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A Carrollton, Texas-based developer has walked away from a proposed mixed-use real estate project along Old Meridian Street in Carmel because the city’s incentive for the project was not enough to make it feasible, city officials say.
Carmel Redevelopment Commission Director Henry Mestetsky told the members of the Carmel City Council this week that Old Meridian Apartments, a $60 million proposed project by Cross Development LLC, will not be constructed.
Old Meridian Apartments had been planned between Bru Burger Bar and Home2 Suites by Hilton in the 12800 block of Old Meridian Street. The project would have featured 266 luxury apartments, 10 for-sale condo units, 8,000 square feet of office and commercial space, and a 378-space public parking garage.
Cross Development did not immediately respond to a request for comment from IBJ.
The Carmel City Council in 2022 approved an ordinance allowing up to $9.5 million in tax-increment financing for the project. Cross Development would have received 75% of the TIF funds for the life of the bond, while the city would have received 25%.
However, Mestetsky told council members that the 75%-25% TIF split was not enough to make the development feasible for Cross Development, especially after interest rates increased in the two years since the project received council approval.
The discussion took place during an introductory presentation for the Proscenium III project, for which Carmel-based Novo Development Group LLC would receive 95% of TIF funds. Council members Matthew Snyder and Anita Joshi questioned the amount of TIF funds that would go to the developer in that instance.
“[The Old Meridian Apartments project] never started, and it’s never going to happen,” Mestetsky said. “And, so, while I take seriously negotiating the best possible deal for the city—it’s literally my job—I also know that if we enter the world of fantasy, we are just wasting a lot of people’s time because the project will never get off the ground.”
Snyder challenged the city to find a project for the Old Meridian site, which he called “a vacant lot with the entire parcel of decimated trees.”
“The administration is trying our best to find a project that works, but frankly, it will probably require going back to council and having a higher TIF split,” Mestetsky said.
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High interest rates thanks to high inflation thanks to Biden-Harris is stifling local development. Very sad.
Have you been paying attention? There have been NUMEROUS new developments announced in just the past few days. Are you going to given Biden-Harris credit for those?
This one was cancelled because of high interest rates according to the article.
Mad? 😂
I will bet about 50% of announced projects don’t take off because the finances don’t work. I’m sure these guys were counting on nearly free money that the anemic Trump economy was handing out.
It was the TIF split, not the “high interest rates”. If they’d been offered a (ridiculous) 95/5 split like the one being proposed for the Carmel based developer (I guess it really is all about who you know), they’d be moving forward, no problem!
We don’t need more apartments in Carmel.
So many more apartments are needed – especially affordable units!
You own Carmel?
Affordable and Carmel?… You must not be from around here.
Couldn’t happen to a better bunch of SimCity players.
Idk but I’m not sure I would ever count on Carmel allowing more “affordable” apartment units.
If its the interest rates, why are other projects moving forward? $100M is being spent by a Simon-backed entity to build a large office tower in Indianapolis. Other projects are moving forward, even if Carmel. No I think it was the TIF split. As the article notes, the TIF split didn’t give them enough, what with higher interest rates.
And what causes higher interest rates? Demand? Higher wages? Supply channel disruptions? Corporate Pricing decisions? Presently, that nasty Biden-Harris economy is delivering higher wages, very high employment level, and lots of infrastructure improvements. Inflation is higher, yes, but because the economy has been humming along. Inflation is coming down as consumers cut back after a few years of spending their COVID savings. That is helping to lower inflation, along with the higher interest rates. Yes, inflation is ugly. But I like seeing road construction and other improvements, knowing those will eventually make life easier and more productive.
If apartments are needed in Carmel, affordable or otherwise, the market will figure it out. Interest rates didn’t kill this project…it was the share of private money required to make it go forward at higher interest rates. If this had been more heavily subsidized by the TIF or other public funding, it would have gone forward…the developers didn’t want to put their own money into the deal…
What large office tower are you referencing?
They had enough money to tear down all the trees creating an eyesore before saying they need more money. All part of the game to make the city cough up more taxpayer cash so the mess gets cleaned up. And Henry saying he negotiates the best deal for the city, that’s funny.