A pair of local developers are seeking a tax break for a $15.3 million affordable housing project they’ve proposed on a six-acre site along the White River, west of downtown.
The Annex Group and Hageman Group plan to build a 159-unit apartment complex at 2216 W. 16th St., southeast of the 16th Street, Pershing Avenue and Lafayette Road intersection. The five-building development has been named Union @ 16th.
The proposed tax abatement from the city of Indianapolis would save the developers about $1.4 million in real property taxes over 10 years.
Hageman Group purchased the largely wooded property for $725,000 in June 2018 through two holding companies. The land was previously home to a car maintenance shop.
The Union complex would be reserved for those making between 40% and 80% of the area’s median income, or AMI: 61 units for 40% AMI; 95 units for 60% AMI; and 26 units for 80% AMI.
City documents indicate the property would have buildings ranging from two to four stories. It would include a variety of residential amenities, including a community room, fitness room, computer center, gazebo, playground and bike parking.
The developers also plan to improve sidewalks and bus shelters abutting the property and to construct a public, multimodal path connected to the White River Greenway.
The abatement request is expected to be heard by the city’s Metropolitan Development Commission on Wednesday, with city staff recommending approval. It has also been referred to the Metropolitan and Economic Development Committee of the City-County Council.
The Annex Group, which started out building student housing at universities that typically were considered commuter schools, has begun in recent years split its attention between student housing and affordable housing in university towns.
The firm was ranked seventh on IBJ’s 2018 list of the fastest-growing companies in the Indianapolis area, with 205% revenue growth between its 2015 and 2017 fiscal years.
The Annex Group is building two other “Union” projects—in Kokomo and Bloomington—and has constructed a variety of student housing projects. The firm also co-developed The Annex on 10th student living project with Hageman Group.
The partners—through Union @ 16th LP—have asked the city of Indianapolis for a 10-year tax abatement for the project “to assist in off-setting the high costs of investment associated with this proposed project and the subsidization of affordable rents,” according to filings with the city’s Department of Metropolitan Development.
Union @ 16th is expected to increase the tax value of the property by about $8.5 million. The proposed breaks would save the developer about 69%, or $1.4 million, in real property taxes.
The firms would still pay about $619,974 in real property taxes over the abatement period, along with taxes tied to the land’s current value, about $15,213 annually based on 2019 figures. After the 10-year period, they would pay about $217,035 annually on the new improvements.
The Union project is also being proposed as a low-income housing tax credit-eligible development, meaning the firm could receive additional public financing considerations.
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No, No, No. The city is going to be completely broke when this is all over and these greedy developers want even more?
Rhea, Did you read to the end? See below. Property taxes paid on this land will rise dramatically.
“Union @ 16th is expected to increase the tax value of the property by about $8.5 million. The proposed breaks would save the developer about 69%, or $1.4 million, in real property taxes.
The firms would still pay about $619,974 in real property taxes over the abatement period, along with taxes tied to the land’s current value, about $15,213 annually based on 2019 figures. After the 10-year period, they would pay about $217,035 annually on the new improvements.”
Rhea,
They are also providing affordable housing. Given all the new apartments, hotels, etc. paying taxes it is doubtful that the city is going to go broke. Got to love the people that pull the automatic “greedy” developer stick.
Jeffrey,
You mean all those developments and hotels that received sweetheart abatement deals of their own, that are largely conveniently located within the downtown TIF District? Your logic is hollow and intent misguided.
As for talks about the City’s finances, has no one been paying attention the past decade and a half (even longer actually). Thankfully, the State has property tax caps because Marion County has done nothing to prove they can manage themselves responsibly.
Yes I read the story. Can nothing be built without the city having to forego taxes?
On the whole this is a good deal… hard to grasp that we need incentives like this but we do and the resulting controlled housing stock is good for a portion of our population that keeps getting pushed to the edges of the county where transportation and services are slim. Social engineering and urban planning both need a nudge sometimes to do the right thing!
We actually don’t “need” them.
They should come see me, I’ve got some property they could purchase that is in a better location, twice the space for a little bit more.
I hope the development includes some form of street-level activation and commercial space. The Annex is really ugly and doesn’t take advantage of its riverside location.