The Vanderburgh County Council held a special meeting on June 30, 2004 in room 301 of the Civic Center Complex. The meeting was called to order at 3:17 p.m. by County Council President Ed Bassemier.

President Bassemier: I’d like to welcome everybody to the June 30^th, 2004 special meeting today. Attendance roll call please.

COUNCILMEMBER	PRESENT	ABSENT
Councilmember Tornatta	X
Councilmember Sutton	X
Councilmember Lloyd	X
Councilmember Hoy	X
Councilmember Raben	X
Councilmember Wortman	X
President Bassemier	X

President Bassemier: Okay, as you know, we’re here today to vote on a tax abatement, whether we’re going to give a tax abatement to Black Buggy or not. I’m going to move right on into the agenda. What I’d like to do, I’d like to get a motion and I’d like to get a second, and then we can discuss it. Is that okay with everybody?

President Bassemier: Okay, I’d like for somebody to make a motion to approve a preliminary resolution by County Council declaring an economic revitalization area for tax abatement for redevelopment of property located at the southeast corner of Green River Road and Lynch Road/Broadway Summit, LLC. Can I have a motion and a second on that please?

Councilmember Raben: Mr. President, to get it on the floor, I’ll make a motion.

Councilmember Winnecke: For the purposes of discussion, I’ll second the motion.

President Bassemier: Okay. I have a motion and a second. Anybody like to make any comments from the County Council? Want to ask Mr. Vincent to come up? Sir, please state your name and your title, please.

Jim Vincent: Jim Vincent, I’m president of Black Buggy Growth, Incorporated. I had a product I wanted to pass around that’s representative of what we’re shipping into the Marsh Supermarkets in Indianapolis and the Buehler’s here in Evansville.

Jim Vincent: We use a local company, Farm Boy, for the production of the meat products that we’re distributing through the supermarket chains. I just wanted to speak real quickly. I appreciate the opportunity to come before you and to go through the application process and make this request. There’s been a lot of communication about this project and I just wanted to kind of cut to the chase and speak maybe to a couple of what we believe are mitigating circumstances regarding our project. Obviously, this is a big project. We are looking at a 44 acre tract of land that is on the northeast side of Evansville. I may not have mentioned this in the past, but I think its critical at this stage to talk about this. We had been interested in that property for a long period of time prior to reaching a point where we had the opportunity to acquire that. We have not acquired that property today. We have an option to. We were required by the land owners to purchase the tract in whole and everyone who has worked on that property was faced with the same challenge. They did not want to sell it in parcels and we understand why; not wanting to break it up in pieces. We were pleased that we could come to an agreement with that piece of property, but as you all know, it’s a piece of farmland and its completely unimproved. We looked at the tax records. That property, the 44 acres generated about $500 in property taxes in 2003. And we did some estimates based on just the land itself because it would be reclassified as commercial. The property valuation there on an annual basis would go to $18,000 and even if we receive abatement for our project. Under statute, the land tax itself is not abated. So from day one when this project begins, if we have the opportunity to start, we will be paying a net increase to the county of about $17,500 in property taxes and I think, myself included, its not clearly understood by a lot of people in the public that tax abatement doesn’t cover the land property tax itself. It is only for the improvements that go on the property, the buildings or expansion, the things that are in our application that we put before you. So I just wanted to clarify that because I think this is a unique situation because one, we are improving that 44 acres and, as a result of our concept, which we estimate will bring about 700,000 per year to the Evansville area and many of those people will be from out of state, on bus tours. As we all know, they will spend other dollars in Evansville related to fuel expenses, or hotel rooms, eating in other restaurants. This will be a big tourist attraction for Evansville to have this here. It is our headquarters, as we’ve spoken about in the past. And we like Evansville for several reasons: one, it’s a growing metropolitan area, its near an airport, its near major arteries for transportation. Our goal in the next seven years is to have six of these restaurants based around the model that will be built on this site. Everything that we test in relationship to this concept and all the training for future sites around the country will be done here in Evansville. And again, close proximity to that airport and to the highway is critical for us. We all want to see things happen in our county that provide opportunities for people. On day one we’ll be employing 100 people in this restaurant and the headquarters operation and also our supermarket distribution for the product I passed around. Over the next few years I expect that number is going to grow substantially which, to be conservative, we didn’t try and put that in our application but its only logical that we would pull from our local universities and our local workforce to help us grow the concept in other places. And I’ve referred in the past to other companies that operate restaurants in the Evansville area. If they would put their headquarters in Evansville, it would be a real, you know, opportunity for our local economy. If you look at Lebanon, Tennessee, for example, and just what has happened to that county and their tax revenues as a result of the growth of that organization, I don’t know if we would ever achieve that kind of success. We are humble and we certainly hope we can achieve success with the growth of our concept but the bottom line is, we have to get started. And when you look at the financial hurdles that we have to overcome, about two and a half million dollars in construction, this will be the largest concept of its type in the region, bar none, about 1.7 million dollars worth of land and land improvement costs. And I would point out that the county will not be required to make any investment in the infrastructure that’s going into this property but I would predict within the next five years that with the improvement of that property and with the growth because of the activity going on around their operation, a lot of new businesses will be attracted to that area, which would have a significant impact on tax revenues. So kind of in summary, you’re looking at a pretty significant increase in annual tax revenue on the property from day one at the beginning of the abatement period. We’d be satisfied with a five year abatement on the property. Our main goal is to overcome that cost of infrastructure because its such a significant expense, I don’t know of any restaurants that have ever made this type of investment in infrastructure. You know, of course, in the scale of what we’re doing with multiple sites throughout the southeast and the mid-west, I don’t know of anybody who is headquartered here that would be similar to us. But along those lines, to overcome that infrastructure investment to get our business started, that’s why we sought abatement in the first place and we think it’s a win-win. I think this is a case for textbook example of where abatement can return to the taxpayer a multiple dollar return even from day one on the dollar investment on the abatement. And I think one thing, also, that’s sometimes confusing is abatement is a phase-in. Its not, let’s say it’s a five-year period, its not 100% abatement, as we all know. It’s a sliding scale, so basically, the abatement decreases every year until it returns to 100%. Our goal is just to have that opportunity to help make this more financially feasible for us to make the kind of investment that we want at the site.

President Bassemier: Thank you. Any questions? Anybody? Troy, you got any – you want to start from your...

Councilmember Sutton: I know we’ve had you before us two other times and looking at this particular project. I think you picked a great county to give some consideration to, for one thing, and a great site that is obviously an opportunity to increase development and provide some things in the area that we haven’t really seen before. And I think one of the things that we look at with any request that comes before us is how a business is able to add some value and able to produce some things other than just the benefit that that company may receive to themselves and what you’ve talked about with your concept, with the relationship with other vendors here locally. It does, there is obviously some potential there, but I think one of the things that we probably have all really grappled with, with the request over the last couple of months is, the decision that we make, is this just this decision? No, its not. It’s a decision that we make that ultimately – it affects other decisions that we make, so are we setting precedent with the request that we are making? And that’s something I’ve kind of tried to work through myself in trying to establish what’s the balance there. How do we look at each request that comes before us without compromising either previous decisions that we’ve made or future decisions that we have. And we’ve also had discussions about the wage levels and how that fits in and the wage levels in particular of those in a restaurant is pretty typical of what most restaurants would pay. Now the executive staff, the administrative staff that’s involved with the training and will be involved with developing the potential franchises that might be out there, the pay levels are on a different scale. So I guess its just a combination of all those things that I guess in questioning, looking at the requests that you have here, I know you’ve also considered another site in Warrick County and I guess the question that I would have would be, if this abatement request isn’t approved, what’s your next step?

Jim Vincent: The comment I’d make is, we really like this site. I mean, that’s why we’ve worked on it. We started evaluating and negotiating and trying to work on this site almost two years ago. We kind of gave up because we didn’t see any way that it would be feasible for us to take on 44 acres and put the improvements in place. And I mentioned the people we’ve been negotiating with have really been good to work with because they’ve given us the opportunity to break that property in half and option the balance of it, so about 18 ½ acres is what we are developing for the area where the headquarters will be located. Its still a lot more than we need, as the Council knows, for our project. And we went through the process that was suggested to break the parcel down. We did a metes and bounds survey so that we were only asking for the area of revitalization to be limited to where our headquarters would be located. And we’ve completed that, put that in the application. We like the site and we think because of its proximity to people, certainly the universities and to the college and to the transportation arteries, its one of the best locations that we could be in. Warrick County has been a great county to work with, similar to Vanderburgh County in terms of the people that have assisted us all the way from the Surveyors office to people within their county government. As you know, we received a tax abatement of five years in Warrick County and ten years on the equipment. Because of the nature of the process here in Vanderburgh County, we made a business decision not to go after the equipment, to focus on the land because the land is the challenge at this particular piece of property, or the building. We knew we were going to be looking at a significant hurdle to put in the road, the sewer, the water, the gas, the electric, there’s nothing on this property. Its completely unimproved, and as a result of that, it doesn’t generate any tax revenue today. The reason this hasn’t been developed is because of the requirement on the part of the sellers to purchase the entire property. And I don’t know what the future is; someday this property will be used for commercial use, but its going to be a challenge for anybody to take on that hurdle. The Black Buggy is a unique concept. It’s a unique opportunity not only in Vanderburgh County, but its kind of a once-in-a-lifetime type project because we feel very confident, not only will this product be well received as it has been in the supermarkets that we distribute in, but we think it has attraction throughout the United States. It sounds a little, you know, farfetched to say something like that about the startup of an organization, but it might surprise people that some of the bigger operators like Cracker Barrel only started in the early 70's. So with the foundation and quality of people that are here in Vanderburgh County, and when I say quality, I mean people who we would hire to help us grow the organization, and the following that we have concerning our product, we think Vanderburgh County is the place to be because it’s a large metropolitan area. Warrick County is a great location, it’s a bit of a challenge to get to the site that we were working on and if you look at our demographic, people who are 50 plus make up a large part of our population that visit the restaurant. And we want it to be easy and convenient and simple for people to find because we want people to be able to enjoy the atmosphere there anytime. And the other advantage that Vanderburgh County provided us is, because of the acreage, there is a real opportunity there with the help of the Convention & Tourism Bureau, who has also been very helpful, to identify some other destinations. We kind of think about this in terms of time segments. Today you can come to this site once we’re complete and there’s two or three hours worth of activities for people to participate in. When we have special events, we’ll give buggy rides on the sites, we’ll eventually do demonstrations and we probably will, because of the farmland, early on. But there’s things for kids to see in Washington today. Its not uncommon to give tours to students and things like that, of the operation just because of its magnitude, the size of the operation. But those are things that we can do in Vanderburgh County that its difficult to do in other counties. I don’t want to digress. One reason why we came to you is, the state of Indiana really does not have incentives for organizations like ours, manufacturing or anything, to any extreme degree for growth for startup businesses. There are some programs you can qualify for but its pretty complicated. To give you an example, the state of Kentucky had approached us about a sales tax abatement that they use for tourist focused projects and the Hofbrauhaus in Newport, Kentucky is similar in scope to ours. Its about a two million dollar development. I don’t know if anybody has been there or is familiar with the Hofbrauhaus? They qualified for the tax abatement in Kentucky, which is a great incentive and tool for their state to grow organizations and try and incent organizations like ours to come there. We qualified for the program. We chose not to go through the process to qualify and take advantage of that program because we felt like Vanderburgh County was the best site for us. So to bring it back around, we believe this is the right site and we want to do everything that we can and investigate every avenue that’s available to help us make this financially feasible to develop the land and to put the restaurant in that location, and, of course, our training area and our headquarters.

Councilmember Winnecke: I have had reservations about this request for some time, as Mr. Vincent knows. We’ve had frank, lengthy discussions. I think the increase in tax revenue alone is not enough for us to approve this abatement today. I think the precedent we set today by voting in favor of this is a dangerous one. Abatements are not entitlements to every development or any company or business wanting to expand or grow into our community. I think each should be taken with a careful watch and this is one I cannot support today. I wish you well. I hope you can do it without my vote.

Councilmember Hoy: Point of information, as you all know, I am your liaison to the Convention & Visitors Bureau. And my information from CVB is that they have not taken a vote on this issue and when I went to the meeting Tuesday, I received opinions from board members on both sides, so I do not want the Council thinking that theres been an anointing of this project by CVB. They have not done that.

Councilmember Raben: Thank you, Mr. President. You know, I’ve done everything I can. I’ve turned both ways on this issue and, in fact, one of the requests that I had was to parcelize this development so we weren’t granting abatement on the entire 20 or 20 plus acres. But even in doing that, I still, I don’t find the comfort that I need to vote in favor of an abatement. You know, I feel like we need to remain harmless from other requests much like this one that will come to us, and there will be many should we grant this abatement. And, you know, I think to protect not only this Council, but Vanderburgh County, because, you know, this Council, everyone up here can change over the course of the next three years, so I think its in the best interests of this Council to probably walk away from this one, as bad as I hate to. And its an exciting project. I wish you all the success in the world, and hopefully your success will be even greater than your early projections and maybe at some point five or ten years from now you can come to us and need a big corporate office structure or building and we can revisit the issue again, but at this time I’m not comfortable with it.

President Bassemier: No comment, that’s unusual for you, Curt. Jim, you know, you and I talked back and forth and, you know, this has really been one of the toughest decisions I’ve made for a long time and Lloyd Winnecke, I’ve got to echo some of his statements. Its, you know, are we going to start a precedent here for other restaurants? But one of the concerns that hadn’t been brought up very much is that property there is the TIF district there and you know what that TIF draws to that stretch there. It helps pay for the infrastructure going on and we receive that and you’ve got that corner there which is Lynch Road and we put in 1.5 million. We supported funding for that 1.5 million dollars out of that TIF fund for the extension of Lynch Road and then a lot of people supported that and without any tax abatements. And I’m thinking well, would it be fair to them to go ahead and give you a tax abatement and you’ve got the Lynch Road right there where we used 1.5 million dollars to extend that to help your business and we’re going to turn around and give you a tax abatement on it when the other businesses, we did not. So I also wish you the best and you’ve got one heck of a project and I wish you well with it but, like I said, it was a very tough decision for me to make here and when its going to come my turn to vote, I’m going to vote against it. But I think you’ve got a wonderful project here. So...

Councilmember Raben: You know, I’m going to add one last comment, that its unfortunate, but due to the financial climate of this county and many others, it’s a shame that we’re not in the condition where we can look at other alternatives other than conventional tax abatement. But that’s not even an option for us at this time. We’re wondering, you know, we’re concerned about paying for our day to day operations for the balance of this year and years to come. So, again, maybe – its not going to help you, but maybe in the future if we have an opportunity, you know, maybe our financial outlook will look better and we can do other things. But sorry, at this point, we can’t.

Jim Vincent: Well, it’s a challenge because it would seem to mathematically, that this would generate additional income for the county. I’ve asked the question, can TIF funds be used for at least the road which we plan to dedicate to the county after we pay for it in full for this project?

Councilmember Raben: I can’t answer that. I know that would probably have to go through what, the Department of Redevelopment?

Jim Vincent: We’re just trying to turn over every stone that we can and we appreciate the opportunity to present and go through the application process. In some ways its probably helped us understand our project in more detail because of the analysis and things that we’ve had to go through to get to this point. So, you know, the bottom line is, we just hope everybody here visits the organization and we hope that we can pull this off and have something to really be proud of in Vanderburgh County.

Councilmember Tornatta: Well, I think, Jim, there’s no question, I think you have support and we appreciate you coming in and showing interest in Vanderburgh County and we have a lot of interest in making sure that you’re as successful as possible. I think you should pursue every avenue to try and see if there are opportunities for you to gain some type of advantage, although we’re not going to be able to offer you any here today. But, I mean, those advantage are there with possibilities and, you know, you do have a lot of support and there is support out there in the community. And I think it would be a great spot for that building and your business. There’s no question about it. At this time, we can’t help you.

President Bassemier: I tell you what, I was going to say we need to move on. We’ve got a meeting right after this one and –

President Bassemier: Okay, we have a motion and a second. Roll call vote please.

Councilmember Sutton: And along with what has been said before, just concerned about the precedent setting nature of providing abatement for a restaurant, so my vote will be no.

President Bassemier: If I may interject here, let’s everybody go ahead and vote. Everybody had a chance to talk. Let’s go ahead and make our vote so we can move on to our next meeting here shortly. So, everybody had a chance for comments, so let’s just move on and vote yes or no. Okay? Thank you.