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In Indiana, tax abatement is technically defined within state law as an economic revitalization area (ERA) deduction. The process begins by designating a certain piece of real estate as an ERA. Subsequent investment on that property, within state guidelines, is then eligible for tax abatement. Two types of investments can receive tax abatement - real estate and personal property improvements.
Regarding real property, the purchase of land does not qualify for a deduction; only a structure or building. Abatement is only for the increase in assessed value which means it cannot be applied to the value of existing structures. Activities eligible for abatement include the construction of new structures, additions to existing structures, and the remodel or repair of a structure that results in an increase in assessed value. Deductions for real property can be approved for a period up to ten years, during which, new taxes are phased in, hence the term tax phase-in.
Personal property abatements are for equipment or machinery used for the production, manufacturing, fabrication, assembly, or processing of other personal property. In addition, equipment used for research and development, information technology systems and on-site logistical equipment are eligible for abatement. Used equipment can qualify for abatement if not previously used and taxed in Indiana. Like the real property abatement, deductions for personal property can be granted for a period up to five years with additional years of abatement based upon the size of the project.
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The County’s economic development staff helps to set the growth and development plan for the Department of Infrastructure, Planning & Growth team and serves as a liaison to coordinate development opportunities with our local cities and towns, the South Bend Regional Chamber, the South Bend-Elkhart Partnership, the State of Indiana’s Economic Development Corporation as well as the private development community and existing, local businesses to help facilitate growth and development within the four corners of the County. Staff works with the development community to help navigate internal and external processes to help advance projects and match incentives, when needed, to help projects to completion. Staff works with local businesses that are seeking to expand or relocate within the County and aids and coordinates to help these businesses grow. Staff also works proactively with State and Federal partners to find resources that can be used locally to leverage development or infrastructure projects.
The Division of Economic Development staff works with our regional economic development partners to promote our region to the local, regional, national, and international development community and to help prospects navigate local and regional development rules to complete their projects. Our team’s goal is to take St. Joseph County to the world and to bring the world to St. Joseph County!
The Division of Economic Development staff aides and assists the Towns by serving as supplemental staff to the local government units as they prepare economic development plans, assist with business retention and expansion projects and coordinates as needed when prospects are interested in developing within their Town limits. Staff also works with the development offices in the cities of Mishawaka and South Bend on an as-needed basis.
Tax Increment Financing, or TIF, is a financial tool that collects new property tax increment generated by new development within a legally defined area. The collected increment helps to pay for infrastructure improvements (streets, sewers, parking lots) in the area near a new development and for targeted property acquisition to support redevelopment purposes. A TIF district sits within an Economic Development Area (EDA) which is a legally defined area managed by the local Redevelopment Commission. Further information about the St. Joseph County Redevelopment Commission or the Commission’s four economic development areas can be found in this section of the website.
An economic development area (EDA) is a legally defined geography that is established to facilitate economic development or redevelopment. An EDA is managed by the local redevelopment commission. Presently, the St. Joseph County Redevelopment Commission manages four (4) EDA’s and is considering the designation of two additional EDAs.
The tax abatement program is managed by the St. Joseph County Council. The Division of Economic Development plays a support role to the Council and works with the prospects and assists them through the various interviews and meetings required for approval. Tax abatement information can be found at: https://www.sjcindiana.com/taxabatement.
Eminent domain refers to the power of the government to take private property and convert it into public use, following the payment of just compensation. The Fifth Amendment provides that the government may only exercise this power if they provide just compensation to the property owners. Private property is taken through condemnation proceedings, in which owners can challenge the legality of the seizure and settle the matter of fair market value used for compensation. The most straightforward examples of condemnation involve land and buildings seized to make way for a public project.
The County and the Redevelopment Commission are both granted the right to use condemnation through State law to further public projects. The County has used condemnation in the past to acquire land for roadway, infrastructure, and drainage projects.