Critics question trustee’s property portfolio given mission to help needy

It sits across Massachusetts Avenue from a strip of art galleries and shops, on increasingly valuable land merchants would love to see transformed.

"Having an abandoned building in your neighborhood isn't a good thing, and that's what it looks like," said Tom Battista, who owns the retail strip just north of College Avenue.

The multimillion-dollar Mass Ave property is one of 16 mostly untaxed parcels the township owns. All told, Center Township's real estate holdings are worth more than $10 million, according to IBJ research.

Its robust real estate portfolio—highly unusual for an Indiana township—fits Trustee Carl L. Drummer's vision for his taxpayer-supported office. But it makes others see red.

"The trustee owns a whole lot of real estate it doesn't need to own," said Jon Elrod, one of seven members of Center Township's board of directors. "I think the trustee should own property if it's being used for housing homeless folks or a neighborhood rec center."

Drummer said his main focus is helping township residents in need, as spelled out in state trustee guidelines—whether that means passing out food vouchers or paying for funerals when family members can't.

But he also believes in revitalizing neighborhoods and fostering economic development.

That broader approach—plus a habit of parking race cars and friends' vehicles in a township-owned garage—raises questions among those who say the trustee's office could do more for the 24 percent of township residents who live in poverty.

"I'm just not convinced that the rewards of revitalizing the community are worth what we're spending," Elrod said. "I just think it could be better used on other things." Nevertheless, Drummer makes no apologies. His office has held on to many of the parcels for years, he said, because it wants to find the right use for them.

"We at Center Township have always thought outside the box," he said. "We believe that government should run like a business."

A landlord comes to mind.

Probing the portfolio

In addition to the mostly vacant Career Development Institute, Center Township owns its headquarters, a former YMCA, a Fall Creek Parkway office building leased out to tenants—including a controversial bar/restaurant—and a two-story house it rents out for just $150 a month.

The township also owns four parking lots and seven empty residential plots, most of which are near the Fall Creek office building, dubbed the Julia M. Carson Government Center.

Drummer inherited much of this from Carson, a fellow Democrat and his predecessor as trustee. He was elected to replace her in December 1996 following her successful run for U.S. Congress. Before that, Drummer served as deputy trustee and chief deputy constable for the township's small claims court.

The township acquired much of the land in 1994 as part of a $3 million deal to buy what is now the Carson Center from Standard Life Insurance Company of Indiana.

"They owned all these lots, and they were liquidating it as one parcel," said Alan S. Mizen, the township's chief financial officer. "You couldn't just pick and choose what you bought."

The trustee's office spent another $3.5 million rehabbing the largely vacant Carson Center because it needed some of the space for township business, he said. It now rents most of it to a bank and other tenants.

Since taking over, Drummer, 42, has added some land and in 2004 bought the old YMCA, now named the Center Township Healthplex.

The headquarters and the Career Development Institute next door were acquired in the 1970s, long before trendy retail and high-end condos started popping up on Massachusetts Avenue.

They're likely to remain in the trustee's possession given Drummer's insistence on leasing, not selling, the property.

How much is enough?

Center Township's real estate holdings are not typical.

The eight other townships in Marion County, for example, own mostly government centers or property used for fire stations and cemeteries.

But comparisons are difficult, Drummer and others said, since trustee duties differ across townships. For instance, Lake County's North Township owns Wicker Park in Munster, which contains a golf course.

Center Township isn't responsible for fire protection or cemetery maintenance, two common trustee functions, and other townships don't have as many residents in need.

"Our main focus is relief for the clients; it's township assistance," Drummer said, using the preferred term for what was once known as poor relief.

Center is the state's largest township based on population and among the neediest. Nearly a quarter of the township's 167,000 residents live below the poverty level and 10 percent are unemployed, according to data Indy Partnership compiled for IBJ.

Last year, Drummer's office fielded nearly 9,700 requests for assistance and doled out benefits worth more than $2 million.

Still, others do more.

Gary's Calumet Township ranks fifth in population but delivered $6 million in assistance last year. It had 32,298 requests, more than three times Center's total. About 21 percent of its 127,800 residents live below the poverty level, and its unemployment rate is 12 percent.

Calumet doesn't own vacant land, but it holds title to an office building that Trustee Mary Elgin leases to commercial tenants. Its portfolio also includes a closed shelter, its current headquarters and a building that will become its new headquarters.

The trustee said she'd like to own more property because it offers a better deal than renting space. But she wouldn't let it sit idle.

"If I had land, I could try to put up some other centers or do something to enhance my community," she said.

Drummer insists that's the idea behind holding on to Center Township's real estate. Not everyone is convinced. Center Township Assessor Jim Maley said he was "aghast" at the trustee's portfolio. "Government entities ought not to acquire any more properties than they need to perform the functions of their office," said Maley, who describes himself as "possibly the most fiscally conservative Democrat you know."

Other Marion County trustees concur.

Wayne Township Trustee Daniel J. Gammon can't think of a reason a trustee's office would own land without a plan for it.

"I'd want it on the tax rolls myself," he said. "The more assessed value you have, the lower the tax rate's going to be."

The tax implications also concern Marion County Assessor Joni Romeril. The Republican doesn't understand why Drummer's office is "in the real estate business as opposed to the poor relief business they're supposed to be in."

Actually, Center Township does both, Mizen said.

"We're not in one or the other," he said. "We're in the business of managing township assets."

Taxing questions

They have plenty to manage, to be sure.

Center Township proposed a $14.7 million budget for next year, up from the $13.6 million spending plan approved for 2006. About $5.1 million of that will come from taxes, including $2.8 million in property taxes.

Any tax revenue lost on township-owned land is relatively small, Mizen said. He estimated that all the township's vacant residential plots probably would add less than $200 to the trustee's coffers if taxed.

But Drummer's office leaves a lot more tax revenue than that on the table.

The untaxed and largely unused Career Development Institute was valued at nearly $2 million when the trustee's office bought it in 1975. Mizen admits it's probably worth much more today.

The trustee's headquarters next door was worth $2.7 million.

Then there's the former Fall Creek Y, which was valued at $2.4 million before Center Township acquired it in 2004.

Some of the Carson Center space generates tax revenue, but for several years nothing came from the Key Bank branch it houses.

The bank opened a branch in the Carson Center in 1997 and just started paying property taxes last year, when it contributed $1,132, said Romeril, the assessor.

Bank spokesman Mike Sherman said the branch has paid the township a "gross rent," which includes money for property taxes, since it opened. But Mizen said he knew nothing about the missing taxes.

"That's between them and the assessor, not us and the assessor," he said.

For-profit entities must pay property taxes on space they rent, Romeril said. The bank hadn't even been assessed—a necessary step for taxes—until she contacted the trustee's office.

The center's other for-profit tenants all pay property taxes, she said.

That's not the case for the residential rental, though. Center Township pays no taxes on its two-story Washington Boulevard home.

Mizen said the house came with the Carson Center. He wasn't working there at the time, but he said the trustee's office had to assume the lease and keep the $150-per-month rent stable as part of the deal.

Property leases are expected to generate $150,000 in revenue for the trustee's office next year—just 1 percent of its $14.7 million budget. Together, taxes and other revenue are expected to total $5.8 million.

The rest will come from the trustee's reserves, money that wasn't spent in previous years. Many townships carry money over from one year to the next because their first tax payment doesn't arrive until spring, said Deborah Driskell, president of the Indiana Township Association.

As of June 30—after that first payment arrived—Center Township had $11.1 million in the bank, according to a budget estimate filed with the Indiana Department of Local Government Finance.

That's "an extraordinarily high balance" for an entity that collects only $5 million in taxes a year, said Dan Jones, assistant budget director at the state agency, which approves tax rates.

Center typically devises its budget to keep a cushion of about $1.5 million, Mizen said, in case tax payments arrive late or a cold winter spikes heating assistance.

Not all townships are so lucky. Calumet scrapes by year to year with no surplus.

"We spend all ours," said Elgin, the trustee. "We need it and more."

Development strategy

Romeril wonders why Drummer doesn't sell the empty land near the Carson Center to an entity like Habitat for Humanity and focus on other trustee duties.

"Habitat could bolster the neighborhood by building homes there, and it would put it right back on the tax rolls," Romeril said.

That won't work because the township would lose control over who buys it, Mizen said.

"I wouldn't want a gas station necessarily on the corner, and I wouldn't want something that might be manufacturing or assembling," Mizen said. "We'd like to have something that's community-service-related."

Drummer's office has talked with a potential charter school and a couple of engineering firms about using some of the land, but nothing's been finalized.

Finding a good fit for the community is important to the trustee's office. Mizen said township leaders believe minimizing urban blight is a key responsibility.

"It's protecting the public interest and the welfare of the citizens of Center Township," he said.

Drummer noted his office filled a void when Key Bank moved into the Carson Center. It was the first bank in years to locate in that part of the city.

300 East, the still-unopened bar/restaurant on the center's first floor, generated controversy this year because of its location in a government building. Still, Drummer hopes it fills another void.

"You can't go somewhere [nearby] and have a nice, sit-down meal with white tablecloths," Drummer said. "There's no place like that in the inner city, so that's how that fits in."

Despite the relatively low rental revenue his office collects, Drummer said tenants help pay the Center's bills so it "doesn't all fall on the taxpayers."

"Taxpayers should scream if we didn't rent it," Mizen added.

But Elrod, the township board member, considers the property ownership poor stewardship of the trustee's resources.

"I just think that money would be better spent in more direct assistance," he said.

Drummer said he does plenty. His office runs a back-to-school clothing store out of the so-called Career Development Institute on Massachusetts Avenue. It also uses space there for a program that manages the finances of more than 150 township residents.

Some neighboring retailers, though, would like to see it used for more.

Becky Banet-Lucas, owner of the Precious Mettles gallery across the street, said she wishes the building had a "whole life instead of a half life," to draw more people across College Avenue to the so-called East End of Massachusetts Avenue.

Drummer has no plans to sell, but he's listened to many ideas for developing and leasing the property.

"We want to partner with an entity where we both can co-exist," he said.

He said he met with a group pitching a "realistic plan" that involves retail and housing. It's doing a feasibility study and should get back to him early next year.

Cost is part of the challenge, Mizen said. The building isn't ready for tenants, and the township wants to recoup any rehab costs in the lease. That, he noted, would raise rent beyond market value.

In the meantime, the roughly 30,000-square-foot building—which consists of classroom, office and garage space—smells musty and sits mostly empty.

Free parking

There's a parking lot out back, but Drummer lets friends and employees keep vehicles in an empty garage at the rear of the Massachusetts Avenue building, a habit that strikes some as improper.

To the trustee, it's a chance to do a favor, mostly for workers who use company cars. However, two ex-employees saw more than commuter cars stored there.

Former security guard Norman Matthews remembers seeing some sort of race cars in the garage before he left in 2003. He didn't know who owned them.

Darlene Taylor, an employment specialist who also left in 2003, saw car trailers parked there as well.

"These ain't no cheap trailers, either," she said. "I'm talking way-up-in-the-money trailers. It's something one of them race car drivers use."

Consider Drummer a car buff. He owns race cars and serves as vice president of the United Council of Corvette Clubs, an organization of black Corvette owners. In fact, he lists his Center Township e-mail on the club's Web site as a contact point.

But the trustee said he never parked trailers in that garage. Race cars are different.

"I'm not going to tell you that they've never been in there," he said. "They have not been stored in there."

Stored, he said, means kept for "a period of time" or longer than a couple of days.

The same can't be said of other cars. Three tarp-covered vehicles sat parked against a garage wall one recent morning, across from a shiny Ford pickup and a couple of other cars.

Drummer said the pickup belonged to John Patterson, a Small Claims Court clerk who used to park a Corvette there. A friend of Drummer's has stored another car in the garage for eight months.

"He wanted to get it out of his back yard," Drummer said. "It's an old Volkswagen that he was restoring. You know, the winter was hitting, he wanted to get it out of his back yard."

Drummer wouldn't let a reporter look under the tarps during a tour, but he said none of the vehicles was his.

The free parking was news to Elrod.

"I don't think it's appropriate for the trustee's office to use facilities for friends and acquaintances," he said.

Drummer said the parking doesn't cost taxpayers a dime because the otherwise empty garage would be lit for security, anyway.

"It's dry storage space," he said. "The building is set to be, you know, hopefully torn down and something great built on it, so why not?"

But to Indiana Chamber of Commerce President Kevin Brinegar, the arrangement smacks of impropriety.

"In the grand scheme of things, is it a big deal?" he said. "Probably, no. But why is that property being taken off the tax rolls and being used to provide storage space for him and his friends … in a way that's not available to taxpayers in general?"

Buying a fitness center

Critics are equally skeptical about Center Township's foray into the fitness business.

The trustee's office paid $1.5 million in cash for the former Fall Creek YMCA in 2004, then spent nearly $175,000 on renovations, according to township records. The place needed ventilation and plumbing work, plus some unexpected mold and asbestos removal, Mizen said.

Drummer didn't have designs on the Y. He said he was "sitting down here on Mass Avenue, minding my own darn business," when state Rep. Bill Crawford visited to talk about the fate of the facility, which had closed that year.

There was a big push to save the old gym, which Drummer called a "landmark" in the black community. Since he was considering a community center for the underused Mass Ave building, he agreed to check it out.

The previous year, the township had earmarked $7 million for the community center and other capital improvements, so Drummer had the cash. He bought the building, renamed it the Center Township Healthplex, and turned over operations to the Indiana Minority Health Coalition.

IMHC pays the township rent and runs programs there. It also offers gym memberships. But the township pays most of the annual operation costs, which total nearly $100,000.

The trustee's office uses about a dozen Healthplex dorm rooms for its transitional housing and offers free community meeting-room space. It also lets youth sports leagues play there, Mizen said.

To Drummer, the deal represents another example of thinking outside the box.

"They do things–obesity for kids, swimming for seniors–that I'm not going to say we're truly in charge of or that we should be doing, but … why can't we do it?" he said. "We care about this community."

That parcel may one day serve up more than fitness. The trustee's office wants to add a bank inside the Healthplex, and officials have talked to a number of businesses–including McDonald's, despite Drummer's childhood-obesity concerns–about developing a separate building on the property.

Mizen said talks are progressing with a "strong suitor" he declined to identify.

Elrod and Brinegar gave the Healthplex purchase two thumbs down.

The Chamber president thinks fitness center ownership falls outside the trustee's responsibilities, and Elrod has a problem with Healthplex membership fees, even the relatively low $12-$18 a month for individuals and $40 for families.

"A rec center is supposed to be a way for kids to stay out of trouble when they get home from school or in the summertime," he said. "If you have to have parents buy a membership card, I don't think that applies."

Is there fat to trim?

The same year the Healthplex deal developed, a government efficiency study came down hard on Center and other townships.

Commissioned by the Indiana Chamber of Commerce, it found that, in 2002, Drummer's office spent $2.35 for every dollar of assistance it delivered, the highest rate in the state. Calumet ranked second, at $1.81 per dollar of aid.

The study recommended shifting poor relief functions to county government to save millions, "just like you see businesses merging and consolidating all the time," Brinegar said.

"[Businesses] have a lot of stake in that because we're one of the key groups that pays the freight on the cost of local government and schools," he said.

Mayor Bart Peterson's Indianapolis Works government consolidation plan originally called for eliminating all but two trustee's offices in Marion County, but that provision was dropped during discussions with legislators in 2005.

Both Drummer and Driskell, the township association chief, dismiss the Chamber study as inaccurate.

Drummer said it didn't measure programs like the one that helps Center Township residents manage their finances. The township incurs administrative costs there, but can't quantify the benefit.

"They never talked to us, they didn't have our numbers, they didn't do a fair assessment," he said.

Drummer, Mizen and even Elrod say Center Township operates efficiently. The trustee's office has no debt and has kept the township's property tax levy–the amount raised through property taxes–steady at $2.8 million the past three years.

"That was one of Mr. Drummer's goals, to not raise the levy, because that means we're working to be efficient," Mizen said.

He points to Drummer's re-election this month as proof that township residents approve. Drummer trounced Republican challenger Linda Ivey, capturing 75 percent of the vote.

Still, Ivey and others can't help wondering why the trustee's office delves so deeply into real estate and property development while touting township assistance as its main focus.

"Why are we doing those things when we have people who need to be clothed, have food on their tables, and shelter over their heads?" she said.