Carmel-based KAR Auction Services announced in September that a new $80 million headquarters would be built to add 400 additional employees. Now, the Carmel City Council is considering $10.5 million in bonds to pay for a parking garage for the company. The city said KAR will assume the risk for the bonds.
The five-story, 250,000-square-foot headquarters will be at the northeast corner of Illinois and West 111th streets. It is about 2 miles south of the current headquarters at 13085 Hamilton Crossing Blvd., which houses 900 employees.
The debt will be paid through tax increment financing, which collects increases in property tax revenue in an area. Carmel expects $1 million in taxes annually from the TIF zone, and the Carmel Redevelopment Commission will keep $100,000 of those taxes for paying other debt.
KAR would buy Carmel’s bonds and assume the risk, which means if there isn’t enough tax revenue to repay the debt, Carmel taxpayers would not be on the hook. The interest rate would be between 4.5 and 5.5 percent.
“We’re not going to have to be responsible for the loan,” city councilor Bruce Kimball said. “We’re giving them TIF. It’s great to see KAR grow while other communities are offering all sorts of tax incentives to try to attract these businesses. KAR has chosen to grow in Carmel because they like it here and they like our quality of life.”
KAR is a global provider of services and technology solutions for the wholesale used-vehicle industry with annual revenue of more than $3 billion. The company employs 17,400 people worldwide.