HomeMy WebLinkAbout1997-R-43RESOLUTION 97-R-43
RESOLUTION APPROVING STATEMENT OF BENEFITS FOR
~ PURPOSES OF PROPERTY Ti%X ABATEMENT
WHEREA~, GEA Parts, L.L.C., (the "Applicant"), has petitioned
the Co~on Council of the City of Jeffersonville, Indiana, for a
deduction in real property taxes to be assessed on a prop6sed
.500,000 square foot facility to be located on the west side of Port
Road, just south of Chemtrusion in the Clark Maritime Centre in the
city of Jeffersonville, Clark County, Indiana; and
WHEREAS, the Applicant 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, the area in which the proposed redevelopment project
is located is in a previously designated registered historic
district; and
WHEREAS, the Common Council of the city of Jeffersonville has
designated the area where the proposed redevelopment project is
located in the city of Jeffersonville as an Economic Development
Target Area pursuant to IC 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 is 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.
STATEMENT OF BENEFITS
State Form 27167 (RS i
FOrm sa - t ~s prescribed by the State Board of Tax Commissioners. 1989
FORM
SB - 1
iNSTRUCTIONS: rn st be subm tted to the body designating the economic rev/tllization area bnor to the public heanng if the designating body requires
t. This statement u .......... .~ ......... C~n,~mic Revitalization Area Otherwise th s statement must be subm~
to?h~ ~s/g~J~ ..,..~ .... taim a~eductlon "Prelects" nlanned or commi~ed to after July 1, 1987 and areas besignated after July 1, 1987 reou/r
STATEMENT OF BENEFfTS. (lC 6-1.1-12.1)
2. Approval of the designating body (City Counci , Town Board County Counc#. etc.) must be obtained prior to initiat/on of the redevelopment or rehaOilitat~
or prior to instal/at/on of the new manufactunng equipment, BEFORE a deduct on may be a~proved.
3. To oOtaJn a deduction. Form 322 ERA, Real Estate Improvements and / or Form 322 ERA / P~ New Machine~, must be fil~ with the coun~ auditor.
Form 322 ERA must be filed b the later of: (1) May 10; or (2) thi~ (30) days a~er a not, ce of increase ~n real pro~e~ assess~
is received from the township assessor ~orm Jz~..~ ~ ~ mu~ ~%,~ ~ ,~ ~rR~n wh~ ~btains a filino extension must file me form
March I and June 14 of t~at year.
4. Prope~ owners whose Statement of Benefits was approved a~er June 30. 199~ must submit Form CF - 1 annually to s~ow compliance with the State~
of Benefits. (IC6.1.1-12.1-5.6)
Name of taxpayer
Address of taxpayer (street and nuthber, c ~, state and ZIP c~e)
Name of contact ~erson
i Te~edhene number
Name of deslgnahng body
Location of property IC°unty
Description of real Oroperty imbrovements and t er new manufactunng equipment
(use additional sheets if necessary)
Resolution number
Taxing district
ESTIMATED
I Start Dote ~i Completion
! New MfgE~ui.ment I ~//4 1' ~/~
' [' NOTE~'Pbrsuant"tb'lC 6
Current values
Plus estimated values of proposed project
aiues of any properly being replaced
Net estimated values upon completion of project
Assessed Value
.... ~Estimatedsolidwastecdnverted(pouz~ds)
Estimated hazardous was e c. enve~_eq..pounds)
Other benefits:
I hereby certify that the representations in this statement are true.
-- Date s~gned rmo~t,h ~ay. yearl
] S~a"---natur~ of au~ori:,~eo re. pr. esentat~ve I'n..~e
.... .4 ....--) ~ ]...-. /~,,-/
GEA Parts, LLC
Attachment to Statement of Benefits
Form SB-1
September, 1997
Section 2:
Description of real property improvements:
A warehouse and distribution facility of approximately 500,000 square feet
including non-manufacturing distribution equipment will be constructed and
installed pursuant to General Electric specifications. Upon completion by the
developer, the facility will be leased to GEA Parts, LLC. The facility will be used
to warehouse and distribute products (inventory) owned by GEA Parts, LLC
through use of a third party warehouse operator.
Section 3:
Estimate of number of employees and salaries as a result of proposed project:
Estimated a roll: ~ Annual Payr0ii
Cumulative as of December 1998 150 $3,557,000
Cumulative as of December 1999 150 $3,670,000
Cumulative as of December 2000 150 $3,816,800
As previously discussed with the Indiana Department of Commerce, employment
services will be contracted from a third party service provider specializing in
~areh0USei~pera~on~i The estimated _net increase in employment at this facility is
a direct result of GEA Pazts; LLC investment in this prOPosed Project. There is no
reduction in employment at any other facility owned by any General Electric
affiliate as a result of tiffs project. The annual payroll amounts above include
benefits estimated at 35% of base payroll wages.
Section 4:
Estimated totalcost, andgaLue of proposed project:
The proposed project Will require an estimated investment in non-manufacturing
machinery and equipment of $7,000'000 Which will be ldaSed to GEA Parts, LLC~
As non-manufacturing machinery and equipment, this investment is ineligible for
the personal property tax abatement.
Unabated taxes: Invento~ Real Estate Machine~ Total
YEAR
1 0 0 0 0
2 0 0 0 0
3 11,234 0 96,798 108,032
4 11,234 15,287 135,517 162,039
5 11,234 61,149 101,638 174,021
6 11,234 ~, 107,010 77,438 195,683
7 11,234 152,872 58,079 222,185
8 11,234 183,446 43,559 238,240
9 11,234 214,020 36,299 261,554
10 11,234 244,595 36,299 292,128
11 11,234 275,169 36,299 322,703
12 11,234 290,456 36,299 337,990
Totals 112,344 1,544,005 658,227 2,314,575
- 13 11,234- 305,743 36,299
...... 14 .... 11,234 . 305,743 - 36,299
15 --!1,234 305,743 36,299
16 11,234 305,743 36,299
17 11,234 305,743 36,299
18 11,234 305,743 36,299
19 11,234 305,743 36,299
20 11,234 305,743 36,299
353 277
353
353
353
353 277
353 277
353 277
353,277
Totals 202,219 3,989,953 948,621 5,140,792
277 .....
277
277
YEAR COST TTV%
1 13,085,000 68%
2 13,085,000 68%
3 13,085,000 68%
4 13,085,000 68%
5 13,085,000 68%
6 13,085,000 68%
7 13,085,000 68%
8 13,085,000 68%
9 13,085,000 68%
10 13,085,000 ' -~o
ASSESSED TAX 10 YEAR
'I-I'V VALUE RATE* TAX ABATEMT.
8,844,000 2,948,000 10.3712 305,743 305,743
8,844,000 2,948,000 10.3712 305,743 290,456
8,844,000 2,948,000 10.3712 305,743 244,595
8,844,000 2,948,000 10.3712 305,743 198,733
8,844,000 2,948,000 10.3712 305,743 152,872
8,844,000 2,948,000 10.3712 305,743 122,297
· 8,844,000 2,948,000 10.3712 305,743 91,723
8,844,000 2,948,000 10.3712 305,743 61,149
8,844,000 2,948,000 10.3712 305,743 30,574
8,844,000 .2,-948,000 10.3712
*Rate is net of property tax replacement credit
305,743 .15,287
3.057.43~5 .15131430
THE
Septentber29,1997
Executive Director
(812) 285-6477
John Perkins
Ron Ellis
Donna Frantz
Peggy Wilder
Barbara Wilson
Veronica Conlin
Andrew Williams
Dear Councflpersons:
Enclosed is a tax abatement application by GEA Parts, L.L.C., an entity
underwritten and financed by General Electric Corp. The project is a
proposed 500,000 square foot facility to be located on the west side of Port
Road, just south of Chemtrusion. The project will employ 150 people at an
average wage in excess of $23,000.00 per year. The request is for a tax
abatement on real property Only, no personal property tax abatement is
being requested on th/s application. The total tax abatement for a ten year
period onthe real~sta-t-e~Wpuld amount to a~Pproximately $1,513,430.00. The
unabated portion of the tax is estimated to be $1,544,000.00. Total unabated
taxes on this project which would include taxes collected on the personal
property, inventory and unabated real property taxes would amount to
approximately $5,140,000.00 over a twenty-year period. During the
abatement period, total taxes collected would be a minimum of $2,300,000.00.
The unabated pox~ion of the taxes and the total taxes collected have been very
..... couservati~vely estimate_d__.~ I~n f~act, depending on inventory levels, this amount
co~!d be S~S~a.n~ia!ly higher.
The Southern Indiana Economic Development Council, the Clark
Maritime Centre and the City Department of Redevelopment have been
working on this project in excess of one year in an attempt to land this
economic development for the City of Jeffersonville. We believe that the
location of a high profile company such as GE will continue the momentum of
......... jefferS0nville'beco-miitg an ~con/~mic development center in thiS-region.
The econon~cs of this development for the GitY °f Jeffers°nville are the I~
....... -~: foll~ng:
501 E. Court Avenue · Jeffersonville, Indiana 47130 · Fax (812) 285-6468
Jeffersonville city Councilpersons
September 29, 1997
Page Two
The abatement being requested will amount to approximately
$1,513,430. The unabated taxes during the same period will amount to a
minimum of $2,300,000. We have assumed a minimum inventory level in
these calculations and the amount could be substantially higher. During the
eight years following the abatement period, the property taxes being paid by
General Electric will exceed $353,000.00 per year, for a total unabated taxes
on an extremely conservative basis of $5,140,000 during the twenty year
period starting with this year.
We believe that because the unabated taxes are going to be so
substantial that we have no problem recommending the abatement on this
project. The average cost per job of this tax abatement amounts to
approximately $10,000 while the approved scale indicates a tax credit of
about $7,500.00 per job would be acceptable. What we believe justifies the
additional abatement credit in this case is the extremely large amount of
unabated taxes in addition to the fact that there ~ be 150 brand new jobs
that are generated as opposed to the jobs that are just retained or are brought
here from somewhere else. The original scale was established to take care of
a normal request for tax abatement. This one is not normal in that it is such an
extremely large and desirable development and it was a highly competitive
process in dealing with GE.' GE has fully guaranteed the operations and the
project at the Maritime Centre for ten years. Although requested, no
additional inc~nti~ Were'agreed to (e,g~infrastruc!ure, !and, or additional ~:
abatements). -
If there are any questions regarding this application, please let me
know so that I may inquire of GE any questions which may be unanswered.
Sincerely,
Philip W. McCauley
............... Enclosure
Resolution No. 97-R-43
Page 2
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 redevelopmen~ is
-sufficient to justify the deduction.
BE IT FURTHER 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 ten (10)
years for improvements to real property, 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.
Passed and adopted this 6th day of October, 1997, by the
Common Council of the city of Jeffersonville, Clark County,
Indiana.
~ R~'~. G~~~res~ding officer
ATTEST:
C. RfcSard Spence~ Jr.~ ~ and Treasure~
Presented by me as Clerk and Treasurer to the Mayor of the City of
Jeffersonville, Indiana, this ~ day of ~ , 1997.
~-- chard Spencer, Jr., Clerk and
~ Treasurer
Approved and signed by me this
,1997.
wp51\ta, res
Thomas R. Gallig~n,~ M~