With its Arts & Design District, City Center and Center for the Performing Arts, Carmel has shed its suburban skin and morphed into a walkable, attractive city in its own right. But in the process, it has acquired some city-sized habits, including a penchant for handing out financial incentives to developers to get them to build exactly the kind of city Carmel leaders envision.
The tension brewing between the pro-incentives crowd—including the architect of Carmel’s transformation, longtime Mayor Jim Brainard—and those who want to put the brakes on the handouts puts Carmel’s city council in a tough spot.
To counter the wave of incentives, the council appears to be ready to quit the habit cold turkey.
Councilors voted June 3 against supporting an application for up to $25 million in state tax credits that could be put toward redevelopment of a former industrial site in midtown, the underdeveloped area between City Center and the Arts & Design District.
Pedcor Cos., owner of the industrial site and the developer on the receiving end of millions in city incentives over the years, hadn’t asked for Carmel’s financial support—yet. It merely wanted a resolution supporting the tax-credit application.
But the council isn’t in a supportive mood after taking on $184 million in debt last year racked up by the Carmel Redevelopment Commission, the group behind most of the incentives handed out to date. Just the anticipation that Pedcor would ask for incentives for the mixed-use project was enough for the majority of councilors to vote no.
The rejection paints a bright battle line between Carmel’s opposing camps, and suggests the city might have no choice in the near term but to test developers’ appetites for pursuing the lucrative market without assistance.
That’s OK as long as the council is willing to objectively weigh future requests from different developers. Some might merit city support. Of course, in a perfect world, developers wouldn’t ask for incentives.
That seems to be the case with Baltimore-based Atapco Properties, which wants to redevelop 34 acres between City Center and the Meridian Street office corridor. The $75 million Carmel Lakeside proposal is primarily apartments, but could include a parking garage and retail space in the future. Atapco, which said it was drawn by Carmel’s recent makeover, said it won’t ask for assistance. It’s not clear if the proposal fits Brainard’s vision for Carmel, but the price is right.
In the end, both sides might be able to claim victory. If developers jump into Carmel without a parachute, the anti-incentives crowd will prove their theory that the city is attractive enough that it doesn’t need to offer handouts. The Brainard camp, on the other hand, can correctly assert that, without incentives, the Carmel that is catching the eye of developers would not exist.