Carmel council to weigh issuing $125 million in bonds for city projects

The Carmel City Council on Monday will begin consideration of $125 million in new bonds to finance a police headquarters expansion, road improvements and other redevelopment projects.

Council members Bruce Kimball, Kevin Rider and Jeff Worrell have co-sponsored Mayor Jim Brainard’s requests to finance a potential $40 million Carmel Police Department headquarters expansion, a $60 million series of road projects and $25 million for undefined redevelopment projects throughout the city.

Monday’s meeting will take place in person at 6 p.m. at Carmel’s City Hall, 1 Civic Square. The meeting will also be broadcast on local access television and live-streamed through the city’s website.

The proposals will be introduced Monday night and then sent to the council’s finance committee for further study and additional input, Worrell said.

If approved, the first $32 million bond proposal will allow the newly formed Carmel Municipal Facilities Building Corporation to acquire the Huntington Bank property at 998 S. Rangeline Road for the future expansion of the adjacent Carmel Police Department headquarters.

Until earlier this year, the city’s court was been housed in the nearby City Hall. The city is currently leasing separate courtroom space until it can move those operations into the expanded police headquarters at 3 Civic Square.

The building corporation will own the facility and lease it to the city for the life of that $32 million bond. The city’s lease payments will match the bond’s debt service payments and will be payable from a pledge of the city’s local income tax. If those funds are insufficient, the city will draw from property taxes as a back-up.

Council member Bruce Kimball said the facility needs to be expanded to keep up with the city’s growth.

“We’ve been promising this to our police people for a number of years,” he said. “It’s long overdue.”

According to city records, another $8 million bond may be issued to complete that project’s expansion and “fund other redevelopment and economic development projects in the city.” The city plans to pay for that bond using local income tax distributions, with a backup pledge of property taxes.

Worrell said the city used “some general estimates” to project a $40 million price tag for the project, although he acknowledged those aren’t always accurate.

Councilors also will consider issuing $60 million in lease-rental bonds for road projects, including improvements to 3rd Avenue, between Main Street and Carmel Drive; Smokey Row Road, between Old Meridian and Rangeline; and College Avenue, between 106th Street and 96th Street. The bond would also fund intersection improvements at 106th and Westfield Boulevard, as well as improvements to the intersection of 96th Street, 106th Street and College Avenue.

According to the ordinance, that money may also be used to complete previously unfinished road projects started with funding from a 2016 bond.

If approved, the Carmel Redevelopment Authority will issue the bonds and lease those road improvements to the Carmel Redevelopment Commission. The redevelopment commission’s lease payments are expected to match the bond debt service payments and will be payable from a special benefits property tax levy on all taxpayers in the city.

An executive summary from Brainard said the financing structure is functionally equivalent to a general obligation property tax pledge, and the new debt levy will not raise the city’s total tax rate.

Finally, various redevelopment projects throughout the city may receive some assistance from a proposed $25 million tax increment finance bond issuance.

The city council’s agenda packet did not list those specific projects, but said the money will pay for the “construction, renovation, improvement and equipping of various redevelopment and economic development projects throughout the City including but not limited to land acquisition, site preparation, other on-site improvements, road and utility infrastructure improvements, utility relocation, parking facilities and other local public improvements.”

The mayor’s executive statement indicates Chicago-based accounting firm Baker Tilly found the city’s TIF revenues would cover a $25 million bond’s debt.

Worrell said he has no interest in supporting that request due to its lack of specificity.

“This is a pot of money to be used in the future which, during these times in the middle of a pandemic, makes me very uncomfortable,” Worrell said. “It may be in somebody’s head, but it hasn’t been shared with me. Without any details, plans or strategy, I couldn’t support it.

Please enable JavaScript to view this content.

Editor's note: You can comment on IBJ stories by signing in to your IBJ account. If you have not registered, please sign up for a free account now. Please note our updated comment policy that will govern how comments are moderated.

{{ articles_remaining }}
Free {{ article_text }} Remaining
{{ articles_remaining }}
Free {{ article_text }} Remaining Article limit resets in {{ count_down }} days.