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Council tables vote on TIF proposal after lawsuit

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Facing a lawsuit from a city activist, the Indianapolis City-County Council put off voting Monday night on a long-delayed proposal to expand a downtown tax-increment financing district.

The council voted 20-8 to send the proposal back to the Metropolitan and Economic Development Committee, where it will have a hearing Sept. 24 with the expectation that it will be back before the full council Oct. 1.

The proposal would pave the way for redevelopment of the Massachusetts Avenue fire station and support other projects, including a West 16th Street technology corridor and new development on the northwest side of downtown.

In a lawsuit filed in Marion Superior Court Monday, environmental activist Clarke Kahlo alleges that the committee failed to follow proper procedure when it voted on the proposal last month. He argues the proposal had been tabled for longer than six months and, under municipal code, should have been taken off the list of pending proposals.

He also wants the court to declare some committee members' action to revive the proposal invalid.

Former committee Chairman Steve Talley had refused to hear the proposal, sponsored by fellow Democrats Vop Osili and Joe Simpson, until the council adopted a new set of policies on tax-increment finance districts.

At the committee's last meeting Aug. 27, Talley declared the meeting adjourned and left the room, as did Kahlo and other members of the audience. Realizing that Talley had not properly adjourned the meeting, Councilor Mary Moriarty-Adams took control.

Osili, also a member of the committee, introduced an amendment that includes $13.5 million for work force development, micro-lending and a revolving loan fund.

Reading the minutes from that meeting, Moriarty-Adams said the vote was 5-0, but Kahlo's lawsuit says the vote was 5-1.

Council Vice President Brian Mahern, who pushed to keep the downtown TIF expansion off the agenda, objected to Moriarty-Adams' version of events. “I would like to lodge my personal objection to the committee report that was just read,” he said.

Minority leader Michael McQuillen urged the council to go ahead and vote on the proposal. “The citizens of our city want a thumbs-up or a thumbs-down on this issue,” he said.

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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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