By Adam Aasen
The Carmel Redevelopment Commission has presented its plan to help finish construction on phase two of the Carmel City Center. And it’s possible the plan could include the city borrowing more money.
The CRC has submitted a request to create new tax increment finance districts in the City Center area so the TIF money can eventually be used to help pay bonds to support new development. The new TIF districts were approved by the CRC and the Carmel Plan Commission and now will go to the Carmel City Council for approval.
While it’s early in the process, CRC Director Corrie Meyer said a key part of the plan which includes at least seven new buildings in “the heart of our city” is constructing a parking garage to support the new tenants. She emphasized that nothing is final but currently the CRC suggests paying for the garage through municipally backed bonds.
Meyer said the garage – which could cost anywhere from $14 to $17 million – would be paid for by creating the new TIF districts. She said that while the city would face the risk of paying off the debt, she said the risk has been minimized by setting up several layers of protection. One layer is setting up a reserve account for excess TIF to help pay for any other shortfalls. The other important protection is a guarantee from Pedcor, the developer of the project, to help pay for any shortfalls.
“We are not drawing from other TIF areas to fund this project,” she said. “That is key. We have spent a lot of time making sure this development is self-sustaining and that there’s enough revenue to support this project because we have other debt commitments we have to honor.”
Meyer said Pedcor could take out the bonds itself, but a private company wouldn’t receive the same interest rate that the city receives. The savings in interest rate can help pay for other improvements, she said.
City Councilor Ron Carter said helping finance the parking garage is improvement to achieving the proper density that Carmel leaders crave for downtown.
“You don’t want to walk by large expansive black-top parking lots in an urban area,” he said. “It hurts our walkability and you don’t get the same return on investment with that density.”
City Councilor Rick Sharp said he had not seen the proposal, but when he was told that the CRC would ask for municipal bonds, he literally erupted with laughter.
“Is she aware where the city of Carmel’s credit line is right now?” he said. “Where is this revenue stream going to come from?”
Sharp said he suspects that the possibility of a special benefits tax will have to be used as a back-up to secure these bonds.
Carter said he feels this is a safe proposal.
“Corrie has explained this in depth and they try to look at any objections that any city councilors might have,” he said. “I don’t have any problem with this being municipally backed. They have the guarantees in there so it doesn’t present any risk to the city.”
This story will be updated.