Financing plan for Broad Ripple Park Family Center advances despite neighborhood group concerns

Broad Ripple Park Family Center (IBJ photo)

A City-County Council committee on Tuesday unanimously recommended approval of a measure that would allow up to $26 million to be spent to acquire the new Broad Ripple Park Family Center.

The vote by the Metropolitan & Economic Development Committee came just over one week after it opted to postpone consideration of the measure to allow officials in Mayor Joe Hogsett’s administration more time to confer with neighborhood leaders about how debt for the project could be serviced  on a long-term basis.

The city plans to use up to $22 million from the Midtown tax-increment financing district to repay bonds that would be issued for the acquisition through the Indianapolis Public Local Improvement Bond Bank. The $26 million issuance would be paid back over nearly 20 years and carry an interest rate of up to 8%.

The full council is expected to vote on the bond issuance Dec. 4.

The $19.7 million family center at 1426 Broad Ripple Ave. opened in January after nearly two years of construction. It was developed through a partnership between Indy Parks and BR Health Holdings LLC, a holding company consisting of Community Health Network and Indianapolis-based Avenue Development.

Residents and representatives of several neighborhoods on Tuesday said they were disappointed by the city’s decision to lean so heavily on the TIF district to cover the debt, as well as the speed at which the city has sought to gain approval for its financing plan.

The city since 2021 has said it planned to purchase the 40,000-square-foot building within a year of the facility’s opening in order to take full control of the property and avoid shelling out nearly $1 million per year as part of a long-term lease agreement with BR Health. Parks officials have said not buying the property now would also put several capital projects related to master planning and erosion mitigation at risk in 2024, and potentially other projects beyond that.

The Midtown TIF was created in 2014 to incentivize private development in five neighborhoods: Broad Ripple, Butler Tarkington, Mapleton-Fall Creek, Meridian Kessler and Midtown.

Representatives from the neighborhoods said they were not made aware of the plan to use the TIF for the project until early November and were not able to have substantive conversations with city officials until the middle of the month. During those conversations in the past week, little new ground was broken and the plan remains largely in the same position it was during last week’s committee meeting.

Each neighborhood, as well as the Midtown Economic Council (which is charged with making recommendations on use of the TIF), opposed the city’s plan to use tax-increment for the bonds, concerned the disbursement could strain their ability to attract additional projects in the future, such as affordable housing, grocery stores and other private investments.

City-County Council member Keith Potts, who represents Midtown, said he is hopeful that because the city is using funds from the TIF district it will be open to using other means to support future proposed projects in the neighborhoods that the district would no longer be able to support on its own.

In a motion to send the matter to the full council with a recommendation in favor of the plan, Potts said he viewed the matter as “particularly urgent and important,” as the city must meet a Jan. 3 deadline to close on the acquisition of the center without a penalty. But, he added, he did not want to create challenges for other parts of the city parks system by reducing funding due to a purchase not moving forward.

However, several neighborhood leaders said during the meeting they were not satisfied with how the matter was handled by the city.

“We couldn’t be more shocked and disappointed by the conduct of the city and their unwillingness to have conversations about this and work in good faith, including by Councillor [Keith] Potts—it’s very disappointing,” said Emma Clust, director of the Meridian Kessler Neighborhood Association, during a public comment period.

“We believe that there are [alternatives] that could be found. … I understand that [the City-County Council is] in a difficult position, because not leveraging these funds means finding money from other sources and puts other projects on hold. But should the entire Midtown Economic Council or the TIF be punished due to the laziness and ineptitude of the city? I would say no.”

Some councilors questioned the city’s approach to paying for the property using the TIF—and the speed at which the city is moving to do so—but ultimately offered consent on approving the measure.

“The way this has been put together just seems pretty ridiculous, that a better plan wasn’t already in place,” said Jared Evans, D-District 22. “This is not a good situation that any of us want to be put in. But we’re also in a situation where many of us are impacted if we don’t vote yes, and pass this, in our own parks. I do not appreciate it nor do I want it to happen again.”

In a statement, a spokesperson for the city of Indianapolis said the Hogsett administration was appreciative of the committee’s favorable recommendation.

“Tonight, the Metropolitan and Economic Development Committee voted to keep the future of Indy Parks secure,” the spokesperson said. “The choice to support the purchase of the Broad Ripple Park Family Center is a measure of fiscal responsibility that furthers the Hogsett Administration’s commitment to strengthening the Indy Parks system.”

The bonds would be used to pay for the facility, at a cost of approximately $22 million, as well as establish a reserve fund, pay financing costs and cover a portion of interest on the debt.

The city isn’t expected to only use funds from the TIF district to repay the bonds. The debt also would be paid in part by facility-generated revenue and other parks department revenue.

Rental payments from Community Health, which has a 25-year lease to operate a health clinic in the building, would also be applied to the debt service. Community is paying $493,350 in rent this year and will pay $412,500 next year, with lease payments increasing by 2% each year after 2024.

Under its current deal with BR Health, Indy Parks agreed to lease at least 25,000 square feet in the family center for 30 years, with the option to buy the building. While rent was waived for the first year, the department will be required to pay $79,900 per month in rent—$958,800 per year—as well as contribute funds toward maintenance and upkeep of the property.

The price tag for the purchase of the building was established in the lease agreement between the parties, with the cost increasing by $1 million per year if the city fails to close on the acquisition by Jan. 3.

The family center was initially proposed as part of a $70 million master renovation plan for the park approved in 2018, replacing a 11,000-square-foot facility that Indy Parks officials argued was too small to meet the growing demand for space.

In addition to health clinic uses, the two-level facility houses a gymnasium, group meeting space, a children’s play area, a running track, administrative areas, and a multipurpose room.