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Development of a vacant area on the southeast side of the Clay Terrace outdoor shopping center could gain momentum following an agreement between the city of Carmel and Hamilton County.
Members of the Carmel City Council on Monday night voted 9-0 to approve an interlocal agreement between the city and county that will remove property for the B.J.’s Wholesale Club at 14400 Lowes Way and the southeast portion of Clay Terrace from Hamilton County’s tax-increment financing allocation areas. The agreement will permit Carmel to create its own allocation areas in their place.
Both sites have been in Hamilton County’s allocation area since 2000 before parts of the area were annexed into the city of Carmel. A TIF allocation area is a designated area where property tax revenue generated by new development is captured and used to fund improvements in the same district.
The county allocation areas are set to expire in 2030. Carmel Redevelopment Director Henry Mestetsky told IBJ that the expiration date made any redevelopment project at Clay Terrace difficult.
A developer working inside the city from a planning and zoning standpoint would also have to work within a county TIF area. Mestetsky said that “chilled the market” until the developer could negotiate a public-private partnership.
The 577,000-square-foot Clay Terrace was co-developed by Indianapolis-based Simon Property Group and Lauth Property Group and opened in 2004. Columbus, Ohio-based Washington Prime Group, which operates Clay Terrace, is a spinoff of Simon Property Group and also has an office in Indianapolis.
“Because of the partnership between the county and the city, the city gets to essentially do any kind of project that the city wants to now because [the county] effectively has transferred that right to the city five years early, so we get to kind of be in charge of our own destiny,” Mestetsky said.
Along with allowing the city to attract new investment to Clay Terrace, the interlocal agreement provides a mechanism to direct excess revenue to the county for improvements to 146th Street, which the county manages on Carmel’s north side. Mestetsky told council members that by changing the TIF allocation areas, the county will gain up to $4 million if the Clay Terrace redevelopment project happens.
The Carmel Redevelopment Commission, Hamilton County Redevelopment Commission and Hamilton County Board of Commissioners previously voted to approve the interlocal agreement. The Hamilton County Council is scheduled to vote on the agreement on Wednesday.
“There’s really a lot of upside for Carmel here, so I appreciate the work that [Mayor Sue Finkam] and [Mestetsky] and the county has done,” City Council member Matthew Snyder said Monday night. “While we may disagree on what ends up going there, I think it opens up opportunities for an otherwise underutilized space.”
Washington Prime Group filed plans in 2020 to diversify Clay Terrace, located at southwest corner 146th Street and U.S. 31, with a planned 140-room hotel, 290 apartments, 200,000 square feet of office space and an additional 70,000 square feet of retail. However, those plans were delayed due to the pandemic.
The Carmel City Council agreed in December 2020 to rezone an area on the southeast side of the shopping center. In June 2021, Washington Prime Group filed for Chapter 11 bankruptcy protection amid the pandemic.
Several buildings at Clay Terrace were demolished in 2022 to make way for an office building that would have been the first phase of the project, but construction has not started.
In July 2022, Fishers-based Dora Hospitality Group LLC announced plans for a 150-room Tempo by Hilton hotel at Clay Terrace. An initial news release at the time said the hotel would open in spring 2024, but Mestetsky told council members that Hilton is “waiting and seeing what happens with the rest of the property.”
Mestetsky said the agreement with the county will help provide momentum for a public-private partnership between the city and mall developer.
“Now that we are in charge of this area as a city, we can now have the City Council potentially consider a TIF project, and that’s where the financing will come in to actually enable a project that’s otherwise allowed within a planning and zoning [planned unit development] already,” he said.
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The ‘future’ BJ’s? BJ’s has been open since early November.
This is a win-win-win. Fantastic opportunity here.