HomeMy WebLinkAboutConfirming Tax Abatement - Great Lakes Capital Development 237 N. Michigan St. (10 Yr. Real Property)Attes
RESOLUTION
4330 -14
Passed by the Common Council of the City of South Bend, Indiana
March 24,
14
20_.
Presented by me to the Mayor of the City of South Bend, Indiana
March 25,
20 14
Approved and signed by me " ' ' - 0
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City Clerk
ident of Common Council
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City Clerk
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RESOLUTION NO. _l 3 o —1 q
A RESOLUTION CONFIRMING THE ADOPTION OF A DECLARATORY
RESOLUTION DESIGNATING CERTAIN AREAS WITHIN THE CITY OF
SOUTH BEND, INDIANA, COMMONLY KNOWN AS
237 North Michigan Street
AS AN ECONOMIC REVITALIZATION AREA FOR
PURPOSES OF A TEN (10) YEAR REAL
PROPERTY TAX ABATEMENT FOR
GREAT LAKES CAPITAL DEVELOPMENT
WHEREAS, the Common Council of the City of South Bend, Indiana, has adopted a
Declaratory Resolution designating certain areas within the City as Economic Revitalization
Areas for the purpose of tax abatement consideration; and
WHEREAS, a Declaratory Resolution designated the area located at 237 North Michigan
Street and which is more particularly described as follows:
Lot 10 P So Bend
Lot 2 & N 33.45'
Lot 30P
and which has Key Numbers 71- 08 -12- 107 - 005.000 -026 and 71 -08 -12 -107- 006.000 -026
presently at this point in time, be designated as an Economic Revitalization Area; and
WHEREAS, petitioner has agreed to and has accepted responsibility to report any
changes in the final legal description and to report the final, appropriate Key Number to the
Department of Community Investment and to the Office of the City Clerk; 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.
NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of South
Bend, Indiana, as follows:
SECTION 1. 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 Real property tax abatement only and is limited to two (2) calendar years
from the date of adoption of the Declaratory Resolution by the Common Council.
SECTION II. The Common Council hereby determines that the property owner is qualified for
and is granted Real property tax deduction for a period of ten (10) years as shown by 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 sea.
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.
PRESEPITE6.- -M,'/L \�I ]
F1oT APPRVAIj
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I
CITY CLERK,�J�Sr
3
227 W. JEFFERSON BOULEVARD
SUITE 1400 S.
SOUTH BEND, IN 46601 -1830
CITY OF SOUTH BEND PETE BUTTIGIEG, MAYOR
COMMUNITY INVESTMENT
SCOTT FORD, EXECUTIVE DIRECTOR
February 12, 2014
Council Member Gavin Ferlic, Chairperson
Community Investment Committee
South Bend Common Council
4th Floor, County City Building
South Bend, IN 46601
RE: Real Property Tax Abatement Petition for:
GREAT LAKES CAPITAL DEVELOPMENT
Dear Council Member Ferlic:
PHONE: 574/235 -9371
FAX: 574/235 -9021
Please find attached the Department of Community Investment's report on a real property tax abatement
petition for the above - referenced petitioner. Also attached is a copy of the petition, Statement of Benefits
form, and supporting information. The project calls for the renovation of the Hotel LaSalle located at 237
North Michigan Street.
The report contains the Department's findings relative to the above petition. The total cost for the renovation
is estimated at $9,537,076.10. The project meets the qualifications for ten -year real property tax abatement
and a representative from Great Lakes Capital Development will be available to meet with the Committee
on Monday, February 24, 2014.
Should you or any of the other Council members have any questions concerning the report, or need
additional information, please feel free to call me at 235 -9339.
Sincerely,
��7z
Brock Zeeb
Director Economic Resources
Attachments
cc: South Bend Common Council Members
Mayor Pete Buttigieg
Scott Ford
Chris Fielding
ASSISTANT EXE.CUTNE DIRECTOR PIANNING NEIGHBORHOOD ENGAGEMENT ECONOMIC RFSOURCES
CHRISFTRIDING JITIN KAIN PAMELA C. MEYER BROCKZEEB
227 W. JEFFERSON BOULEVARD
SUITE 1400 S.
SOUTH BEND, IN 46601 -1830
CITY OF SOUTH BEND PETE BUTTIGIEG, MAYOR
COMMUNITY INVESTMENT
SCOTT FORD, EXECUTIVE DIRECTOR
TAX ABATEMENT REPORT
TO: SOUTH BEND COMMON COUNCIL
FROM: KATHY HAHN
SUBJECT: REAL PROPERTY TAX ABATEMENT PETITION FOR:
GREAT LAKES CAPITAL DEVELOPMENT
DATE: February 12, 2014
PHONE: 574/235 -9371
FAX: 574/235 -9021
On August 21, 2013, a petition for real property tax abatement consideration for property located at 237
North Michigan Street was filed with the City Clerk by Great Lakes Capital Development. Pursuant to
Chapter 2, Article 6, Section 2 -84.2 of the Municipal Code of the City of South Bend, this 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
I.C.6 -1.1 -12.1 and whether 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
In order to strengthen and aid in the redensification of core value within downtown South Bend, the
petitioner proposes interior, exterior, and site renovation for the Hotel LaSalle building. This will mark the
third in five currently slated improvement projects for downtown South Bend. The other sites include
American Trust Place Phase I, Phase II, Main Street Row, and Citizen's Bank & Trust. This all adds to
the value creation for downtown. The proposed rehabilitation will cost $9,537,076.10. After renovation
the primary use would be residential with commercial use on the main level.
ASSISTANT EXECUTIVE DIRECTOR PLANNING NEIGHBORHOOD ENGAGEMENT ECONOMIC RFSOURCES
CHRIS FIELDING JITIN KAIN PAMELA C. MEYER BROCKZEEB
South Bend Common Council
RE: Tax Abatement for Great Lakes Capital Development
February 12, 2014
Page 2
There are three different schedules of taxes abated attached for your review. The first schedule shows
the taxes abated for a 10 year abatement based on our normal everyday calculations. Under this
scenario, taxes abated would be $1,086,677 and net tax paid would be $1,943,305.
The petitioner has requested that we offer the business a more aggressive schedule of taxes abated.
Much of the investment into the building will be "Costs to Cure" as the building has been vacant for
approximately twenty years. The renovation costs are extensive and without a more aggressive
schedule of taxes abated, the project does not cash flow in the first few years. The developer needs a
more aggressive tax abatement than usual in order to complete this project. This scenario is shown on
the attachment called "Petitioner's Requested Schedule. " Taxes abated would be $1,993,298 and net
tax paid would be $1,036,684.
The third schedule called "Best Estimate" shows the Department of Community Investment's best
estimate of taxes abated for this project. Because so much of the rehabilitation costs will be "Costs to
Cure ", the department estimates that the new assessed value of the building will only be $5,340,000
despite a $9.5 million investment. This schedule is based on the $5.3 million assessed value along
with more aggressive rates for taxes abated and shows that taxes abated will be $1,241,636 and net
tax paid will be $696,910.
EMPLOYMENTIMPACT
Per the petition, it is estimated that the project will create nine (9) new, permanent full -time positions and
zero (0) part-time positions with an annual payroll of $315,000. The project will not maintain any jobs.
ABATEMENT QUALIFICATION
A review of the tax abatements previously granted finds that the Petitioner, Great Lakes Capital
Development has not been granted any previous abatements.
2. The Building Commissioner has reviewed the petition and finds the property to be properly zoned
for the proposed project.
The property is located in the Central Business District.
4. A review of the Tax Abatement Ordinance No. 9394 -03 finds that the petitioner meets the
qualifications for a (10) ten -year real property tax abatement under section 2 -80 Mixed Use
Developments in the Central Business District.
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