A $60 million mixed-use development planned on 4.4 acres on the east side of Old Meridian Street south of BRU Burger Bar is no longer feasible and will not be constructed, according to Carmel Redevelopment Commission Director Henry Mestetsky.

Old Meridian Apartments, a public private partnership between Cross Development and the CRC, was set to include 263 luxury apartments, 10 for-sale condos, 9,000 square feet of office and commercial space and a 395-space parking garage. In 2022, the Carmel City Council approved authorizing up to $9.5 million in developer-backed bonds to support the project.

At the July 15 city council meeting, Mestetsky said the agreement to give 75 percent of tax increment financing dollars generated through the project to developers was not enough to support its construction, as interest rates have doubled since then (the city would receive the other 25 percent). TIF uses tax revenue generated by improvements to a site to pay down the debt acquired to make the improvements.

Mestetsky made the comments as part of a discussion about a proposal to give 95 percent of TIF dollars to the developer of Proscenium III, a project proposed at Range Line Road and Executive Drive. Some councilors questioned whether the Proscenium TIF split gives too many dollars to developers, but Mestetsky said it must make financial sense for projects to happen.

“(Old Meridian Apartments) is never going to happen,” he said. “So, while I take seriously negotiating the best possible deal for the city, I also know that if we enter the world of fantasy, we’re just wasting a lot of people’s time because the project will never get off the ground.”

Councilor Matt Snyder described the Old Meridian project site as “a vacant lot with an entire parcel of decimated trees” and urged the CRC to find a project that will work there. Mestetsky said that the process to find a new development for the site is already underway.

“The administration is trying our best to find a project that works, but frankly it will probably require going back to council and having a higher TIF split,” Mestetsky said.

Cross Development did not respond to a request for comment as of press time.