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®CITY OF SOUTH BEND I OFFICE OF THE CLERK
<br /> James Mueller, Director of Community Investment with offices on the 14th floor of the County-
<br /> City Building stated, We have eleven(11) resolutions today that are modifying the designation
<br /> period of the tax abatements. This does not extend the actual abatement itself, or the benefits that
<br /> come along with the abatement. The only thing being modified is the qualifying time period in
<br /> which they have to get their project done, get it reassessed by the Assessor, and then to have it
<br /> reviewed by the Auditor.
<br /> Mr. Mueller referred to a slide on the presentation (available in the City Clerk's Office). He
<br /> stated, These are tax abatements that are for the familiar projects that you've seen around town:
<br /> the JMS right around the corner, Holiday Inn south of town,the Courtyard Marriott between the
<br /> Chocolate Caf6 and the Century Center, the Hall of Fame just north of that, the Studebaker,
<br /> Imagineering Enterprises has a personal and real property tax abatement, and the Liberty Tower
<br /> just across the way that had a hotel, garage, retail and apartments.
<br /> Mr. Mueller continued, There has been an uptick in tax abatements as the economy has picked up.
<br /> South Bend has seen many booms and busts over the decades, but didn't necessarily take part in
<br /> the booms. Referring to the presentation, he stated, Here is the significant increase in tax
<br /> abatements and business activity since 2010. There has been an explosion in investment over the
<br /> last couple of years. Many of these projects represented today are the reason why. With these
<br /> larger projects,the scale and complexity has increased.Unanticipated issues even come with small
<br /> scale developments because there are unforeseen challenges with every project. A lot of times you
<br /> get through them on time,other times it delays the project from what you originally anticipated. If
<br /> you finish your project on time within the designation period, but given the timeline of the tax
<br /> abatement process, you may not receive your assessed value in time before the designation period
<br /> ends. Looking at the private investments from the property associated with tax abatements over
<br /> the years, you see that 2015 is a peak year, as many of these tax abatements before you are from
<br /> the 2015-2016 time period. As the economy tightened and the unemployment rate decreased, we
<br /> are almost at full employment, and you aren't seeing as many commitments for job creation. He
<br /> referred to the presentation, stating, Overall, we're exceeding what was announced in the"actual"
<br /> categories. In the investment levels, we are a little behind. This is because some of the projects
<br /> have not completed yet. Once they are completed, the actuals will go up. It is important to note
<br /> that they have the period of the tax abatement to phase in the jobs. The period is still ongoing, so
<br /> they still have time to meet those goals. Also, some of the assessed values aren't exactly what we
<br /> projected. In our meeting with Councilmembers Broden and Ferlic and the Assessor's Office, we
<br /> went over our methodology and they said it was a sound approach. Still,we're seeing a mismatch
<br /> between our estimated and assessed value.
<br /> Mr. Mueller explained the process of tax abatements, stating, The petitioner comes in with an
<br /> application,the SB-1 Form. DCI analyzes it and presents it to the Common Council for an up or
<br /> down vote. If the Council approves the abatement, there would be a designating resolution, a
<br /> confirming resolution,then a memorandum of agreement(MOA). Then the project gets started.
<br /> Then projects can change and on the back end, the companies are submitting their CF-1 Forms.
<br /> The Assessors reassess the value of the investment. The abatement is on the increase in value, so
<br /> we are not losing any money, it is basically phasing in the taxes on the new value being
<br /> generated by the new investment. That is an important distinction. We are looking at the personal
<br /> abatements which could be a five (5) year abatement, real property tax abatements can be three
<br /> (3) to ten(10) years, and the vacant building is two (2) years. The designation period, which is
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