Carmel tentatively approves $39 million in project bonds

Carmel’s city council on Monday advanced plans to issue $39 million in developer-backed bonds to help finance four projects across the city.

Anticipating complaints about the approvals, Henry Mestetsky, the city’s redevelopment director, defended the move. “People love yelling the words, ‘Carmel debt,’” Mestetsky said during the council meeting. “They put it on signs in their front yards. But because the city is the issuer—just the issuer, not the holder of the bonds—the city has no risk and the taxpayers have no risk.”

Mestetsky said the nearly $1.4 billion the Indiana Department of Local Government Finance lists as Carmel’s total debt is misleading for the reason that it includes debt that’s backed by developers or user fees.

For the $39 million in bonds tentatively approved Monday night, Mestetsky said the sole source of repayment is the single-site allocation area, and the taxes from the project itself are what generates that repayment.

Councilor Sue Finkam said the misperceptions about Carmel bond issues are damaging to the city and those who choose to invest in it.

The projects, all of which will still need to be reviewed by the council’s finance committee, are:

— Franciscan Health. Mishawaka-based Franciscan Health’s planned $130 million orthopedic hospital and medical offices would be issued up to $16.5 million in bonds to construct a 670-space parking garage and skybridge.

The garage and skybridge are to be built on 10 acres of undeveloped land that will also house the hospital and offices. It’s all part of a larger 18-acre tract on the east side of North Illinois Street, between West 106th and 111th streets. The additional eight acres will be developed in the future.

Franciscan’s improvements will raise the property taxes on the vacant land  from $393 annually to nearly $1.5 million, with the city taking $370,710 of that money each year over the district’s 25-year lifespan.

The project is expected to create 432 new jobs earning nearly $89,000 per year.

— South Rangeline. Carmel-based Old Town Companies is planning a development adjacent to the Proscenium that it will call South Rangeline. The project—four buildings of multi-family, office and retail space—will be built on four acres near city hall.

CEO Justin Moffett has requested the city issue $12.5 million in bonds to help pay for a 443-space garage that would be free and mostly available to the public.

Old Town’s current headquarters on the site pays a majority of the nearly $40,000 in property taxes each year. The multi-use development will generate $965,000 of new taxes each year, for which the city will receive $96,500 during the life of the district.

Councilor Ron Carter issued the proposal’s only ‘no’ vote after expressing concern about the project’s multifamily rental units.

— North End. Old Town is also planning a multi-use project on the north side of Smokey Row Road, between U.S. 31 and the Monon Trail, called North End. Plans include up to 240 apartments, 46 townhomes, 30 condominiums, 10 single-family homes and urban farmland on a nearly 28-acre site. Old Town is asking for the issuance of $6.2 million in bonds to fund a new roundabout at the intersection of Smokey Row Road and Rohrer Road, an extension of Rohrer Road, utility relocations and a parking structure.

The land where North End will be developed currently generates $31,101 in property taxes. Old Town’s improvements will generated an estimated $895,150 per year while the district is in effect. Carmel’s share of those taxes will be $447,575 annually.

Councilor Tony Green was the only member to vote no on the request. He expressed concerns that the project was too much for the area and that it would have negative impacts on traffic.

— City Center Phase II. Carmel-based Pedcor is asking the city to issue nearly $3.6 million in bonds for its City Center Phase II project. The proceeds would fund almost $6.5 million of roads and sidewalks, along with public restrooms on the Monon, stairways, a covered walkway and two skywalks.