Trustee eyes $9M development

February 12, 2008
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AthenaeumPlans are taking shape for a $9-million, four-story building that would replace a one-story, township-owned structure at 875 Mass Ave. Center Township Trustee Carl Drummer plans to lease the property to Riley Area Development Corp., which wants to build a basement community center, 25,000 square feet of first-floor retail space and 75 mostly low-income apartments on the upper levels. Bill Gray, Riley's executive director, hopes to finish the project by March 2010. Indianapolis-based Monument Properties also is working on the development. A new YMCA facility behind the project is another possibility, Drummer said. The YMCA is located a few blocks away, at the Athenaeum (shown here). The plans were revealed this week in an IBJ story by Peter Schnitzler. What do you think?
  • As a users of the downtown YMCA, I would LOVE for a new/updated facility.

    Beyond that, I am all for affordable housing, but it would be nice to just have apartments on Mass Ave that were market price. There is already a Section 42 property in the Davlan.
  • Downtown is already home to a number of low-income housing developments.

    Packing the poor into buildings or neighborhoods with only other poor people is a known failed strategy - unless your strategy is to segregate the poor.

    A better bet: affordable and low income housing spread across the city, not packed into select neighborhoods.

    Another better bet: Buildings with a mix of market rate apartments and low income/subsidized housing so that you don't end up with just a public housing project, which is what this sounds like. (In fairness, according the article, only 62 of the apartments are low income, but that's still too high a percentage).

    The best bet is a mix of both approaches. I think there's certainly room for subsidized housing on Mass Ave, but this doesn't sound like the best development on its surface.
  • I agree with the previous comments. Downtown really needs just plain market price apartments for us average people. There are choices by I.U.P.U.I., or the old north side, but few in the mass ave and core of downtown areas. But over all its good see surface lots and single story buildings being replaced with higher density structures. One more thing are there any renderings available yet?
  • Urbanophile, with all due respect (b/c I read and love your blog), I think you might have missed some important aspects of this project. First, looking at some of the parties involved (Riley Area Dev. Corp. and the Center Township Trustee), this is a project is in furtherance of the two entities purposes which is important when dealing with CDC and a governmental entity whose primary purpose is poor relief. Second, having affordable housing in an area that is developing like mass ave will be nice for people that have limited means but don't want to live in the ghetto. This also would fit within your second point because this is a very economically diverse area. Third, it would appear that this is a continuation of successful previous developments that Riley Area has done like the Davlan and the Rink/Savoy.

    To me this sounds like a mix use development that would be a nice addition to the area and would help diversify the landscape of an increasingly gentrified area.
  • Bryan: No renderings yet, unfortunately.
  • I was eating lunch at R Bistro a couple weeks ago lamenting the lack of foot traffic on that end of Mass Ave. My wife asked me what should be done to help the area. First thing was obviously redeveloping the bus garage/Coke plant. But the second thing I said was rip out that one-story eyesore across the street and put in some apartments with a Starbucks on the first floor.

    One down, one to go.
  • I'm certainly ok with low income housing on this location. The problem is putting a large 75 unit building that is almost entirely low income. That's bad for them and bad for the community. Better to have a mix of say 2/3 market rate, 1/3 subsidized. That would put about 25 subsidized low income units in the building, still a substantial net add for the area.

    Didn't we learn anything from the failures of public housing projects that packing poor people into high density projects is a bad idea?
  • I'm glad to see an empty parking lot and one story building go.
    I do think it should be more average income with some extra low income housing. Like said before, packing a lot of low income people into one building doesn't seem very nice. Mix it up a bit. ;)
    I'd like to see retail in that area too.
  • Alas, the scoring system for Low Income Housing Tax Credit (LIHTC) deals is weighted to favor developments with half or more of their units provided to people below 60% of area median income. That is to say, tax credit deals are competitive and complex, and the better score (i.e. the fewer market rate units in the mix), the more likely the development is to be awarded credits. Then the development must keep its affordable units available for 15 years.

    For reference, AMI for a two-person household in Indy is about $52,000.
  • I wonder when people will realize the difference between past public housing projects and mixed income developments. Public housing mistakes of the past were due to concentrations of very low income. Mixed income is a different story.

    Additionally, without the tax credits this development would probably not occur at all. Even Mass Ave. can only hold so many $1000 and up a month apartments. That's where true market rate apartments start.

    In 20 years, no one will care how it was financed - focus more attention on what they are building - not how they are financing it.
  • MM, I agree with part of what you said: the building should be scrutinized because it will still be here in 20, 30, 50 years regardless of how it's financed.

    One of the lessons learned about warehousing low-income or no-income people in projects doesn't work. My point was that a higher proportion of near-market rents in a development is a better thing.

    There is also a need for on-site active management and control of properties. There are entities that are better at this than others, and the operator's credentials and history should be examined and questioned for any new project.
  • Not enough coffee. The second sentence should have read people in projects IS THAT it doesn't work.
  • Oh, another low-income subsidized apartment? Is Rink-Savoy not enough?! To live downtown, you have two choices - you have to be in a low income or high income bracket. No in between.

    Too much low-income concentration downtown will drive the other residents out of downtown. What a vicious cycle!
  • Sell the property and get it back on the tax rolls.
  • Couldn't they sell the property to a private developer with a clause in the purchase agreement that the developer would receive a 5-year tax abatement if the property were of a certain density? That way, it's money to fund police and fire services in the area, future tax growth to lower the temptation to increase overall rates, and allows the government to subtly suggest the kind of development that they want to see, without using governmental coercion to get it done. Seems like a better deal.

    Plus, I definitely agree with Urbanophile here, concentration of low-income people is unfair, unjust, and unsuccessful. If having housing options for low-income people is a desire for the developer, build a mix of units that can bring a profitable rent at different levels and allow anyone who wishes to purchase any of the units to do so.
  • Isn't that also where the Rathskeller is at? What would happen to it?
  • Kathy, I think the picture at the beginning of the article is throwing you off, as it did me. The propery in question is way out on the east end of Mass. The building that is to be torn down does not fit in the area, this would be a great development for that end of Mass. The above picture is what you say it is and also now is the home to the downtown YMCA...this building won't be affected.

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  1. Apologies for the wall of text. I promise I had this nicely formatted in paragraphs in Notepad before pasting here.

  2. I believe that is incorrect Sir, the people's tax-dollars are NOT paying for the companies investment. Without the tax-break the company would be paying an ADDITIONAL $11.1 million in taxes ON TOP of their $22.5 Million investment (Building + IT), for a total of $33.6M or a 50% tax rate. Also, the article does not specify what the total taxes were BEFORE the break. Usually such a corporate tax-break is a 'discount' not a 100% wavier of tax obligations. For sake of example lets say the original taxes added up to $30M over 10 years. $12.5M, New Building $10.0M, IT infrastructure $30.0M, Total Taxes (Example Number) == $52.5M ININ's Cost - $1.8M /10 years, Tax Break (Building) - $0.75M /10 years, Tax Break (IT Infrastructure) - $8.6M /2 years, Tax Breaks (against Hiring Commitment: 430 new jobs /2 years) == 11.5M Possible tax breaks. ININ TOTAL COST: $41M Even if you assume a 100% break, change the '30.0M' to '11.5M' and you can see the Company will be paying a minimum of $22.5, out-of-pocket for their capital-investment - NOT the tax-payers. Also note, much of this money is being spent locally in Indiana and it is creating 430 jobs in your city. I admit I'm a little unclear which tax-breaks are allocated to exactly which expenses. Clearly this is all oversimplified but I think we have both made our points! :) Sorry for the long post.

  3. Clearly, there is a lack of a basic understanding of economics. It is not up to the company to decide what to pay its workers. If companies were able to decide how much to pay their workers then why wouldn't they pay everyone minimum wage? Why choose to pay $10 or $14 when they could pay $7? The answer is that companies DO NOT decide how much to pay workers. It is the market that dictates what a worker is worth and how much they should get paid. If Lowe's chooses to pay a call center worker $7 an hour it will not be able to hire anyone for the job, because all those people will work for someone else paying the market rate of $10-$14 an hour. This forces Lowes to pay its workers that much. Not because it wants to pay them that much out of the goodness of their heart, but because it has to pay them that much in order to stay competitive and attract good workers.

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  5. It is sad to see these races not have a full attendance. The Indy Car races are so much more exciting than Nascar. It seems to me the commenters here are still a little upset with Tony George from a move he made 20 years ago. It was his decision to make, not yours. He lost his position over it. But I believe the problem in all pro sports is the escalating price of admission. In todays economy, people have to pay much more for food and gas. The average fan cannot attend many events anymore. It's gotten priced out of most peoples budgets.