City to consider $15.2M in bonds for downtown projects

Indianapolis officials on Monday will consider issuing bonds to contribute $15.2 million to two downtown development projects: the conversion of the city’s oldest African-American church into a hotel complex, and construction of a five-story apartment and retail development near the base of Massachusetts Avenue.

Members of the Metropolitan Economic Development Committee of the City-County Council will weigh issuing tax-increment revenue bonds to help finance the two projects. The meeting is scheduled for 5:30 p.m. Monday in Room 260 of the City-County Building.

In the larger of the two proposals, the committee would authorize issuing about $8 million in bonds for the $36 million hotel project, slated for on the site of the Bethel African Methodist Church at 414 W. Vermont St. and along the Central Canal.

The plans call for two hotels to be housed in separate seven-story towers on the property, according to a Department of Metropolitan Development staff report. They would share amenities on the lower floors, including meetings rooms and lounges. The church itself would be renovated and retrofitted as part of the complex.

The church was built in 1869 and has served the black community at its current location for nearly 150 years. But dwindling membership and an aging building requiring costly repairs have forced the congregation to sell the property near the Central Canal.

Under the proposal, the city would issue the bonds to project owner Indy Canal Lodging Associates LLC and developer Sun Development and Management Corp. As opposed to typical tax-increment financing, the bonds would be so-called “developer-backed bonds,” a financing vehicle being championed by the Hogsett administration.

Under traditional tax-increment financing deals, the city assumes the risk of a bond issue and must make up shortfalls if additional property tax revenue generated in a defined district falls short of debt payments. Under the developer-backed strategy, the developer is on the hook for shortfalls.

The five-story mixed-use project by the base of Massachusetts Avenue is known as The Ardmore, to be developed by Gershman Partners Inc. and Deylen Realty Inc. and owned by GP-Deylen LLC.

Plans for The Ardmore call for 126 apartments ranging in size from 553 square feet to 1,631 square feet; 20,000 square feet of retail; and 302 below-ground parking spaces. It is slated to be built on 2.8 acres at the southwest corner of North Delaware and East New York streets on property that currently is used for surface parking.

Under the proposal to be considered Monday, the city would issue $7.2 million in developer-backed bonds to GP-Deylen to help finance the $41 million project.

The staff of the Department of Metropolitan Development has recommended approving both bond proposals, noting the creation of jobs, increases in real estate value and other benefits to the city potentially generated by the projects.

If the proposals are approved Monday, they are scheduled to be considered by the full City-County Council on July 10. If approved in that venue, they would be heard for final approval by the city’s Metropolitan Development Commission on July 19.