CRC director confident city will continue receiving Barrington PILOT payments despite bankruptcy

0

As the company that owns The Barrington continues the bankruptcy process, Carmel officials are confident the city will continue to receive promised tax payments from the senior living community without interruption.

Because the Barrington operates as a nonprofit, state law allows it file for exemption from property taxes. However, it has an agreement with the city to make a payment in lieu of taxes, or PILOT, of $350,000 per year.

Carmel Redevelopment Commission Director Henry Mestetsky, who previously worked as an attorney handling bankruptcy cases, told the Carmel City Council at a March 4 meeting that The Barrington has petitioned the court to use its available cash to continue meeting PILOT obligations. A final ruling is expected March 8, but Mestetsky expects the judge to approve the petition.

“I don’t expect anything to change in the course of The Barrington continuing to pay taxes like they always did,” he said.

The PILOT agreement states that the taxes are tied to the site, not the property owner. That means if the bankruptcy leads to new ownership, the city will still receive the payments.

The Barrington parent company, Mayflower Communities Inc., filed for bankruptcy Jan. 30 in a Texas court. The community was funded in part by $119 million in municipal bonds sold by the City of Carmel in 2012. After Mayflower defaulted on multiple payments in November 2018 the bonds have an outstanding balance of $92.7 million. The terms of the bonds state that the City of Carmel is not financially responsible for the debt.

Court documents show that The Barrington owes $52 million to an unspecified number of residents, who pay six-figure partially refundable entrance fees to live in the community. Carmel Mayor Jim Brainard told the council that he recently met with residents of The Barrington, who have hired an attorney and are “very optimistic” that they won’t be adversely affected by the bankruptcy in the long run.

The Barrington opened in 2014. It includes 271 living units on nearly 20 acres and employs more than 200 people. Day-to-day operations at The Barrington have not been affected by the bankruptcy filing.

 

Share.

Leave A Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.