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HomeMy WebLinkAbout10-23-00 Community & Economic Development COMM itat mart: (ommnnit ant( tronoutir lidelontttnt Commtttet The October 23, 2000 meeting of the Community and Economic Development Committee was called to order by its Chairperson, Council Member Roland Kelly at 4:15 pm in the Council Informal Meeting room. Persons in attendance included Council Members Aranowski, Kelly, King,Varner, Coleman, Kirsits, Pfeifer, White, and Ujdak; Jon Hunt, Citizen Member Isabelle Gonzalez, Citizen Member Jean Troutman-Poole, Bob Case, Larry Magliozzi, Dave Coker, Steve Hartz, John Cleaver,Phil Panzica,Public Works Director Gary Gilot,Michael Beitzinger,Tom and Carol Gyuriak, and Kathleen Cekanski-Farrand, Council Attorney. Council Member Kelly noted that the first item on the agenda was to review Bill No. 00- 116 which is a five-year residential real property tax abatement request by Dave Coker for the properties located at 1904, 1912, 1920, 2004 and 2012 Phillipa Street. Mr. Michael Beitzinger of Community & Economic Development reviewed the October 2, 2000 report (copy attached). The project would include the construction of five (5) single-family homes at an individual estimated cost of$ 80,000 for a total project cost of$400,000. The report concluded that the Petitioner meets the qualifications for a five-year residential tax abatement under § 2-77.1 of the South Bend Municipal Code addressing"single family real property abatement". The Petitioner, Mr. Dave Coker, stated that this project is his continuing effort to provide affordable housing within the City of South Bend. Following discussion, Council Member Kirsits made a motion, seconded by Council Member Varner that Bill No. 00-116 be recommended favorably to Council. The motion passed. The Committee then reviewed Bill No. 00-117 which is a three-year real property tax abatement request by GVW Realty, LLC for the property located at 4411 Quality Drive. Mr. Beitzinger of Community and Economic Development reviewed the October 2, 2000 report (copy attached). The petitioner proposes to construct a 32,000 square foot warehouse/distribution facility on five (5) acres of land for an estimated cost of $ 1,126,000. It will enable the Petitioner to have all merchandise inside and to would permit distribution to local stores. Six (6) new jobs would be created in addition to maintaining thirty-three (33) existing full- time jobs. The report concluded that the Petitioner meets the criteria for a three-year real property tax abatement under § 2-83 of the South Bend Municipal Code addressing "warehouse development city-wide". Council Member Aranowski noted that he is a member of the accounting firm which provides services for the Petitioner. On the advise of the Council Attorney, he will be recusing himself from action on Bill No. 00-117. Tom and Carol Gyuriak, the Petitioners, then made the presentation. They noted that at the Commission meeting on Friday, they requested that there petition be considered for a ten(10) year real property tax abatement under Section 31-33 Manufacturing, Industry Group No. 371, #3714 Motor Vehicle Parts and Accessories. They were advised that this request would have to be made to the Council. They noted that they mount tires and ship a completed product. Currently they average 2,500 units per month with this number growing to 4,000 per month. Community and Economic Development Committee October 23, 2000 Page 2 In response to a question from Council Member Coleman, the Petitioners noted that manufacturing makes up approximately 60%of their business with this percentage increasing once they move to their new location. In response to a question from Dr. Varner, it was noted that the petitioners will be located in the tip of the newly annexed part of the City. In response to a question from Citizen Member Jean Troutman-Poole, the Petitioners noted that the average salary will be$ 12.50 per hour plus benefits. The Council Attorney noted that in reviewing the Resolution adopted by the Commission on Friday, it does not specify the number of years for the real property tax abatement. She further noted that if the Council would approve a ten year abatement rather than a three year abatement, it would require a proper paper trail from the City Administration. Mr. Beitzinger stated that he could review the SIC codes to reference in the documentation and would prepare an addendum to the October 2, 2000 Community and Economic Development Report addressing the data described by the Petitioners, noting that the square footage would qualify the Petitioners for a 10-year real property tax abatement under the proper SIC code. He noted that the taxes abated for a 3-year abatement would be$ 111,000;and that the taxes abated for a 10-year abatement would be $ 261,000. Dr. Varner stated that with the petitioner providing 50 to 60 quality jobs that he believes the City should do all that it can go spur new development. He would therefore be supporting a ten- year abatement for the Petitioners. Following discussion, Council Member Varner made a motion, seconded by Council Member Kirsits that Bill No. 00-117 (amended to reflect a 10-year abatement) be recommended favorably to Council. The motion passed. The Committee then reviewed Bill No. 00-118 which is a five (5) year personal property tax abatement request of Value Tool & Engineering, Inc. for the property located at 2629 Foundation Drive. Mr. Michael Beitzinger reviewed the October 3, 2000 report (copy attached). The Petitioner manufactures tooling for use in the aerospace, automotive, medical and commercial markets. The new equipment cost is approximately$450,000. Ten(10)new full-time jobs would be created and twelve(12) full-time jobs would be maintained. The Petitioner meets the criteria for a five (5) year personal property tax abatement under § 2-84.2 of the South Bend Municipal Code addressing"tangible personal property tax abatement". Mr. Steven Hartz, President of Value Tool &Engineering, Inc. made the presentation. He noted that their products are used throughout the world with supplies being sent to GM, Ownes Corning, etc. Citizen Member Jean Troutman-Poole inquired as to the average hourly rate. Mr. Hartz stated that the hourly rate would be$ 21.00 per hour plus benefits. Following discussion, Dr. Varner made a motion, seconded by Council Member Kirsits, that Bill No. 00-117 be recommended favorably to Council. The motion passed. Council Member Kelly then called for the review of Bill No. 00-122 which is a ten(10) • Community and Economic Development October 23, 2000 Page 3 year real property tax abatement request by Gibbs Wire & Steel Company, Inc. for the property located at 3751 Olive Road. Mr. Beitzinger reviewed the Community & Economic Development Report of October 18, 2000 (copy attached). He noted that the Petitioner plans to construct a 167,000 square foot distribution facility on fifteen (15) acres for a total project cost of $ 5.5 million. 3 to 5 new full- time jobs would be created in the first year. The report concluded that the Petitioner meets the qualifications for a ten (10) year real property tax abatement under § 2-83 of the South Bend Municipal Code addressing"warehouse development city-wide". Mr. John Cleaver, Vice President of Gibbs Wire & Wire Company, Inc. made the presentation. He noted that their company currently has six (6) warehouses in the United States and one (1) in Canada. Their present site in South Bend was constructed in 1961 and four (4) additions have been made to it. Their company will grow from 80,000 square feet to 167,000 square feet. Phil Panzica, a local architect, showed two (2) architectural renderings to the Committee members. He noted that much of their inventory is sent overseas. Jon R. Hunt, Executive Director of the Department of Community & Economic Development stated that the Petitioner has been a real supporter of South Bend for many, many years. He noted that the proposed abatement project would permit the Petitioner to create approximately 29 jobs after the initial 3-5 jobs,which maintaining quality full-time jobs in the City. He urged the Committee to approve the request. Council Member Coleman noted that in addition to keeping Gibbs Wire in our community and creating quality new full-time jobs, an additional benefit by the relocation is that the use of Voorde Park and the surrounding area would be enhanced. Following discussion, Council Member Varner made a motion, seconded by Council Member Ujdak that Bill No. 00-122 be recommended favorably to Council. The motion passed. Council Member Kelly then called for the presentation on Bill No. 95-00 which would authorize the submission of a grant&loan application for the Robert Bosch Corporation Retention Project. Mr. Bob Case of the Community & Economic Development Department made the presentation. He noted that the ordinance is a requirement of the State of Indiana in order to apply for the$ 1 million grant and loan assistance through the state's Industrial Development Fund. In response to questions raised by Council Member White, Mr. Case noted that the loan would be repaid over fifteen(15) years at a 3 %interest rate. Citizen Member Jean Troutman-Poole inquired how much tax money is being used to keep Bosch in the community,noting that they had over$ 5 billion in sales in 1999. Bob Case stated that $ 3.5 million in TIF would be provided over three (3) years. The average salary would be $ 70,000; and Bosch agreed to stay for 20 years as a part of a lease agreement. Community and Economic Development October 23, 2000 Page 4 Jon R. Hunt, Executive Director of Community & Economic Development noted that the City would own the building and lease it to Bosch for $ 1.00 per year. If Bosch leaves the community there would be a penalty;and there would also be a penalty if employment drops below a five-year average. There would also be a credit program in place to reward additional job creations. There are currently 470 jobs including those in New Carlisle. The four (4) million dollar loan breaks down as follows: $ 1 million from the State of Indiana;$ 1 million grant; $ 500,000 from the Business Revolving Loan Fund; $ 500,000 Redevelopment loan; and $ 1 million from the County. He noted that the State of Michigan was competing for Bosch and that this type of competition will continue. Citizen Member Jean Troutman-Poole inquired into the"claw-back"provisions. Mr. Hunt stated that the current level of employment plus a five-year average would be used, thus a rolling average would result. There must be 536 jobs before a credit would be created. Dr. Varner requested a Memorandum from the Department of Community & Economic Development on the Bosch project which Mr. Hunt agreed to provide. Following discussion, Dr. Varner made a motion, seconded by Council Member Ujdak, that Bill No. 95-00 be recommended favorably to Council. The motion passed. There being no further business to come before the Committee, the meeting was adjourned by Council Member Kelly at 4:55 p.m. Respectfully submitted, Council Member Roland Kelly, Chairperson Community and Economic Development Committee KCF:kmf Attachments