To refinance, or not – that is the question

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After a recent article in an Indianapolis publication, most people are now aware that the Carmel Redevelopment Commission is in a difficult financial situation, of their own making.

Although this year the CRC will collect close to $22,000,000 in commercial taxes (TIF), they don’t have enough income to continue paying their bills. And because they have borrowed more than they can pay back, banks will no longer loan them money to continue.

The current City Council understands that the Center of the Performing Arts cost millions more than was presented to the public; nevertheless, it is there and the money is owed. Therefore, we must insure that it prospers.

We also now understand that the CRC has $195,000,000 in high interest, short term debt that needs to be restructured at a lower interest rate to save money and actually preserve income.

But why should the Council contemplate this refinance, putting the full faith and credit of the City of Carmel on the line to bail out the CRC?

Certainly a responsible fiscal body should put aside the years of acrimony and denial by the CRC and move to save the millions that are being squandered on high interest rates … But only under certain conditions:

  • If the payments on the new bonds are completely covered by the CRC’s TIF income.
  • If there will be enough TIF income remaining to cover payments on the $80,000,000 Performing Arts Center bond that, if not covered, would result in a tax on residential property owners.
  • If the CRC uses that income generated to support The Center for the Performing Arts and finish City Center.
  • Finally, if, and only if, the Council can insure that the CRC won’t do it all over again.

In other words, we will pay their credit card bill … But we will take their card away.

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