11-27-17 Council Minutes - Laserfiche WebLink

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REGULAR MEETING November 27, 2017 REVITALIZATION AREA FOR PURPOSES OF A(6) SIX-YEAR REAL PROPERTY TAX ABATEMENT FOR RIVER PARK LEASING CORPORATION Councilmember Gavin Ferlic, Chair of the Community Investment Committee, reported that they met this afternoon and send this bill forward with a favorable recommendation. Dan Buckenmeyer, Director of Business Development for the Department of Community Investment, with offices on the 14th floor of the County-City Building, South Bend, IN, served as the presenter of this bill. Mr. Buckenmeyer stated, We are here to launch the revitalization of the block immediately south of this building. What used to be a fully developed downtown block is now a sea of parking, and we are looking to change that. The northeast corner of the block was home to the Hotel Jefferson for most of the 1900s. In 1979,that four (4) story structure was demolished to make way for a Hardy's, only to be demolished itself in 2000. Since then and for almost the past two (2) decades, that corner of the block has sat vacant. It is owned by the City but is generating no revenues or benefits for our citizens. We are thrilled to present an opportunity to avoid this situation happening for another decade or two (2). The Department of Community Investment is recommending the approval of a resolution to designate that corner as an economic revitalization area to aid in the revitalization of that block, and provide an assessed value deduction or tax abatement to the property in order to incent and enable this exciting and important property in question. The property in question will actually sit on the parcel that includes only the eastern most half of the lot and the City will maintain ownership of the western half of the lot in anticipation of incenting and activating future development. This will be the first new downtown South Bend office building or development in about twenty (20) years. It also sits on a meaningful artery between downtown and the ballpark. The proposed building includes high-end retail with four(4) floors of Class-A office space above. It would be five (5) stories and 3,800 square feet in total. When we evaluate opportunities to support economic development in the City of South Bend, the top two (2) of the many factors we look at are the levels of private investment and job creation. This building's expected $9 million price tag represents significant private investment whilst also representing significant risk. It is important to note that this is a new SPEC Building. The retail space is not contracted at this point. We are in an era of high construction costs which also increases the risk. Known and committed job creation will stem from this project. The owner has committed to creating fifteen (15) new jobs with a payroll of$750,000 per year. In addition to those jobs, we anticipate there will be significant indirect job creation resulting from the activation of ground floor retail and the other offices. We, the City, are selling the parcel to the developer for$50,000. The owner of the development citied that, "The recent revitalization of down town South Bend is an impetus for his decision to locate here." We are thrilled to present this opportunity to the Council and hope you are equally as excited. This property has sat idle and made no contributions to the tax rolls for decades. The Department of Community Investment staff recommends to the Council the approval of this resolution for a real property tax abatement at one hundred percent (100%) for six(6)years. When the abatement does finish, the property is expected to generate up to about $250,000 in tax revenues. Jeff Smoke, Great Lakes Capital, 112 W. Jefferson Boulevard, South Bend, IN, served on behalf of the petitioner of this bill. Mr. Smoke stated, We are pretty excited about this project. It is the first office building built in down town South Bend in a number of years. Councilmember Oliver Davis asked, Could you talk about any key environmental benefits the owner plans to do with the building? Will you be going after LEAD Certifications? Mr. Smoke replied, We are looking at all those facets and, given the cost to this new office building construction, the most environmentally friendly thing we can do is to make it energy efficient. We are definitely utilizing the latest technology for that but are also looking into green roofs. Councilmember Jo M. Broden asked, Was there an independent appraisal analysis for the land value? 13