Zotec Partners is building a new headquarters next to its current office, and the City of Carmel may support the project through tax abatements and infrastructure improvements.
The specialized medical billing and practice management services firm at 11460 N. Meridian St. broke ground in April on a five-story, 120,000-square-foot office building and five-story parking facility with 450 spaces on 7.5 acres of undeveloped land on Illinois Street just west of its existing building.
At its Nov. 18 meeting, the Carmel City Council considered resolutions that would provide a 10-year, 80 percent tax abatement for Zotec and designate the new headquarters site as a tax increment financing district, meaning increased property taxes generated by new development there would be used to make repayments for infrastructure improvements.
Usually, TIF revenues pay down bonds used to finance a project, but in this case they would repay the Carmel Redevelopment Commission, which is planning to use up to $1.5 million from its Supplement Reserve Fund to pay for a new roundabout at Illinois Street and Fidelity Way, which will be renamed Zotec Way.
CRC Director Henry Mestetsky told the council that it didn’t make financial sense to finance a $1.5 million project through a bond, which would incur interest payments and several other associated fees. Mestetsky said the CRC’s reserve fund is expected to contain approximately $6.7 million in two months and that using it to finance the roundabout will save up to $600,000 in costs associated with bond financing. Grant funds from the State of Indiana are also expected to cover part of the roundabout’s cost.
Zotec is expected to save $3 million through the tax abatements. Mestetsky said the site currently generates $338 in property taxes annually for the city but that Carmel will collect $137,980 annually during the abatement period and $413,870 per year until the TIF district expires in more than 20 years.
Mestetsky said the project is on some of Carmel’s “most commercially desirable land” and that the incentives will pay off for the city in the long run.
“When a developer builds a three- or four-story parking garage and parks vehicles for this many new jobs, it’s an incredibly efficient use of space,” he said. “If there wasn’t an incentive for the development to build the parking structure, they’d be taking up acres and acres and acres of land, parking cars on a flat surface instead, meaning there’s less room to build the next corporate headquarters that pays a huge amount in taxes.”
Zotec is expecting to more than double its 250 jobs in Carmel by 2024, with employees earning an average hourly wage of $44. The company is planning to invest $48.7 million in the new headquarters, including $5.8 million for the parking garage. Employees are expected to move into the new building in 2020.
A public hearing on the creation of the TIF district will be held at the next city council meeting, set for 6 p.m. Dec. 2. The council’s Finance, Utilities and Rules Committee will consider the incentives and financing at a future meeting. A date has not been announced.