Developer seeks tax break for $11M medical office building in Fishers

May 19, 2014
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Indianapolis-based Cornerstone Cos. Inc. is working on plans for an $11 million medical office building near St. Vincent and IU Health hospitals in Fishers.

The developer—which builds, leases and manages health-care properties—is targeting a 4-acre site on Olivia Way, off Interstate 69’s Exit 210. Preliminary plans call for a three-story, 43,000-square-foot facility largely owned by the doctors who practice there.

A partnership dubbed Deer Creek Point MOB LLC would own and operate the speculative medical building, which would be funded through the sale of “membership units” to participating physicians, according to a project summary provided to Fishers Town Council ahead of its Monday meeting.

Cornerstone principals Bob Whitacre and Tag Birge also would purchase an interest in the company and act as its managers, the summary said.

"It's a great area with visibility, demographics and rooftops being built nearby," Birge said.

The proposed project represents an $11 million investment that is expected to create 30 jobs within six years, Deer Creek Point said in a request for a property-tax abatement filed with the town. The new positions would pay an estimated $45,000 a year.

Half the jobs are expected to be created within three years, and the other half in the following three years.

Town staff recommends the council approve the incentives to land the project, which will “diversify the business mix in the area and create a higher taxable use for this parcel,” Tim Gropp, assistant director of economic development, wrote in the summary.

Aside from the two hospitals, nearby development so far has been largely retail. In the long term, a medical office building would produce more taxes than a retail building, Gropp told the council.

Council members are weighing whether to declare the parcel an economic revitalization area, the first step in qualifying the project for a tax abatement. If final approval comes next month, the town would forgive two-thirds of property taxes for six years.

Construction could begin this summer, Birge said.

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  • Hand...Out
    I don't have a dog in this fight, but doesn't it seem ridiculous that the first item on the developers agenda is tax abatement. Competing for new business is certainly a reality now, but this is different. If I was HamCo, I'd tell them to please put your medical building in a much more convenient place - like Anderson. Location, location, location.
  • Not needed
    Didn't Fishers pass a rule that churches and such could not build along I69 because they do not generate tax revenue - but....the first business that wants to build, asks to have their taxes removed. Hmmm, that doesn't seem right. I'm sure Fishers will say the jobs is what matters - if that was the case, then say that in the reason you wanted to ban churches!!
    • Tax-exempt
      Fishers does indeed have zoning rules prohibiting tax-exempt entities from locating along I-69, but it ends south of Exit 210. The request is for a partial six-year abatement, so some taxes would be paid during that six years and then the full amount would be due after that. Tax-exempt entities like churches would never pay taxes.
    • No more free money
      We live in the area and the article points to IU Health. There is rumbles that IU Health Saxony might close the ER due to low census. A speculative building is not needed. I am sure IU Health has space. The city should mandate a 90% lease commitment before the tax abatement is approved.
    • More revenue
      I would hope that anyone who truly cares about Fisher, and keeping it a thriving community, would realize that the 3% property tax on an estimated $11 million will bring $330,000 in new tax revenues to Fishers each year. While the first 6 years will see a reduced amount, that property will still generate more than a residential location at only 1%. The addition of 30 jobs at an average salary of $45,000 will also bring payroll taxes and wages to Hamilton county which will benefit everyone. Fishers can not survive as only a residential City, the infrastructure and schools need a healthy commercial tax base to continue to fund them. It may seem like we are giving away money to greedy developers, but they are not making money off of reduced taxes; it is intended to help the new businesses that have to invest in equipment and other business expenses in the first few years of operation to get off the ground.

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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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