City secures $24M loan from state for ‘confidential’ downtown project

(IBJ photo/Mickey Shuey)

The city of Indianapolis is borrowing more than $24 million from the state to shore up a development agreement for a so-far confidential downtown development project.

The loan, which was approved by the city’s Metropolitan Development Commission on Sept. 6, is expected to be used for “downtown redevelopment efforts,” a spokesperson for the city’s Department of Metropolitan Development told IBJ.

But the city, citing confidentiality concerns, declined to share specifics of the arrangement, including how the $24.4 million loan will be used or its repayment terms.

“The partnership between the city and IEDC plays a critical role in downtown redevelopment efforts,” Hannah Thomas, director of communications for DMD, said in an emailed statement. “The resolution approved by the Metropolitan Development Commission continues that long history of collaboration for the next transformative downtown project. Due to the confidential nature of the project, we cannot offer more specificity at this time.”

The MDC is an independent board that oversees planning, zoning and financial incentive matters for projects across the city.

The commission’s resolution, authored by DMD staff, noted Indianapolis plans to use the loan to “provide funding for the acquisition and improvement of real property in order to facilitate redevelopment of an area in need of redevelopment” in the city’s consolidated allocation area.

That area’s boundary encompasses areas including the former General Motors stamping plant site (a portion of which is now being redeveloped by Elanco Animal Health Inc., with the rest controlled by the state), as well as the western portion of Monument Circle and most of downtown south of Washington Street, including Circle Centre Mall and the Indiana Convention Center.

The consolidated TIF also includes the Indianapolis Downtown Heliport, Jail I, a portion of Bottleworks and 16 Tech, among other prominent sites in the central business district. Developer Ersal Ozdemir’s Eleven Park project is not part of the allocation area.

The resolution said the city will use proceeds generated in the proposed redevelopment area to repay the IEDC’s loan. In most cases, such a approach is reflective of a tax-increment financing district, which relies on a portion of the new property tax value created by improvements to a site to pay back certain bonds or other debt obligations.

The IEDC has declined to share many details of the loan agreement, other than to say it is a short-term arrangement with specific repayment requirements. It also confirmed the board’s regional economic development committee approved the loan on Aug. 21 and the funds will be dispersed to the city by the end of the month.

The IEDC also declined to share a copy of the agreement with IBJ and said a copy would be placed in the state’s transparency portal when the document was finalized. As of late Monday night, no such document had been uploaded.

Mark Wasky, senior vice president of community development for IEDC, said the loan “will help advance critical downtown redevelopment efforts,” but did not offer any specificity.

“We have a strong economic development partnership with the city of Indianapolis and are consistently working together on various projects to benefit central Indiana,” he said.