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A last-minute addition to the proposed state budget would provide a mechanism for Indianapolis to tax downtown property owners in order to pay for revitalization efforts.
Only property in the Mile Square could be taxed, and the revenue could only be used for services in that district that are now provided by the not-for-profit Downtown Indy Inc.. Those services include cleanliness initiatives, homelessness outreach and providing “safety ambassadors.” The tax increase would also pay for the operational costs for an eventual low-barrier homeless shelter.
Safety ambassadors would be tasked with deterring “aggressive panhandling and other nuisance behavior,” communicating with police to report ongoing issues and providing “safety escort services,” among other responsibilities, according to language in the budget.
The effort revives a 2018 move by the city that would have established a similar district. Downtown Indy Inc. led that initiative, which was supported by Indianapolis City-County Council leadership but was not passed by the full body. Another barrier to implementation was a requirement that half of property owners in Mile Square sign on to pay the extra fee. Just shy of 50% signed on to pay the fee.
The new language, added by state lawmakers Wednesday as they work to end this year’s legislative session, does not appear to require agreement from property owners and would only require a majority vote by the City-County Council.
The budget also includes a $20 million grant program for low-barrier homeless shelters in the state—the full ask from Democratic State Rep. Justin Moed, D-Indianapolis.
Tom McGowan, president of Kite Realty Group and co-chair of the low-barrier shelter task force, said the commission supports the budget allocation.
“The governor’s office, House and Senate made this important issue a priority,” McGowan told IBJ in written remarks. “The establishment of an economic enhancement district, along with the $20 million capital allocation for a low-barrier homeless shelter in Indianapolis, will supply the necessary funds to advance this vital project.”
When reached by IBJ, communications director Mark Bode said Mayor Joe Hogsett’s administration had no comment on the proposed taxing district at this time. Indianapolis City-County Council President Vop Osili and Vice President Zach Adamson also declined to comment.
Rep. Ed DeLaney, D-Indianapolis, said he believes the city supports the concept.
“They believe that this is probably more likely to be effective than some of the other elements we’ve had when dealing with the homeless issue,” Delaney said. “So I’m inclined to support that.”
Rep. Jeff Thompson, R-Lizton, said the language was the result of ongoing conversations between state and city officials. But it’s unclear why the proposal wasn’t included in a bill or amendment earlier in the legislative session, which would have allowed for public testimony.
If the proposal remains in the final budget, DeLaney said he doesn’t expect the city to act on it until after the November election. Mayor Hogsett, a Democrat, is seeking a third term and faces opposition for the Democratic nomination in Tuesday’s primary.
“Unless every Democrat has lost their memory,” DeLaney said, “there will not be a tax increase before the [November] election.”
Sen. Andrea Hunley, D-Indianapolis, whose district includes the entirety of Mile Square, supports the proposal but declined to label it as a tax increase.
“I think that we are gathering our resources to make sure that we are leveraging them in the best way possible to make sure that this economic enhancement area is working for everybody that lives, works, plays and studies in downtown,” Hunley told IBJ.
Under the proposal, the city could impose an “annual special benefits assessment” on all of the taxable property in Mile Square “based on the relative benefits to be received by each type of property.”
Factors used to determine such benefits could include: proximity of the property to any projects funded by the tax; the accessibility of the parcel to those projects; the true cash value of the parcel; the true cash value of any improvement on the parcel; the age of any improvement on the parcel; and other “similar factors.”
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What a joke.
It is not really a “joke,” the businesses in and near the Mile Square make their money mainly off the convention, tourist, and entertainment seeking locals. They used to also make money off the day-time office workers who have largely disappeared with remote work. And, the residential buildings located there only exist (if new) or have any real value (if older) because people want to be next to cultural and entertainment amenities located downtown (with remote work being next to the office buildings generally no longer matters). Most of these amenities have been *entirely paid* for or *heavily subsidized* by local taxpayers. So, the property owners get the basic services that every other neighborhood gets for paying property taxes, but they want “extras” like flowers, banners, additional street cleaning, etc. because all that makes downtown more enticing to lure more potential customers downtown.
So, great, they can pay additional taxes for all these little perks instead of laundering funds through a non-profit that allows them to claim a tax deduction for contributions.
My mother has lived in the same house in Indianapolis for 55 years and made substantial improvements and maintenance to it while dutifully paying her taxes (which continue to go up) and the city has never come to plant flowers or hang banners on her street. They usually don’t even bother to plow the snow or fill in the potholes.
Yeah I see the joke too! All of that state owned property in the mile square doesn’t pay a nickel in county property taxes, but gets the benefits.
I notice our autocratic legislature isn’t interested in public comments on their closed door actions.
The Mile Square is just a fraction of what most would consider to be “downtown” Indianapolis, so restricting the tax to a smaller group of businesses does nothing to improve the rest of “downtown” (typically defined by I-65 on the north, I-65 and I-70 on the east, I-70 on the south, and the White River on the west).
The proposal isn’t perfect, but I’m just pleasantly shocked that the State is doing something that could benefit the City. That’s a rare thing to see in the modern Statehouse. Usually everything is anti-Indy.
Put it up for referendum. Only property owners in the mile square can vote on it. Marion county property owners need to take a hard look at their current property tax bills. There is an election coming up soon.
The opportunity to increase property taxes during a time when property taxes are likely to increase? That might be problematic. The State Legislature and the City recently approved increasing the area where taxes are diverted to fund Gainbridge upgrades. This is an example of how some of those funds (or similar funds) could be used.
Great night picture of the Circle, must be old none of the buildings are illuminated at night anymore unfortunately.