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Committee urges hiring commitment for $81M MSA tower project

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A proposal by Flaherty & Collins Properties to build an $81 million, 28-story apartment tower on part of the former Market Square Arena site passed a major hurdle Monday evening.

Members of the Indianapolis City-County Council’s Metropolitan and Economic Development Committee recommended to the full council that the project be built, with one key stipulation. The vote was 6-2, with Democrats Leroy Robinson and Zach Adamson voting against it.

Flaherty & Collins must commit in a letter to Mayor Greg Ballard before a council vote that 30 percent of the workers that it hires to build the project must live in Marion County.

The developer would only be penalized, though, if it fails to hit a 25-percent benchmark for local hires.

“If that’s the only hiring requirement and it doesn’t go up at the council meeting, I would think the developer could live with 30 [percent],” said Deron Kintner, the city’s deputy mayor for economic development.

David Flaherty, CEO of Flaherty & Collins, said the developer can achieve the hiring goal.

“We have a very good track record of hiring locally and training locally,” he said.

The committee also recommended the city help fund the project with a 25-year, $23 million bond, of which $17.5 million will go directly to construction costs while the remainder will be held as a safety net to fund unexpected expenses.

The committee had delayed action on the development’s financing and hiring goals after failing to receive information it requested from Flaherty & Collins.

The proposed Market Square Tower—if it’s built as planned at 28 stories and 370 feet—will be one of the 10 tallest buildings in Indianapolis. It would rank as the tallest apartment building in Indianapolis.

The tower 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 funding from the bond sale and land for the project appraised at $5.6 million.

But before the city commits, committee members had asked that Flaherty & Collins provide it information on the project’s financing structure, plans to hire local contractors and parking specifics.

City-County Council member Vop Osili, who represents the district in which the project would be built, said he supports Flaherty & Collins’ commitment to ensure that 30 percent of workers are local.

“You have my commitment that I won’t ask for a dot over 30 [percent],” he said.

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.

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 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.
 

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  • What's the tax rate?
    "Kintner has said he believes real estate taxes on the $81 million project, estimated at $1.3 million per year" But those figures imply a 1.6% property tax rate. ?! If instead the property will be taxed at the (capped) 2% rate for commercial property, then $1.3 million a year in property tax liability would indicate the building's Assessed Value is only $65 million, well less than its $81 million cited cost. Seems that something's being hidden here.
  • Marshall & DRT
    If you are so annoyed by the comments section... don't read it. I, for one, think it is an integral part of our system. Are we just supposed to roll over and accept what government does. As for the bond and land giveaway to the developers, it stinks. The property taxes might be enough to pay the bond off.. that's nice. 25 years of more money not going to the general fund. I was told at a recent neighborhood TIF meeting that if your property values go up and your property taxes increase due to the fact that you are in a TIF district, that those additional higher fees go directly to the TIF. How can a city continue to operate this way? Won't this just catch up to us and we'll have more debt than income? Or are we already there?
  • What are the chances?
    From following the IBJ coverage. The city demanded info on workers, after not getting it three months in a row, they gave up and just mandated how many local workers they had to have. Sounds like F&C still isn't moving on this one. I'm really doubting its viability at this point. Anyone else?
  • Subscription
    Marshall: That's why I subscribe to the print version. I highly recommend it. You won't see negative free-loaders commenting that haven't paid a dime for the content. Groupon often runs specials too.
  • Huh?
    Steve, what do you mean development downtown has stagnated recently? Have you BEEN downtown at ANY time in the past oh, I don't know, 2 years? There's been more development occurring on a consistent basis in our downtown than in any other part of the city. I'm glad you approve of the project - so do I. But really you should get downtown more often to see what is really happening here.
  • And Dan Tallman?
    Could you possibly be any more vague? Moves like what? Approval of multi-million, high profile residential development in the heart of our downtown? Ummmmm.... ok....
  • Geesh
    Some of you people make reading the online version of this paper so damn hard anymore. Silly blabber about your taxes and constant conspiracy theories and not a CLUE about urban development. If you want to live in Mayberry then, by all means, MOVE THERE.
  • really?
    These naysayers are disguisting and need to get a life. Indianapolis a failed city? Really? Move to detroit then tell me that.
  • Excellent development
    I am a Marion County resident and I, for one, am excited by the prospect of developing the MSA site. I am even more pleased that the project will be a high rise that will add to the downtown skyline. Downtown has stagnated recently with very limited development and this project, if successful, will be a definite boost to the downtown and county economies. Further, it won't add to the downtown office space vacancies.
  • Failed city
    Indianapolis is a failed city and moves like this are proof. Why any business would remain here rather than high-tail it to Hamilton County is beyond me. Most already have. Silly moves like this and a commuter tax will seal the fate of this mess.
  • Valuable Land
    That land, valued in the $$MILLION$$, is being GIVEN to the developer FREE, plus $$MILLION$$ of tax dollars to build the building!!!!!!!! Welcome to Chicago South.
  • UNIGOV= Severe Public Corruption
    To much power.... Disband Out of control Unigov! Meanwhile out in the suburbs the streets crumble, are poc'd with chuck holes and uneven pavement, no police protection because TIF DISTRICTS siphon revenue away from the GENERAL FUND. Go ask what made many California Cities fall into municipal bankruptcy, yep that's right out of control TIFS and crony govt spending and obligating by inept government leaders.
  • Another Give Away
    Here we go again. give them the land and 23 million to build the building. The rich get richer on the backs of the poor. Who can we vote out of office to stop this robbery?

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  1. How can any company that has the cash and other assets be allowed to simply foreclose and not pay the debt? Simon, pay the debt and sell the property yourself. Don't just stiff the bank with the loan and require them to find a buyer.

  2. If you only knew....

  3. The proposal is structured in such a way that a private company (who has competitors in the marketplace) has struck a deal to get "financing" through utility ratepayers via IPL. Competitors to BlueIndy are at disadvantage now. The story isn't "how green can we be" but how creative "financing" through captive ratepayers benefits a company whose proposal should sink or float in the competitive marketplace without customer funding. If it was a great idea there would be financing available. IBJ needs to be doing a story on the utility ratemaking piece of this (which is pretty complicated) but instead it suggests that folks are whining about paying for being green.

  4. The facts contained in your post make your position so much more credible than those based on sheer emotion. Thanks for enlightening us.

  5. Please consider a couple of economic realities: First, retail is more consolidated now than it was when malls like this were built. There used to be many department stores. Now, in essence, there is one--Macy's. Right off, you've eliminated the need for multiple anchor stores in malls. And in-line retailers have consolidated or folded or have stopped building new stores because so much of their business is now online. The Limited, for example, Next, malls are closing all over the country, even some of the former gems are now derelict.Times change. And finally, as the income level of any particular area declines, so do the retail offerings. Sad, but true.

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