The Carmel City Council will not support Pedcor Cos.’ application for a state tax credit to help pay for a $100 million redevelopment project—a contentious decision Mayor Jim Brainard called “unusual and illogical.”
Councilors called it a sign of the growing philosophical divide over whether the city should pursue development at all costs.
Members voted 4-2 Monday to reject a resolution allowing the mayor to seek industrial recovery site designation for the former Woods Wire plant at the heart of the redevelopment site, making it eligible for a tax credit of up to $25 million.
Pedcor, the principal developer of Carmel City Center, owns the shuttered manufacturing facility and is working on plans to transform the so-called Midtown area along the Monon Trail.
Details have yet to take shape, but CEO Bruce Cordingley said the project likely will include a mix of upscale housing and offices.
Cordingley answered questions from the council’s Land Use committee last month, assuring members that the community would be part of the development process. The panel voted 3-1 against the resolution.
The council on Monday affirmed that recommendation after some heated debate.
“I am disappointed and, frankly, disgusted with how this came out of committee,” council member Sue Finkam said, adding that the tax credit would encourage private investment in a project that could bolster Carmel City Center and the city’s Arts & Design District, which bookend the Midtown site.
Later, she called the vote "the most short-sighted decision I've seen the council make yet."
Resolution sponsor Kevin “Woody” Rider joined Finkam in supporting the measure. (Councilor Ron Carter, who also spoke in favor of the tax-credit application before the committee vote last week, was absent from Monday’s meeting.)
Council Finance Committee chairwoman Luci Snyder said the city simply cannot afford to get involved with new projects after taking on $184 million of Carmel Redevelopment Commission debt late last year.
Although Carmel-based Pedcor has not asked for financial help with the so-called Midtown project yet, Cordingley told the committee it likely would require tax-increment financing.
Then there’s the expense of relocating utilities on the property, which Snyder said could cost the city as much as $9 million “before the wonderfulness of the new project” can take shape. A proposed “Monon Avenue” would add another $11 million to the tab, she said.
“The first thing developers do is come to this body and say, ‘We need municipal infrastructure,’” Snyder said. “That entails [the city] borrowing more when we really need to take a break and do the prudent thing and pay down debt.”
Rider disagreed, calling the committee’s recommendation “baffling.” The city wouldn’t be making any financial commitments by approving the tax-credit application, he said.
“If we can’t afford it, the project doesn’t start,” Rider said. “I have the guts to say ‘no’ if we don’t have the money to build Midtown.”
Brainard urged councilors to delay their vote and send the resolution back to committee for another look. Although a change in state law would allow Pedcor to apply for the tax credit without Carmel’s backing, “it won’t help our local developer … to have a resolution in place saying ‘We don’t want to do this,’” he said.
After the vote, council President Rick Sharp called the decision practical given the city’s financial situation.
He also echoed Finkam’s observation that the Midtown debate may only be the opening salvo of a bigger battle over continued growth.
“What do we think is in the best long-term interest for Carmel?” Sharp said. “It is clear there has been some divergence on this topic.”