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HomeMy WebLinkAbout25-38 Confirming Resolution - Real Property Tax Abatement for South Bend Chippewa, LLC and South Bend Chippewa ACG, LLC Y .y = CITY OF SOUTH BEND COMMUNITY INVESTMENT August 20, 2025 Filed in Clerk's Office Council Member Troy Warner AUG 0 2025 Chairperson, Community Investment Committee South Bend Common Council Bianca Tirado County-City Building, 4'h Floor City Clerk, South Bend, IN South Bend, Indiana 46601 RE: Confirming Resolutions: Industrial Real Property Tax Abatement for South Bend Chippewa, LLC and South Bend Chippewa ACG, LLC Dear Council Member Warner, Please find the enclosed Confirming Resolution, Memoranda of Agreement, and adjusted Form SB-1 for an industrial real property tax abatement for South Bend Chippewa, LLC, and South Bend Chippewa ACG, LLC, which are Foreign Limited Liability Companies with principal offices in Richfield, Ohio. The petitioner intends to redevelop property at 701 W. Chippewa Ave. The redevelopment will occur over 2 phases, with the initial phase consisting of structural and masonry repairs, new facade and siding, utility upgrades, paving and concrete, lighting and landscaping improvements. The second phase will include the demolition and renovation of former aviation testing cell areas on the property. The project meets the qualifications for an eight-year (8) industrial development real property tax abatement. A representative from South Bend Chippewa, LLC/South Bend Chippewa ACG, LLC, will be available to meet with the Committee on Monday, August 25, 2025. Should you or other Council members have questions about the report or need additional information, please feel free to call me at (574) 235-5836. Sincerely, Mark Bemenderfer Manager of Business Development EXCELLENCE ACCOUNTABILITY INNOVATION INCLUSION EMPOWERMENT 1400S County-City Building 227W.Jefferson Blvd. South Bend,Indiana 46601 p 574.235.9371 www.southbendin.gov i. ,1' 3 rsi i'3311-? s ,f L �.c1 J • Filed in Clerk's Office AUG 2 0 2025 BILL NO. 25-38 rado RESOLUTION NO. Bianca South Bend,Clerk, South Bend, IN A RESOLUTION CONFIRMING THE ADOPTION OF A DECLARATORY RESOLUTION DESIGNATING CERTAIN AREAS WITHIN THE CITY OF SOUTH BEND, INDIANA, COMMONLY KNOWN AS 701 W. Chippewa Ave, South Bend, IN 46614 AN ECONOMIC REVITALIZATION AREA FOR PURPOSES OF AN EIGHT-YEAR (8) REAL PROPERTY TAX ABATEMENT FOR South Bend Chippewa, LLC AND South Bend Chippewa ACG, LLC WHEREAS, the Common Council of the City of South Bend, Indiana, has adopted a Declaratory Resolution designating certain areas within the City as an Economic Revitalization Area for the purpose of tax abatement consideration; and WHEREAS, a Declaratory Resolution designated the area described as: Key Number: 71-08-23-400-001.000-026 Local Parcel Number: 018-8020-0837 Commonly Known As: 701 W Chippewa Ave Legal Description: Lot 1 Indiana G R Q Minor Sub 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, notice of the adoption of a Declaratory Resolution and the public hearing before the Council has been published pursuant to Indiana Code 6-1.1-12.1-2.5; and WHEREAS, the Council held a public hearing for the purposes of hearing all remonstrances and objections from interested persons; and WHEREAS, the Council has determined that the qualifications for an economic revitalization area have been met; and WHEREAS, the Council adopted Declaratory Resolution No. 5140-25 on June 23, 2025. Alut;,) ,!1,4 NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of South Bend, Indiana, as follows: SECTION I. The Common Council hereby confirms its Declaratory Resolution designating the area described herein as an Economic Revitalization Area for the purposes of tax abatement. Such designation is for an industrial development real property tax abatement only and shall expire on December 31, 2028. SECTION II. The Common Council hereby determines that the property owner is qualified for and is granted real property tax deduction for up to a period of eight (8) years as shown by the schedule outlined below as well as the attachment pursuant to Indiana Code 6-1.1-12.1-17 and further determines that the petition, the Memorandum of Agreement between the Petitioner and the City of South Bend, and the Statement of Benefits comply with Chapter 2, Article 6, of the Municipal Code of the City of South Bend and Indiana Code 6-1.1-12 et seq. Year 1 - 100% Year 2 - 95% Year 3 - 90% Year 4 - 85% Year s - 80% Year 6 - 75% Year 7 - 70% Year 8 - 65% SECTION III. This Resolution shall be in full force and effect from and after its adoption by the Common Council and approved by the Mayor. Canneth J. Lee, Council President South Bend Common Council Attest: Bianca L. 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 L. 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, Indiana Filed in Clerk's Office 2 0 2(.125 rado MEMORANDUM OF AGREEMENT Bianca Tth Bend,Clerk, South Bend, IN (INDUSTRIAL DEVELOPMENT REAL PROPERTY TAX ABATEMENT) This Memorandum of Agreement (this "Agreement") dated as of July 17, 2025, serves as confirmation of a commitment by South Bend Chippewa, LLC and South Bend Chippewa ACG, LLC (the "Applicants"), pending a July 28, 2025, public hearing, to comply with the project description,job creation and retention (and associated wage rates and salaries) figures contained in its petition, Statement of Benefits, and attachments and this Agreement. 1. Property Associated with the Abatement and Responsibilities of the Applicants. At the time of this Agreement, the property is located at 701 W. Chippewa St,South Bend, IN 46614,and has Key Number 71-08-23-400-001.000-026 (the "Property"). Throughout the duration of the abatement, the Applicants shall promptly report any changes in the address or Key Number of the property receiving the abatement to the Department of Community Investment and to the Office of the City Clerk. Moreover,the Applicants also shall report any material changes or improvements made to the property subject to the abatement including changes as the result of subdividing, replatting, or otherwise. The Applicants agrees that failure to promptly report changes can result in a finding of noncompliance on behalf of the Applicants under the commitments of this Agreement. 2. Commitments of City and Applicants. Subject to the adoption of a Declaratory Resolution and a Confirmatory Resolution by the South Bend Common Council(the"SBCC"),the City of South Bend, Indiana,(the"City")commits to provide an eight-year(8)industrial development real property tax abatement for the Applicants, based on the Applicants' commitment set forth in its Application. The Applicants commit to the following(the"Commitments"): (a)making total combined real property expenditures of no less than Six Million Nine Hundred Thousand Dollars($6,900,000.00) for the rehabilitation of the Property; (b)contingent upon the activation of space that houses the former test cell area of the Property, creating at least fifty-five (55) permanent full-time jobs with a total estimated annual payroll of at least One Million Nine Hundred Forty-Four Thousand Eight Hundred dollars($1,944,800); and (c) acting in good faith to complete the project as described in its Application. 3. Applicants' Compliance with City and State Laws. During the term of the abatement, the Applicants shall comply with Chapter 2, Article 6, of the South Bend Municipal Code, entitled"Tax Abatement Procedures," and all governing provisions of the Indiana Code. During the term of this abatement, the City may annually request information from the Applicants concerning the nature of the Project, the approved capital expenditure of the Project, the number of full-time permanent positions newly created by the Project, and the average wage rates and salaries (excluding benefits & overtime)associated with the positions,and the Applicants shall provide the City with adequate written evidence thereof within fifteen(15)days of such request(the"Annual Survey"). The City shall utilize this information and the information required to be filed by the Applicants in the CF-1 Compliance with the Statement of Benefits form to verify that the Applicants has at all times complied with the Commitments after the Commitment Date and during the duration of the abatement and for no other 1 li �•,,. t.� purpose. The Applicants further agree to provide the City with such additional information as requested by the City to determine Applicants' compliance with the Commitments and with local and state requirements within twenty (20) days following any such request. Notwithstanding anything herein to the contrary, the Applicants acknowledges that the City may be required to disclose certain documents provided by the Applicants as required by a court order or applicable law. 4. Substantial Compliance and Rights of Termination. The City, by and through the SBCC, reserves the right to terminate the Economic Revitalization Area designation and associated property tax abatement deductions if it reasonably determines that the Applicants have not made reasonable efforts to substantially comply with all the Commitments, as defined in Section 2 of this Agreement, and the Applicants' failure to substantially comply with the Commitments was not due to factors beyond its reasonable control, as described in Section 5 below. 5. Factors Beyond Control. As used in this Agreement, factors beyond the control of the Applicants shall include,but not be limited to,conditions that negatively impact the Applicant's ability to perform under this Agreement, including: (a)economic downturns,recessions,or market conditions; (b) major supply chain disruptions; (c) labor shortages or disputes; (d) acts of God; (e) pandemics or public health emergencies;(f)changes in laws or regulations;(g)delays in obtaining necessary permits or approvals not caused by Applicants; (h) construction delays not caused by Applicants; and (i) any other factors not reasonably foreseeable at the time of designation application and submission of Statement of Benefits which are not caused by any act or omission of the Applicants, and which materially and adversely affect the ability of the Applicants to substantially comply with this Agreement. Applicants have the burden to communicate to the City any such factors in which it believes is beyond its control and impacting its ability to fulfill the terms of this Agreement or any tax abatement benefit provided to the City. The City reserves the right to investigate the factors cited by Applicants under this Section 5 to the fullest extent possible and may deny Applicants' request upon the completion of the City's investigation. 6. Repayment of Tax Abatement Savings. If at any time during the term of this Agreement the Applicants shall: (a) be delinquent or in default with respect to any tax payment in St. Joseph County, Indiana;or(b)cease operations at the facility for which the tax abatement was granted;or(c)announce the cessation of operations at such facility, then the City may immediately terminate the Economic Revitalization Area designation and associated tax abatement deductions, and upon such termination, require Applicants to repay all of the tax abatement savings received through the date of such termination. 7. Notice/Hearing of Termination. In the event that the City determines that the Economic Revitalization Area designation and associated tax abatement deductions should be terminated or that all or a portion of the tax abatement savings should be repaid, it will give the Applicants notice of such determination, including a written statement calculating the amount due from the Applicants, and will provide the Applicants with an opportunity to meet with the City's designated representatives to show cause why the abatement should not be terminated and/or the tax savings repaid. Such notice shall state the names of the person with whom the Applicants may meet and will provide that the Applicants shall have thirty (30) days from the date of such notice to arrange such meeting and to provide its evidence concerning why the abatement termination and/or tax savings repayment should not occur. If, after giving such notice and receiving such evidence, if any,the City determines that the abatement 2 termination and/or the tax repayment action is proper, the Applicants shall be provided with written notice and a hearing before the SBCC before any final action shall be taken terminating the abatement and/or requiring repayment of tax benefits. The Applicants shall be entitled to appeal that determination to a St. Joseph County Superior or Circuit Court. 8. Repayment. In the event the City requires repayment of the tax abatement savings as provided hereunder, it shall provide Applicants with a written statement calculating the amount due (the "Statement"),and Applicants shall make such repayment to the City within one hundred twenty(120) days of the date of the Statement. If the Applicants do not make timely repayment, the City shall be entitled to all reasonable costs and attorneys' fees incurred in the enforcement of this Agreement and the collection of the tax abatement savings required to be repaid hereunder. 9. Modification/Entire Agreement. This Agreement and the schedules attached hereto as Exhibit A contain the entire understanding between the City and the Applicants with respect to the subject matter hereof, and supersede all prior and contemporaneous agreements and understandings, inducements, and conditions, expressed or implied, oral, or written, except as herein contained. This Agreement may not be modified or amended other than by an agreement in writing signed by the City and the Applicants. The Applicants understand that any and all filings required to be made or actions required to be taken to initiate or maintain the abatement are solely the responsibility of the Applicants. 10. Waivers. Neither the failure nor any delay on the part of the City to exercise any right,remedy, power, or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power, or privilege preclude any other or further exercise of the same or of any other right,remedy,power,or privilege with respect to any occurrence or be construed as a waiver of such right, remedy,power,or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver. 11. Notices. All notices, requests, demands, and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been received when delivered by hand or by facsimile (with confirmation by registered or certified mail) or on the third business day following the mailing,by registered or certified mail,postage prepaid,return receipt requested,thereof, addressed as set forth below: If to Applicants: Indiana GRQ, Inc 4020 Kinross Lakes Pkwy, Suite 200, Richfield, OH 44286 Attn: Michele Kiernan& Matt DeVicchio If to the City: City of South Bend, Indiana 227 W. Jefferson Boulevard, Suite 1400S South Bend, Indiana 46601 Attn: Executive Director of Community Investment 12. Governing Laws of Indiana. This Agreement and all questions relating to its validity, interpretation,performance,and enforcement shall be governed by the laws and decisions of the courts of the State of Indiana. 3 1 1 _ 13. Applicants' Consent to Jurisdiction. The Applicants hereby irrevocably consent to the jurisdiction of the Courts of the State of Indiana and of the St. Joseph County Circuit or Superior Court in connection with any action or proceeding arising out of or relating to this Agreement or any documents or instrument delivered with respect to any of the obligations hereunder, and any action related to this Agreement shall be brought in such County and in such Court. 14. Assignment and Transfer Prohibited. This Agreement shall be binding upon and inure to the benefit of the City and the Applicants and their successors and assigns, except (a) that no party may assign or transfer its rights or obligations under this Agreement without the prior written consent of the other party hereto, in which consent shall not be unreasonably withheld, conditioned or delayed and (b) Applicants may assign and transfer their rights under this Agreement to the Permitted Assign without prior written consent. "Permitted Assign" means the affiliated single purpose entity created for purposes of designing, constructing, owning, operating, and maintaining the project which is the subject of this Agreement. 15. Valid and Binding Agreement. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original as against any party whose signature appears thereon, and all of which shall together constitute one and the same instrument. By executing this Agreement, each person so executing affirms that he has been duly authorized to execute this Agreement on behalf of such party and that this Agreement constitutes a valid and binding obligation of the party. 16. Severability. The provisions of this Agreement and of each section or other subdivision herein are independent of and separable from each other,and no provision shall be affected or rendered invalid or unenforceable by virtue of the fact that for any reason any other or others of them may be invalid or unenforceable in whole or in part unless this Agreement is rendered totally unenforceable thereby. 17. No Personal Liability. No official, director, officer, employee, or agent of the City shall be charged personally by the Applicants, its employees, or its agents with any liabilities or expenses of defense or be held personally liable to the Applicants under any term or provision of this Agreement or because of the execution by such party of this Agreement or because of any default by such party hereunder. [Remainder of page intentionally blank.' 4 c IN WITNESS WHEREOF,the parties hereto have executed this Agreement as of the day and year first above written. "Applicants" "City" South Bend Chippewa, LLC & South Bend City of South Bend, Indiana Chippewa ACG, LLC By: By: `//�fL� Canneth Lee Michele Kiernan President, South Bend Common Council Authorized Agent Indiana GRQ, Inc By: Approved as to Legal Adequacy and Form this Troy Warner day of , 2025. Chairperson, Community Investment Committee Counsel, South Bend Common Council By: Erik Glavich Department of Community Investment Counsel for Applicants By: James Mueller Mayor 5 - - I I I - - - EXHIBIT A Abatement Schedule Subject to the adoption by the SBCC of a resolution confirming the adoption of Declaratory Resolution No. 5140-25, the property owner is qualified for and is granted an industrial development real property tax abatement for a period of eight(8) years as shown by the schedule outlined below. Year 1 - 100% Year 2 - 95% Year 3 - 90% Year 4 - 85% Year 5 - 80% Year 6 - 75% Year 7 - 70% Year 8 - 65% 6 1 STATEMENT OF BENEFITS 2025 PAY2026 1.1 REAL ESTATE IMPROVEMENTS axtri� State Form 51767(R7/1-21) FORM SB-1 I Real Property • `'" Prescribed by the Department of Local Government Finance "° PRIVACY NOTICE This statement is being completed for real property that qualifies under the following Indiana Code(check one box): Any information concerning the cost E Redevelopment or rehabilitation of real estate improvements(IC 6-1.1-12.1-4) of the property and specific salaries paid to individual employees by the ❑ Residentially distressed area(IC 6-1.1-12.1-4.1) property owner is confidential per IC 6-1.1-12.1-5.1. 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 redevelopment or rehabilitation of real property for which the person wishes to claim a deduction. 2. The statement of benefits form must be submitted to the designating body and the area designated an economic revitalization area before the initiation of the redevelopment or rehabilitation for which the person desires to claim a deduction 3. To obtain a deduction.a Form 322/RE must be filed with the county auditor before May 10 in the year in which the addition to assessed valuation is made or not later than thirty(30)days after the assessment notice is mailed to the property owner if it was mailed after April 10. A property owner who failed to file a deduction application within the prescribed deadline may file an application between January 1 and May 10 of a subsequent year 4. A property owner who files for the deduction must provide the county auditor and designating body with a Form CF-1/Real Property. The Form CF-1/Real Property should be attached to the Form 322/RE when the deduction is first claimed and then updated annually for each year the deduction is applicable IC 6-1.1-12.1-5.1(b) 5. For a Form SB-1/Real Property that is approved after June 30. 2013, the designating body is required to establish an abatement schedule for each deduction allowed. For a Form SB-1/Real Property that is approved prior to July 1. 2013, the abatement schedule approved by the designating body remains in effect. IC 6-1.1-12.1-17 SECTION 1 TAXPAYER INFORMATION Name of taxpayer South Bend Chippewa, LLC & South Bend Chippewa ACG, LLC Address of taxpayer Numhcr and Street: 4020 Kinross Lakes Pkwy Ste. 200 City. Mishawaka State: IN ZIP. 46545 Name of contact person Telephone number E-mail address Pirsi Name. Michele List Name' Kiernan (330)671-9825 mkiernan@irgra.com 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 Number and rirunt City Sian ZIP County DLGF taxing district number 701 W Chippewa St South Bend IN 46614 St. Joseph 026(South Bend-Portage) Description of real property improvements.redevelopment.or rehabilitation(use additional sheets if necessary) Estimated start date(month day.year) Rehabilitation of the property accomplished through 2 phases:Phase 1 includes,but is not restricted to,structural and masonry repairs, 9/1/2025 new facade and siding,utility upgrades,paving and concrete,landscaping improvements,lighting,and more. Phase 2 includes,but is not limited to,demolition and development of the former test cell area of the building(comprising approximately Estimated completion date(month,day year) 221,000 sq ft),additional building improvements and development as necessary 6/1/2027 SECTION 3 ESTIMATE OF EMPLOYEES AND SALARIES AS RESULT OF PROPOSED PROJECT Current Number Salaries Number Retained Salaries Number Additional Salaries 200 $6,800,000 200 $ 6,800,000 55 $ 1,944,800 SECTION 4 ESTIMATED TOTAL COST AND VALUE OF PROPOSED PROJECT REAL ESTATE IMPROVEMENTS COST ASSESSED VALUE Current values $0 $9.841,500 Plus estimated values of proposed project $6,900,000 $4,140,000 Less values of any property being replaced $0 $0 Net estimated values upon completion of project $6,900.000 $13,981,500 SECTION 5 WASTE CONVERTED AND OTHER BENEFITS PROMISED BY THE TAXPAYER Estimated solid waste converted(pounds) Estimated hazardous waste converted(pounds) Other benefits Filed in Clerk's Office AUG 2 0 2025 Bianca Tirado City Clerk, South Bend, IN SECTION 6 TAXPAYER CERTIFICATION I hereby certify that the representations in this statement are true. __. - tive Date signed(month,day year) /1/j1l 8/13/2025 Printed name of authorized representative Title Michele Kiernan Authorized Agent Page 1 of 2 • A)01%_) fit 6. FOR USE OF THE DESIGNATING BODY We find that the applicant meets the general standards in the resolution adopted or to be adopted by this body. Said resolution.passed or to be passed under IC 6-1.1-12.1,provides for the following limitations: A. The designated area has been limited to a period of time not to exceed n/a calendar years"(see below). The date this designation expires is 12/31/2028 . NOTE:This question addresses whether the resolution contains an expiration date for the designated area. B. The type of deduction that is allowed in the designated area is limited to: 1.Redevelopment or rehabilitation of real estate improvements 0 Yes ❑No 2.Residentially distressed areas ❑Yes No C. The amount of the deduction applicable is limited to$ n/a D. Other limitations or conditions(specify) n/a E. Number of years allowed ❑Year 1 ❑Year 2 ❑Year 3 ❑Year 4 ❑ Year 5 (*see below) ❑Year 6 ❑Year 7 Q Year 8 ❑Year 9 ❑ Year 10 F. For a statement of benefits approved after June 30.2013,did this 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. A. For residentially distressed areas where the Form SB-1/Real Property was approved prior to July 1,2013,the deductions established in IC 6-1.1-12.1-4.1 remain in effect.The deduction period may not exceed five(5)years. For a Form SB-1/Real Property that is approved after June 30. 2013.the designating body is required to establish an abatement schedule for each deduction allowed. Except as provided in IC 6-1.1-12.1-18.the deduction period may not exceed ten(10)years. (See IC 6-1.1-12.1-17 below.) B. For the redevelopment or rehabilitation of real property where the Form SB-1/Real Property was approved prior to July 1.2013.the abatement schedule approved by the designating body remains in effect. For a Form SB-1/Real Property that is approved after June 30.2013.the designating body is required to establish an abatement schedule for each deduction allowed.(See IC 6-1.1-12.1-17 below.) 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 taxpayers 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 taxpayers 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 taxpayers statement of benefits. Page 2 of 2 1111 �.