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HomeMy Public PortalAbout024-2019 - Tax Abatement - Purina - EquipmentCOMMON COUNCIL OF THE CITY OF RICHMOND, INDIANA ORDINANCE NO. 24-2019 A SPECIAL ORDINANCE AUTHORIZING THE APPROVAL OF A STATEMENT OF BENEFITS FORA 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 36 months of the date the ordinance is signed by the designating body. Further, the abatement is limited to the equipment listed in the SB-1. 7. That a prior deduction schedule was passed by Common Council pursuant to Richmond City Amended ordinance Number 5-2019 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 36 months of the date the ordinance is signed by the designating body. Further, the abatement is limited to the equipment listed in the SB-1. 7. That a prior deduction schedule was passed by Common Council pursuant to Richmond City Amended Ordinance Number 5-2019 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: MANUFACTURING EQUIPMENT —10 YEARS Purina Mills, LLC Current Jobs: 80 Jobs Retained: 80 Jobs Created: 5 Estimated New Value: $ 10,000,000.00 Dated: April 28, 2019 Passed and adopted this day o 2019, by the Common Council of the City of Richmond, Indiana. ATTEST: Chasteen, IAMC, MMC} President PRESENTED to the Mayor of the City of Richmond, Indiana, this day 20195 at 9:00 a.m. /�' Clerk (Karen Chasteen, IAMC, MNIC) APPROVED by me, David M. Snow, Mayor of the City of Richmond, Indiana, this 4day of 2019, at ATTE S (Karen Chasteen, IAMC, MMC) Mayor Form SB-lA City of Richmond, Indiana Taxpayer Wage &Benefit Information Company Name, Address & Contact Person: Purina Animal Nutrition, LLC Scott Crittenden, Sr. Plant Manager 505 N. 4th and 1700 Industries Dr. Richmond, IN 47374 The information requested on this supplement to form SB- 1 must be completed and submitted along with your SB-I 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. 1. Average hourly wage for existing employees $ 23.56 2. Average hourly wage for projected new positions $ 22.68 3. Average hourly health insurance benefit $ 5.55 1. The length of the abatement you are requesting 10 (A 1--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 state(s) 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 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. part time employees; P. management, supervisors, foremen, or any other supervisory personnel; C. owners, stockholders, or partners if they own 2% or more of the business, and their family members. 2. Average hourly wage for projected new 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 ra4e computed using the annual east per eligible employee divided by 2080 hours. � ---w- Marcia H. Droeg e, Director of Real Estate & Facilities 04/29/2019 (Authorized Signature and Title) (Date) Attachment Made Part of RICHMOND Form S13-1A Purina Animal Nutrition, LLC Purchase Asset Description Useful Life Used? Lease Estimated Cost 2019 North Extruder Dryer Install 5--8 yr New Purchase $ 1,810,000 South Pellet Dryer 5-8 yr New Purchase $ 800,000 Warehouse MCC Replacement 5-8 yr New Purchase $ 501000 Finished Product Warehouse Ventilation & Pest Control 5-8 yr New Purchase $ 20,000 Pellet Packer Meal Grinder rebuild 5-8 yr New Purchase $ 15,000 North Extruder Rebuild parts 5--8 yr New Purchase $ 120,000 North Pellet Mill Partial Rebuild 5-8 yr New Purchase $ 15,000 Liquids Renovation for Extruder Packer Blenders 5--8 yr New Purchase $ 37,500 2019 Total $ 2,867,500 2020 South Pellet Dryer 5-8 yr New Purchase $ 1,800,000 Pellet Packer packing Scale Replacement 5-8 yr New Purchase $ 3201000 Extruder Packing blending system 5-8 yr New Purchase $ 400,000 Pellet Packer Bag Conveyance to Palietizer Replacement 5-8 yr New Purchase $ 110,000 South Pellet dryer fan replacement 5-8 yr New Purchase $ 85,000 South Pellet grinder install 5-8 yr New Purchase $ 5001000 South Pellet downstream capability improvement 5-8 yr New Purchase $ 250,000 Extruder Packer Palletizer Rebuild 5-8 yr New Purchase $ 17,500 Extrusion Mixed Meal Turnhead & Spouting replacement 5-8 yr New Purchase $ 145,000 Acid Hydrolysis attachment for existing Fat & Fiber unit in Q.A. Lab 5-8 yr New Purchase $ 6,000 North Pellet Mill Sth Floor Grinder replacement 5-8 yr New Purchase $ 60,000 Unloading Conveyance rebuild 5-8 yr New Purchase $ 25,000 Steam control valve replacement 5--8 yr New Purchase $ 12,000 Grinding Elevator Leg rebuild 5-8 yr New Purchase $ 15,000 2020 $ 3,7450500 2021 Unloading Turnhead - Softstock 5-8 yr New Purchase $ 901000 Unloading Turnhead - Grain 5-8 yr New Purchase $ 901000 North Pellet Screener replacement 5-8 yr New Purchase $ 120,000 Mixing Bin bottom replacement 5-8 yr New Purchase $ 320,000 Fish Oil tank replacement 5-8 yr New Purchase $ 120,000 Boiler 02 Trim 5-8 yr New Purchase $ 60,000 Boiler RO System 5-8 yr New Purchase $ 40,000 North Extruder Conditioner 5-8 yr New Purchase $ 65,000 Steam Control Valve Replacement 5-8 yr New Purchase $ 12,000 Condensate Mover and Piping 5-8 yr New Purchase $ 140,000 Pellet Mill Controls 5-8 yr New Purchase $ 300,000 Extruder Process Control 5-8 yr New Purchase $ 5001000 Micro micro system for mixing 5-8 yr New Purchase $ 4401000 2021 Total $ 21297,000 Variance $ 11090,000 Project Total $ 10,000,000 Attachment Made Part of RICHMOND Farm SB-1A Purina Animal Nutrition, LLC Purchase Asset Description Useful Life Used? Lease Estimated Cost 2019 Extrusion Equipment 5-8 yr New Purchase $ 1,967,500 Pellet Equipment 5-8 yr New Purchase $ 8300000 Either 5-8 yr New Purchase $ 70,000 2019 Total $ 2,8671v500 2020 Extrusion Equipment -5-8 yr -New Purchase $ 562;500 Pellet Equipment 5-8 yr New Purchase $ 3,125,000 Other 5-8 yr New Purchase $ 58,000 2020 Total $ 3,745,500 2021 Extrusion Equipment 5-8 yr New Purchase $ 565,000 Pellet Equipment 5-8 yr New Purchase .$ 420,000 Other 5-8 yr New Purchase $ L312,000 2021 Total $ 2,297,000 Variance $ 1,090,000 Project Total $ 10,000,D00 STATEMENT OF BENEFITS PERSONAL PROPERTY ' } State Form 51764 (R4 / 11-15) } +ere► Prescribed by the Department of Local Government Finance FORM SB-1 / PP PRIVACY NOTICE AInformation concerning the cost e property and specific salaries paid to individual employees by the property owner Is confidential per IC 6-1.1-12.1-5.1. INSTRUCTIONS 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 BEFORE a person installs the new manufacturing equipment and/or research and development equipment, and/or logistical distribution equipment and/or Information technology equipment for which the person wishes to claim a deduction. 2. The statement of benefits form must be submitted to the designating body and the area designated an economic revitalization area before the installation of quafifying abatable equipment for which the person desires to claim a deduction. 3. To obtain a deduction, a person must file a certified deduction schedule with the person's personal property return on a certified deduction schedule (Form 103-ERA) with the township assessor of the township where the property Is situated or with the county assessor If there Is no township assessor for the township. The 103-ERA must be filed between January I and May 15 of the assessment year In which new manufacturing equipment and/or research and development equipment and/or logistical distribution equipment and/or information technology equipment is installed and rully functional, unless a filing extension has been obtained. A person who obtains a filing extension must file the form between January I and the extended due date of that year. 4. Property owners whose Statement of Benefits was approved, must submit Form CF-1IPP annually to show compllance with the Statement of Benefits. (IC 6-1.1-12.1-5.6) 5. For a Form SB-1IPP that is approved after June 30, 2013, the designating body Is required to establish an abatement schedule for each deduction allowed For a Fonn SB-1IPP that is approved prior to July 1, 2013, the abatement schedule approved by the designating body remains In effect. (IC 6-1.1-12.1-17) SECTION• "AYER INFORMATION Name of taxpayer Name of contact person PURINA MILLS LLC KAREN KARRAS Address of taxpayer (number and street, city, state, and ZIP code) Telephone number PO BOX 64101 MS-5185, ST PAUL, MN 55164 651 ) 375-5654 SECTION 2 LOCATION AND DESCRIPTION OF PROPOSED PROJECT Name of designating body Resolution number (s) CITY OF RICHMOND Location of property County DLGF taxing district number . 505 N 4TH ST WAYNE 89030 Description of manufacturing equipment and/or research and development equipment ESTIMATED and/or logistical distribution equipment and/or Information technology equipment. (Use additional sheets if necessary.) START DATE COMPLETION DATE Manufacturing Equipment 07/0112019 12/31/2021 VARIOUS UPGRADES TO PLANT INCLUDING EQUIPMENT FOR GRINDING, EXTRUSION, PELLETING, BULK LIQUID INGREDIENT STORAGE AND WAREHOUSING R & D Equipment Logist Dist Equipment IT Equipment SECTION 3 ESTIMATE OF EMPLOYEES AND SALARIES AS RESULT OF PROPOSED PROJECT Current number Salaries Number retained Salaries Number additional Salaries 80 $49K annual avg 80 $49K annual avg 5 $47K annual avg SECTION 4 ESTIMATED TOTAL COST AND VALUE OF PROPOSED PROJECT NOTE: Pursuant to 1C 6-1.1-12.1-5.1 (d) (2) the MANUFACTURING R & D EQUIPMENT LOGIST DIST IT EQUIPMENT E UIPMENT EQUIPMENT COST of the property is confidential. COST ASSESSED COST ASSESSED COST ASSESSED COST ASSESSED VALUE VALUE VALUE VALUE Current values 32,692, 854 9, 807, 856 Plus estimated values of proposed project 10,000,000 41000,000 Less values of any property being replaced 11400,000 200,000 Net estimated values upon completion of project 41,2929854 13,607,856 SECTION WASTE • ! ! OTHER BENEFITS PROMISED BY THE TAXPAYER Estimated solid waste converted (pounds) Estimated hazardous waste converted (pounds) Other benefits: SECTION., _ CERTIFICATION I hereby certify that the repr eptations In this statement are true. Signatu e,of uthorixed repre a � der Date signed (month, day, year) 04/28/2019 Printed name of authorized reprAer(tafive Title Marcia H. Droege Director of Real Estate & Facilities Page I of 2 FOR USE OF THE DESIGNATING BODY 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 IC 6-1.1-12.1-2.5, provides for the following limitations as authorized under 1C 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 . 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 C7 No ❑ Enhanced Abatement per IC 6-1.1-12.1-18 2 . Installation of new research and development equipment; ❑ Yes ❑ No Check box if an enhanced abatement was 3. installation of new logistical distribution equipment. ❑ 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 manufacturing equipment is limited to cost with an assessed value of $ . (One or both lines may be filled out to establish a limit, if desired.) D . The amount of deduction applicable to new research and development equipment is limited to $ cost with an assessed value of $ . (One or both lines maybe filled out to establish a limit, if desired.) E . The amount of deduction applicable to new logistical distribution equipment Is limited to $ cost with an assessed value of $ . (One orboth 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 orboth lines may be filled out to establish a limit, if desired.) G. Other limitations or conditions (specify] H. The deduction for new manufacturing equipment and/or new research and development equipment andlor new logistical distribution equipment andlor 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 1C 6-1.1-12.1-18 Number of years approved: ❑ Year 6 ❑ Year 7 ❑ Year 8 ❑ Year 9 ❑ Year 10 (Enter one to twenty (1-20) years; may not exceed twenty (20) years.) 1. For a 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. AIso 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 totality of benefits Is sufficient to justify the deduction described above. Approved by: (signature and We of authorized member of designafrng body) Telephone number Date signed (month, day, year) Printed name of authorized member of designating body Name of designating body Attested by: (signature and Title of attester) Printed name of attester * 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. 1C 5-1.1-12.1-17 Abatement schedules Sec.17. (a) A designating body may provide to a business that Is established in or relocated to a revitalization area and that receives a deduction under section 4 or 4.5 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 number of new full-time 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 until the abatement schedule expires under the terms of the resolution approving the taxpayer's statement of benefits. Page 2 of 2 FORM SB - t IPP AMENDMENT TO ORDINANCE NO.24-20'19 STATEMENT of BENEFITS PERSONAL PROPERTY Purina Animal Nutrition, LLC operates two locations within the City limits of Richmond, Indiana: 1 700 Industries Road, and the subject property, 505 North 4t' Street. The requested deduction for personal property will induce Purina Animal Nutrition to retain 80 and create 5 net new jobs between the two locations. All employees at the operations of Purina Animal Nutrition, LLC are employees of its parent, Land O'Lakes, Inc. and are provided under a service agreement between the two. The request for personal property tax deduction is specific to personal property proposed to be placed into service at the 505 North 4t' Street location. The property talc owner of record for this location is Purina Mills, LLC, a wholly owned company of Purina Animal Nutrition, LLC.