A $100 million proposal to reinvent an old industrial area in downtown Carmel hit a snag Tuesday when a City Council committee decided not to pursue a state tax credit that could help fund the project.
Developer Pedcor Cos. is working on plans for the so-called Midtown site, located between the Monon Trail and 3rd Avenue SW near a city water tower. Details have yet to take shape, but CEO Bruce Cordingley said the project likely will include a mix of upscale housing and offices.
But committee members balked at backing the venture, saying Carmel simply cannot afford to support additional development.
“Maintenance and ongoing care of the rest of the city has been ignored to a certain extent so we can put up pretty buildings,” said Eric Seidensticker, who chairs the council’s Land Use, Annexation and Economic Development Committee. He cited repeated flooding problems and roads in need of repaving. “Why don’t we focus our financial energy on our existing assets?”
Pedcor isn’t requesting financial assistance—yet. The Carmel-based developer, which has worked with the city on several downtown projects, only asked the council for permission to jointly apply for an industrial recovery tax credit.
After peppering Cordingley and a city attorney with questions about whether such an application would commit Carmel to the project, the land use panel voted 3-1 to recommend the council deny Pedcor’s request. Seidensticker said the seven-member city council is likely to accept the decision.
Councilor Kevin “Woody” Rider, who cast the lone vote in favor of the tax-credit application, said he fails to see a downside to participating in project planning.
“All we are committed to is a discussion,” he said. “Then we can decide if the project scope makes sense for the city. … We can complicate this if we want to, but that’s all it does.”
Cordingley said securing the $25 million tax credit would help Pedcor line up a private investor, but he admitted the project also likely would need tax-increment financing to ensure it meets the high architectural standards set by earlier downtown redevelopment.
“Could we do the project without TIF? Yes,” he told the committee. “We don’t want to.”
And that’s the problem.
The city late last year agreed to take on $184 million in debt incurred by the Carmel Redevelopment Commission when it was in danger of running short of TIF revenue to pay its bills. As part of the deal, the City Council gained oversight of future CRC expenditures.
Finance Committee leader Luci Snyder, who also serves on the land use panel, is keeping a firm hand on the checkbook, saying she would like the city to pay down the debt before incurring more. A majority of council members agree, Seidensticker said.
“Right now, we are spread pretty thin financially and have a large number of obligations,” he said. “We’ve invested lot of taxpayer money in infrastructure, design and development [downtown]. … At some point in time, if we have done our job right, developers should want to come in.”
Pedcor also has a stake in the city’s redevelopment, Cordingley said, citing its involvement in Carmel City Center and the Indiana Design Center, among other projects.
He said remaking Midtown—where the city also owns property—would benefit the community by eliminating an eyesore in the shuttered Woods Wire manufacturing facility and providing a crucial connection between Main Street and City Center.
“We believe it is in our mutual best interests,” Cordingley said.
Pedcor may apply for the tax credit on its own, he said, but city support would improve its chances.