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City to consider $7.7M bond issue to assist Broad Ripple project

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The city of Indianapolis is considering issuing $7.7 million in bonds to assist in the development of a controversial $30 million apartment-and-retail project in Broad Ripple.

Developer Browning Investments Inc. says it is seeking $5.7 million from the bond issue to help finance the project along the Central Canal. On Monday night, the City-County Council referred the request to the Metropolitan and Economic Development Committee, which could consider it March 31.

The same committee recommended up to $23 million in city financing for Flaherty & Collins Properties’ $81 million, 28-story apartment tower to be built on part of the former Market Square Arena site. The council voted 18-9 Monday to provide the financing.

Under the request including the Browning project, the city would issue bonds for up to $7.7 million. The bonds would be paid off over time from property-tax proceeds in the North Midtown tax increment financing district. The district, created in January 2013, includes the Browning project, which would be called Canal Pointe.

Jamie Browning, a partner in the firm, told IBJ that the amount required for Canal Pointe would be closer to $5.7 million. It would be used for such infrastructure elements as installing lighting and landscaping, demolition of existing buildings, and construction of a parking garage for the development.

Browning maintains that Canal Pointe will generate more than $7 million in property taxes that would be used to pay down the bonds.

Browning anticipates that the $2 million difference between the bond issue and the amount required for the project could help fund public improvements in the TIF district, which includes Tarkington Park and runs as far south as 30th Street and Central Avenue.

Mayor Greg Ballard's deputy mayor for economic development was not immediately available to discuss the plan Tuesday afternoon.

Browning Investments received approval in October to rezone 1.9 acres northeast of College Avenue and the Central Canal to allow for a single 35,000-square-foot retail space—earmarked for a Whole Foods store—plus 119 apartments and a four-story parking garage.

The project sparked fierce debate in the northside burg and packed meetings during the city's zoning approval process. Some residents objected to its height and size relative to the relatively low-slung feel of Broad Ripple. National grocery chain Whole Foods rankled those who feared the store would divert business from local shops.

The current number of apartment units is up from the 88 the developer originally proposed. Browning said it added more apartments to the project at the urging of the Broad Ripple Village Association, driving the cost up to $30 million from approximately $25 million.

Browning Investments won’t break ground on the project until it knows whether it will receive the city subsidy, Browning said.

Earlier Monday, the developer cleared one of the remaining hurdles.

Broad Ripple retailer Good Earth Natural Foods had asked Marion County Judge Michael D. Keele in November to overturn the zoning variances awarded to Browning Investments the previous month by the city’s Metropolitan Development Commission.

The MDC voted 5-2 to grant Browning Investments' variances, enabling it to construct a building higher than local zoning ordinances call for, and with less parking than typically required.

On Monday, Keele granted MDC’s motion to dismiss Good Earth’s complaint, largely on a technicality. After filing the complaint, Good Earth’s lawyers failed to submit within 30 days to the court a record of the zoning board’s decision. The lawyers also didn’t ask for an extension.

“There’s no question on this. It’s the petitioner’s duty [to file the record],” Keele said upon dismissing the complaint.

Good Earth, located about a block east of the development site, has 10 days to file an appeal with the Indiana Court of Appeals. The store’s owner, Rudy Nehrling, said it’s likely he’ll “go that route” despite already spending “tens of thousands of dollars” fighting the development.

Nehrling maintains that the project’s scope is much too large for Broad Ripple.

“Obviously, we’re very disappointed,” he said of the judge’s decision. “We don’t feel like we got a fair shake.”

Clarification: An earlier version of the story stated that Browning Investments Inc. was seeking up to $7.7. million from the city. The firm says that it is seeking $5.7 million in assistance from the overall bond issue.
 

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  • bond coverage
    Edwin - because this is the first bond issued through the Midtown TIF, the market will expect 1.5 times coverage (the tax revenues from the increment properties will need to generate 1.5 times what it will cost to service the bond. Pretty decent margin for error.
  • Jerry is right
    Our highest priority now should be shoring up the revenue streams for core city functions. That the tax revenue will be sufficient to pay down the bonds is speculation. The economy could lapse into another recession, in which case the financing aid to Browning Investments would be an outright give-away of tax-payer money. If this is such a viable project, why can't Browning finance through the debt markets?
    • There are 2 such groceries in the area aleady.
      Another is not needed. Also, I wonder about who is saying the apartments will be rented. There is a new much needed (Ha!) hi-rise parking facility that is not being used, and they told us it was so badly needed. Who plans what Broad Ripple needs? They are changing the face of the village.
    • Unigov
      Unigov works well. It allows for a bigger pool of sheep to be sheered. Unigov doesn't work when the government is rife with leaders and their minions do not represent the people but rather specific people and their capitalistic interests. Look up the definition of a Banana Republic.
    • uncreative
      I really hate anything with "Pointe" in the name. It's just like "Centre": high-falutin' intent but, in reality, nothing more than banal.
    • Ridiculous
      The notion that we taxpayers now have to subsidize private companies while we can't afford enough police officers is outrageous. The claim that taxpayers are going to get their money back has proven time and time again to be false. Any property taxes from this project goes to the Midtown TIF so the money which will then be used for more taxpayer gifts to the Mayor's campaign contributors. Browning should be showed the door and not given a dime of our money.
    • Midtown Economic Council
      Lots of information on both the Browning Broad Ripple project and the Tarkington Park improvements has been compiled by the Midtown Economic Council. View it here http://www.midtownindy.org/TIF-bond, and contribute to the conversation on their message board.
    • Yes Marsh
      True, but there corporate headquarters are here so you are supporting good jobs instead of Walmart pay.
    • For the Record
      Mr. Nehrling is an employee of Good Earth. Bob Landman's widow is the owner.
    • re: Mikey
      Shop Marsh? Mikey, Marsh is owned by a parent company Sun Capitol Partners out of Boca Raton, FL. Profits go there and to it's shareholders, not here.
      • Bad Math
        So $5.7M is 25% of $30M? I think you should check your math and facts, try 19%. Whole Foods doesn't get a subsidy, they pay market rate, sales tax, and their 144 employees will pay income tax. The subsidy the developer is asking for (5.7M) they are generating with their own $25million private investment. The request is less than 75% of what the project generates. Besides they are asking for the funds to clean up the messes left on the site by the last user and to make flood prone property developable. Let us just ignore the 200+ occupants of market rate apartments on the canal, they can just keep on going to Carmel and pay income taxes there, Indy doesn't need it. Its okay, don't subsidize the project and it won’t come, neither will the extra $2million in taxes it will generate or the ultimate $580,000 in annual taxes it will pay through to the base at the end of the bond. Instead we can continue to covet the 1,034 acres of Brownfield, Vacant, and tax exempt property in the economic development area because it serves us so well today in fixing things like streets and educating children. I am sure there will be lines of folks ready to dump $30 million into the site because we have been beating them back with sticks for the last decade.
      • oops
        It should probably be noted that Marsh isn't locally owned
      • Shop Marsh
        I won't shop at Whole Foods. Shop Marsh! I say that because it's the only way to get our country back. support local business. profits from Marsh support local people and the money gets funneled back to Indiana in one way or another. Go shop somewhere else, and all you do is send the profits to corporate in another state that doesn't benefit us. especially Walmart, shop there and all you are doing is supporting low wages, high welfare and making the Waltons rich while nobody else benefits. say what you want, but Marsh in the past year is better than any other grocer...period! there prices have dropped tremendously. until people realize what is going on with these huge national and worldwide companies and how they are the reason our economy sucks nothing will change. if you aren't down with it then keep shopping at Wally World and your other places and continue being broke.
        • To Italiano
          I wish it were that simple to just vote them out; but you notice, most of the decisions come down to who is on the MDC, their recommendations, etc. Unfortunately, voting out some of the council members or mayors won't help too much. We need to demand to leadership, and people who actually think long-term about development in this city and replace the MDC members.
        • Infrastructure
          To HarveyF: Not sure what you are referring too, but historically, since I can remember in Indianapolis and around the metro-9; cities have been paying for infrastructure extensions and upgrades to entice, and assist in projects getting developed. I mean, it is the cities' infrastructure of piping, electrical, street/curb cuts etc. so the city should have somewhat of a hand in this. As far as the other comment of property taxes going to pay off bond...I agree - some of those taxes should be dedicated to infrastructure improvements (10 years down) the line when things may need to be refreshed.
        • WHEN WILL THIS END
          Hear me, crooked polititions...The voters will get you next election
        • Right
          It used to be the government required the developer to spend their own money to make infrastructure improvements, etc. if they wanted approval for a project. I guess the politicians like the new arrangement better. I wonder why that could be?
        • again...
          Here we are again. The Property taxes will pay off the bond. Wouldn't it be nice if the property taxes went to the general fund to keep the infrastructure up?
        • Wonder what Italiano thinks?
          My guess is once Italiano gets wind of this we'll be bombarded with the same old worn out story..... Can't wait.
        • Corp Welfare
          Hey Indy City Council and the Mayor's office....i want to expand my house which will generate more tax $$$ for you. Can you spot $100K at N/C so i can add infrastructure, etc......thanks, the taxpayer
        • @Mikey
          I'm with you, for lots of reasons (outside of sharing a name). Mayor Ballard and company are urging more people to live in Indy with incomes of $50K or better in order to increase the tax base (because we can't repair the streets, educate the kids, pay the Pacers and Colts, afford cricket bats, stuff like) but then giving tax incentives equivalent to approximately 25% of the project cost. Sure, the city (i.e. we tax payers already living here) will benefit on the backend by getting SOME tax revenue from it, but I can't believe it's in line with our investment. And while I love me some Whole Food and such, the profits from their expensive food stuff are going to be realized by someone(s) in faraway Austin, Texas (and I'll bet the ground floor retail ain't gonna include too many local retailers). Nothing against hizzoner or the city councillors, but they need to drive a harder bargain (or be far more forthcoming with any other "returns" we'll receive for our "investment"). Or maybe IBJ can dig 'em up for us.
        • Wow
          Surely there is a connected rich guy pool of money in the private sector looking for investments. These projects really don't help the average taxpayer, do they?
        • Rudy Nehrling
          Maybe Rudy Nehrling should be spending "tens of thousands" of dollars on improving his rundown store rather than frivolous lawsuits??
        • Taxpayer funded?
          huh? i'm kinda tired of these profitable companies needing taxpayer money to fund there projects. hey, finance it yourself!!!! sick of this crap. seems the rich always need handouts.

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          1. I keep wondering why I keep hearing about this problem of corporations leaving America, and I never hear a reasonable proposal to lower corporate tax rates and raise personal rates on income from capital gains and dividends, especially for high earners. It is just too simple of a solution for Congress to embrace?

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          3. is a disaster. SR37 already needs to be built to interstate standards between 465 and SR144. Southport Road is a mess each morning and evening.

          4. Bass Pro Shops would be good for the mall as well as a Giant Eagle Market District or a Jungle Jim's International Market Place grocery store like the one near Cincinnati Ohio.A Disney quest indoor theme park would be good.An Academy outdoor store would be good too.Indoor Circus shows and magic shows would be good as well. A casino with sports bar would be good.A Disney theater inside that shows movies and Broadway shows would work.Nashville Tennessee concert shops with indoor neon lights would be good.How about a theater that shows travel shows and theme parks. A train store would be good.How about a giant toy store with high tech video games.

          5. This development is in addition to Allpoints Midwest 5, Aitrtek, a recent FedEx and more in Plainfield. Greenwood and Brownsburg also have similar projects.

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