The City Council Monday night unanimously voted to issue a $130 million municipal bond for a new retirement community, despite weeks of contention from one of its future competitors.
Texas-based nonprofit Mayflower Companies plans to build a $142 million development, the Barrington, on Guilford Road near 116th Street but needs the city’s help to secure its financing at a lower cost. So the company asked the city to issue the bond to help lower its borrowing costs and the overall costs of the project.
However an existing Carmel retirement community, the Stratford, had argued for weeks that approving such a bond would create a competitive advantage for the Barrington.
In response to some of the Stratford’s claims, Councilwoman Luci Snyder said it is common for nonprofits to seek, and receive, funding from municipal bonds, also adding that the recent expansions of other retirement communities is a sign that the area is underserved. The Stratford is a for-profit entity.
Snyder also said approving the bond was a “no-brainer” because, as a nonprofit, Mayflower could have secured its own financing and remained exempt from paying property taxes. In return for the bond, however, Mayflower has agreed to pay $350,000 to the city per year, indefinitely.
“People want to say we’re subsidizing this. We’re not,” Snyder said. “It’s not that they could have paid full taxes and we’re only getting half. It’s that they could have paid no taxes and we’re getting half. … It isn’t costing us a dime. If the Barrington goes belly up, we’re not on the hook for that, not at all.”