HAMILTON COUNTY

Carmel to consider $15M for Midtown parking

Chris Sikich
chris.sikich@indystar.com
Merchants Bank headquarters will break ground this year at Midtown.

The Carmel City Council today will consider up to $15 million in bonds for a parking garage at Midtown and up to $6 million in bonds for roadwork and a creek bridge at the Sunrise on the Monon development.

No votes are expected.

At Midtown, Indianapolis-based Barrett & Stokely plans to build a five-story, 100,000-square-foot office building at Fourth Street Southwest east of the Monon Greenway. Merchants Bank will move its corporate headquarters from U.S. 31 to the top four floors of the new building.The first floor will be leased to retail and restaurants and will have a Merchants' bank branch.

Barrett & Stokely also will build a 370-space public parking garage adjacent to the headquarters.The garage will be wrapped with 167 apartment units, similar to The Mezz development at The Center for the Performing Arts' parking garage. The first floor of the four-story biding will feature retail along the Monon.

In a public-private partnership, Carmel will consider funding up to $15 million in bonds to build the parking garage and other infrastructure. Corrie Meyer, executive director of the Carmel Redevelopment Commission, said the project will be paid through a tax-increment financing district, property taxes collected annually from the development.

She said 90 percent of the tax increment, about $828,000 annually, will pay back the 25-year bonds. She estimates the debt service will be $750,000 annually. The redevelopment commission will keep the remainder of the tax increment, about $77,000, in a reserve account.

Barrett & Stokely, Meyer said, has made commitments to cover any shortfalls.

The city's general property taxes, though, ultimately will back the bond. Structuring the deal like that will allow the city to get a better interest rate. The deal, though, does leave taxpayers vulnerable to rate hikes if the property tax projections fall short and the developer's financial safeguards fall through.

Mayor Jim Brainard believes the deal has been structured well enough to protect taxpayers.

"This is being paid from the taxes from the new development," Brainard said, "so this is not a burden on the taxpayer."

Old Town Design Group first announced the project in the spring of 2015, but work never started. Since then, Barrett & Stokely have taken over. Meyer estimates the development is valued at $60 million.

If approved, the project would break ground this year and would be complete by 2019.

Work already is underway at a sister project by Old Town Design Group at Midtown. In 2016, the council approved up to $20 million in bonds, structured in the same way, for two parking garages in a project that includes Allied Solutions' corporate headquarters and a Sun King distillery.

A rendering of the distillery Sun King plans to build in partnership with Old Town Development in the Midtown area of Carmel.

Old Town Design Group also is asking the Council to approve up to $6 million in bonds for roadwork, a bridge over a creek and other infrastructure at Sunrise on the Monon, a development with houses and apartments at 99th Street and Westfield Boulevard.

The bonds would be paid back through TIF. But unlike the Midtown project, the developer would take out the bonds directly and would be responsible for paying them back without a tax backup. The debt would not count toward the city's total debt service.

The Council will be considering another public-private partnership next month. In December, the redevelopment commission OK'd a 20-year installment-purchase contract, which works like a loan, for up to $4.5 million to fund a 200-space parking garage for Chuck Lazzara's redevelopment of the city block at Main Street and the Monon Greenway.

Lazzara, who owns the Ritz Charles, plans a $20 million development on the property with townhomes, offices, retail and a high-end steakhouse.

Meyer said the installment-purchase contract is an option due to the amount of money the city is borrowing, which is much less than a typical bond issue. She said it has several advantages over a bond, including lower issuance costs and a shorter term. It would be backed by TIF from the project.

In an unusual public-private deal, Carmel already has agreed to purchase the city block from Lazzara for $1.6 million and to transfer it back to him for free.

In addition to providing Lazzara cash, the deal also resets the property's value. TIF districts capture property taxes from new economic growth, and transferring the property will categorize everything on the property, including the land itself, as new growth. The land transfer will allow Carmel to collect $668,720 more in property taxes through TIF over the next 20 years from the site.

Call IndyStar reporter Chris Sikich at (317) 444-6036. Follow him on Twitter: @ChrisSikich and at facebook/chris.sikich.

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