Carmel Redevelopment Commission takes another step towards city-backed bonds


The Carmel Redevelopment Commission voted on Oct. 30 to approve a preliminary resolution to take out city-backed bonds to fund phase two of the Carmel City Center.

CRC Director Corrie Meyer said the city wouldn’t actually obtain the bonds – not to exceed $20 million – until about 18 months from now, but this step in the process gives the developer, Pedcor, a guarantee so construction can begin.

Loren Matthes, of H.J. Umbaugh & Associates, an accounting firm contracted by the city, presented detailed estimates of how much tax increment finance (TIF) revenue would be generated through development of this area.

The TIF money would be the first choice to pay off the debt of a newly constructed parking garage that will support more than 10 new buildings. If TIF revenue is insufficient, there are several layers of developer guarantees, which means Pedcor would make up the funding shortfalls. If for some reason Pedcor fails to pay and other avenues have been exhausted, then a special benefits tax would automatically kick in and charge taxpayers to pay off this debt.

Matthes provided a chart that shows estimated TIF money and the debt service on the bond for every year from 2018 to 2040. In total, her firm estimates that $28.7 million in TIF will be generated and debt service will be $26.1 million. These estimates assume no growth so as to be conservative.

In some incidents, property owners have successfully appealed their property taxes, which means that TIF revenue would be less than anticipated. In this instance, that might not happen because if TIF revenue is lower than expected then Pedcor would still have to help make up the difference.

In other news, the CRC also voted to finalize its agreement with Keystone Construction Group about using TIF money to repay a developer-backed bond to support the Olivia on Main building. The City Council asked that the money only be spent on infrastructure, such as drainage improvements, and not on things like landscaping. Ninety percent of the TIF money will help repay the bond and the rest goes back to the city via the CRC.

The CRC also announced it received two bids for $1.7 million worth of unused land situated in Midtown area. Old Town Design Group bid $1,722,000 million and Barrett and Stokley bid $2,500,000. The land is situated west of the Monon Trail, south of 2nd Avenue SW and east of 3rd Avenue/4th Avenue SW.


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