02-12-96 Community & Economic Development

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Committee Report Community and Economic Development February 12, 1996 Page 3 Following favorable comments by Council Member Zakrzewski,Council Member Luecke made a motion, seconded by Council Member Zakrzewski that Resolution No. 96-12 be recommended favorably to Council.The motion passed. The Committee then returned to Resolution No 96-8 which is a 10 year Real Property Tax Abatement request for the property located at 5820 West F. Jay Nimtz Parkway.Mr.Mike Beitzinger reviewed the report dated February 5, 1996 and noted that the petitioner is requesting a special exception under Section 2-84 of the South Bend Municipal Code. Mr. William Hurst then made the presentation. He noted that currently large hotels are being over built and only larger cities are being looked at by developers and the banking industry. They see a busy Airport in South Bend and that Blackthorn will be busy in the future.They are working with the city and believe that this will be a choice location in the years to come.He noted that for every dollar that a hotel brings in that its is leveraged 7 to 9 times.He stated that the petitioner proposes to build a 4-story 150 room full service hotel on approximately 4.5 acres of land in the Blackthorn Corporate Office Park area.Total cost of the construction is estimated at approximately $10, 000,000.00. He noted that average room rate will be between$70.00 to$72.00 with$64.00 for a single room.There will be a free breakfast and it will be licensed by"Choice International"and it will be of the level of a Marriott Courtyard. In response to a question raised by Council Member Varner, it was noted that there is discussion with regard to a 5 year non-compete for property owned by the Airport Authority and Blackthorn only.Jon Hunt stated that this is a very quality project and spoke in favor of the overall development. He noted that all financing must be in place by February 27, 1997. Mr. Hurst noted that the developer has developed over 450 million dollars of real estate over the past several years. Mr. Beitzinger noted that if they cannot meet the financing deadline that they will have to come back to the Common Council with regard to the tax abatement. tax abatement. Ann Kolata also spoke in favor of the proposed 10 year real property Discussion then took place with regard to why tax abatement was necessary. Ann Kolota noted that the Corporate Park itself is not providing tax abatement incentives for office type structures. The Council Attorney noted that in the proposed Resolution that Section VI sets for the specific reasons why the Council,if they believe a special exception is necessary,believes that the project should go forward with the tax abatement. Council Member Hosinski stated that this is one of the most significant investments in Blackthorn and that the hotel will be cornerstone for continued growth. Council Member Kelly stated that the taxes of$2 1/2 million dollars which would be the amount of taxes paid after the abatement is indeed significant. Council Member Hosinski attempted to make a motion in favor of the proposed abatement however was unable to do so since he was not on the Committee.