Pace slows, but Carmel redevelopment panel still busy

November 4, 2013
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The Carmel Redevelopment Commission has a lot to do—with or without staff support.

It’s looking for a new user for the former Shapiro’s Delicatessen on Range Line Road, for example, and it’s working with developers interested in overhauling the old Party Time Rentals site a few blocks south.

Then there the projects already in progress, like Pedcor Cos.’ The Nash building and Anderson Birkla’s The Mezz, both under construction in Carmel City Center. The CRC’s responsibilities include streetscaping and utility relocation.

For years, the volunteer board’s efforts were guided by paid staff. But longtime Executive Director Les Olds and his lone remaining employee resigned last month, and Mayor Jim Brainard told IBJ he won’t rush to hire a new leader. (Subscribers: Read the full story here.)

Brainard and city Director of Administration Steve Engelking will handle day-to-day affairs in the meantime.

“This is a good chance to step back and re-evaluate how the CRC works and who we need in those positions,” Brainard said.

Redevelopment activity slowed this year as the City Council exerted control over commission spending after agreeing to refinance $184 million in CRC debt.

The CRC collects revenue from 27 of the city’s tax-increment financing districts. Bond payments and other obligations consume most of it.

Indeed, the commission expects to close out this year with a balance of less than $70,000, board Vice President Dave Bowers told the council last month.

That’s after giving the city $1.5 million to help pay for operations and expenses it inherited as a result of the refinancing deal. Approved in July, the grant was paid Oct. 21—just before council members voted on the 2014 budget.

Brainard broke a 3-3 tie to pass the $127 million spending plan. The divisive issue: whether to cut the budget as a result of a seven-figure loss of revenue from the CRC.

City leaders were expecting $2 million from the CRC next year, but longtime financial adviser Curt Coonrod told councilors that new projections “lead us to believe that is unlikely to materialize.” The commission instead will contribute about $500,000, he said.

Bowers mentioned the sale of CRC-owned real estate—including the Shapiro’s and Party Time sites—as a possible revenue boost that could increase the grant.

But city Clerk-Treasurer Diana Cordray told IBJ the commission is obligated to return any proceeds to the TIF fund used to purchase the property. (She asked the State Board of Accounts for clarification on the law in 2010 and still has a copy of the email exchange.)

State auditors take a strict stance on how TIF revenue can be used; their most recent CRC review dinged the commission for spending it on operational expenses.

The CRC’s attorneys have a different take on the rules, Brainard said. “Our legal advice was to the contrary.”

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  • Directions
    The Old Party Time is South of Shapiros not North?
    • Yes, thanks!
      You're right, Randy. I fixed my mistake. Thank you!
    • CRC Truth
      The only thing the CRC has to do is pay it bills and bonds and the clerk/treasurer office is doing that. I am tried of the Brainard Administration using taxpayer money to do the work of private developers. These projects are private developments that already have gotten TIF. They can oversee their own projects.
    • Nice Job
      Captured the meeting in word and deed. The comment about streetscaping is ironic. I fear we will spend money we don't have streetscaping our 'new' US 31 segment. As far as Utility relocation I find that interesting. I would really like to hear more about what that might entail.

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    1. The $104K to CRC would go toward debts service on $486M of existing debt they already have from other things outside this project. Keystone buys the bonds for 3.8M from CRC, and CRC in turn pays for the parking and site work, and some time later CRC buys them back (with interest) from the projected annual property tax revenue from the entire TIF district (est. $415K / yr. from just this property, plus more from all the other property in the TIF district), which in theory would be about a 10-year term, give-or-take. CRC is basically betting on the future, that property values will increase, driving up the tax revenue to the limit of the annual increase cap on commercial property (I think that's 3%). It should be noted that Keystone can't print money (unlike the Federal Treasury) so commercial property tax can only come from consumers, in this case the apartment renters and consumers of the goods and services offered by the ground floor retailers, and employees in the form of lower non-mandatory compensation items, such as bonuses, benefits, 401K match, etc.

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