We were glad to see the City-County Council on Sept. 9 approve proposals awarding nearly $10 million in incentives to a Denver-based developer planning a $66 million apartment project at 431 N. Pennsylvania St., across from the Indiana War Memorial.
We’re glad it passed, but we’re also glad there was so much hand-wringing leading up to the vote. It’s a reflection of the increased scrutiny incentive deals are getting from government and economic development officials across Indianapolis—a long overdue shift in mindset.
The apartment project is the kind of proposal for which incentives are justified. Developers have been seeking a new use for the site, which was home to the 14-story Essex Hotel before its demolition in 1994, for a quarter century. If market forces alone could have supported a high-quality project on the high-profile site, it would have happened by now.
Charles Street Investment Partners’ project is indeed high-quality. The firm plans to build a visually appealing, 11-story structure with 213 apartments and 27,400 square feet of office and retail space.
The Sept. 9 vote—20-5—wasn’t close, but the Metropolitan and Economic Development Committee votes leading up to it certainly were. On July 23, the committee deadlocked 5-5. When it considered the matter again on Aug. 27, Democrat David Ray, who’d been absent in July, gave it the support needed to pass 6-5.
The site has been used for parking since the Essex came down, despite the existence of a city zoning rule barring surface parking lots adjacent to the World War Memorial and American Legion Mall along Meridian and Pennsylvania streets.
The proposals approved by the council will result in the creation of a tax-increment financing district on the site and the issuance of $9.8 million in developer-backed bonds. To retire the debt, Charles Street will receive 80% of the increase in property tax revenue the project generates over the next 25 years.
The development is projected to generate $159,650 in additional tax revenue per year, more than eight times what it now produces.
While we support incentives for this project, we welcome the mindset espoused by Democrat Zach Adamson, the council’s vice president, who said in July, “With all the needs we have in this city, it’s harder and harder for the council to embrace [these] kinds of things.”
We wish other incentive deals had fostered such vigorous debate, such as the council’s decision last year to provide $2.9 million in TIF financing for Duke Realty Corp.’s new $28 million headquarters in Keystone at the Crossing—an area of the city that’s already a magnet for development.
And we’re especially pleased that the city’s economic development agency, Develop Indy, is putting the new philosophy into policy. Develop Indy announced in July that starting July 1, 2020, companies must pay at least $18 an hour to be eligible for tax abatements and training grants.•
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