The Carmel City Council narrowly approved the $15 million purchase of the Monon Square shopping center by the Carmel Redevelopment Commission at its Oct. 15 meeting, with councilors who voted against the sale citing cost and a lack of information among concerns.
The 8.7-acre shopping center is on the northwest corner of Range Line Road and City Center Drive, sandwiched between other areas recently redeveloped by the city. It’s home to several small businesses, including Union Brewing Company, Soho Café & Gallery, Ristorante Roma and others. The city expects to eventually partner with the private sector to build a mixed-use development on the land.
The 4-3 vote came after some councilors said they were surprised to learn that the item could not be sent to committee for further discussion. The purchase is funded through $25 million in bonds sold in 2017, and the ordinance outlining the bond sale states that the city council can vote on CRC expenditures greater than $49,999 if a city councilor requests a review. It does not indicate the item can be sent to committee.
Council President Kevin “Woody” Rider said he expected the council would have an opportunity to discuss purchase details and called for better communication between city officials and the council on redevelopment matters.
“We’re spending $15 million. We should have more input than we’re having,” Rider said. “There’s not one piece of paper showing us anything (about this purchase).”
Councilor Jeff Worrell voted in favor of the purchase as a member of the CRC and again at the council meeting.
“I am convinced that this piece of land is critical to keep the momentum going. It’s not creating any new debt. It’s using money that has already been earmarked for this exact type of situation,” he said. I apologize to my colleagues who are disappointed by the process, but we voted for the ordinance.”
Carmel Redevelopment Commission Director Henry Mestetsky said the average of two appraisals for the property came in at $11 million. Carmel Mayor Jim Brainard said the owners of Monon Square received other offers on the property in line with what the city will pay and that a period of delay is built in to the appraisal system.
“When prices go up quickly, the appraisers are not quick to pick up on that,” he said.
Councilors Laura Campbell and Tony Green joined Rider in voting against the sale.
“This is such a key piece of property. Why wouldn’t a private developer jump at this?” Campbell said. “I feel the city is overpaying for this property. It just boggles my mind why a developer wouldn’t go after this property and want to develop it, being so close to the Monon (Trail). It makes no sense to me.”
Brainard said the city should purchase the land rather than a private entity to ensure that redevelopment fits with the city’s vision, which includes multi-story mixed-use buildings and associated parking. The property rests between Midtown and City Center, two areas in Carmel’s core that have undergone major redevelopment – with much city involvement – in recent years.
“This will make the connection between City Center and (Midtown and Arts & Design District). It’s absolutely critical to continue what we started 22 years ago and do it successfully,” said Brainard, adding that he thinks $15 million is a “fair price” and a “good value for the taxpayers.”
He also said that the property, which currently brings in nearly $62,000 per year in property tax revenue, is expected to generate $2.7 million per year after redevelopment.
Mestetsky said he’s reached out to affected business owners and that the city’s plans to purchase the site did not come as a surprise to most.
“Even the most nonprofessional spectator would say this is probably the most underdeveloped area left in the central core,” Mestetsky said. “To get private developers to propose potential projects, it was important for the CRC to get ownership of the land and get that conversation started.”
The city plans to hire a management company to work with the center’s current tenants. Mestetsky said the city does not have specific plans for the site and that it will likely be several years before the aging shopping center is torn down. Existing tenants are welcome to stay until redevelopment occurs, he said, and he expects that some of them will reopen on site in new buildings.
“This center has great public places where people already meet and the community already thrives and exists,” he said. “We’re going to do all we can to maintain a place like that.”