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Indianapolis City-County Council members on Monday night narrowly voted to advance proposals that would award nearly $10 million in financial incentives to a Denver-based developer behind a proposed $66 million downtown mixed-use building across from the Indiana War Memorial.
The council’s Metropolitan and Economic Development Committee voted 6-5 to send two proposals concerning Charles Street Investment Partners’ mixed-use project at 421 N. Pennsylvania St. to the full City-County Council, where all 25 members of the body will have a chance to weigh in.
One proposal would create a single-site tax-increment financing district on the site. The other would award a $9.8 million developer-backed TIF bond to the development. The 25-year bond would be paid back with 80% of the TIF funds generated by the development, with 20% going back to the city.
The votes on the two proposals had bipartisan supporters and detractors—meaning their fate is still in jeopardy on the Democrat-controlled council.
“It barely made it out of this committee,” Vice President Zach Adamson said. “It could run into issues at the [full] council.”
On Monday, Democrats David Ray, Jared Evans and Maggie Lewis, joined Republicans Colleen Fanning, Jason Holliday and Brian Mowery in supporting the proposal.
Voting against it were Democrats La Keisha Jackson, Leroy Robinson, and Adamson, along with Republicans Jefferson Shreve and Janice McHenry.
Adamson said he believes TIF should be used when a property would otherwise not be able to be developed.
“With all the needs we have in this city it’s harder and harder for the council to embrace [these] kinds of things,” Adamson said. “Otherwise, we’re just giving away money. It’s hard to imagine any scenario where the 400 block of Pennsylvania Street would not be able to be developed.”
The committee approval on Monday comes after the vote on the incentives failed to advance in July after a 5-5 deadlocked vote. However, Ray, one of the supporters on Monday night, was absent during the July vote.
Ray told IBJ he voted in favor of the proposal because it is “better than what’s there now.” The property was once the site of the Essex Hotel but has been a parking lot for the last 25 years.
“Any sort of development downtown is good,” Ray said.
Along with ground floor retail and office space, the development will have 213 residential apartment units, and 20% will be available for workforce housing dedicated to residents earning 80% of the area median income.
However, some of the council members had concerns that even the workforce housing units were going to be too expensive for working people.
“How affordable is a $1,200 apartment?” Shreve said at the July hearing. “Who are we serving [by] creating space at that level?”
IBJ reported in December that Charles Street was in the process of buying the property from Cincinnati-based Chavez Properties, a Parking Company of America affiliate.
The property has long been used as a 165-space parking lot by Chavez. Chavez razed the Essex Hotel in 1994 with plans to redevelop the site, but it has been unable to since.
There were plans in the early 2000s to develop the property into a high-rise condo complex, but that deal fell through in 2004.
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We can only have so many TIF districts. Our city needs the tax finds to run the service and fix potholes. If this development was genuinely going to create housing for the average work force that would be different but the price on these luxury pads is sky high. Please no tax insensitives for projects that are not accessible to the average citizen. I am happy Jefferson voted no.
I am glad this passed. Looking at a parking lot for almost 20 years tells me this spot could stay a parking lot forever. It is worth something to fill in the street scape along this major downtown thoroughfare. I also think it will help with more development north along Meridian Street is what is a slightly dead part of downtown.
Unless your gonna pay for it out of your own pocket then spare us your talking points….. politicians should not be choosing winners and looser by writing welfare checks to out of state corporations. The markets decide…… not you and not some clowns downtown trying to line the pockets of their buddies out of state.
Adamson says, “It’s hard to imagine any scenario where the 400 block of Pennsylvania Street would not be able to be developed.”. Yet, it’s been a parking lot for nearly 25 years. A parking lot. In one of the most high profile locations in the city. This project NEEDS to be developed or it will be another 25 years before anything happens.
The markets decide value not you and not politicians….unless your gonna subsidize this shit out of your own pocket stay away from our tax dollars and let the markets work on their own……..
No one said it shouldn’t be developed. The issue is, should the city pay for it. We should only be involved when the development can not command the rents necessary to pay for the development. If you watch the hearing, that is not the case. These rents will be top tier rents. It CAN and should pay for itself. Just because it hasn’t been developed doesn’t mean it could not have been. I’ve also understood the seller of the property didn’t want to allow a building that would obstruct the view of the building to the north. That’s no reason to not develop, but has nothing to do with the city chipping in for, what I suspect, will be a $10M padding of the profits on luxury housing.
I’m not a “let the market decide” person. I know there are times when the city needs to help get a development over a funding gap. I don’t believe this is one of those times and I have a hard time imagining with the excessive rents they’ll be charging, including those that are labeled affordable, there will be any funding gap.
Jon H., you do realize that those aren’t “your” tax dollars, right? In fact, at this moment, those tax dollars don’t even exist! You’ll actually be receiving MORE in tax dollars from this project than you ever will from what is currently there. Of course, you don’t see it that way…..
There is no reason to believe the TIF share could not be more than 80/20. 70/30 or even 60/40.
Ahh more corporate welfare , fraud, and abuse. Everyone needs to contact their city county councilors and tell them to stop using our taxes to subsidize these out of town for profit companies…… TIFs have turned into a cesspool of corruption in this city with no accoutability or oversight. Our schools crumble, our roads crumble , our allys crumble , our parks crumble….. All while our taxes are stolen and used for corporate welfare. Contact your rep and tell them to vote against this corporate welfare check when it goes to the full council for a vote.
“Democrats David Ray, Jared Evans and Maggie Lewis, joined Republicans Colleen Fanning, Jason Holliday and Brian Mowery in supporting the proposal”
The group of reps above voted to take money from our communities and give it to an out of town corporation in the form of a big welfare check. If they represent you contact them and tell them to stop subsidizing corporations with our tax money.
Jon H. 25 years as a parking lot sure has propped up or schools and roads.
Not only will this project eventually contribute to the tax base, it will most likely spur other development that will immediately raise the tax base. If you want to prop up the tax base, examine the amount of property in center township that pays little or no taxes because it is dedicated to city-tax exempt Federal and State government uses. That does not even touch on the billion $ a year revenue “not for profit” hospitals. Look at the number of other not-for-profits that attract people and pay little or nothing to support police, fire, or roads. At least the city has a way to collect for storm water fees from these folks. There seems to be a lot of accusations with no facts on the fraud and abuse.
The 39,585 square foot lot is currently assessed for tax purposes at $1,205,000. Because commercial properties pay a tax rate of 3-percent, the city will therefore receive just $36,168.00 in tax revenue on it.
The new proposed development will cost $66,000,000 million to build, though give. the Marion County assessor’s notoriously low assessment the building not be assessed at it initial construction cost. But let’s assume it will be assessed at two-thirds that cost, which result in an assessment of $44,000,000. The same 3-percent tax rate would henceforth yield $1,320,000 in tax revenue its first full year.
Even if the property does not increase in any value over the next 10 years (which is highly unlikely), the property tax revenue collected by the TIF on this development’s $9.8 million tax break would be paid back in full in just seven and a half years. In the meantime, additional development in its vicinity and the jobs generated will contribute even more to the city’s coffers.
Finally, one can legitimately argue that getting public utilities to this unserved site for such a development will also be very costly. That alone is further justification for this particular TIF. The city – and its taxpayers – have a vested interest in a strong, viable downtown. The Mile Square and its immediate environs is the economic engine – the center of gravity, if you will – for the county and central Indiana.
This.
It is still handing out money to corporate greed. If they can’t come up with their own financing.. you know. I would imagine if all the giveaways were totaled up, this city could pay for infrastructure out its butt, as well as hiring more public safety and fire personnel. It’s a good thing they are expanding the sewer system, they are going to need it. Another project passed on to the citizens, the big sewer dig. They couldn’t try for a federal grant??
Have any of you paid attention to Nashville Tenn,St Louise,Columbus ohio,Kansas city?all these are considered peer cities to indy. whats amazing is that they’re out pacing indy as far as development goes. go on youtube and look at the videos of all the cranes downtown Nashville putting up high rises. how are these cities able to development major projects like this and indy struggle to build two major hotels on pan am plaza? conventions and sports are suppose to be our bread and butter,so if any city needs major hotels it would be Indy don’t you think? when people pass through your city, one way to determine a cities economic growth is by looking at their skyline. if you see cranes everywhere and skyscrapers,then its safe to say that city is growing economically. if city leaders are afraid to help bring major development here then outside investors wont help develop indy like they do in so many other cities. im sick of people afraid to think BIG and BOLD here. would love to see what a modern Indy looks like. enough with the Hoosier mindset. lets stop thinking and looking like FLYOVER COUNTRY
I so agree!! 300 market place was suppose to rise 7 more stories with it’s original plan. A proposal before 300 market was a 52 story high rise. Always thinking small!!