A City-County Council committee again delayed voting on whether the city should provide a developer up to $23 million to help finance a massive mixed-use project to be built on part of the former Market Square Arena site.
On Monday evening, members of the Metropolitan and Economic Development Committee continued the vote until their next meeting March 3.
This is the second time the committee has delayed action on the development’s financing after failing to receive information it requested from developer Flaherty & Collins Properties.
The committee is seeking to build an $81 million, 28-story tower that would include 300 luxury apartments renting for $1,300 to $2,400 per month. About 500 parking spaces and 43,000 square feet of ground-floor retail space would be included. Flaherty & Collins said it prefers that a specialty grocer occupy the space and is pursuing Whole Foods as a tenant.
The development would be backed by a combination of public and private funds, with the city agreeing to contribute at least $17.8 million from a bond sale and land for the project appraised at $5.6 million.
But before the city commits, members of the Metropolitan and Economic Development Committee are asking that Flaherty & Collins provide it information on the project’s financing structure, plans to hire local contractors and parking specifics.
Flaherty & Collins so far has not supplied the information, causing the committee to once again continue the vote, to the frustration of the body’s eight members.
“I feel against the wall, having made the request [to Flaherty & Collins] and not having anything in front of us,” said Vop Osili, who represents the district in which the project would be built.
Why Flaherty & Collins has yet to abide by the request is unclear. Representatives of the company did not speak at the meeting and abruptly left before the committee voted on the continuance.
Reached by IBJ, Flaherty & Collins CEO David Flaherty referred comment on the situation to the city.
Deron Kintner, the city’s deputy mayor for economic development, was at the meeting and prepared to give a presentation along with Flaherty & Collins’ executives.
“We were surprised and as caught off-guard [by the continuation] as everyone,” he said. “It sounds like they were hoping for [the information] ahead of time.”
Kintner has said he believes real estate taxes on the $81 million project, estimated at $1.3 million per year, will be adequate to cover payments on the 25-year bond.
“I’m supportive of this project, but if you’re looking at the maximum to be bonded ... it’s fair for the city to be asking tough questions,” said John Barth, a committee member and City-County Council vice president.
The deal is essentially tax-increment financing, but Kintner said it hasn’t yet been decided whether to expand the downtown TIF district to encompass the site. By law, tax revenue can be captured outside a TIF district, as long as it benefits the district, he said.
The project and bond financing will need to be approved by both the Metropolitan Development Commission and City-County Council.
The remainder would be financed by Flaherty & Collins, which requested the second-lowest amount of public incentives of five development teams vying to develop the nearly 2-acre property. The city chose Flaherty's proposal in July.