03-24-14 Common Council Meeting Minutes

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REGULAR MEETING MARCH 24, 2014 Councilmember Ferlic, Community Investment Committee, reported that this committee held a Public Hearing on this amended bill this afternoon and voted to send it to the full Council with a favorable recommendation. Presenter (Community Investment)- Good Evening Council, the reason to bring before you for resolution for a two year vacant building tax abatement under state code 6 -1.12 this has been another long time coming as council White has stated. This has been a true partnership between IPDC, chamber of commerce, Great Lakes Capital, Holiday Corporation and certainly the great entrepreneurs and future stakeholders of Lippert Industry. So we bring before you a two year tax abatement for the real property total taxes abated would $696,000, total taxes paid over two years would be $400,839, total jobs to be committed to be created during that two year time period would be 200, total jobs committed over a 10 year period are 380. That's it. Councilmember Henry Davis- Was this tax really necessary for this in order for this to happen? Presenter (Community Investment)- Absolutely, this tax abatement and between the old tax abatement these are conversations that are had months sometimes 3 to 6 months in advance to them ever making the decision to build a facility or buy a facility and at no time would a tax abatement nor tax abatement going to give them... These are the incentives that we utilize to attract them to enter into the field. Councilmember Henry Davis- I'm aware of that, what I was wondering if it is a fact that in order of us to show up, we need a tax abatement or do they show up and this is what we can offer you ? Presenter (Community Investment) - No, this facility especially requested it. It's interesting that with this facility the taxes are approximately $500,000 and $600,000 depending on what's the assessment that year. Where the actually advertised lease rate for the building was $1.95. So if you think about it the taxes are almost as much as a potential lease on the building for a year. Sc it makes a huge factor in their decision to take that building in, if they take abatement especially for the first two years, where there in the red for a certain number of months while their still ramping up. They're not even in operations. It absolutely was huge factor in their decision to moving forward. In this situation it's for two years, no longer that two years. Councilmember Dieter- AJ Wright, currently owns the city lease on it right, how much do they still owe? Presenter (Community Investment) - Approximately $354,000 per year for 2022 those numbers might be off, they have seven years remaining. Councilmember Dieter- Also prior to this deal, was there also an outstanding tax bill on that building that was waived? Presenter (Community Investment) - Not that I'm aware of, the building was bought at auction. So maybe the taxes prior to bankruptcy auction that you are speaking about. Councilmember Dieter- Yes, because someone told me that, where would I find that information out? There's $500,000 worth of past previous taxes paid or that were supposedly waived or? Presenter (Community Investment) - Prior to the bankruptcy of Nobel America's, yes at that point. I'm not aware of any outstanding tax for this building that was on the Ethanol plant for the TJX building that I was unaware. And I did check the County Assessor office for those things prior to processing the abatement in town before the City Council meeting. We check that. Councilmember Schey- Just a quick question for you, and may be for the controller. The penalty that AJ Wright are paying are those being paid the redevelopment commission or funds 227? Presenter (Community Investment) - They are paid to 401 $354.000 a year and the other funding on that is used a lot to transfer is made to support the community on the development operations. Councilmember Schey- Is that the same fund as the vouch funds are received? Presenter (Community Investment) - The vouch funds, the primary dollars in that fund have gone M