High-profile Carmel property draws just one bid

June 20, 2013
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Flaherty & Collins Properties was the only developer to bid on the former Party Time Rental site on Range Line Road in Carmel, offering $4.35 million for the city-owned property.

Carmel Redevelopment Commission Executive Director Les Olds opened the bid at a public meeting Wednesday evening, but he declined to share details of the proposal pending a review by commission staff and attorneys.

Company officials were not available Thursday morning to provide an overview of the plans.

The Indianapolis-based developer had proposed building more than 400 luxury apartments on the high-profile parcel in 2011, but that effort stalled because of questions over the city’s ownership stake in the property.

City Council members agreed to rezone the land to allow residential and retail uses in March after the CRC became its sole owner. Including legal fees and taxes, it spent about $4 million to acquire the site, which includes seven acres of land and a 50,000-square-foot warehouse-like building.

A request for proposals issued last month asked would-be buyers to pitch plans for a three-story (or taller) mixed-use building featuring first-floor retail and plenty of parking. Designs were to be consistent with other recent development in the City Center district downtown.

The site at Range Line and Carmel Drive is more than a half mile from City Center Drive and the Center for the Performing Arts, but it’s seen as a gateway to the tony area.

The minimum asking price: $4.35 million.

Bidders were allowed to ask for financial assistance to pull off the project, but the CRC made it clear it’s not promising anything.

“Preference will be given to redevelopment proposals that limit the CRC contribution to streetscape work,” the RFP said.

If possible, the commission also wanted proposals to incorporate adjacent parcels at 1132 S. Range Line Road and 1224 S. Range Line Road, which are privately owned.

The CRC hopes to close on the sale by Sept. 1 and have construction begin by Jan. 1.

It remains to be seen whether the city will accept Flaherty & Collins’ proposal or go back to the drawing board.

CRC President Bill Hammer said redeveloping the Party Time site is “priority 1A,” second only to building out the remainder of the sprawling City Center project.

That makes sense, given its location at a bustling corner in the growing city. So why weren’t more developers interested in the property?

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  • Anti Development.
    No matter how you slice it, quality redevelopment takes a close working relationship with developer and city. This is true whether its Fishers, Indy or Carmel. The City Councils rejection of a redevelopment tax credit for Midtown has sent a clear signal that developers need to take their projects to other cities. That tax credit had no cost to the city and was all about cleaning up brown sites.
    • Apts Apts Apts!!!!
      Why is every proposal in Carmel now including so many apartments? Is there that much of a demand(especially "high end"? I don't get it and the traffic is already too heavy at the intersection of Rangeline and Carmel Drive. I just don't get it, except it must be GREED, GREED, GREED.
    • Yeah, right
      One thing for sure, it cannot be Mayor Brainard's fault. From what I've read of Bruce's comments the Mayor is always infallible.
    • HIgher
      Carmel is going high density and supposedly urban (fat chance). That is the Mayor's plan. He needs the property taxes for his pet projects and subsidies of the Performin Arts Center and favored businesses. This will most likely also put a strain on Carmel's school system, especially with all of the taxes TIF is taking away from the school system.
    • Micromanaging private industry devalues properties.
      The city should not be in the business of interfering with market mechanics by attaching all these detailed constraints onto the property. We already have mechanisms to prevent a dogfood property (which wouldnt bother with expensive suburban property anyway). Let the market come up with the most valuable design for the property. We don't need a leftist central planning commission to oversee development.
      • Typo correction
        Meant to say "prevent something like a dogfood FACTORY" (dictating on phone)
      • Carmel - show us some love!
        If Carmel sent a signal it was to the Mayor and his 'spend it like it's free money' Councilors. Closed for Business? Only thing that was closed was the open ended 'blind' support for anything the Mayor wraps in a ribbon and pretty paper. So far once the pretty paper comes off we've been finding out the Mayor's 'surprise' is actually a largely empty, expensive promise. Much like the funds that were never raised by the Mayor for his signature Performing Arts Center. We got a Very Pretty Package but we found out she is very high maintenance and is only one of the Mayor's love children. We, the taxpayers, have to cover her expenses and the Mayor is so far behind in his 'child support payments' that it appears those promises by the Mayor of financial support were as empty as the second floors at CVS and Turkey Hill.
      • Penny wise Pound foolish
        Look forward to seeing the proposal. Greenfield sites in the long run are going to be more costly to a city than redevelopment. It's exciting to see their downtown morph from a series of strip malls to a walkable city. Indiana needs more Mayor Brainard's and progressive thinking
        • High Density Apartments don't pay
          Does it ever seem to make sense that building apartments never seems to cover the cost of building new schools and educating, vs tax dollars per unit of an apartment complex. Every community needs them. However, they are sexy for developers, not communities. You will never see the tax revenue per pupil/unit work to the good. Schools are our most expensive part of the roll in every county in Indiana. I often think that councils don't think of the downstream costs what they approve. Building schools is not cheap.
          • Progressive Failures
            Exciting indeed! Look at some of the exciting details.. The Mayor's redevelopment commission was broke and had to be bailed out by the taxpayers. Carmel has about $1 billion of debt. http://www.ogdenonpolitics.com/2012/09/dlgf-report-finds-indianapolis-and.html The mayor could not raise even 10% of the funds for his pet project the Performing Arts Center? The arts & design district is such a success that the mayor has to subsidize businesses with our tax dollars.
          • Not even penny wise
            Pepper. If Mayor Brainard and Progressive thinking go together I suggest a disconnect unless you also include them with the terms tax and spend. We just financed about $200,000,000 to cover the cost of the Mayors Progressive Thinking. If Carmel is a desirable area, which it is, why wouldn't the city make a little extra money off of the investment in non-greenfield sites like this one? After all these are largely the areas that have benefited from the taxpayers investment and will continue to do so at ever increasing rate based on eventual build out. Shouldn't that command a premium instead of being treated as a blighted area that needs Public assistance? You are aware of the TIF scandal that is brewing nationally. If you doubt my logic or are not familiar with the devastating impact it can have Google TIF abuse. We need people to think for themselves, challenge what they hear and become more involved. Interested?
            • Amazing how this Mayor has screwed up this city
              His constant debt and tax scheme is killing progress. His vision? More like DOUBLE VISION cause he's drunk on power.
            • Tired of the Apartments
              I have lived in Carmel since 1975, and am in my early 40's..so I'm not a geezer when I say...ENOUGH! I had built a town home near the Palladium. Thought it was a great idea. Loved walking to all the nearby businesses. I hoped to eventually make it a rental, but lived there for 8 years. The development I was in changed it's last phase from more townhomes/condos to a four story "high end apartment and muli-use building". Not including the apartments that were already built next to the Palladium, but the two buildings soon to be started. Mayor B says that it will increase the value of those homes. I think, and so do many of the other residents there. I did not want to be surrounded by apartments. Now not where I want to live and add all that construction and eventual traffic. What a headache. So I bought a house in Carmel, yay yardwork...Now my office is near the Party Time rental..Yikes! But Why add all these apartments when the ones now cannot be filled?
              • Response to Rob
                Rob, evidently you've never been to a plan commission meeting? You might want to try it.
              • Wrong
                Actually, schools aren't primarily financed by property tax anymore and apartments in Carmel are attracting college educated empty nesters and young professionals who don't yet have children. Academic studies show that apartments such as the ones at city center provide multiple times the revenue AND less expense than single family homes. That is why he schools in Carmel have always supported the city's redevelopment: it is financially good for the schools.
              • Wrong again
                The poster who wrote that the apartments being built have vacancies is not in touch with reality. All of the new apartments in the Carmel city center and arts and design district are filled and have waiting lists. Cities always have expense when development occurs but much less so in a redevelopment area versus a greenfield site. My houses' property taxes have decreased by almost half, when taking inflation into account since Brainard took office.
              • No bailout
                The political campaign that keeps trying to present the redevelopment commissions refinance is a bailout will fail because it just isn't true. A bailout is when cash is handled over. A refinance that lowers the average interest rate by three percent is not a bailout. It appears that the city has at least a million and a half more in annual revenue than its' bond payments. Construction financing is almost always short term and replaced by long term financing in the private sector...why should a growing city be even different. I suspect most financial managers would say Carmel's financial management is fine and a textbook example of how to do it. Remember the city's property tax bond ratings were increased recently; that wouldn't happen if the city was badly managed.
                • Spreading it
                  It's good to see the Mayor's PR firm is hard at work putting out all of the propaganda that we've heard before. But, if the reality of what you've done stinks, I guess he doesn't have any choice but attempting to fool people into believing everything is hunky dory. I mean, attempting to redefine the word "bailout?" That's laughable.
                • Wrong Salt
                  I suggest you must not watched the Bailout Hearings. The only way they were making payments was off of our credit line. They were insolvent. As far as Carmel's Bond Rating had you been paying attention you would have known it was lowered last September due to the impending collapse of the CRC and the need to assess a Special Benefits tax was imminent if there was not a bailout. After the Bailout the rating was again raised, because our council took prudent action and made the difficult choice to bail the Mayor out AGAIN! As far as your definition of a bailout I'm perplexed. We could only pay our bills with credit and our credit rating dropped. We were paying junk bond rates on some of the money the CRC borrowed so saving 3% was largely due to the boneheaded deals made by Da Mayor in exotic financial instruments. I could go on but I'm not out for vengeance I'm really just trying to help. As long as we have citizens parroting lines they've heard without some analysis and critical thinking we will continue to get the Government we seem to deserve.
                  • Reality
                    I did watch the refinance discussion and you need to recognize several points: 1. The Redevelopment commission bailed out the city council by borrowing the money to run the Palladium. That was why they had a temporary cash flow issue. I suspect you knew this but it doesn't fit what you want to believe. 2. Secondly, the city's property tax bond rating was never lowered. 3. The redevelopments commission average short term interest rates at the time of the refinance was slightly over six percent. That is not a junk rate. Don't forget that some of this financing was done at a time when rates where much higher than now and the one nine percent loan was entered into when there was virtually no lending taking place anywhere in the US. I work with lenders and finance and have for years and the redevelopment commission acted prudently at all times. I particularly noted from watching that just not the mayors appointments but the council's appointments always had consensus. I also find it sad that you accuse everyone who doesn't hold your narrow view of the world of being a paid pr firm. You, I am afraid, are terribly out of touch with the vast majority of the community. You can act outraged but this is a fiscally smart community which understands finance and the necessity of improving and tackling these poorer older areas before they become blighted.
                  • facts
                    The entire Carmel Redevelopment Commission refinancing got a low interest rate because it is back with a special benefits tax if enough money is not available to make the payments. Additionally, no principal payments are being made on $115M of the refinance debt until 2025. These facts are all part of public record. IBJ readers are intelligent enough to interrupt whether meets the definition of an bailout. Currently, I am not an elected official or part of any campaign for any office.
                    • Salt-Not so fast....
                      http://www.finanzen.net/nachricht/anleihen/Carmel-City-of-IN-Moody-s-downgrades-to-A2-from-Aa2-the-rating-on-the-City-of-Carmel-s-IN-County-Option-Income-Tax-secured-debt-outstanding-1933052 Check out the link. As far as claiming you worked for a PR firm that wasn't me my friend. Regarding the period when loans were nearly non-existent. Well duh, when your paying your current obligations with a credit card you have to pay the price. I got a 13% mortgage with excellent credit in the 70's so I'm not sure when that might have been that loans weren't available to credit worthy customers. I'll also note that you failed to mention the draconian prepayment penalties we had to agree to to get those loans. Did you read the report by Frost, Brown and Todd? It was a slaughterhouse. They were in shock and made comments to that effect. I seem to remember a comment along the lines of it being a very jumbled mess. As far as my narrow view of the world, I think it is you that need get beyond the Mayor's talking points. I was pro-Brainard, even now live in the city proper, bought into the whole vision and relocated to be closer to the 'action'. Small problem along the way. The Mayor was caught in a web of deceit of his own making. He was snared in a little lie. I believe if a person will lie about the little things you certainly can't trust them on the big things. Unfortunately after a couple of years of activity the worst has been confirmed about the Mayor. He will say what ever you want to hear as long as you back his vision.
                    • Accetturo not being forthcoming
                      John is not explaining that there were taxable and non-taxable bonds refinanced. The taxable bonds average around 4 percent interest and the non-taxable bonds average about 1.5 percent interest. They could have paid off both at the same time but doesn't it make sense to pay off all the four percent interest bonds first? Of course it does because it saves money but John in his obsession to be critical doesn't explain why the mayor and the city council choose to do it that way.
                      • Salt sounds an awful lot like Bruce
                        Salt's comment sounds an awful lot like a poster on Carmel Chatter: SALT: "John is not explaining that there were taxable and non-taxable bonds refinanced. The taxable bonds average around 4 percent interest and the non-taxable bonds average about 1.5 percent interest. They could have paid off both at the same time but doesn't it make sense to pay off all the four percent interest bonds first?" CarmelBruce: "John it gets old having to explain repeatedly to you basics. Once again there are two types of bonds, taxable and tax free. The taxable has a substantial higher interest rate of a little over 3% versus 1.9. For obvious reasons the lower rate is being paid interest only. Additional principal is being paid on the higher rate bonds. Both bonds could be fully amortized if needed."
                        • SALT is CarmelBruce - Duh
                          Just use your same name Bruce, we all know a brown noser when we read it.

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                        1. The east side does have potential...and I have always thought Washington Scare should become an outlet mall. Anyone remember how popular Eastgate was? Well, Indy has no outlet malls, we have to go to Edinburgh for the deep discounts and I don't understand why. Jim is right. We need a few good eastsiders interested in actually making some noise and trying to change the commerce, culture and stereotypes of the East side. Irvington is very progressive and making great strides, why can't the far east side ride on their coat tails to make some changes?

                        2. Boston.com has an article from 2010 where they talk about how Interactions moved to Massachusetts in the year prior. http://www.boston.com/business/technology/innoeco/2010/07/interactions_banks_63_million.html The article includes a link back to that Inside Indiana Business press release I linked to earlier, snarkily noting, "Guess this 2006 plan to create 200-plus new jobs in Indiana didn't exactly work out."

                        3. I live on the east side and I have read all your comments. a local paper just did an article on Washington square mall with just as many comments and concerns. I am not sure if they are still around, but there was an east side coalition with good intentions to do good things on the east side. And there is a facebook post that called my eastside indy with many old members of the eastside who voice concerns about the east side of the city. We need to come together and not just complain and moan, but come up with actual concrete solutions, because what Dal said is very very true- the eastside could be a goldmine in the right hands. But if anyone is going damn, and change things, it is us eastside residents

                        4. Please go back re-read your economics text book and the fine print on the February 2014 CBO report. A minimum wage increase has never resulted in a net job loss...

                        5. The GOP at the Statehouse is more interested in PR to keep their majority, than using it to get anything good actually done. The State continues its downward spiral.

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