Gary Urban Enterprise Association

Last updated

The Gary Urban Enterprise Association (GUEA) was a 501(c)(3) organization developed to provide support and economic aid to the community of Gary, Indiana. It had a short history characterized by corruption.

Contents

State Enterprise Zone Program: Policies, and Governance

In 1983, the Indiana General Assembly created the Enterprise Zone Program. Under this program, local enterprise zone areas were created to address general and economic distress, provide community support, and develop revitalization efforts. [1] Local zones programs were created in twenty-seven various cities including Gary, Hammond, Portage, East Chicago, Michigan City, South Bend, Elkhart, Fort Wayne, Kokomo, Marion, Lafayette, Frankfort, Indianapolis, Terre Haute, Connersville, Bloomington, Bedford, Mitchell, Vincennes, Jeffersonville, New Albany, and Evansville. The local zone programs “serve as catalysts to promote the area to outside groups and individuals and act as a liaison between and among businesses, residents, and state and local governments.”

All Enterprise Zone Programs received oversight and governance from a 20-member State Enterprise Zone Board. This Board was made up of 15 voting members and 5 non-voting members. The Board was charged with broad powers to designate, review, approve, or disqualify enterprise zones. Staff for the Board and daily Zone Programs issues were handled by the Indiana Department of Commerce (IDC).

As originally enacted under Indiana Code, 4-4-61 and then under 5-28-15, Enterprise Zones expire “ten years from the day on which it is designated by the (Enterprise Zone) Board.” Any zone may “be renewed for a period of five years” based “the success of the enterprise zone.” After the initial five-year period, a second and final five-year renewal could be granted. After twenty years, a complete re-designation would need to take place. [2]

Gary Urban Enterprise Zone: Beginnings

For Gary, the State established the Gary Enterprise Zone in 1985. Gary “met the threshold criteria” as laid out by the Enterprise Zone Program. Shortly after being established, he Gary Enterprise Zone was transformed into the Gary Urban Enterprise Association, Inc. (GUEA), an Indiana 501(c)(3) agency. The board then had the following members: i.) Gregory Wilkins (Chairman), ii.) Gardest Gillespie (Vice-Chairman), iii.) Thomas Eskileson, iv.) Douglas Grimes, v.) Taghi Arshami, vi.) Alpha Dixon, vii.) Alyce Blakey, viii.) Jackie Holcomb, and ix.) James Reed. [3]

In 1991, the GUEA was officially reinstated as an Indiana 501 (c)(3) corporation and also gained status as a Federal 501 (c)(3) agency. Under the direction of Executive Director Jihad T. Muhammad and Board Chairman Donald Thompson, the GUEA evolved into “promoting existing business and attract(ing) new industry to diversify the City of Gary’s economy.” In addition to these activities, Director Muhammad and the GUEA Board established “prime examples of creating economic prosperity for citizens of Gary” through programs such as “the Kids Enrichment Program. Business Loans, Christmas Toys Program, Environmental Job Training and Affiliate Programs: the Incubator/Fifth Avenue Mall and Main Street.”

Moreover, under the State Enterprise Zone Program, the GUEA was chartered to work with qualified businesses located within the enterprise zone and to direct fiscal collection or the capture of certain tax abatements, tax credits, and tax exemptions. Programs or tax incentives that funded zone activities included 1.) the Inventory Tax Abatement Program (no property tax on business inventory in the zone), 2.) the Gross Income Tax Exemption Program (exemption from gross income tax in increase in receipts from zone operations). 3.) the Investment Cost Credit Program (State income tax credit for individuals purchasing an ownership interest in zone businesses), 4.) Loan Interest Credit Program (state income tax credit on lender interest income), 5.) Employment Expense Credit Program (State income tax credit based on wages paid to qualified zone employees), and 6.) Employee Tax Deduction Program (qualified employee wages being exempted from State income taxes).

According to a Post-Tribune article dated July 22, 1992, Board Chairman Thompson and Director Muhammad clashed over board governance and agency policies. At a July 1992 meeting, the Board accepted the resignation of Director Muhammad. Muhammad demanded that the Board address a list of demands or that he would resign. Chairman Thompson is noted as saying that by Muhammad “coming to our meeting and giving us ultimatums is incorrigible and impermissible.”

With the resignation of Muhammad, the Board promoted Administrative Assistant Donna Kizer into the position of Interim Executive Director.

In November 1993, Governor Evan Bayh issued an Executive Order Proclamation recognizing and commending the GUEA, its Board, and staff “for their dedication, commitment, and unique contributions to the City of Gary.” [4]

Donna Kizer - Second Executive Director

With the ascension of Donna Kizer the agency’s Administrative Assistant to Executive Director, this change in management brought about new appointments in the Board and expansion of the agency. Kizer was also chosen by her colleagues around the state of Indiana to be the founding Director of the Indiana Association of Enterprise Zones.

Under her lead, GUEA revenue grew from $69,000 to nearly $2 million in pledges, revenue and assets for neighborhood development including the award-winning Kids Enrichment Program "KEP" funded in partnership with the Lilly Endowment. KEP provided a nurturing environment for latch-key children as well as employing present and future educators. The developed various partnerships that secured critical zone partners such as the United States Steel Corporation, Republic Steel, Gary Sheet & Tin, Gary Armor Plate, American Bridge, Taylor Forge and Pipe Works, among many others. These businesses greatly benefit from the Inventory Tax Abatement Program and Employee Tax Programs.

Also during this timeframe, according to a Post-Tribune articles dated August 11, 1994, Kizer stressed professional agency advancement and securing professional credentials. She received training in the areas of economic development and finance. Kizer received certification from the National Development Council. Even more important to the GUEA, Kizer secured the first renewal of the enterprise zone status in 1995. As discussed earlier, enterprise zones were allowed an initial lifecycle of ten years and two possible five-year renewals. After the 1995 renewal, a second five-year renewal of the agency could take place in 2000 and provide for an agency lifecycle until 2005. Kizer left GUEA financially with over $2 million, resigning 1996 to relocate and pursue her new Christian path and continuing education providing counseling to people in need.

Legal counsel of Karen Freeman-Wilson was employed by the Board of Directors. During the 1990, the quasi-government Board may have listed political figures and business people such as: Virginia Gianikos, Helena Smith, i.) Oryn Carlisle (President), ii.) Chester Dickson (Vice-President), iii.) Margaret E. Goudeaux (Treasurer), iv.) Johnnie Wright (Secretary), v.) Michael Cervay, vi.) Derrick Earls, vii.) Gardest Gillespie, viii.) Doris Jackson, and ix.) Moses Steele. The GUEA 1997 Return of Organization Exempt from Income Tax Form 990 lists total revenue received in “contributions, gifts, grants, and similar amounts” including “government contributions “as $451,821 and combined net assets at $1,503,831. [5]

Jojuana Lynn Meeks – Third Executive Director

Jojuana commenced her career with the GUEA in 1993. She initially began work with the agency as a secretary. In 1994, Meeks was promoted to Business Development Coordinator. [6]

Under Meeks’ direction, the board was again reformatted. From 1998 to 2001, the board was composed of the following members: i.) Christopher Morrow (president), ii.) Derrick Earls (vice-president), iii.) Margaret Goudeaux, iv.) Johnnie Wright, and v.) Moses Steele. From 2002 to 2005, the Board composition was the same minus the involvement of Margaret Goudeaux. [7]

Jojuana Lynn Meeks significantly reshaped the direction of the agency. Under her guidance and direction, the agency increased its involvement in purchasing and land banking a large number of properties, developed programs to provide construction-based training and residential rehabilitation through the Zone Builders Training Program, increased capture incentive-revenues from zone enterprise companies, oversaw the establishment and roll out of the Airport Development Zone Program, and constructed various physical and capital improvements.

For 2003, the agency’s Form 990 submission lists $3,787,661 as revenue received and $10,304,564 in total assets. [8]

From 1998 to 2004, Director Meeks used the increase in revenue to purchase properties. According to property records, Meeks purchased over 655 properties. Meeks was charged with improving conditions with the Gary Enterprise but the funds she received on behalf of the agency purchased properties within the Gary Enterprise Zone as well as outside the Enterprise Zone perimeters in Gary and Northwest Indiana. These properties were primarily purchased at the Lake County Tax sales. Moreover, as being a tax-exempt not-for-profit, the GUEA was required to submit a development plan to Lake County Government showing its intent for these properties in order to maintain tax-free status. Meeks did not provide such reporting. Several properties were purchased out of state in Chicago, Illinois. According to various records, Director Meeks spent over $5,260,417 on property acquisition. [9]

In addition to the rapid purchase of properties, Meeks began the transfer of GUEA assets to the litany of businesses including

  1. a construction-based training school, called the Urban Career Institute
  2. a developmental corporation, called Urban Enterprise Development Corporation,
  3. a housing managing group, called Urban Management Group, and
  4. various construction companies such as Community Plumbing, Enterprise Carpenters, Inner-City Electrical, Marbelized Painting, and Tri-City Heating. All of these companies were reviewed both by local and Indianapolis-based legal firms. [10]

In addition to creating these companies for a post-GUEA life, Meeks and her Financial Manager Charmaine Pratchett used the resources of the agency for personal gain and profit. Between Meeks and Pratchett, over $215,000 was charged on personal expenditures on the corporation's credit cards. Further, Meeks and Pratchett received “excess” salary payments between 2001 and 2004. Meeks’ annual salary was set at $45,000 per year. For this four-year period, Meeks received supplemental pay of $45,415. Similarly, Pratchett received $33,927 during this same period. [11]

An End to the Gary Enterprise Zone

Based upon investigating reporting guided by whistle blowers, the State Enterprise Zone conducted an investigation of financial records of the Gary Urban Enterprise Association. Theft, malfeasance, misuse of public funds, under-reporting of funds, excess pay, hiring relatives, paying for family member funeral services, investing outside the Enterprise Zone, among many criminal issues were found. Charges were ultimately brought up against Jojuana Lynn Meeks and Charmaine Pratchett. Jojuanna Lynn Meeks received 5 years and 11 months on 13 counts. Charmaine Pratchett received a seven-year prison sentence on the same counts. In addition to the conviction of Meeks and Pratchett, Board members Derrick Earls and Johnnie Wright, Gregory Hill, Lawrence Meeks, Roosevelt Powell, Willie Harris, Will Smith were all convicted of corruption and wrongdoing according to Indiana prosecutors. [12]

[13] In August 2006, the State Enterprise disqualified and closed the Gary Enterprise Zone.

Related Research Articles

<span class="mw-page-title-main">Taxation in the United States</span> United States tax codes

The United States of America has separate federal, state, and local governments with taxes imposed at each of these levels. Taxes are levied on income, payroll, property, sales, capital gains, dividends, imports, estates and gifts, as well as various fees. In 2020, taxes collected by federal, state, and local governments amounted to 25.5% of GDP, below the OECD average of 33.5% of GDP.

A tax credit is a tax incentive which allows certain taxpayers to subtract the amount of the credit they have accrued from the total they owe the state. It may also be a credit granted in recognition of taxes already paid or a form of state "discount" applied in certain cases. Another way to think of a tax credit is as a rebate.

The Low-Income Housing Tax Credit (LIHTC) is a federal program in the United States that awards tax credits to housing developers in exchange for agreeing to reserve a certain fraction of rent-restricted units for lower-income households. The program was created under the Tax Reform Act of 1986 (TRA86) to incentivize the use of private equity in developing affordable housing. Projects developed with LIHTC credits must maintain a certain percentage of affordable units for a set period of time, typically 30 years, though there is a "qualified contract" process that can allow property owners to opt out after 15 years. The maximum rent that can be charged for designated affordable units is based on Area Median Income (AMI); over 50% of residents in LIHTC properties are considered Extremely Low-Income. Less than 10% of current credit expenditures are claimed by individual investors.

<span class="mw-page-title-main">Sole proprietorship</span> Business legally synonymous with its owner

A sole proprietorship, also known as a sole tradership, individual entrepreneurship or proprietorship, is a type of enterprise owned and run by only one person and in which there is no legal distinction between the owner and the business entity. A sole trader does not necessarily work alone and may employ other people.

Tax exemption is the reduction or removal of a liability to make a compulsory payment that would otherwise be imposed by a ruling power upon persons, property, income, or transactions. Tax-exempt status may provide complete relief from taxes, reduced rates, or tax on only a portion of items. Examples include exemption of charitable organizations from property taxes and income taxes, veterans, and certain cross-border or multi-jurisdictional scenarios.

A tax refund or tax rebate is a payment to the taxpayer due to the taxpayer having paid more tax than they owed.

The Employer Identification Number (EIN), also known as the Federal Employer Identification Number (FEIN) or the Federal Tax Identification Number, is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to business entities operating in the United States for the purposes of identification. When the number is used for identification rather than employment tax reporting, it is usually referred to as a Taxpayer Identification Number (TIN). When used for the purposes of reporting employment taxes, it is usually referred to as an EIN. These numbers are used for tax administration and must not be used for any other purpose. For example, an EIN should not be used in tax lien auction or sales, lotteries, or for any other purposes not related to tax administration.

A gift tax or known originally as inheritance tax is a tax imposed on the transfer of ownership of property during the giver's life. The United States Internal Revenue Service says that a gift is "Any transfer to an individual, either directly or indirectly, where full compensation is not received in return."

<span class="mw-page-title-main">S corporation</span> US tax term for a type of company

An S corporation, for United States federal income tax, is a closely held corporation that makes a valid election to be taxed under Subchapter S of Chapter 1 of the Internal Revenue Code. In general, S corporations do not pay any income taxes. Instead, the corporation's income and losses are divided among and passed through to its shareholders. The shareholders must then report the income or loss on their own individual income tax returns.

<span class="mw-page-title-main">Income tax in the United States</span> Form of taxation in the United States

The United States federal government and most state governments impose an income tax. They are determined by applying a tax rate, which may increase as income increases, to taxable income, which is the total income less allowable deductions. Income is broadly defined. Individuals and corporations are directly taxable, and estates and trusts may be taxable on undistributed income. Partnerships are not taxed, but their partners are taxed on their shares of partnership income. Residents and citizens are taxed on worldwide income, while nonresidents are taxed only on income within the jurisdiction. Several types of credits reduce tax, and some types of credits may exceed tax before credits. An Alternative Minimum Tax (AMT) applies at the federal and some state levels.

<span class="mw-page-title-main">Fund accounting</span> An accounting system used for special reporting requirements

Fund accounting is an accounting system for recording resources whose use has been limited by the donor, grant authority, governing agency, or other individuals or organisations or by law. It emphasizes accountability rather than profitability, and is used by Nonprofit organizations and by governments. In this method, a fund consists of a self-balancing set of accounts and each are reported as either unrestricted, temporarily restricted or permanently restricted based on the provider-imposed restrictions.

The United States Internal Revenue Service (IRS) uses forms for taxpayers and tax-exempt organizations to report financial information, such as to report income, calculate taxes to be paid to the federal government, and disclose other information as required by the Internal Revenue Code (IRC). There are over 800 various forms and schedules. Other tax forms in the United States are filed with state and local governments.

<span class="mw-page-title-main">IRS Criminal Investigation</span> Criminal Investigation division of the IRS

Internal Revenue Service, Criminal Investigation (IRS-CI) is the United States federal law enforcement agency responsible for investigating potential criminal violations of the U.S. Internal Revenue Code and related financial crimes, such as money laundering, currency transaction violations, tax-related identity theft fraud and terrorist financing that adversely affect tax administration. While other federal agencies also have investigative jurisdiction for money laundering and some Bank Secrecy Act violations, IRS-CI is the only federal agency that can investigate potential criminal violations of the Internal Revenue Code, in a manner intended to foster confidence in the tax system and deter violations of tax law. Criminal Investigation is a division of the Internal Revenue Service, which in turn is a bureau within the United States Department of the Treasury.

<span class="mw-page-title-main">Form 990</span> United States Internal Revenue Service form

Form 990 is a United States Internal Revenue Service (IRS) form that provides the public with information about a nonprofit organization. It is also used by government agencies to prevent organizations from abusing their tax-exempt status. Some nonprofits, such as hospitals and other healthcare organizations, have more comprehensive reporting requirements.

Within United States federal legislation, an empowerment zone is an economically distressed community eligible to receive tax incentives and grants from the United States federal government under the Empowerment Zones and Enterprise Communities Act of 1993.

<span class="mw-page-title-main">Taxation in Indiana</span> Overview about the taxation in Indiana

Taxes in Indiana are almost entirely authorized at the state level, although the revenue is used to fund both local and state level government. The state of Indiana's income comes from four primary tax areas. Most state level income is from a sales tax of 7% and a flat state income tax of 3.23%. The state also collects an additional income tax for the 92 counties. Local governments are funded by a property tax that is the sum of rates set by local boards, but the total rate must be approved by the Indiana General Assembly before it can be imposed. Residential property tax rates are capped at maximum of 1% of property value. Excise tax is the fourth form of taxation and is charged on motor vehicles, alcohol, tobacco, gasoline, and certain other forms of movable property; most of the proceeds are used to fund state and local roads and health programs. The Indiana Department of Revenue collects all taxes and pays them out to the appropriate agencies and municipalities. The Indiana Tax Court deals with all tax disputes issues, but decisions can be appealed to the Indiana Supreme Court.

An economic development incentive can be strictly defined as “cash or near-cash assistance provided on a discretionary basis to attract or retain business operations. In practice, however, it is a broadly used term denoting an array of benefits designed to promote new business activity or to encourage business or job retention. These benefits principally encompass tax and economic incentives provided by federal, state or local governmental bodies. Other entities, such as utilities and non-profits, can also make incentives available for these purposes. They accord the recipient, in some manner, a monetary benefit or an in-kind benefit. Private enterprises, including individuals, are generally the ultimate beneficiary of economic development incentives. Depending on the incentive in question, other qualified parties are eligible to receive them, as in the case of municipalities, utilities, or economic development agencies.

<span class="mw-page-title-main">Community Renewal Tax Relief Act of 2000</span> United States Congress bill

The Community Renewal Tax Relief Act of 2000 is a bill that was introduced into the United States House of Representatives during the 106th United States Congress. The Act was eventually passed as part of the Consolidated Appropriations Act, 2001.

Statistics of Income (SOI) is a program and associated division of the Internal Revenue Service (IRS) in the United States to make statistics collected from income tax returns and information returns available to other government agencies and the general public. It fulfills an IRS function mandated by the Revenue Act of 1916.

<span class="mw-page-title-main">Charles Rettig</span> American attorney (born 1956)

Charles Paul Rettig is an American attorney who served as the United States Commissioner of Internal Revenue, the head of the U.S. Internal Revenue Service (IRS). On September 12, 2018, the United States Senate confirmed Rettig's nomination to be Commissioner for the term expiring November 12, 2022. Rettig was sworn in on October 1, 2018.

References

  1. ↑ Jim Landers and Dagney Faulk. "In the Zone: A Look at Indiana's Enterprise Zones". Indiana.edu. Retrieved 2012-11-23.
  2. ↑ State of Indiana. "Indiana Code 5-28-15: Enterprise Zones". www.in.gov. Retrieved 2012-11-23.
  3. ↑ Gary Urban Enterprise Association. "1985 Articles of Incorporation" (PDF). www.in.gov. Retrieved 2012-11-23.
  4. ↑ State Government. "Governor Bayh Proclamation". www.in.gov. Retrieved 2012-11-23.
  5. ↑ GUEA. "1997 Form 990 Tax Return" (PDF). www.irs.gov. Retrieved 2012-11-23.
  6. ↑ GUEA. "Investigation into the Financial Records of the GUEA" (PDF). www.irs.gov. Retrieved 2012-11-23.
  7. ↑ GUEA. "2003 Form 990 Tax Return" (PDF). www.irs.gov. Retrieved 2012-11-23.
  8. ↑ GUEA. "2003 Form 990 Tax Return" (PDF). www.irs.gov. Retrieved 2012-11-23.
  9. ↑ GUEA. "Investigation into the Financial Records of the GUEA" (PDF). www.irs.gov. Retrieved November 23, 2012.
  10. ↑ GUEA. "Investigation into the Financial Records of the GUEA" (PDF). www.irs.gov. Retrieved November 23, 2012.
  11. ↑ GUEA. "Investigation into the Financial Records of the GUEA" (PDF). www.irs.gov. Retrieved November 23, 2012.
  12. ↑ Elizabeth Theaken NW IN Times. "Ind. Gov't. - AG suing Gary Urban Enterprise Association to recover assets". Indianalawblog.com. Retrieved 2005-10-05.
  13. ↑ Jim Landers and Dagney Faulk. "In the Zone: A Look at Indiana's Enterprise Zones". Indiana.edu. Retrieved 2012-11-23.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.