HomeMy WebLinkAbout2023-06-15 Annual Tax Abatement Report Memo
CITY OF SOUTH BEND
COMMUNITY INVESTMENT
TO: South Bend Common Council
FROM: Erik Glavich, Director, Growth and Opportunity
SUBJECT: 2022 Annual Tax Abatement Report
DATE: June 15, 2023
It is our pleasure to present the Annual Tax Abatement Report from the Department of
Community Investment. The report provides information on tax abatements confirmed by the
Common Council and active as of December 31, 2022. The active number of abatements for
each type are provided below.
• Real Property: 52 active tax abatements
• Vacant Building: 4 active tax abatements
• Personal Property: 20 active tax abatements
For real properties where actual costs were reported on the CF-1 forms, the total assessed
value before a tax abatement was granted was about $21.0 million total for 42 properties. As of
January 1, 2023, the combined assessed value for these properties is now $219.8 million.
As the economy continues to recover from the pandemic, investments in our community
continue to increase. Among abatement recipients that reported costs:
• Real property investments were $326.4 million, exceeding commitments of $319.5
million; and
• Despite inflationary pressures and supply chain challenges, personal property
investments totaled $53.2 million, nearly equaling the $53.9 million in commitments
made by these abatement recipients.
Total job creation goals have been exceeded across all tax abatements. Below are the reported
job numbers from abatement recipients who have begun receiving the benefits of their
abatements.
• Real property abatements committed 2,183 jobs and achieved 2,726 jobs.
• Personal property abatements committed 702 and achieved 732 jobs.
Total minority employment among all abatement recipients was 1,367, a decline from last year
due to abatements that expired and are not included in this report.
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The staff reviewed annual CF-1 forms submitted by the tax abatement recipients and found that
no recipients are considered noncompliant and only two abatements are considered
substantially in compliance. The two abatements that were substantially in compliance are both
associated with Liberty Tower, and the rating was due to changes in the project scope since
abatements were issued and residual challenges related to the pandemic. The developer is
moving forward with the final phase of the $40+ million Liberty Tower renovation.
Attached you will find the detail elements of the City of South Bend 2022 Tax Abatement Annual
Report. The report is split into four parts:
• Part 1 – Real Property Tax Abatement Summary. Provides a complete listing of
companies granted real property tax abatement and receiving an assessed valuation
deduction during tax year 2022 (pay 2023); shows completion of a project and
investment amount; details the employment impact and Form CF-1 / Real Property
compliance of the abatements.
• Part 2 – Personal Property Tax Abatement Summary. Provides a complete listing of
companies granted personal property tax abatement and receiving an assessed
valuation deduction during tax year 2022 (pay 2023); shows completions of a project and
investment amount; details the employment impact and Form CF-1 / PP compliance of
the abatements.
• Part 3 – Local Companies/Minority Contractors & Minority Employees. The minority
groups are all persons classified as African American, Hispanic, American Indian,
Alaskan Native, Asian and Pacific Islander.
• Part 4 – New Tax Abatements Confirmed by the Common Council. Provides a list of
all companies for which the Common Council confirmed tax abatements in 2022.
Important Notes:
• Section 2-76.1 of the Municipal Code recognizes the following minority groups: All
persons classified as Black, Hispanic, Asian and Pacific Islander, American Indian, or
Alaskan Native. Sec. 2-84.13 requires the number of minority persons hired since the
completion of the project for which the abatement was given and the names of local
and/or minority contractors used for the project.
• Assessments: If an assessment did not occur prior to or on January 1, the abatement
will not activate until the following year. Business operations can begin; however, tax
assessments and deductions start after the issuance of County Assessment Form 11.
After reviewing the attached report, please feel free to contact me at (574) 235-5838 with any
questions.