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The Carmel City Council continues to examine plans for a proposed $123 million real estate project that would feature a boutique hotel and apartments near City Hall. However, some councilors are skeptical if that is the right location for multifamily housing.
Carmel-based Novo Development Group LLC and the city of Carmel are working on a project called Proscenium III at the northwest corner of the roundabout at South Rangeline Road and Executive Drive. Initial plans include 151 apartments, a 125-room hotel, 63,000 square feet of office space, 15,000 square feet of retail space, 508 parking spaces and a public plaza.
City Council members are considering a $19 million developer-backed tax-increment financing bond for the project, which was introduced at the council’s July 15 meeting.
At Monday night’s meeting, some council members said they are concerned about how Proscenium III would impact traffic near City Hall and if there would be enough parking included in the project.
“If I had my way, this project would be the office space and the hotel,” Councilor Matthew Snyder said. “I’d be 100% supportive if we could do the retail and the hotel, even an expanded version of either, and not do the garage and the apartments.”
Carmel Redevelopment Commission Director Henry Mestetsky responded that the project needs apartments and a parking garage in order for Proscenium III to make sense financially for the developer.
“I think if you take out any of these uses, the whole project breaks apart and it doesn’t work,” he said. “So, you can’t take half of it off and expect there to still be a project. It’s either what it is or there’s no project.”
Councilor Shannon Minnaar asked Mestetsky if it is a common practice to place apartments “right directly across the street” from a city hall and adjacent to a city’s fire and police departments. Mestetsky said it is common.
“I just was wondering if that was a situation that happens often,” Minnaar said. “I just wonder what kind of security risk that poses, having people living directly across.”
Carmel’s practice for more than a decade while redeveloping its central core has been to build mixed-use buildings with a public parking garage. Mestetsky said building a large surface parking lot would not make sense for the city.
“We have seen what the world looks like when you put a big building in the middle of a big parking lot,” he said. “We have that all along U.S. 31, and we have also seen what it looks like when you hide the parking and you put different uses on top of that parking. The vibrancy and the economic effect created are worlds apart, and we have been successful in building our central core with walkability.”
He reiterated that if the project does not have apartments, office space and a hotel above a parking garage, it would not happen. Snyder disagreed and said he thinks there is a way to find a new vision for Proscenium III.
“From my perspective, there’s no project at all if you’re not willing to work through it,” Snyder said. “We’re telling you what we have heard, and the desire is not to have apartments against City Hall. There is a different way we could do this.”
Carmel and Novo Development Group previously partnered on the first two phases of the Proscenium complex.
Proscenium’s $85 million first phase was completed in 2021 on the northwest corner of South Rangeline Road and West Carmel Drive.
The project’s first elements—a 100,000-square-foot Agora at Proscenium office building and a 600-space subterranean parking garage—opened in summer 2020.
A 196 luxury apartments (called Ver at Proscenium), 15,000-square-foot restaurant building and a 22-unit condominium building opened in 2021 to complete the first phase of development.
Proscenium also has one restaurant on site—101 Beer Kitchen—and a salon and spa, Lux Lab Hair + Body. Indiana’s first Wahlburgers eatery operated at Proscenium before it closed in July. The 4,600-square-foot Proscenium tavern, which is expected to house an Italian steakhouse and a wine-coffee bar, received approval last year.
Construction is expected to be complete this year on Proscenium’s $18 million second phase at 1215 S. Rangeline Road.
The five-story Proscenium II will feature 48 rental units and seven penthouse condominiums, 15,000 square feet of ground-floor space for retail and office uses, and a 120-vehicle multilevel parking garage.
City Council members are expected to resume discussion about Proscenium III at their next meeting on Monday, Sept. 16.
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If a project does not make financial sense on its own, then the developer should not do it nor should the city throw $19 million dollars at it. Has Carmel seen an apartment project with a city paid parking garage that it didn’t like? With all the new high end mixed use buildings recently opened, under construction or already planned what is their occupancy level? How much of that inventory has been absorbed and at what rate? Overall, I like what has been done but how much more 4 over 1 do we immediately need?
Developer backed bonds just don’t make any sense. What if developer would become insolvent or be unavailable in the future for collection if the project fails. These deals could always leave the city on the hook i.e. the Citizens of Carmel (Taxpayers) I never heard of so many of these type deals for TIF financing that Carmel is doing. What is the total portfolio right now of these types of deals on the books of the RDC. This entire issue needs to be examined for financial exposures of all the City Redevelopment Commision has done. Also, All these droves of Apartments are changing the demographics of Carmel. Check out the median age groups of occupants and what their affiliations are.