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HomeMy WebLinkAbout25-06 Designating Resolution - Vacant Building Tax Abatement for 635 South Main Street n CITY OF SOUTH BEND COMMUNITY INVESTMENT r ,WS January 22, 2025 Filed in Clerk's Office Council Member Troy Warner Chairperson, Community Investment Committee South Bend Common Council Bianca Tirado County-City Building, 4th Floor City Clerk,South Bend, IN South Bend, Indiana 46601 RE: Declaratory Resolution: Vacant Building Tax Abatement for Studebaker Admin QOZB LLC Dear Council Member Warner, Please find the enclosed Declaratory Resolution and supporting information pertaining to a tax abatement petition submitted by Studebaker Admin QOZB LLC, an Indiana Limited Liability Company. This petition package includes: • Department of Community Investment's summary report • Petition for abatement • Statement of Benefits forms (SB-1 / Real Property) • Supporting information The report contains the Department's findings relative to the above-mentioned petition. The petitioner intends to stabilize the property at 635 S. Main Street by replacing the roof and installing new windows. The building has been vacant for two decades and was previously the headquarters of the Studebaker Corporation and then the South Bend Community School Corporation. The total investment for this project is $920,653. The project meets the qualifications for a two- year(2)vacant building tax abatement. A representative from Studebaker Admin QOZB, LLC, will be available to meet with the Committee on Monday, January 27, 2025. If you or other Council members have questions about the report or need additional information, please feel free to call me at (574) 245-6022 Sincerely, Joseph Molnar Assistant 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 Filed in Clerk's Office is ? BILL NO. 25-06 Bianca Tirado RESOLUTION NO. City Clerk, South Bend, IN A RESOLUTION OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND DESIGNATING CERTAIN AREAS WITHIN THE CITY OF SOUTH BEND, INDIANA, COMMONLY KNOWN AS 635 S. Main Street, South Bend, Indiana 46601 AN ECONOMIC REVITALIZATION AREA FOR PURPOSES OF A TWO-YEAR (2) VACANT BUILDING TAX ABATEMENT FOR Studebaker Admin QOZB LLC WHEREAS, a petition for real property tax abatement consideration has been filed with the City Clerk for consideration by the Common Council of the City of South Bend, Indiana, requesting that the areas described as: Key Number: 71-08-12-352-001.000-026 Local Parcel Number: 018-3018-0687 Commonly Known As: 635 S MAIN ST Legal Description: TRACT 1 be designated as an Economic Revitalization Area under the provisions of Indiana Code 6-1.1- 12.1 et seq. and South Bend Municipal Code Sections 2-76 et seq.; and WHEREAS,petitioner has agreed to and has accepted responsibility to report any changes in the Key Number and legal description to the Department of Community Investment and to the Office of the City Clerk; and WHEREAS,the Department of Community Investment has concluded an investigation and prepared a report with information sufficient for the Common Council to determine that the area qualifies as an Economic Revitalization Area under Indiana Code 6-1.1-12.1 et seq. and South Bend Municipal Code Sections 2-76 et seq. and has further prepared maps and plats showing the boundaries and such other information regarding the area in question as required by law; and WHEREAS,the Community Investment Committee of the Common Council has reviewed said report and recommended to the Common Council that the area qualifies as an Economic Revitalization Area. NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of South Bend, Indiana, as follows: SECTION I. The Common Council hereby determines and finds that the Petition for Real Property Tax Abatement and the Statement of Benefits form completed by the Petitioner meet the requirements of Indiana Code 6-1.1-12.1 et seq. for tax abatement. SECTION II. The Common Council hereby determines and finds the following: A. That the description of the proposed redevelopment or rehabilitation meets the applicable standards for such development; B. That the estimate of the value of the redevelopment or rehabilitation is reasonable for projects of this nature; C. That the estimate of the number of individuals who will be employed or whose employment will be retained by the Petitioner can reasonably be expected to result from the proposed described redevelopment or rehabilitation; D. That the estimate of the annual salaries of those individuals who will be employed or whose employment will be retained by the Petitioner can be reasonably expected to result from the proposed redevelopment or rehabilitation; E. That the other benefits about which information was requested are benefits that can be reasonably expected to result from the proposed described redevelopment or rehabilitation; and F. That the totality of benefits is sufficient to justify the requested deduction, all of which satisfy the requirements of Indiana Code 6-1.1-12.1-3. SECTION III. The Common Council hereby determines and finds that the proposed described redevelopment or rehabilitation can be reasonably expected to yield benefits identified in the Statement of Benefits, Sections 1 through 3 of the Petition for Real Property Tax Abatement Consideration, and the Memorandum of Agreement between the Petitioner and the City of South Bend and that the Statement of Benefits form completed by the petitioner, said form being prescribed by the State Board of Accounts, is sufficient to justify the deduction granted under Indiana Code 6-1.1-12.1-3. SECTION IV. The Common Council hereby accepts the report and recommendation of the Community Investment Committee that the area herein described be designated as an Economic Revitalization Area and hereby adopts a Resolution designating this area as an Economic Revitalization Area for purposes of real property tax abatement. SECTION V. The designation as an Economic Revitalization Areas shall expire on December 31, 2027. SECTION VI. The Common Council hereby determines that the property owner is qualified for and is granted a vacant building property tax deduction for a period of two(2)years outlined below as well as shown by the attachment pursuant to Indiana Code 6-1.1-12.1-17. Year 1 - 100% Year 2 - 75% SECTION VII. The Common Council directs the City Clerk to cause notice of the adoption of this Declaratory Resolution for a Vacant Building Real Property Tax Abatement to be published pursuant to Indiana Code 5-3-1 and Indiana Code 6-1.1-12.1-2.5,said publication providing notice of the public hearing before the Common Council on the proposed confirming of said declaration. SECTION VIII. This Resolution shall be in full force and effect from and after its adoption by the Common Council and approval by the Mayor. Canneth Lee, Council President South Bend Common Council Attest: Bianca Tirado, 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 , 2025, at o'clock .m. Bianca Tirado, City Clerk Office of the City Clerk Approved and signed by me on the day of , 2025, at o'clock .m. James Mueller, Mayor City of South Bend TAX ABATEMENT REPORT TO: South Bend Common Council FROM: Joseph Molnar, Director, Assistant Growth and Opportunity SUBJECT: Vacant Building Real Property Tax Abatement Petition for Studebaker Admin QOZB LLC DATE: January 22, 2025 On January 22, 2025, a petition for tax abatement from Studebaker Admin QOZB LLC was filed with the Office of the City Clerk. The petition seeks consideration for a vacant building tax abatement for property 635 S. Main Street in south downtown South Bend. Pursuant to Chapter 2, Article 6, Section 2-84.9 of the Municipal Code of the City of South Bend, the petition was referred to the Department of Community Investment for purposes of investigation and preparation of a report determining whether the area qualifies as an Economic Revitalization Area pursuant to Indiana Code 6 1.1-12.1 and all zoning requirements have been met. The Department of Community Investment has reviewed the petition, investigated the area, and makes the following report. Project Summary • The petitioner, Studebaker Admin QOZB LLC, intends to stabilize the former Studebaker Administration Building which has been vacant and deteriorating for the past two decades. • The project will consist of stabilizing the building—including replacing the roof and all windows—to preserve it from further deterioration and potential demolition. • Private investment for this project is approximately $920,000. • By saving this historic structure, the petitioner is ensuring its future redevelopment potential, which will incentivize additional investment into the south edge of downtown South Bend. Employment Impact Per this petition and supporting material, it is estimated that the project will create temporary construction jobs. Tax Estimates The petitioner qualifies for a two-year (2) vacant building development tax abatement. • Current estimated annual real property taxes: $15,326 • Total estimated combined taxes during the two-year (2) abatement period: $30,652 o Estimated taxes being abated during the abatement period: $20,441 • Estimated total taxes to be paid during the abatement period: $10,211 Abatement Qualification 1. A review of the tax abatements previously granted finds that the petitioner has been granted the following prior abatement. • Resolution No. 4514-15 (12/14/25): Ten-year (10) real property tax abatement for property located at 635 S. Lafayette Blvd granted to RDistrict One LLC. The petitioner (Studebaker Admin QOZB LLC) and RDistrict One LLC are under common ownership. 2. The property is properly zoned for the proposed project. 3. Taxes on the property have been paid in full. 4. A review of the South Bend Redevelopment designation areas finds that the property is in the River West Development Area. 5. A review of the Tax Abatement Ordinance No. 9394-03 finds that the petitioner meets the qualifications for a Two-year (2) vacant building tax abatement under Division 9 (Miscellaneous Real Property Tax Abatement), Section 2-84 (Council's Authority to Enlarge Real Property Tax Abatement General Standards). 2 2-Year Abatement January 16,2025 Studebaker Center LLC South Bend Portage Township Vacant Building Tax Abatement Schedule * Property Address: 635 S. Main Street Tax Key Number: 71-08-12-352-001.000-026 Current Year 1 Year 2 Assessed Value(AV) Land $ 58,400 $ 58,400 $ 58,400 Structure 394,500 394,500 394,500 Gross Assessed Value 452,900 452,900 452,900 Abatement(100%of Structure) 100% 75% Abatement Deduction (394,500) (295,875) Net Assessed Value 452,900 58,400 157,025 Property Taxes Assume constant tax rate of 5.3548% Gross Tax(Tax Rate x Net AV) 24,252 3,127 8,408 Local Tax Credit(12.3682%of GT-DS (2,784) (359) (965) Circuit Breaker Credit (6,141) - - Taxes Due $ 15,326 $ 2.768 $ 7,443 3% 3% 3% Circuit Breaker Cap 13,587 13,587 13,587 Debt Service(0.3840%of Net AV) 1,739 224 603 Max Tax Under the Cap 15,326 13,811 14,190 Year Abatement Taxes Due Taxes Abated Net Taxes Paid 1 100% $ 15,326 $ (12,558) $ 2.768 2 75% 15,326 (7,883) 7,443 Total: 30,652 (20,441) 10,211 *This schedule is for estimation purposes only and assumes constant tax rates equal to those for 2023 Payable 2024. The true tax values will ultimately be determined by the actual assessed valuation and the then current tax rates. 1 `� Department of Community Investment a •e ' City of South Bend City of South Bend Instructions:Complete pages 1-3 AND the proper Form SB-1 for for Incentives Petition the type of abatement(real property or personal property) Petition must include a$250 filing fee payable to the for which you are applying. "City of South Bend"before processing can be complete General Information Project Name I Studebaker Administration Project Number Legal name as registered with Secretary of State Studebaker Admin QOZB LLC Business structure Limited Liability Company Company website Proposed Project Information Proposed project address 635 S.Main Street Parent company name • City,State,Zip South Bend,IN 46601 Legal owner Site acreage or acreage required Is the real estate owned Owned 2.3 or leased? Square feet of facility 149,595 If leased,by whom? Primary Contact Information Primary company contact name Kevin Smith Title Member Address of company contact 506 W.South Street Phone 574-514-2959 City,State,Zip South Berd, IN 46601 Email k.smith@iqi-bi.com Senior Official Information Company senior official name Title Address of company contact Phone (if different from above) City,State,Zip Email Consultant Information/Agent Hired business consultant/agent name Consultant release?(Y/N) Address Local economic development partners approval?(Y/N) !City,State,Zip Email Project Overview Brief description of your company,project,and why the The primary objective is to stabilize the Studebaker Administration property is necessary for building, preserve its historical significance, and position it for future economic growth development. Immediate actions focus on structural stabilization and environmental remediation, with the City of South Bend and Indiana Landmarks as collaborators. Certified Technology Park appropriate 1 Is the project in a Tax Incremental Financing (TIF)area? If so,which? Have Building Permits been issued?(YIN) Number of residential units created by ggpp,, [Note-Not eligible for abatement if Yes] No project None If this is a petition for personal property tax abatement,has the equipment been installed? Investment Details Public Infrastructure needs Has any 504 funding been What is the value of any equipment being purchased in I What is the value of any equipment being (Off-site of project in dollars) received? Indiana for the project? purchased from out of state for the project? New Project Investments Calendar Year 2023 2024 2025 2026 2027 2028 2029 2030 Land Acquisition Building Lease Payments it Building Purchase Costs p$809,000.00 New Building Construction Existing Building Improvements S 1,227,000.00 New Machinery&Equipment Special Tooling/Retooling New Furniture/Fixtures New Computer/IT Hardware New Software On-site Rail Infrastructure On-site Fiber Infrastructure TOTAL $0.00 $0.00 $2.036,000.00 $0.00 $0.00 $0.00 $0.00 $0.00 Full-Time Permanent Indiana-Resident Positions by Calendar Year Calendar Year Jobs retained I Hourly Cumulative H of net NEW full time Hourly average wage,w/o Total training Total C to be average permanent jobs created at project benefits or oonuses,of expenditure- trained-not wage,w/o benefits or cumulative net new jobs not cumulative bonuses cumulative 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Provide hourly wage information for new employees in the following positions. Full time Part time Laborers Technical Managerial Administrative Who will be the individual responsible for coordinating with WorkOne on recruiting? Does your company have an EEO hiring policy? Are you an EEO employer? Please list the number of full time and part time minority and/or female Please describe your commitment to employees for the following years: diversity and inclusion by detailing your Year outreach and recruitment efforts for the last 2024 2023 2022 three years as well as current policies. Full Time Part Time Full Time Part Time Full Time Part Time Black Hispanic Asian Indian Female Other �`="" STATEMENT OF BENEFITS r 20 24 PAY 20 25 --. - VACANT BUILDING DEDUCTION FORM SB-1 I VBD J f State Form 55182(R2/1-21) �' ,,,. F Prescribed by the Department of Local Government Finance PRIVACY NOTICE This statement is being completed for real property that qualifies as an"eligible vacant building"as defined by The cost and any specific individual's IC 6-1.1-12.1-1(17). salary information is confidential;the balance of the filing Is public record per IC 6-1.1-12.1-5.1(c)and(d). INSTRUCTIONS: 1. This statement must be submitted to the body designating the Economic Revitalization Area prior to the public hearing if the designating body requires information from the applicant in making its decision about whether to designate an Economic Revitalization Area. Otherwise, this statement must be submitted to the designating body BEFORE the occupation of the eligible vacant building for which the person wishes to claim a deduction. 2. To obtain a vacant building deduction,a Form 322NBD must be filed with the county auditor before May 10 in the year in which the property owner or his tenant occupies the vacant building or not later than thirty(30)days after the assessment notice is mailed to the property owner if it was mailed after April 10. If the property owner misses the May 10 deadline in the initial year of occupation,he can apply between January 1 and May 10 of a subsequent year. 3 A property owner who files the Form 322NBD must provide the county auditor and the designating body with a Form CF-1NBD to show compliance with the approved Form SB-1/VBD. The Form CF-1NBD must also be updated each year in which the deduction is applicable. SECTION 1 TAXPAYER INFORMATION Name of taxpayer Studebaker Admin QOZB LLC Address of taxpayer Number and Street: 506 W South Street, Suite 210 city: South Bend State: IN ZIP: 46601 Name of contact person YY1 Telephone number E-mail address First Name: Sue Last Name: St I tlth (574) 340-6257 s.smith@iqi-bi.eom SECTION 2 LOCATION AND DESCRIPTION OF PROPOSED PROJECT Name of designating body Resolution number Common Council of the City of South Bend Location of property County DLGF taxing district number Number and Street: 635 S. Main St. City: soaihBend State: IN ZIP:46601 St. Joseph - 026 (South Bend - Portage) Description of eligible vacant building that the property owner or tenant will occupy(use additional sheets if necessary). Estimated occupancy date(month,day,year) Former Studebaker Administration Building Estimated date placed-in-use(month,day,year) SECTION 3 ESTIMATE OF EMPLOYEES AND SALARIES AS A RESULT OF PROPOSED PROJECT Current Number Salaries Number Retained Salaries Number Additional Salaries SECTION ESTIMATED TOTAL COST AND'VALUE OF PROPOSED PROJECT REAL ESTATE IMPROVEMENTS COST ASSESSED VALUE Current values $518,653 452.900 Plus estimated values of proposed project s 402,000 Less values of any property being replaced Net estimated values upon completion of project S 920,653 $452,900 SECTION 5 EFFORTS TO SELL OR LEASE VACANT BUILDING Described efforts by the owner or previous owner to sell,lease,or rent the building during period of vacancy' Building was for sale for the past few years and has deteriorated during that time frame. Show amount for which the building was offered for sale,lease,or rent during period of vacancy. 518,653 List any other benefits resulting from the occupancy of the eligible vacant building. Saving of a historic structure. SECTION 6 TAXPAYER CERTIFICATION _ I hereby certify that the representations in this statement are true. Signer irau trorized represintat 1 Title Date sig (month, y;year) C. '"---.,r)^ 0 Ift‘n /I 7.--S"-- - / 7--/ '' ..-6 Page 1 of 2 FOR USE OF THE DESIGNATING BODY We find that the applicant meets the general standards in the resolution adopted or to be adopted by this body. Said resolution,passed or to be passed under IC 6-1.1-12.1,provides for the following limitations: A. The designated area has been limited to a period of time not to exceed Il/a calendar years*(see below). The date this designation expires is 12/31/2027 . NOTE:This question addresses whether the resolution contains an expiration date for the designated area. B. The amount of the deduction applicable is limited to$ n/a C. Other limitations or conditions(specify) n/a D. Number of years allowed: ❑ Year 1 Year 2 ❑ Year 3 ❑ Year 4 ❑ Year 5(*see below) ❑ Year 6 ❑ Year 7 ❑ Year 8 ❑ Year 9 ❑ Year 10 E. For a statement of benefits approved after June 30,2013,did the designating body adopt an abatement schedule per IC 6-1.1-12.1-17? El Yes ❑ No If yes,attach a copy of the abatement schedule to this form. If no,the designating body is required to establish an abatement schedule before the deduction can be determined. We have also reviewed the information contained in the statement of benefits and find that the estimates and expectations are reasonable and have determined that the totality of benefits is sufficient to justify the deduction described above. Approved(signature and title of authorized member of designating body) Telephone number Date signed(month,day,year) Printed name of authorized member of designating body Name of designating body Common Council of the City of South Bend, Indiana Attested by(signature and title of attester) Printed name of attester "if the designating body limits the time period during which an area is an economic revitalization area,that limitation does not limit the length of time a taxpayer is entitled to receive a deduction to a number of years that is less than the number of years designated under IC 6-1.1-12.1-17. IC 6-1.1-12.1-1 (17) "Eligible vacant building"means a building that: (A)is zoned for commercial or industrial purposes;and (B)is unoccupied for at least one(1)year before the owner of the building or a tenant of the owner occupies the building,as evidenced by a valid certificate of occupancy,paid utility receipts,executed lease agreements,or any other evidence of occupation that the department of local government finance requires. IC 6-1.1-12.1-17 Abatement schedules Sec.17. (a)A designating body may provide to a business that is established In or relocated to a revitalization area and that receives a deduction under section 4 or 4.5 of this chapter an abatement schedule based on the following factors: (1) The total amount of the taxpayer's investment in real and personal property. (2) The number of new full-time equivalent jobs created. (3) The average wage of the new employees compared to the state minimum wage. (4) The infrastructure requirements for the taxpayer's investment. (b)This subsection applies to a statement of benefits approved after June 30,2013. A designating body shall establish an abatement schedule for each deduction allowed under this chapter. An abatement schedule must specify the percentage amount of the deduction for each year of the deduction. Except as provided in IC 6-1.1-12.1-18,an abatement schedule may not exceed ten(10)years. (c)An abatement schedule approved for a particular taxpayer before July 1,2013,remains in effect until the abatement schedule expires under the terms of the resolution approving the taxpayer's statement of benefits. Page 2 of 2 Aerial and Street Views .o .�f - • "1111111. ,._,, CIe:Mand NA � � � lai 1 -44 0 JA i'li A lidjaesL E f1rnRd -- "I t ���a►'�111N 1h +�o�iwlr a y I II a. i t=1 ��11�H1�111 Ly oti .. .�- .__...�- ---'.1Slu 1- .. W111�11; . nis�aa11 11 .- 10111111 � �a�; 'V1j»u. Ri%iG���G�McKi•: A e "'--to&11 �i i '••::" -.1 -- !'Ave Salk,.tanfw f1e5x yrvf. inurix S w:-^ !! 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