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REGULAR MEETING October 22, 2018
<br /> Dan Buckenmeyer, Director of Business Development for the Department of Community
<br /> Investment with offices located on the 14th floor of the County-City Building, South Bend, IN,
<br /> served as the presenter for this bill.Mr.Buckenmeyer stated, While it pales in comparison to black
<br /> walnut ice cream, a $30 million investment in our community is what I will be presenting.
<br /> Everybody knows what South Bend Ethanol is. It was formerly Noble Americas and recently,
<br /> purchased this year by Mercuria who has made a very wonderful commitment to invest in this
<br /> plant and our community. They plan, retain and create some new jobs in an effort to get this plant
<br /> up to date and up to speed with modern equipment and so on, specifically with, again, nearly $30
<br /> million of investment in new equipment they are about to launch on installation in the next few
<br /> months. It will increase the manufacturing capacity significantly from sixty-five (65) million
<br /> gallons per year to one hundred (100) million per year. What is important about this, beyond just
<br /> our City and the jobs that are here, is the ripple effect in the region. In addition to what they are
<br /> investing now, an additional twelve and a half(12.5) million bushels of corn will be purchased by
<br /> local farmers such as the ones that were recently annexed. An anticipated ripple effect of about
<br /> $140 million of direct local economic benefit every year. They will retain sixty-six (66)jobs and
<br /> with the expansion and increased efficiency of this, it will create five (5) new jobs. (Referencing
<br /> a slide in a presentation which is available in the City Clerk's Office) he continued, Just to drill
<br /> down what we are proposing here, it is a five (5) year personal property abatement. It is a phase-
<br /> in. The amount abated in that period of time will be just over$482,000. On this investment alone,
<br /> they will still pay $3,220,000. They are a tremendous contributor to the community from a taxes
<br /> standpoint. In ten(10) years, we estimate they will pay well over$8 million in taxes.
<br /> Major Rhodes, 1415 Enchanted Forest, South Bend, IN, served as the petitioner for this bill. Mr.
<br /> Rhodes stated, What we are actually doing is increasing the capacity of the plant from sixty-five
<br /> (65)million to one hundred(100)million gallons. As Dan said,we will be taking on five (5)more
<br /> people. This is a two (2)year experience so, it will take a bit of time but we be paying back to the
<br /> community in roughly$8 million.
<br /> Councilmember Karen White asked, What is the average income level of those five (5) new
<br /> employees?
<br /> Mr. Rhodes replied, Twenty to twenty-five dollars an hour($20 - $25/hr.).
<br /> Councilmember Jake Teshka stated,Just to reiterate from this afternoon in Committee, if we were
<br /> to not move forward with this abatement,what would be your contingency plan?
<br /> Rob Winks, 50948 Hawthorne Meadow Drive, South Bend, IN, replied, The plan would go
<br /> forward without the abatement. It makes economic sense but the abatement makes it to be a much
<br /> more viable project.The issue is the plant is running at sixty-five percent(65%)capacity and when
<br /> you are a process manufacturer, you must use your assets to one hundred percent(100%)capacity.
<br /> We are basically forced to make this decision because we need to improve the reliability and
<br /> output.
<br /> Councilmember Jake Teshka followed up, Thank you for that. I understand that. As part of my
<br /> job, I oversee a much smaller manufacturing facility and some of the equipment we buy is bought
<br /> for $150,000. So, not quite to your level. But at the same time, I feel like we know, getting into
<br /> the business, that was part of it. We needed to make improvements to the infrastructure of our
<br /> plant from time to time. I guess, for me, I have not seen a real compelling reason to abate in this
<br /> instance.
<br /> Councilmember Oliver Davis asked, Where are we with the future of Ethanol? What are the
<br /> projections of success for this plant?
<br /> Mr. Rhodes replied, Well, right now our ethanol is at a ten percent (10%) blend. There is an
<br /> initiative to go to a fifteen percent (15%) blend and that would get us in to more markets. The
<br /> outlook for ethanol is on the rise.
<br /> Councilmember Oliver Davis followed up, That's good. And so as you look at the five (5) extra
<br /> jobs, what stimulated you to consider five (5) extra jobs at this time?
<br /> Mr. Rhodes replied, Well, as we increase capacity, we are taking more grain from the area and we
<br /> need five (5) additional people to actually take that grain in.
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