The Carmel City Council is considering whether to issue $27 million in new debt to advance three long-planned redevelopment projects in the city’s core, as well as improvements to an east-side shopping center.
Developer-backed bond requests dominated the council meeting Monday for mixed-use projects made up of offices, condominiums, apartments, public plazas, parking, retail and more. The potential $27 million in bonds could, in turn, spur $138 million in private development.
Carmel taxpayers will not be directly responsible for the expenses associated with the debt, if the council decides to issue it. That’s because the increased assessed value generated by the developments is expected to pay the costs associated with those bonds. Under that arrangement, the developer is responsible for covering any shortfalls.
The council voted for each of the following bond requests to be forwarded to the city’s Land Use Committee for further review:
Lauth’s Lot One project
Carmel-based Lauth Group Inc. is requesting the city issue $6.5 million in developer-backed bonds for its planned $35 million mixed-use development at the northeast corner of Rangeline Road and Main Street, in Carmel’s Arts and Design District.
The nearly 1.8-acre property—including parts of the PNC Bank property and an adjacent site the city also owns—is referred to as Lot One because part of the property incorporates the first four lots of the town of Bethlehem, which changed its name to Carmel in 1874 because there was another town in Indiana registered as Bethlehem.
The city solicited pitches for redeveloping the property last spring, and Lauth’s vision was chosen from the eight respondents.
Lauth’s original proposal was for 67,400 square feet of office and retail space, 40 to 50 condos, five townhouses and a 236-space public parking garage.
The latest iteration presented at Monday’s meeting envisions a 60,000-square-foot, three-story office building topped with four condominiums on the site. The project may also feature 70 apartments wrapped around a 325-space parking garage. About 240 of those spaces will be available for public use, as will a plaza at the center of the project.
Michael Garvey, chief investment officer for Lauth, said construction could start before the end of the year.
“This will make a key architectural statement on Main Street and in the city,” Garvey said.
If it’s built as presented, the project is expected to create nearly $400,000 of tax revenue annually on what’s currently government-owned property.
Melange may bring condos near Carmel’s central firehouse
Indianapolis-based Onyx+East’s vision for a $29 million residential development just south of City Center, at the intersection of Veterans Way and Monon Green boulevards, has been three years in the making.
Called Melange, the planned series of 57 multistory brownstones and single-story townhouses along the Monon Trail could bring additional for-sale housing to the city’s center. For its investment, Onyx+East is asking the city to issue $3.5 million in developer-backed bonds.
David Leazenby, vice president of acquisitions for Onyx+East, said in a written statement that the prices for those houses will range from $400,000 to $700,000. The brownstones will have two to four bedrooms and 2.5 to 3.5 bathrooms. The condominiums have been designed with two- or three-bedroom layouts, featuring 2.5 bathrooms.
Construction on those residences and a Central Park-like common area is expected to begin in the fall, with a model opening in spring 2021.
Kite Realty’s Corner lot project
Kite Realty Group announced in 2016 its plans to redevelop a 1970s-era retail center on the southwest corner of 116th Street and Rangeline Road as a mixed-use project.
Those plans included multiple four-story buildings with a total of 30,000 square feet of ground-level retail along 116th Street. They also included 250 to 270 residential units on upper floors, structured parking in the center of the property and additional residential structures on the southwest side of the property.
After tearing down the shopping center in January 2018, Kite’s vision for the $15 million to $20 million mixed-use project on the nearly 5-acre site stalled.
“We came to the conclusion this was a lot tougher than we initially anticipated,” Tom McGowan, CEO of Kite Realty, said.
Having now successfully strung together a series contiguous properties, the real estate firm is ready to move forward with a scaled-up version of its previous plans. Kite is requesting the city issue $14 million in developer bonds for its newly designed $69 million project.
“This is really the southern gateway to the city of Carmel. We wanted to try to do something monumental. We wanted something with scale,” McGowan said.
The new vision may bring as many as 278 luxury apartments, 364 structured parking spaces and 25,000 square feet of retail to the intersection.
f the project advances, it could be complete by the end of 2023, McGowan said.
Brookshire Village Shoppes featuring Needler’s grocery
Last September, Indianapolis-based real estate investment firm KennMar bought the 67,000-square-foot Brookshire Village Shoppes for $6.4 million with plans to attract a new neighborhood grocer.
Brent Benge, president and CEO of KennMar, announced in January that the firm would partner with Needler’s Fresh Market to invest a total of between $5 million and $6 million to update the center’s facade with a more modern aesthetic.
Once those improvements are made, Needler’s anticipates opening in the former O’Malia’s Food Market. KennMar is requesting the city issue $2.5 million in developer-backed bonds to support that project.
When council member Tim Hannon questioned the use of tax increment finance funds for a grocery store’s facade, Carmel Redevelopment Commission Executive Director Henry Mestetsky said the improvements would help any businesses located in the outdated strip center to remain competitive.
“The use of TIF here really propels us into the 21st Century,” Mestetsky said. “We want to put our east side on an equal footing with those competitors outside of Carmel.”