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HomeMy Public PortalAbout014-2019 - Tax Abatement - Grace Sales & Engineering LLC - R & D Equipment - STRICKENCOMMON COUNCIL OF THE CITY OF RICHMOND, INDIANA ORDINANCE NO. 14-2019 A SPECIAL ORDINANCE AUTHORIZING THE APPROVAL OF A STATEMENT OF BENEFITS FOR A PROPERTY OWNER APPLYING FOR DEDUCTIONS UNDER I.C. 6-1.1-12.1 WHEREAS, Common Council has previously designated eight economic revitalization areas within the City of Richmond; and WHEREAS, I.C. 6-1.1-12.1 requires the Common Council as the designating entity to approve all Statements of Benefits required to be filed by property owners applying for deductions in assessed valuations for the installation of new manufacturing equipment, research and development equipment, logistic distribution equipment, or information technology equipment or for the redevelopment or rehabilitation of real property; and WHEREAS, An owner of real property located in an economic revitalization area is entitled to deductions from the assessed value, pursuant to Indiana law and Richmond City Ordinance, for a period of any number of years less than or equal to ten (10) years (i.e. one to ten years); and WHEREAS, An owner of new manufacturing equipment, research and development equipment, logistic distribution equipment, or information technology equipment is also entitled to deductions from the assessed value, pursuant to Indiana law and Richmond City Ordinance, for a period of any number of years, less than or equal to ten (10) years (i.e. one to ten years); and WHEREAS, In order for Common Council to approve a Statement of Benefits to allow a deduction, it must make the following findings, to -wit: 1. That the estimate of value of the redevelopment or rehabilitation, as to real property, or the estimate of cost of the new manufacturing equipment, research and development equipment, logistic distribution equipment, or information technology equipment, as to personal property, is reasonable for projects of that nature or equipment of that type. 2. That the estimate of number of individuals who will be employed or whose employment will be retained can be reasonably expected to result from the proposed described redevelopment or rehabilitation, or from the installation of the new manufacturing equipment, research and development equipment, logistic distribution equipment, or information technology equipment. 3. That the estimate of 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 or rehabilitation, or from the installation of the new manufacturing equipment, research and development equipment, logistic distribution equipment, or information technology equipment. 4. That any other benefits about which information was requested are benefits that can be reasonably expected to result from the proposed redevelopment or rehabilitation, or from the installation of the new manufacturing equipment, research and development equipment, logistic distribution equipment, or information technology equipment. 5. That the totality of the benefits is sufficient to justify the deduction. 6. That installation of the equipment described in the SB-1 must be completed within 24 months of the date the ordinance is signed by the designating body. Further, the abatement is limited to the equipment listed in the SB-l. 7. That a prior deduction schedule was passed by Common Council pursuant to Richmond City Ordinance Number 16-2018 and that said deduction schedule is applicable to the deductions approved along with these findings. NOW, THEREFORE, the Common Council of the City of Richmond, Indiana, now makes the following findings: 1. That the estimate of value of the redevelopment or rehabilitation, as to real property, or the estimate of cost of the new manufacturing equipment, research and development equipment, logistic distribution equipment, or information technology equipment, as to personal property, is reasonable for projects of that nature or equipment of that type. 2. That the estimate of number of individuals who will be employed or whose employment will be retained can be reasonably expected to result from the proposed described redevelopment or rehabilitation, or from the installation of the new manufacturing equipment, research and development equipment, logistic distribution equipment, or information technology equipment. 3. That the estimate of 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 or rehabilitation, or from the installation of the new manufacturing equipment, research and development equipment, logistic distribution equipment, or information technology equipment. 4. That any other benefits about which information was requested are benefits that can be reasonably expected to result from the proposed redevelopment or rehabilitation, or from the installation of the new manufacturing equipment, research and development equipment, logistic distribution equipment, or information technology equipment. 5. That the totality of the benefits is sufficient to justify the deduction. 6. That installation of the equipment described in the SB-1 must be completed within 24 months of the date the ordinance is signed by the designating body. Further, the abatement is limited to the equipment listed in the SB-I. 7. That a prior deduction schedule was passed by Common Council pursuant to Richmond City Ordinance Number 16-2018 and that said deduction schedule is applicable to the deductions approved along with these findings. NOW THEREFORE, be it ordained by the Common Council of the City of Richmond, that the following property owner meets the requirements for property tax assessed valuation deductions, as follows: RESEARCH & DEVELOPMENT EQUIPMENT — 5 YEARS Grace Sales and Engineering, LLC Current Jobs: 3 Jobs Retained: 3 Jobs Created: 10 Estimated New Value: $120,000.00 Dated: November 24, 2018 Passed and adopted this day of 2019, by the Common Council of the City of Richmond, Indiana. President (Gary Turner) ATTEST: , City Clerk (Karen Chasteen, IAMC, MMC) PRESENTED to the Mayor of the City of Richmond, Indiana, this _ day of 2019, at 9:00 a.m. , City Clerk (Karen Chasteen, IAMC, MMC) APPROVED by me, David M. Snow, Mayor of the City of Richmond, Indiana, this _ day of 7 2019, at 9:05 a.m. Mayor (David M. Snow) ATTEST: , City Clerk (Karen Chasteen, IAMC, MMC) STATEMENT OF BENEFITS Q PERSONAL PROPERTY State Form 51764 (R4 / 11-15) Prescribed by the Departmentof Local Government Finance INSrRUCTIOAls FORM S8-1 / PP PRIVACY NOTICE Any information concerning the cost ,of the y and specific salaries paid to indiJlduaeI employees by the property owner Is conitdential per IC a-1.1-12.1-5.1. Y. This statement must be submitted to the body designating the Economic Revitalization Area prior to the public hearing if the designating body requires information 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 BEIrORE a person installs the new manufacturing equipment and/or research and development equipment and/or logistical dlstribu6on,equipment andlorinformation technology equipment for which the person wishes to claim a deduction. 2. The statement of beneftsform must be submitted to the designating body and the area designated an economic revitaii2ation area before the installation of quaW.'ng abatable equipment for which the person desires to claim a deduction. 3. To obtain a .deducBon; a person must file a cerfifred deduction schedule with the person's personal property return on a certified deduction schedule (Form t6wns i1hip. ) with the township.assessor of the to for'the townsnship, where the property is situated or with the county assessor if there is no township assessor The 103-ERA must be filed between January 1 and May 15 of the assessment year in which new manufacturing equipment andlor research and development equipment and/or logistical distribution equipment and/or frifoimaron technology equipment is installed and fully functional, unless a Kling extension has been obtained. A person who obtains a riling extension must file the form between January i and the extended due date ofthat year. 4. Property owners whose Statement of Benefits was approved, must submit Form CF1/PP annually to show compliance, with the Statement of Benefits. (IC 6-1.1-1Z 5. For a.Form SS-1)PP Ghat is approved alter June 30, 2013, the designating body Is required to establish an, abatement schedule for each deduction allowed. For a Font SB-1/PP Met Is approved prior to July 1, 2013, the abatement schedule approved by the designating body remains in effect. OC6-1.1-12.1-171 •• • Name of- faxpayer Name.ofcanWdperson Grace Sales & Engineering, LLC Aan Russell Address .offaxpayerOjmberenrlskeaL c'l3 state, andZ/PcoCle) 5626 New Paris Pike Richmond, IN 47374 Telephone number ( 765 ) 967-4440 Name.of designating body Grace Sales & Engineering, LLC Resolution number (s) Locat'nm otproperty County 4810 Woodside Drive Richmond, IN 47374 DLGF taxtng:distrid number Wayne Descripfion of manufacturing'equipment andlor research end development equipment andlor Loggistical distribution equipment andlot infomraGon technology equipment. (tJse-additional sheets ESTIMATED START DATE COMPLETION DATE -if necessary.) Projectwillconsist of two Farrel CP 55 continuous production processors and Manufacturing Equipment doom stream equipment One Farrel CP12 R&D lab processor and peiletizer. 10/01/2018 12/31/2019 04/22/2019 12/31/2019 Two bulk conveying systems and two gravirnetric blende€/feederunits. RA D Equipment Retrofitted with PLC andaouch screen controls integrated t0 Central processor Logist Dist Equipment for data collection and analysis. One skiver and foam reclaim system. Forklift 04/22/2019 12/31/2019 10/01/2018 12/31/2019 IT Equipment Current number Salaries 3 $113,240 Numberretairied Salaries Number edditiunet Salaries 3 $113,240 +0 $381,888 NOTE: , Pursuant tolC'8-1.1-12.1-5.1(d)(2),the MANUFACTURING E tJIPME T R&'p'EQUIPMENT LOGI$TDIST IT9QUiPMENT COST of the property p petty is confidential: EQUIPMENT COST ASSESSED COST E USSEED SVALUE COST ASSESSED VALUE COST ASSESSED Current values 0 0' 0 VALUE VALUE 0 p Plus estimated values of proposed project 535,000 120,000 0. 0 0 12,200 50,500 Less values of any property being replaced 0 0 0 0 0 Net estimated values upon completion of project 535;000 120,OOp . 0 0 12,000` 0, 50;500 Estimated solid waste converted (pounds) 650000 Estimated -hazardous waste converted (pounds) 0 Other benefits The process will reclaim approximately 650,000 pounds annually of foam laminate and processed rubber from the solid waste stream and return it into industrial and commercial rubber sheet products and will continue for.the foreseeable future. 1 hereby,ce[tity that the re ` ' `ntations in this statemenf are.true. Signature orized re Uve bate signed (month, day, year) November 24, 20,18, Printed name of authorized representative Title Alan Russell Owner Page 1 of 2 We have reviewed our prior actions relating to the designation of this economic revitalization area and find that the applicant meets thegeneral standards adopted in the resolution previously approved by this body. Said resolution, passed under IC 6-1.1-12.1-2.5, provides for the following limitations as authorized under IC 6-1.1-12.1-2. A. The designated area has been limited to a period of time not to exceed calendar ears is Y (see below). The date this designation expires . NOTE.., This question addresses whether the resolution contains an expiration date for the designated area. B. The type of deduction that is allowed in the designated area is limited to: 1 . Installation of new manufacturing equipment; ❑ Yes ❑ No ❑ Enhanced Abatement per IC 6-1.1-12.1-18 2 . Installation of new research and development equipment; ❑ Yes ❑ N o Check box ifan enhanced abatement was 3. installation of new logistical distribution equipment. D Yes ❑ No approved for one or more of these types. 4. Installation of new -information technology equipment; ❑ Yes []No C. The amount of deduction applicable to new manufacturingequipment is limited to S (One or both lines may be filled out to establish a limit if desired.) O. The amount of deduction applicable to new research and development equipment is limited to $ With an assessed value of (One or both lines may be filled out to. establish a limit, if desired.) E. The amount of deduction applicable to new logistical distribution equipment is limited to $ g cost with an assessed value of (One or both lines may be filled out to establish a limit, if desired.) F The amount of deduction applicable to new information technology equipment is limited to $ $ cost with an assessed value of (One or both lines maybe filled out to establish a limit, if desired.) G Other liinitations orconditions (specify) N. The deduction for new manufacturing equipment and/or new research and development.equipment and/or new logistical distribution equipment and/or new information technology equipment installed and first claimed eligible for deduction is allowed for. ❑ Year 1 ❑ Year 2 ❑ Year 3 ❑ Year 4 ❑ Year 5 ❑ Enhanced Abatement per IC 6-1.1-12.1-18 Number of years approved: ❑ Year6 ❑ Yoar7 ❑ Year 8 ❑ Year 9 ❑ Year 10 (Enter one to twenty (1-20) years; may not exceed twenty (20) years.) I. Fora Statement of Benefits approved after. June 30, 2013, did this designating body adopt an abatement schedule per IC 6-1.1-12.1-17? ❑ Yes ❑ No If yes, attach a copy of the abatement schedule to this form. If no, the designating body is required to establish an abatement schedule before the deduction can be determined. Also we have reviewed the information contained in the statement of benefits and find that the estimates and expectations are reasonable and have determined that the fatality of benefits is sufficient to justify the deduction described above. Approved by. (signature andtilleotaulhorizedMember ofdesignatingbody) Tele hone number p Dale signed (month, day,:year) Printed name of authorized member of deaignetin9 Wx oY Name of Aednnminn hn t., name of attester cost with an assessed value of * if the designating body limits the time period during which an area is an economic revitalization area, that limitation does not limit the length of time a taxpayer is entitled to receive a deduction to a number of years that is less than the number of years designated under IC 6-1.1-12.1-17. IC 6-1.1-12.1-17 Abatement schedules Sec. 17. {a) A designating body may provide to a business dial is established in or relocated to a revitalization area and that receives a deduction under section 4 or 4.6 of this chapter an abatement schedule based on the following factors: (1) The total amount of the taxpayer's investment in real and personal property. (2) The numberof new full tame equivalent jobs created. (3) The average wage of the new employees compared to the state minimum wage. (4) The infrastructure requirements for the taxpayer's investment. (b) This subsection applies to a statement of benefits approved after June 30, 2013. A designating body shall establish an abatement schedule for each deduction allowed under this chapter. An abatement schedule must specify the percentage amount of the deduction for each year of the deduction. An abatement schedule may not exceed ten (10) years. (c) An abatement schedule approved for a particular taxpayer before July 1, 2013, remains in effect unlit the abatement schedule expires under the terms of the resolution approving the taxpayer's statement of benefits. Page 2 of 2 Form SB-1A City of Richmond, Indiana Taxpayer Wage & Benefit Information Company Name, Address & Contact Person: Grace Sales and Engineering, LLC 5626 New Paris Pike- Office 4810 Woodside Drive — Manufacturing Alan Russell-765-967-4440 The information requested on this supplement to form SB-1 must be completed and submitted along with your SB-1 in order for your tax abatement request to be considered by Richmond Common Council. Please retain your records and calculations used to arrive at the information requested on this form. It is subject to review as a part of our monitoring process. I . Average hourly wage. for existing employees $18.15 2. Average hourly wage for projected new positions $'18 31 3. Average hourly health insurance benefit Not at this time I . The length of the abatement you are requesting 10 Years (A I-10 year abatement may be requested for real estate improvements and manufacturing equipment.) 2. If purchasing equipment, please attach a list that includes the following: • brief description of each piece of equipment being purchased •, the projected useful life of each piece of equipment • the states) in which the equipment is being brought into Indiana from if purchasing used equipment • the cost of each piece of equipment • state if the machinery is being purchased or leased • if the machinery is being leased, provide information from the lease .that explains which party is responsible for paying the property taxes 3. If making real estate improvements, please provide a list that includes the following: • brief description of the real estate improvement (new construction, rehab, expansion, etc.) • size of the proposed real estate improvements. • costs of the proposed real estate improvements - No Real Estate Improvements DEFINITIONS 1. Average hourly wage for existing employees: for your most recent pay period please provide the average base wage per hour for all current full time, non -supervisory employees. Do not include the following groups: A. parl'time employees,- B. management, supervisors, foremen, or any other supervisory personnel,' C. owners, stockholders, or partners if they awn 2% or more of the business, and their family members. 2. Average hourly wage for projected neiv positions: Use the same definition of employees to be included as in number one above. 3. Average hourly health insurance benefit: Please provide the current company paid health insurance benefits provided.to hourly employees. (as defined above) and family members. Please present in the. form of an hourly rate computed rising the annual cost per eligible employee divided by 2080 hours. Alan Russell owner 11 /24/2018 kn.uuiorizea algnature and Title) (Date) Form SB-1A City of Richmond, Indiana Taxpayer Wage & Benefit Information Grace Sales & Engineering, LLC Current Equipment List 1.) (2) Farrel CP55 Compact Mixer/ Compounders 2'.) (1) Farrel CP,12 Laboratory Mixer/Compounder a.) These machines are des ' igned to compound thermoplastics into pellets that can then be used in various extrusion and injection molding processes. They are manufactured by Farrel Poinini. in the U.S.. and U.K. Farrel just opened a new state of the Art facility in Ansonia, CT where Farrel has had it's U.S. home for over one hundred years. b.) The life expectancy of thesemachines'is only limited by care and maintenance. Units were first developed in . the early 1960's with many of the earlier machines still. producing today. There are several companies that specialize in the rebuilding, reconditioning, and updating of these, machines. C.) Stock Photo d-) These three machines were manufactured in the UX. and delivered to Russia, in early 1990. They were never used: Grace Sales & Engineering` imported the machines from Volgograd Russia at a. total cost of S135,000 U.S: The machines Were purchased "as is." and without controls, drives, and some basic mechanical items missing. 3.) Skiver a.) A skiver is used to. slice thin layers from a material. Originally the machines were. used to split leather hides into thinner easier to use and more comfortable product. Grace Sales and Engineering will use the machine to slice foam from rubber sheet We anticipate keeping around 650,000 pounds of material out of the solid waste stream annually. Actual Photo b.) The unit was purchased new from Pontotoc Machine Works in Pontotoc, MS. The cost was $35,000. Again, the life expectancy is limited only by care and maintenance. The components, other than the frame and sheet metal parts are purchased. items. Form SB-lA City of Richmond, Indiana Taxpayer Wage & Benefit Information 4.) Cumberland 14261 Granulator a.) Machine is used to make "regrind" or granulate larger material into a smaller size suitable for an extrusion or injection molding process. b.) The grinder was purchased used from Envirotech Extrusion, Inc for $7500 here in Richmond, IN. c.) The unit is completely serviceable with units having in excess of 50 years of service. 5.) -2007 TCM 5000 Pound'Lift Fork Truck a.) setup'. W b.) Unit was purchased used from B1ue.Diamond Equipment in Z011inger, PA,for $12,200 with just over 2'000 hours. Average life expectancy with proper maintenance is around 15,000 hours. (4 to $ `hours a day x 5 x 50 = 1000 to 2000 hours/year = somewhere between 6.5 and 15 years of service life left.) G.) OMV 31.5 Extrusion Sheet Line a.) Machineis.used to make sheet in line from the compounded material from the Actual Phntn b) The machine was purchased used from Federal Equipment Company in Cleveland, OH for $29,750. e.) The unit is also completely serviceable with units having over 40 years of service. Machine was purchased as a basic "shell' to be retrofitted with controls, drives; and operating mechanical systems. Form SB-lA City of Richmond, Indiana Taxpayer Wage & Benefit Information 7.) OMV 27.5 Inch Sheet Die a.) Used to make a uniform sheet thickness for above OMV sheet line b.) Actual Photo Die was purchased from Arlington Equipment in Elk Grove Village, IL for $1750.0,0 "as is" to be, refurbished by'Grace Sales & Engineering. Again, indefinite life expectancy. 8.) 3.5 inch Screen Changer a.) Used to filter contaminates out of material stream during compounding process. Stock Photo b.) Unit was purchase from Perry Videx Equipment in Iiainesport, NJ for $2300. Indefinite. life expectancy. Equipment under negotiation: 1.) Processing Extruder Screw for Farrel CP a. to extruder sheet die :k Photo b. Under negotiation with Jim Franklin and United Feed Screws of Akron Ohio (2) required at approximately $5000 each. Rebuild every 5 years. Form SB-1A City of Richmond, Indiana Taxpayer Wage & Benefit Information 2.) Loading System. a.) uric blender Stock image b.) Under negotiation with Advance Blending Solutions of Wallace, MI. (2) units required at approximately $50,006 Each. Units are new. Longevity based on care and maintenance. Estimated 10-20 years, 3.) Gravimetric.Blending System a.) Used to blend various material recipes and feed the Farrel compact mixers. hock Phom c.), Under negotiation with -Advance` Blending Solutions, of Wallace, ML (2) units required at approximately $75,000 Each. Units are new.. Longevity Based on care and maintenance. Estimated. 10-20-years