The Indianola Board of Aldermen recently voted 3 to 1 to grant a 100 percent tax abatement on a new construction project proposed by businessman Sam Rosenthal.
The board also voted 3 to 1 to give a tax break on the increased value of an existing building undergoing renovation at the same site. The abatement is for the maximum seven years.
Alderman Sam Brock voted no on each motion.
After tabling the issue at a previous board meeting, the city lawmakers called a special session on May 31 to determine whether or not to allow the tax abatement and if so, how much and for how long.
Mayor Steve Rosenthal recused himself when talks began at the prior regular board meeting, and he once again recused himself from that portion of the special meeting, and Alderman/Vice-Mayor Ruben Woods conducted the session.
Sam Rosenthal appeared before the city decision-makers at the May 29 regular session to make his original request for the tax break. Alderman Marvin Elder made a motion at that time to allow it, but there was no second and the vote was never carried through.
“We are doing an extensive rehab on this 211 property,” Rosenthal said, “If you drive by you can see we’re spending a lot of money to keep these people,” he added.
Confusion arose because Rosenthal indicated that he had started construction but later said he had not. He said, “The back extension has not been started.” Rosenthal said he had been waiting in order to come before the board so the new construction on the back had not begun.
Alderman Gary Fratesi suggested tabling it until Austin could come back to the board with clarification on what could be done about the existing structure. Brock concurred. Woods added that Rosenthal’s request was for a tax abatement for the entire property, but did not spell out the specific portions.
Rosenthal cautioned then that if the board had to table its response for weeks before getting back to him then there would not be a need for him to construct the building because the company would leave.
At the May 31 special session, the main question was if the abatement could also be applied to the improvements on the existing structure as well as the proposed new building construction. Attorney Gary Austin affirmed that it could because the renovations are not yet complete on the current building and definitely on the new one.
He explained, “And the difference is going to be this, on the old building the value of it after it is finished, as opposed to the value before it’s done is the amount that would be taxable and abatable. So, if it goes up $10,000 that would be all that could be abatable, that portion, not the full building.”
Austin told the city officials that they could grant a full abatement for up to seven years, but the school taxes are not abatable. Brock then asked Rosenthal if the two structures would be combined or separate. Rosenthal responded, “It’s on one piece of property. It’s going to have separate utilities, going to have separate water, separate everything.”
Woods and Brock then questioned if it would be considered separate property for tax purposes since there are only “six-inches” between the two spaces and it will be under one roof. “That kind of complicates matters a little bit,” said Woods. “That complicates it a whole lot,” Brock added.
“Has the city inspector looked at this?” Brock asked. Austin responded, “He issued permits.” Brock then retorted, “Well, the city inspector issues a lot of permits, some he wish he could take back.” He then asked about the use of the building.
Rosenthal disclosed that the front is going to be used by a beauty supply company out of Greenville and the new construction will be used by DIRECTV to distribute equipment to their employees. “They employ, according to the manager, about 30 people,” Rosenthal asserted.
Brock then asked if there was adequate parking. Rosenthal said that the 30 people will not be in the building at one time but will arrive at “staggered” times during the week to pick up supplies. “They’re not even open every day, just when people need parts,” Rosenthal replied.
After a lengthy discussion that resulted in having to call in City Inspector Elvis Pernell, Fratesi pointed out that the parking debate was irrelevant because Pernell had already issued the permits. Pernell affirmed that everything was in order
Brock then again raised the issue of the difference between the Platinum Plus Care request and Rosenthal’s. Austin stated that it was because the senior care facility had been in operation for eight months prior to her request. But as for Rosenthal’s project, “The building has been closed and there is no operating business in it, it’s being renovated,” Austin countered.
