of the 2019 Resolution as of the January 1, 2020, and January 1., 2021, assessment dates, all as is permitted under Indiana Code § 6-1.1-12.1-11.3 (including specific waiver of any and all nonconformities relating to the requirement, under Indiana Code § 6-1.1- 12.1-5 that economic revitalization area deduction applications be timely filed with the county auditor to claim property tax deductions for the 2020-Pay-2021 and 2021-Pay-2022 tax years). SECTION 4. The Common Council incorporates herein by reference, and hereby ratifies and reaffirms: (a)the 2019 Resolution; (b)the tax deduction application and statements of benefits of the Taxpayer; and (c) the recitals of this Resolution. The Common Council and the Clerk of the City of South Bend are authorized to take all such further acts and execute and deliver all such further documents for the St. Joseph County Auditor or otherwise as may be reasonably necessary to give effect to this Resolution,all without further application to or formal action by the Common Council. SECTION 5. This Resolution shall be in full force and effect from and after its passage and approval by the Mayor. Sharon McBride, Council President South Bend Common Council Attest: Dawn M. Jones, City Clerk Office of the City Clerk Presented by me, the undersigned Clerk of the City of South Bend, to the Mayor of the City of South Bend, Indiana, on the day of , 2023, at o'clock .m. Dawn M. Jones, City Clerk Office of the City Clerk Approved and signed by me on the day of ,2023, at o'clock .m. James Mueller, Mayor City of South Bend Ffice FEB '22 DA NN M. JONES CITY CLERK. SOUTH BEND, IN