In a former life, Carmel Mayor Jim Brainard was a real estate attorney. So it shouldn’t surprise anyone that splashy development projects have been a hallmark of his four terms as mayor.
He’s left an impressive legacy, to be sure, from the imposing Center for the Performing Arts to the bustling Arts & Design District—projects that have helped turn Carmel into a magnet for high-income professionals hungry for a broader array of amenities than Hoosier suburbs typically offer.
But as is often the case with real estate dreamers, they’re optimistic to a fault. They’re all too eager to embrace overly optimistic financial projections, or to dismiss the downside risk. It’s tough to be bold and cautious at the same time.
All of which helps explain why Carmel—or, more specifically, the Carmel Redevelopment Commission—finds itself in such a pickle.
As IBJ has chronicled throughout 2012, the commission has maxed out its credit and needs to execute a refinancing to free up $8.8 million Brainard needs to complete his massive City Center mixed-use project.
To refinance $183 million of the CRC’s $267 million in high-interest debt, Brainard this year agreed to an ordinance that gives the elected Carmel City Council future say over debt incurred by the CRC—a panel Brainard controls through appointments.
It was an embarrassing concession by Brainard, an acknowledgement that the commission needs Carmel’s full faith and credit to pull off the refinancing. The mayor had long dismissed critics of his building spree by asserting that TIF revenue on commercial property flowing to the commission—not the city’s residential tax base—would pay the bills.
We’re pleased with the financial fix in the works, largely because it puts decision-making in the hands of elected officials, not mayoral appointees.
For two years, Sen. Luke Kenley had pushed legislation in the General Assembly that would require redevelopment commissions to seek approval from a local elected body. He said the commissions are like “shadow governments” because they control large amounts of revenue but don’t answer to voters. While the measures failed amid General Assembly gamesmanship, it wasn’t for lack of merit.
At least in Carmel, from here on out, there will be greater transparency—and greater accountability to voters. That doesn’t mean Brainard will have to put his real estate ambitions on the back burner. But it does mean he will have to deal with the checks and balances that come with City Council oversight. That’s sure to be frustrating. But it’s also better government.•
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