Owners of properties in downtown’s core are one step closer to paying a fee for beautification and public safety efforts beginning in 2025 after a City-County Council committee on Monday advanced a proposal creating an economic enhancement district in the Mile Square.
The City-County Council Metropolitan and Economic Development Committee heard testimony from over a dozen downtown residents and representatives of prominent companies before passing the proposal, 8-3. The full 25-member council will hear and vote on the proposal at its Dec. 4 meeting.
Those who spoke Monday evening were mostly in favor of the district. They spanned from homelessness service providers like Chelsea Haring-Cozzi, executive director of the Coalition for Homelessness Intervention and Prevention, to large corporate residents such as Salesforce and Elanco Animal Health.
Councilor Kristin Jones, a Democrat who represents downtown’s District 16, told the committee that the proposal would fund solutions to the challenges her constituents are most concerned about.
“I spent a lot of time in Zoom boxes with shareholder meetings, stakeholder meetings assessing the needs and the challenges of downtown,” Jones said. “And ironically, it was almost everything that’s in this packet.”
Under the proposal, owners of single-family, residential parcels would pay an annual $250 flat fee, while other properties would have a fee rate of 0.1681% of assessed value. For instance, owners of non-residential properties and apartment buildings with a gross assessed value of $1 million would pay $1,681 toward the district, while a property valued at $25 million would pay $42,025.
The fee is expected to generate about $5.5 million per year. The proposed $5.5 million annual budget for the enhancement district would provide:
- $1.025 million for public safety efforts, like B-link camera grants and safety patrols;
- $570,000 for homelessness outreach, including increasing pay for a housing navigator and hours for IMPD’s Homeless Unit;
- $2.04 million for cleaning services, including hiring an additional supervisor and additional cleaning ambassadors for daily cleaning;
- $365,000 for administrative costs;
- $1.5 million in support for the operation of a low-barrier homeless shelter and planned housing hub.
The city already has been funding services similar to those proposed for the district via $3.7 million in funds provided by the federal American Rescue Plan Act. The funds allowed for the creation of an 18-month pilot program operated by Downtown Indy Inc. to provide enhanced downtown services.
Downtown Indy has said the pilot program this year collected 5,000 additional bags of trash, cleaned up of 1,000 graffiti sites, provided more outreach to downtown’s homeless population and an increased public safety presence.
However, the $3.7 million in ARPA funds is projected to run out in summer 2024. City officials now want a lang-term source of funds to sustain the program.
The framework for the economic enhancement district—also known as EED—was made possible earlier this year through legislation slipped into the state budget at the eleventh hour of the Indiana General Assembly.
The City-County Council charged Downtown Indy Inc. and the Indy Chamber with talking to stakeholders and ensuring that the funds would “support the type of ongoing, consistent, reliable response and services” to make downtown Indianapolis competitive with peer cities already utilizing such a framework, Downtown Indy Inc. CEO Taylor Schaffer told the committee.
Indianapolis is the largest city without an improvement or enhancement district, according to the Indy Chamber. Peer cities such as Denver; Charlotte, North Carolina; Nashville, Tennessee; and Columbus, Ohio, use this mechanism, Schaffer said.
Indy Chamber led the last-minute charge to win approval for the new law in this year’s Legislature. The Indiana Apartment Association, which represents 5,000 units in the Mile Square, fought hard to stop the change and objects to the EED proposal.
Apartment Association President Lynne Petersen has called the district fee an “unlimited tax,” that will “only exacerbate the problem,” of reduced occupancy rates in commercial and residential buildings downtown.
Indianapolis-based Policy Analytics LLC did the fiscal analysis on the district. According to its assessment, apartment property owners would foot the largest chunk of the bill at $1.87 million of the $5.5 million budget, followed by office space owners at $1.77 million.
Owners of the nearly 650 residential parcels in Mile Square would account for just over $160,000 of the district’s revenue.
A few downtown residents shared concerns Monday.
Jeffrey Stroebel, a resident of the Massachusetts Avenue neighborhood, said the district is a no-brainer. However, the district cuts Massachusetts Avenue in half, while the entire area faces similar issues.
Residents in other areas could “pay in” to receive a similar level of service, Schaffer said.
In addition, Stroebel said the city would need to find a way to bridge the gap between the exhaustion of the ARPA funds and the collection of EED fees to avoid negative perceptions of downtown in the interim.
Resident Mark Firmin said Mile Square property owners shouldn’t foot the bill for services that should be within the city budget.
City-County Council Majority Leader Maggie Lewis, the chair of the committee, noted the lack of diversity within the group of downtown stakeholders that testified before the committee.
“We need to hear those voices as well,” Lewis said.
Republican council members have criticized the timing of the EED proposal. Council President Vop Osili announced on Nov. 9 that he would introduce the proposal—just two days after Indianapolis Mayor Joe Hogsett won reelection and the Democratic caucus maintained the council supermajority.
Republican Councilor Michael-Paul Hart told the committee he was conflicted about his vote. He noted that the framework isn’t entirely new, since Marion County has economic improvement districts in Woodruff Place and the Virginia Avenue corridor. But he said the details of the district came out too late to engage with stakeholders.
“One week before committee was not enough time for me to be able to vote in favor of this,” Hart said.
The district would be governed by an eight-member board, which would consist of:
- Four state-appointed members: Two would be appointed by the Indiana governor, one by the speaker of the Indiana House of Representatives, and one by the Senate president pro tempore.
- Four local-appointed members. Two appointees would come from the mayor and two from the City-County Council.
A majority of the board members must be downtown property owners. Board meetings would be open to the public, and the annual budgets of the board would be submitted to the City-County Council for review and approval.