The Indianapolis City-County Council on Monday night approved nearly $10 million in financial incentives for a Denver-based developer that is planning a $66 million, mixed-use downtown project across the street from the Indiana War Memorial.
The council voted 20-5 to approve the incentives for the unnamed 13-story development at 421 N. Pennsylvania St., clearing the path for Charles Street Investment Partners to receive a $9.8 million, developer-backed tax-increment financing bond to supplement the project.
The 25-year bond would be paid back with 80% of the TIF funds generated by the development, with 20% going back to the city.
The vote was among the few remaining bureaucratic hurdles for the project. The council also voted 20-5 to approve an allocation area that must still receive final approval from the city’s Metropolitan Development Commission, but no additional steps are required for the incentives.
Charles Street’s project is expected to have have 213 studio, one-bedroom, two-bedroom and live-work apartment units, along with about 8,800 square feet of first-floor retail space. The project also calls for 18,600 square feet of office space and a 214-space parking garage throughout the first four floors.
Part of the building would be terraced, creating a pool and recreation area above the fifth floor and green space on the roofs of other floors.
Twenty percent of the units—42 total—will be available for workforce housing dedicated to residents earning 80% of the area’s median income as determined by the Department of Housing and Urban Development. The rents would be $200 to $1,000 below the cost paid by those making the area’s median income. Charles Street has committed to maintain those rates for at least 25 years.
The firm also plans to make a public arts contribution of $98,520, which won’t be paid by the bonds.
The council’s approval follows a 6-5 vote three weeks ago by the its Metropolitan and Economic Development Committee, moving the project to the full panel. An earlier vote, in July, yielded a stalemate.
A handful of councilors previously expressed concerns over the project’s affordability to residents and the decision to incentivize TIF projects. Those concerns continued at Monday’s meeting, with several councilors continuing to oppose the incentives.
Councilors Zach Adamson, Keisha Jackson, Janice McHenry, Leroy Robinson and Jefferson Shreve cast the only votes against the project.
“My reservation with the project is from a policy standpoint,” said Shreve. “We’ve got to make good bets on where we’re going to allocate and source public funding.”
He said he was concerned that the incentives would mean taxpayers surrounding the project would have to foot part of the bill.
The tax assessment for the completed project would be about $39 million, meaning about $800,000 in taxes would be collected annually from the site. That would be split 80-20 between the developer and the city over 25 years.
The site would generate about $159,650 in additional tax revenue per year for the city, more than eight times the $17,000 it brings in annually as a parking lot.
Charles Street’s project has been in the works since 2017, but has faced a series of hurdles, including concerns from neighbors in a building directly north who said they were worried about sight lines associated with the development.
“It’s been a long process … we’ve been working on this for nearly two years at this point,” said Chuck Howell, vice president of construction and asset management for Charles Street. “This is obviously a big night and we’re certainly looking forward to getting under construction and getting the project built.”
The original plan called for $15 million development with seven stories, 160 apartments, 2,200 square feet of retail space and 157 parking spaces. That design was updated in late 2018 to include 209 units and an increased parking count across 11 stories.
The property has long been used as a 165-space parking lot by Cincinnati-based Chavez Properties, after the company razed the Essex Hotel in 1994 with plans to redevelop the site. Charles Street bought the property in late 2017.
There were plans in the early part of the century to develop the property into a high-rise condo complex, but that deal fell through in 2004.