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Carmel OKs $20M bond for City Center garage, public space

December 15, 2014

A divided Carmel City Council on Monday approved a $20 million bond issue to build a parking garage and other infrastructure at Carmel City Center, clearing the way for the final phase of construction at the ambitious mixed-use project.

Even opponents say the 620-space Park East garage is needed to address an existing parking shortage and support the 575,000 square feet of retail, residential and office space developer Pedcor Cos. is planning to add at City Center in the next five years.

But the council was at odds over the financing plan: debt to be repaid with new property taxes and secured by a special-benefits tax that could be levied on all property owners in the city—if an unusual array of financial guarantees from Pedcor fails to provide the expected protection.

Councilor Rick Sharp said he's fine with using tax-increment financing revenue for the project, but wasn’t satisfied with the corporate pledge to cover any revenue shortfall.

Sharp said he asked Pedcor CEO Bruce Cordingley and other principals to sign personal, irrevocable guarantees obligating themselves (and their spouses) to repay the debt, but Cordingley declined.

It may have been an unreasonable request, he admitted, but “I decline to put taxpayers at risk for this project.”

Outgoing council President Eric Seidensticker also questioned the public investment in the garage, which the city will own. Other business owners are responsible for their own parking facilities, he said, and they pay property taxes to boot.

Carmel already has a number of “really expensive parking spaces” in the existing City Center garage, he said.

“The taxpayers got the short end of the stick,” he said.

Councilor Carol Schleif agrees that the garage should be a private enterprise, but the trained architect is more concerned about ensuring the development will include plenty of public open space.

“I’m not against City Center, but I don’t feel the urgency that’s being put on us,” she said, recommending that the final phase of construction be delayed to rethink the design. “We can do better.”

Sharp went even further, saying the existing City Center complex fails to live up to the “vibrant and exciting” concepts Pedcor laid out for the 88-acre project a decade ago.

“I don’t see that we’re getting the grand heart of the city that we had envisioned back then,” he said.

As IBJ reported last week, the swing vote belonged to Luci Snyder, who chairs the council’s finance committee. She agreed to support the project after getting Pedcor to provide a written commitment to include a four-story garage with at least 620 spaces.

She and Schleif also worked with Pedcor and Carmel Redevelopment Commission chief Corrie Meyer for months to revise the site plan to improve vistas and create more open space.

Councilors Sue Finkam, Ron Carter and Kevin “Woody” Rider, allies of Mayor Jim Brainard who tend to vote as a bloc, joined Snyder in the majority.

Finishing City Center has been priority for Brainard, who advocates dense development as a more sustainable alternative to suburban sprawl.

Rider voted despite concerns raised by the Indianapolis Star about a potential conflict of interest: He owns 51 percent of City Center restaurant tenant Divvy, and his partners in the venture are three Pedcor executives.

The Star consulted two ethics experts who said Rider's connection to Pedcor may be an ethical issue, but it's not a legal conflict because he won’t receive any of the bond proceeds.

Rider said he obtained favorable opinions from three attorneys—including one who helped write the state law—but the legal minds all failed to recognize an even more basic fact: Pedcor won’t get a dime from the bonds, either.

The public money will be used to pay for public improvements, he said, and the funds will go to whatever contractors win the jobs in a competitive process. (Pedcor does not plan to bid.)

And then there’s the fact that the property tax revenue wouldn’t exist in the first place without Pedcor’s planned $80 million to $100 million investment in the City Center expansion.

Sure, businesses at City Center—including Divvy—stand to benefit from the increased activity expected to come along with more buildings and added parking, he acknowledged, but that’s the point of creating a dense, walkable downtown.

“Any business in the city could benefit from what we’re trying to do here,” said Rider, who also owns Woody’s Library Restaurant, located on Main Street in Carmel’s Arts & Design District since before the district existed.

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