Pedcor Cos.’ $100 million vision for an old industrial area in Carmel includes luxury housing and upscale offices with a splash of retail, a high-end development befitting its location between the palatial Palladium and tony Arts & Design District.
The developer is asking for permission to apply for a $25 million state tax credit to help fund the project. City Council members for now are holding the project at arm's length, concerned about the ramifications of the tax credit and the possibility that public money could end up supporting the speculative venture.
“At some point in time, the city has to take a stand,” said Councilor Eric Seidensticker, who chairs the Land Use, Annexation and Economic Development Committee that will weigh the tax-credit request. “Do we continue to help out developers, or do we say, ‘You know what? We’ve got everything in place—you take it from here.’”
Redevelopment of the so-called Midtown area, located between the Monon Trail and 3rd Avenue SW near a former grain elevator, is part of Mayor Jim Brainard’s grand plan to reinvent the suburban city.
It’s the same vision that drove development of the Center for the Performing Arts and Carmel City Center. In his Oct. 10 State of the City speech, Brainard said plans for Midtown were being fine-tuned.
Pedcor is seeking the state’s industrial recovery tax credit, intended to encourage redevelopment of aging properties—in this case the former Woods Wire building. But first, Carmel has to apply for industrial recovery zone designation.
City Council members balked at approving the seemingly routine resolution on Monday, saying they didn’t know enough about the project or the financial implications of the city’s support.
Among their concerns were the mayor’s comments during a February meeting with nearby residents that the project would include low-income housing, a use council members said would not attract employers or create jobs.
“I would love to see some high-tech business go in there,” said Luci Snyder, chairwoman of the council’s Finance Committee.
That would be fine by Pedcor CEO Bruce Cordingley, who revealed more details about the project Wednesday. He described the residential component of the Midtown project as “luxury” and said commercial development will focus on office space.
“I do not think affordable housing works from an economic perspective on that site,” he told IBJ on Wednesday, adding that Pedcor will seek input on the development from city officials and the broader community. “We welcome their involvement. It’s very important part of their community—of our community.”
If the industrial recovery tax credit goes through, it could cover as much as a quarter of project costs. Cordingley said the remainder of the funding has yet to be determined.
But Councilor Kevin “Woody” Rider, who sponsored the tax-credit resolution, told his colleagues Monday that he believed Pedcor would ask for tax-increment financing—a suggestion that raised the hackles of a group that six months ago agreed to take on $184 million in debt incurred by the Carmel Redevelopment Commission.
“For a year or two, I’d like to stop borrowing money, pay down our debt and see where the economy is going,” Snyder said.
She’d prefer the city make investments like the 10-year property tax abatement it gave insurer Baldwin & Lyons, which has pledged to spend as much as $30 million to buy and improve a 184,000-square-foot office building along Carmel’s Meridian Street office corridor, bringing 500 jobs with an average annual salary of $90,000.
“I would much rather do something like that for a real business, with real employees, where everyone runs out at lunch and spends money,” she said, “than spend taxpayers’ money on empty structures in hopes that something comes.”
Other Pedcor developments have posted early successes. IBJ has reported that the 3-year-old Indiana Design Center is at capacity, for example; the first 106 apartments in City Center are 90 percent leased, and phase two is scheduled to break ground soon.
The Midtown project will be “similar quality to those developments,” Cordingley said, “and something I’m sure everyone would be very proud of.”
Seidensticker said his committee will meet with Pedcor officials May 28 to discuss the developer’s plans before deciding how to proceed. Pedcor already owns most of the land in question.
“It’s a lot to think about and try to understand,” he said. “We need to evaluate the highest and best use of the property.”