The Carmel City Council voted unanimously March 6 to approve up to $15 million in bonds for a parking garage in the Midtown area.
The Midtown proposal would be backed by the possibility of a special benefits tax, which would kick in if not enough property tax increment funds are generated to pay off the debt. There are several guarantees built into the agreement that call for the developer to pay the difference if TIF does not cover the project. There’s even a completion guarantee that allows the Carmel Redevelopment Commission to finish the project if necessary.
“This allows the CRC to step in and complete construction,” CRC Director Corrie Meyer said. “We can step in prior to the bank stepping in.”
The bonds would pay for a 370-space parking garage that will be wrapped with 167 apartment units in a four-story building, built and managed by Barrett & Stokely, which also owns The Seasons in Carmel and manages several properties such as Main Street on the Monon and Old Town on the Monon. The parking spaces would be shared by residents and the public, similar to The Mezz development at The Center for the Performing Arts’ parking garage. A neighboring five-story building will have office space, including the headquarters for Merchants Bank. There will be first floor space for retail and restaurants. Merchants Bank headquarters will have 92 private spaces for parking.
Meyer estimated the garage could cost $10 million for construction.
To help finance this deal, the city organized the first meeting of the Midtown Building Corporation on March 1. This development corporation will be financing part of the bonds, and then the CRC will make payments using TIF.
“The money will technically flow to the building corporation, which will fund building the garage, and then the city will lease the garage and ultimately these lease payments will pay for the garage,” said bond attorney Bruce Donaldson, who advises the CRC and the City of Carmel.
Donaldson said the building corporation is needed because, “basically Indiana has very arcane debt limits.”
Both buildings have been in the works for nearly two years but have been delayed. Old Town Design Group, led by developer Justin Moffett, was involved in both projects but backed out and is instead focusing on Midtown buildings on the east of the Monon.
“The city owned the property on Midtown West while Old Town owned the land for Midtown East,” Meyer said.
Moffett originally stood beside Merchants Bank officials at an announcement for its headquarters in May 2015. That press conference promised a spring 2017 opening, but construction hasn’t began. Meyer said that’s because the Allied Solutions headquarters came to fruition on the east side of the Monon, along with a Sun King Tap Room and Distillery. Both of those projects — announced after Merchants Bank — are already under construction. Merchants Bank moved to the west, which is on land owned by the city. A city market concept was announced for the ground floor of the Merchants Bank building at one time but it appears that idea is dead or on hold, Meyer said.
Old Town was also a joint-bidder with Barrett & Stokely for the residential units south of Bub’s Cafe. In March 2015, an announcement was made that the CRC would sell $1.7 million worth of land for the two companies to create a combination of for-rent and for-sale units along the Monon. Meyer said they agreed to part ways and that Barrett & Stokley took over the project.
“In the process of development, they couldn’t figure out how to structure for-sale units in the space of this development,” she said. “Old Town Development opted to step back.”