Loading...
HomeMy WebLinkAbout2001-R-31 RESOLUTION 2001-R- ~\ RESOLUTION APPROVING STATEMENT OF BENEFITS FOR PURPOSES OF PROPERTY TAX ABATEMENT WHEREAS, Eagle Steel Products, Inc.i has petitioned the Common Council of the City of Jeffersonville, Indiana, for a deduction in personal property taxes to be assessed on proposed improvements to be made on property located in' the area commonly known as the Clark Maritime Centre, in the City of Jeffersonville, Clark County, Indiana; and WHEREAS, Eagle Steel Products, Inc., has submitted an application which includes the Statement of Benefits on the form prescribed by the Indiana State Board of Tax Commissioners for such purpose, which application and statement include a description of the proposed redevelopment,' an estimate of the number of individuals who will be employed as a result of the redevelopment, an estimate of the annual salaries of these individuals, and an estimate of the value of the redevelopment, attached hereto as Exhibit A; and WHEREAS, by Ordinance No. 90-0R-56, on November 7, 1990, the Common Council of the City of Jeffersonville designated the area where the proposed redevelopment project is located in the City of Jeffersonville as an Economic Development Target Area pursuant to Indiana Code 6-1.1-12.1 et seq., specifically IC 6-1.1-12.1-7; and WHEREAS, the City's Department of Redevelopment has reviewed the application and Statement of Benefits submitted by the Applicant and has advised the Common Council that the application has been submitted in compliance with the approved Tax Abatement Policy of the Common Council of the City of Jeffersonville. NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of Jeffersonville, Indiana, that it specifically and affirmatively finds as follows: 1. That the estimate of the value of the redevelopment is reasonable for projects of the nature described in the Statement of Benefits submitted by the Applicant. 2. That the estimate of the number of individuals who will be employed or whose employment will be retained can reasonably be expected to result from the proposed described redevelopment. 3. That the estimate of the annual salaries of those individuals who will be employed or whose employment will be retained can be reasonably expected to result from the proposed described redevelopment. 4. That all other information requested from the Applicant has been submitted, and the benefits described in such information can be reasonably expected to result from the proposed described redevelopment. 5. That the totality of benefits for said redevelopment is sufficient to justify the deduction. BE IT FUKTI-I~R RESOLVED, that the Common Council of the City of Jeffersonville hereby approves the application and Statement of Benefits as presented and filed by the Applicant, and that said Applicant shall be entitled to deductions for a period of five (5) years for equipment and machinery, pursuant to the provision of IC 6-1.1-12.1-3(d) and IC 6-1.1-12.1- 4(d)(3), with the timely filing and perfection thereof with the Clark County Auditor's office. This Ordinance shall be in full force and effect from and after its passage and approval. Passed this 9, day of~.~gi,~i21,t,~ 2001. ~Tliomas R. Galligan}' Pr'esidiFOfficer ATTEST: Peggy ~i~e~, Clerk-Treasurer Presented by me as Clerk-Treasurer to the Mayor of said City of Jeffersonville this \0 day of '~~ ,2001. 2001, Peggy W)i~e~"~ Clerk-Treasurer o~ma's R~G~ lligan, ~ E3420:30752:23103 :JEFFERSONVILLE STATEMENT OF BENEFITS State Form 27167 (R5 / 11-95) Form SB - 1 is prescribed by the State Board of Tax Commissioners, 1989 FORM SB - 1 INSTRUCTIONS: 1. This statement must be eubm tted to the body designating the economic revftilization area pdor to the public hearing if the designating body requires infor- mation from the applicant in making its decision about whether to designate an Economic Revitalization Area. Otherwise this statement must be submitted to the designating body BEFORE a person installs the new manufactudng equipment, or BEFORE the redevelopment or rehabilitation of real property for which the person wishes to claim a deduction. "Projects" planned or committed to after July 1, 1987 and areas designated after July 1, 1987 require a STATEMENT OF BENEFITS. (IC6-1.1-12.1) 2. Approval of the designating body (City Council, Town Board, County Council, etc.) must be obtained pdor to initiation of the redevelopment or rehabilitation, or prior to installafion of the new manufacturing equipment, BEFORE a deduction may be approved. 3. To obtain a deduction, Form 322 ERA, Real Estate Improvements and / or Form 322 ERA / PP, New Machinery, must be filed with the county auditor. With respect to real property, Form 322 ERA must be filed by the later of: (1) May lO;or (2) thirty (30) days after a notice of increase in real property assessment is received from the township assessor. Form 322 ERA / PP must be filed between March I and May 15 of the assessment year in which new manufac- turing equipment becomes assessable, unless a filing extension has been obtained. A person who obtains a filing extension must file the form between March 1 and June 14 of that year. 4. Property owners whose Statement of Benefits was approved after June 30, 1991 must submit Form CF- 1 annually to show compliance with the Statement of Benefite. (lC 6-1.1-12.1-5.6) Name of taxpayer Address of taxpayer (street and number, city, state and ZiP code) Nsme of contact person Telephone number Resolution number Name of designating body Location of property County ~'~1~/( Taxing district Description of real prope~y improvements and / or new manufe~uring equipment ESTIMATED (use~additional sheets if~znecessarY)l~ ~ ~ ¢ ~ O- Start Date Completion Date New Mfg Equipment ~, CZ ~¢ ~Z ~:.:~!ii Assessed Value COST of the property is confidential. ~ ;,~ ~;~ ~ ~ ~ ~ Assessed Value Cun'ent values /-~/OZ ,,.~,~ · /,~.~0 ~7~' ~- Plus estimated values of proposed proje~ ~ ~ ~ ~ Less values of any prope~ being replaced I ~ Net estimated values upon completion of project~ ~ ¢~ ~ Estimated solid waste converted (pounds) Other benefits: Estimated hazardous waste converted (pounds) I hereby certify that the representations in this statement are true. We have reviewed our prior actions relating to the designation of this economic revitalization area and find that the applicant meets the general standards adopted in the resolution previously approved by this body. Said resolution, passed under lC 6-1.1-12.1-2.5 pro- vides for the following limitations as authorized under lC 6-1.1-12.1-2. A. The designated area has been limited to a period of time not to exceed calendar years * (see below). The date this designation expires is B. The type of deduction that is allowed in the designated area is limited to: 1. Redevelopment or rehabilitation of real estate improvements; I-lYes []No 2. Installation of new manufacturing equipment; []Yes r~No 3. Residentially distressed areas [] Yes [] No C .The amount of deduction applicable for new manufacturing equipment is Ii'hired to $ cost with an assessed value of $ D .The amount of deduction applicable to redevelopment or rehabilitation is limited to $ cost with an assessed value of $ E. Other limitations or conditions (specify) F, The deduction for new manufacturing equipment installed and first claimed eligible for deduction after July 1, 1991 is allowed for: [] 5 years [] 10 years The deduction period will be five (5) years unless the designating body has by resolution specified the ten (10) year period. Also we have reviewed the information contained in the statement of benefits and find that the estimates and expectations are reason- able and have determined that the totality of benefits is sufficient to ustify the deduction described above. Approved: (signature and title of authorized member) Telephone number Date signed (month, day, year) ( ) Attested by: Designated body * If the designating body limits the time period during which an area is an economic revitilization area, it does not limit the length of time a taxpayer is entitled to receive a deduction to a number of years designated under lC 6-1.1-12.1-4 or 4.5 Namely: (see tables below) 1 st 100% 95% 100% 95% 2nd 3rd 80% 90% 4th 65% 85% , 5th _. 50% , 80% 70% 6th 7th 55% 8th . ' 40% 9th 3O% 25% 10th Yearof : Three {3) Year ~. Six(6)Year Ten (10) Year Deduction Deduction Dedu~ctiOn Deduction 1st / 100% 100% 100% 2nd/ 66% 85% 95% 3rd 33% 66% 80% 4th 50% 65% 5th 34% 50% 6th 17% 40% 7th 30% 8th 20% 9th 10% 10th 5% EXPANDING THE STEEL CAMPUS (01) EAGLE STEEL PRODUCTS, 1NC. APRIL 2001 GROWING TIlE STEEL CAMPUS MISSION STATEMENT · STATEMENT OF PURPOSE · COMPANY HISTORY BUSINESS DESCRIPTION · MANAGEMENT TEAM MARKET RESEARCH AND ASSUMPTIONS COMPETITION · MARKET SHARE GEOGRAPHIC MARKET FACTORS · BARRIERS TO MARKET ENTRY · STRATEGIES · PRICING · OVERALL SCHEDULE &OPERATIONS PLAN · LABOR FORCE o SUPPORTING PROFESSIONAL SERVICES · COMMUNITY BENEFITS · FINANCIAL PLANS · THE FUTURE MISSION STATEMENT EAGLE STEEL PRODUCTS WILL WAREHOUSE AND PROCESS METAL MATERIALS AS A REGIONAL SERVICE CENTER. EAGLE STEEL IS A MINORITY OWNED COMPANY AND ESPOUSES A MINORITY POSITION. QUALITY OF LIFE IS A HIGH PRIORITY AFTER PROFIT AND CONTROLLED GROWTH. t STATEMENT OF PURPOSE (GROWTH 01) Eagle Steel Products is maxed out and must rely on expansion to support future sales. The purpose of this plan is to put into place a nine month two phase growth plan that would allow Eagle to expand its current business. Eagle processing and direct sales averaged 8,000 tons per month in 2000. The new growth will enable Eagle to do 10,000 tons per month on the short term going to 17,000 + tpm by 2004. Except for Phase t & I1 the qualified people are in place to handle this growth. All departments have been geared up with only general labor costs to increase. Phase I will be an additional 80,000 square foot connected warehouse with craneway covering half of the building. The budget numbers for this phase are 3.6 million dollars. Phase II will be the addition of a new or used slitter which will be used to process additional business. This phase will be started in the 4th quarter of 2001 as contractual growth is confirmed. The budget for this project is 1.5 million. COMPANY It'ISTORY Eagle Steel Products, Inc. was founded in November 1982. We are a minority owned and operated corporation. In 1985 Eagle Steel Products was named the National Minority Supplier of the year by the United States Department of Commerce. Eagle has a very strong commitment to the industries it serves, its employees and the community. Eagle Steel Products, Inc. serves the automotive, appliance, office products and construction industries. Our major customers are General Electric, Dephi, Deere and Company, Johnson Controls and Arvin Meritor. Eagle also supplies steel to Chrysler and Ford through second tier suppliers. We have two facilities located in the Greater Louisville Kentucky metropolitan area. The 100,000 square feet processing facility is strategically located on the Ohio River at the Clark Maritime Centre in Jeffersonville,.Indiana. This facility is equipped to handle barge, rail and truck shipments: Major equipment includes a "State of the Art" Stamco slitting line with looping pit, and an Arrasate Cut-To- Length Line. At Collins Lane in Louisville, Kentucky we have a new 130,000 square feet warehouse where we receive and ship by rail and truck. Both of these facilities provide "Just-In-Time" service to our customers and partners. Eagle is committed to producing processed steel that is 100% usable. We utilize statistical process control and are Qsg000flSO900 registered. We utilize EDI with all of our major partners. The management of Eagle Steel believes strongly in adding value to the products we sell along with continued training and development of Eagle's employees. Eagle has established a minority purchasing program to increase its base of minority owned suppliers. This philosophy will help to insure our continued growth and profitability within the steel industry. BUSINESS DESCRIPTION The Industry_ Although the domestic steel industry is constantly under pressure by environmentalists, economists, labor leaders, as well as a host of other critics, Steel Service Centers stay relatively healthy even during recessionary periods. During periods of short steel supply and rising prices it is extremely difficult for service centers with many annual contractual obligations to maintain a profitable margin. For these reasons Eagle Steel has developed processing. Some specific reasons which help Steel Service Centers during up and down periods are: · Steel Service Centers have zero environmental problems (no residuals added to the environment). Integrated mills (United States Steel, Bethlehem, LTV, etc.) must pay United Steel Worker's of America wages and benefits which climb to as much as $35.00 per hour. Steel Service Centers pay local family based wages. Integrated mills must spend millions on plants and equipment, whereas Service Centers refine the products of basic steel with relatively small capital investment. In an attempt to work with their problems the mills will continue to out source processing therefore eliminating unneeded labor and adding to the viability and value of centers such as OURS. In short, the Steel Service Center performs a labor intensive sequence of operations which could be performed by the integrated mills, but because of their high costs, elect to ship wide coils of sheet steel to be processed by firms outside or away from their plants. Additionally the service of stevedoring and warehousing is an area where there seems to be continual need for "good service" in a Foreign Trade Zone. The relatively new concept of "global" steel and for that matter global economics brings the opportunity to our door. As the Clark Maritime Centre grows, we continue to see the area which we coined as the "epicenter" of steel activity in our 1988 business plan, the need for expanded services within the Port is critical. The Company Eagle continues to grow. Our revenue streams come from: 1. Stevedoring 2. Direct Sales 3. Processing 4. Trucking All are on the rise. A new expanded building is essential to this growth. Upon completion, the use of two rented warehouses will not be necessary freeing up approximately $20,000.00 monthly. Each stream will be expanded. The potential exists for Eagle to double its basic business in three (3) years. With new space and equipment that growth will be realized. Fortunately Eagle is the only minority supplier of these products and services in the hundred plus mile radius of Louisville, Kentucky. Large manufacturers in our area have both and Affirmative Action and Market driven approach to minority companies. EAGLE MANAGEMENT TEAM Chief Executive Officer · General Management · Quality · Human Resources · Information Services President Future Development Sales and Marketing Executive Vice President · Plant Operations · Equipment · Steel Purchasing Vice President Finance · Accounting · Financial Planning Shirley M. Ohta, Charles R. Moore, Henry H. Taylor, Rita C. Moore Production Manager Mgr. Sales & Marketing Quality Manager Comptroller Maintenance Manager Human Resource Manager Marty Finerty Gary Shumate Annette Carney Karen Gibson Michael Hayes Becky Bloom All of the above Management Team have substantial experience within the steel industry. Each management representative has proven particular expertise in their area. MARKET RESEARCH AND ASSUMPTIONS The immediate geographic market is described as an approximate 250 land mile radius of Louisville, Kentucky, including such lucrative steel consuming areas as St. Louis (256 miles), Ft. Wayne, Indiana (235 miles), Knoxville, Tennessee (259 miles), Charlestown, West Virginia (259 miles), Columbus, Ohio (215 miles). The enclosed map shows the Clark Maritime Centre as the Epi-Center of the strongest new growth, steel oriented market in our country. Regular shipments go to the following eight states comprising the aforementioned market of approximately 8 million processed tons: · Indiana · Illinois Kentucky · Michigan · Missouri · Ohio · Tennessee · West Virginia The available market is broken down in the following consuming areas: · Automotive (Direct) ...................................... 25% · Automotive (Indirect) ...................................... 25°4 · Appliance ......................................................... 30% · Office Equipment .............................................. · Communications and Electrical ........................ 5% · Other ................................................................. 10% t In the above consuming areas typical customers served are: Automotive (Direct) - GMC (All Divisions) - Chrysler (IN & OH) - Ford (O1t & KY) ~ Honda - Nissan ~ Toyota - Saturn - Mitsubishi Chrysler - Mazda - Delphi Automotive (Indirect) (Tier I & Tier II) -Arvin Meritor - General Tire - Anson Machine - Johnson Controls, Inc. - Precision Tool & Die - Holly Carburetor - Alshin International - Small Parts - Toyota Tsusho America - Dana Corp. Appliance - General Electric - Whirlpool - White Consolidated -Precision Tool & Die - Carrier Corp. Office Equipment - IBM - Star Tool - Richmond Tool - Cosco - Hon - Roll Forming Corp. (Voist Alpine) Communications & Electrical- Square D - A T & T Technologies Other - KCC - SKF Industries COMPETITION Eagle Steel Products has competition. Excellent Service Center/Processors are operating in our market area. It should be restated however: none are minority organizations; none are located on the river; and only one has "World Class" "State of the Art" equipment similar to the equipment Eagle has installed. * Worthington Steel * Steel Technologies * Cargill Steel * Ryerson * Metal Services * Central Steel & Wire * Itochu Steel Inc. Louisville, KY Eminence, KY Nashville, TN Cincinnati, OH & Indianapolis, 1N Louisville, KY & Indianapolis, IN Cincinnati, OH Louisville, KY · Most competitive location (river) · QS9000 · State of the Art equipment · Minority Certification The above factors are the reasons Eagle has always been able to extract more than normal share of the market. Normally one or two of these factors help but all four is unheard of in our industry. The only hindrance to more market share is capacity which we address in this document. GEOGRAPHIC MARKET FACTORS As noted earlier the new facility sits at the epicenter of new activity. The location is truly at the crossroads of major interstate highways (I-71, 1-64 and 1-65). We serve the states of Indiana, Kentucky, Illinois, Ohio, Michigan, Tennessee and West Virginia. The Clark MC intersects what is called automotive and appliance alley. This location on the Ohio River is conducive for shipments to and from the entire inland waterway system as well as import export markets. Our "always open" slogan will soon replace unreliable winter shipments to the Great Lakes. BARRIERS TO MARKET ENTRY As each business contains certain barriers Eagle has and will continue to insulate itself from the t~ollowing: · Recession · Low Margins · Proper Capital Equipment · Competition Eagle will stay on a course ofindust diversification, cost control, and expanded services (24 hour). Additionally, used but very reliable equipment will be utilized in order to minimize capitalization. It is easily said that the steel industry has been in a deep recession since 3~a quarter 2000. Although Eagle suffered initially we were able to diversify ourselves by adding new customers in order to maintain position. STRATEGY Eagle Steel Products will initially posess certain strategic opportunities that none of our competition is capable of using. They are: · Minority certification · Direct access to river · QS 9000 certification · Reputation in steel industry PRICING Although prices in general are depressed and pressure remains on for reductions Eagle has been successful in maintaining good margins which will allow profitable growth. As long as we are able to keep our costs down successful financial growth will prevail. The conservative number of $25.00/ton has been used in our attached pro-forma. Direct sales and other processing could realistically be higher. OVERALL SCHEDULE A) Design & Develop Building Plans B) Building start C) Completion D) Slitter E) Installation F) Start Up - Feb. O1 - MarO1 - Aug O1 - July O1 - OctO1 - Nov/Dec Ol CRITICAL RISKS Price cutting · Further market erosion Cost overmn · Projects not achievable Competition Although all of the above create possible problem areas we feel none would represent insurmountable odds in our continued growth. Our conservative margins and costs will help modify risks. Eagles minority position and geography will also help overcome risks. LABORFORCE As we have proven in the past, although difficult, with proper training the Kentuckiana labor force provides adequate quantity and quality to supply and service as needed. As we grow, we will advance our current employees as we try to further their potential. Our work force will be represented in the following manner: Short Term- Phase I - · Phase II- retain 70-80 employees 80-90 employees 90-110 employees SUPPORTING PROFESSIONAL SERVICES Eagle Marine Services LLC will be professionally guided by the following: Mr. Bradley Wilcox, C.P.A- Mr. Johrl Vissing Ms. Joan Grayson - Mr. Dan Schwartz Accounting Attorneys at Law COMMUNITY BENEFITS The obvious community benefit is of course, jobs. Eagle Steel will continue to add jobs as previously mentioned. Eagles payroll is over 3 million dollars per year and continues to grow. We spend an additional 6 million dollars with local small and minority businesses. Every attempt will be made to hire minorities. Additionally Eagle Steel Products feels that our obligations go beyond a family wage. We will continue to make provisions for the following objectives on behalf of our employees: · Profit sharing · Health insurance · Continued education tuition assistance program · Life insurance · Disability · Scholarships THE FUTURE One cannot omit the tremendous potential for our area as we move into the new millenium. As you plot the new and old potential customers for this new venture you can also recognize the area as the epi- center of those activities. Activities that can and will be supported by Eagle Steel Products. We must continue using our areas greatest natural resource - the navigable fiver. As economics of our neighbors grow, we in this unique geographic position must step forward and develop the fiver facilities that will enable strong steady growth to all of our surrounding states, who are equally dependent on the most economic form of transportation. No other community along the Ohio River offers the potential that the Jeffersonville area offers. The development of a large fiver facility to handle the major bulk of our growth is imperative.