The Carmel City Council introduced several bills on Feb. 20 that would issue more than $20 million in bonds to be repaid using tax increment financing. One is for up to $15 million for a parking garage in Midtown and the other is up to $6 million for infrastructure improvements at Sunrise on the Monon, which is under construction along Westfield Boulevard just north of 96th Street.
The Midtown proposal would be backed by the possibility of a special benefits tax, which would kick in if not enough property tax increment funds are generated to pay off the debt.
“It has been used as a credit enhancement to get the best interest rate on the bonds, but there are a lot of guarantees to make sure that it would likely never be used,” said Bruce Donaldson, a bond attorney with Barnes & Thornburg who advises the City of Carmel.
Corrie Meyer, director of the Carmel Redevelopment Commission, said the parking garage bond could be approximately $10.6 million. She explained that the garage will be built through a public-private partnership and 90 percent of the tax increment, about $828,000 annually, will pay back the 25-year bonds. The debt service could be around $750,000 annually, and any remaining tax money — which could be more than $70,000 a year if projections are correct — will go into a reserve account with the CRC, Meyer said. She said that the developer, Indianapolis-based Barrett & Stokely, is guaranteeing the debt payments.
“We always have the protection of that payment being made based on the taxed amount,” she said. “If there’s a delay, the developer is on the hook for that commitment.”
The garage will service the Merchants Bank headquarters and a development with 167 apartment units, similar to Mezz 42. Old Town Design Group was originally supposed to be involved with the both projects but backed out because of conflicts. The 370-space garage will be in the center of the apartment units but will be open to the public.
Meyer said these projects represent more than $50 million in new development in the area.
Old Town Design Group is also asking for a bond issuance for Sunrise on the Monon, a new neighborhood with rentals and various size custom-home lots. Many of the lots have already been sold and some homes are complete, but Old Town would like a bond for up to $6 million for roadwork, a bridge over a creek and other infrastructure improvements. The bonds would be paid back using tax increment financing, but Old Town is planning on buying the bonds and there would be no special benefits tax backup. The debt doesn’t count toward the city’s debt service and Carmel would still receive 25 percent of the TIF with Old Town using the remaining 75 percent to pay off bonds it purchased.
Down the road, the Carmel City Council will soon begin looking at finalizing a public-private partnership with Ritz Charles owner Chuck Lazzara for his development on the field across from Bub’s Burgers at Main Street and the Monon Trail. The $20 million mixed-used development is planned to include a steakhouse and rooftop dining.