A city plan to spend up to $26 million to acquire the new Broad Ripple Park Family Center will have to wait another week to be considered by a City-County Council committee.
The Metropolitan & Economic Development Committee on Monday voted to postpone its consideration of the measure—which would allow bonds to be sold for the purchase of the facility—until Nov. 28, in order to give Hogsett administration officials more time to confer with neighborhood leaders about how debt for the project would be serviced long-term.
The move follows pushback by several neighborhood groups on the north side who expressed concern about the city’s plan, which could rely heavily on the Midtown tax-increment financing district to repay the bonds issued for the acquisition.
The $19.7 million family center at 1426 Broad Ripple Ave. opened in January after nearly two years of construction. It was developed through a partnership between Indy Parks and BR Health Holdings LLC, a holding company comprising Community Health Network and Indianapolis-based Avenue Development.
The city since 2021 has said it planned to purchase the 40,000-square-foot building within a year of the facility’s opening in order to take full control of the property and avoid shelling out nearly $1 million per year as part of a long-term lease agreement with BR Health.
The bonds, which would be issued through the Indianapolis Local Public Improvement Bond Bank, would be paid back over nearly 20 years and carry an interest rate of up to 8%.
The city has not revealed the agreed-upon price for buying the family center, but it’s believed to be less than $26 million. The balance would help establish a reserve fund, pay financing costs and some interest on the bond debt.
The council on Nov. 13 introduced the measure, which received approval from the city’s Metropolitan Development Commission on Wednesday. The council committee now is expected to weigh in with its recommendation next Tuesday, before the measure is considered by the full City-County Council.
A still-undefined portion of the debt is expected to be covered by revenue generated through the Midtown tax-increment financing district created in 2014 to incentivize private development in five neighborhoods: Broad Ripple, Butler Tarkington, Mapleton-Fall Creek, Meridian Kessler and Midtown.
Neighborhood organizations have said while they generally support the city owning the property, they’re opposed to the potential depletion of the Midtown TIF to fund the purchase.
Michael McKillip, executive director of Midtown Indy, said the postponement was welcome news, after the city contacted neighborhood leaders last week to begin discussing the matter and address concerns.
“The fact this was scheduled for today, we knew it was going to take some time, so we were hopeful that sponsors could agree to a continuance to see if this would be a fruitful conversation or not,” he said on Monday.
McKillip said Joe Glass, executive director of the bond bank, has committed to providing analyses that illustrate the short- and long-term impacts on the Midtown TIF.
But he also said residents remain skeptical of the repayment structure for the bonds, particularly as the neighborhoods continue pushing for more development elsewhere, such as an apartment project at 46th Street and College Avenue, affordable housing along 38th Street, grocery stores throughout the area and long-standing infrastructure improvements.
The TIF was first used to finance The Coil apartments, 6349 N. College Ave., which were completed in 2017, and has been used on multiple other Broad Ripple developments since then, including the EightEleven Group headquarters and River House apartments.
The TIF has also previously been used for smaller projects related to public spaces, including $1 million in improvements for Tarkington Park.
The city isn’t expected to only use funds from the TIF district to repay the bonds. The debt also would be paid in part by facility-generated revenue and other parks department revenue.
Rental payments from Community Health, which has a 25-year lease to operate a health clinic in the building, would also be applied to the debt service. Community is paying $493,350 in rent this year and will pay $412,500 next year, with lease payments increasing by 2% each year after 2024.
“Regardless of what that analysis says, extracting [millions] out of the TIF will have a substantial impact on the availability of funds for other things, including what we have shared with the city in a list of intermediate and long-term plans and projects in the pipeline that could be negatively affected by this action,” McKillip said.
In written comments, a spokesperson for the city of Indianapolis said the proposal is “the fiscally responsible way” to acquire the family center.
“We remain focused on securing this community asset in a way that ensures equitable access to parks and parks services for all Indianapolis residents, and we look forward to presenting next Tuesday,” the spokesperson said.
Under its current deal with BR Health, Indy Parks agreed to lease at least 25,000 square feet in the family center for 30 years, with the option to buy the building. While rent was waived for the first year, the department will be required to pay $79,900 per month in rent—$958,800 per year—as well as contribute funds toward maintenance and upkeep of the property.
The price tag for the purchase of the building was established in the lease agreement between the parties, with the cost increasing by $1 million per year if the city fails to close on the acquisition by Jan. 3.
The family center was initially proposed as part of a $70 million master renovation plan for the park approved in 2018, replacing a 11,000-square-foot facility that Indy Parks officials argued was too small to meet the growing demand for space.
In addition to health clinic uses, the two-level facility houses a gymnasium, group meeting space, a children’s play area, a two- or three-lane running track, administrative areas, and a multipurpose room.
“I think there is fruitful ground for compromise if the city has a way to find other funds to achieve these community goals,” McKillip said. “But I think we do find it frustrating that this is happening in such a rush when the city’s obligation with regard to the Family Center has been a known quantity for nearly four years. We’ve got a lot of work to do.”