The Carmel City Council’s land use committee voted 3-1 in favor of $2.5 million in bonds to upgrade the Brookshire Village Shoppes retail center.
The bonds would be repaid through tax increment financing, which captures the additional taxes generated by upgrades in an area to pay for the improvements. Developer KennMar would be responsible to cover bond payments if TIF revenues fall short.
Needler’s Fresh Market is expected to anchor the site, but its expansion into Carmel is dependent on the bonds being approved. The city council will make the final decision on the bonds at its June 15 meeting.
KennMar and Needler’s anticipate spending more than $5 million to upgrade the aging retail center on the southwest corner of 126th Street and Gray Road with an updated facade and enhanced entrance features. The anchor space housed O’Malia Food Market until 2017 when its parent company went out of business.
Councilor Tony Green, who heads the committee, voted against the bonds, saying he wants to see a market study on the long-term sustainability of a grocery store in the area before he can vote in support.
“The grocery industry is pretty tough right now,” Green said. “I understand people want a grocery store in that area, but is there really a need?”
Councilor Tim Hannon joined councilors Kevin “Woody” Rider and Adam Aasen in voting in favor of the project after learning that Needler’s lease on the site is for 10 years. KennMar President and CEO Brent Benge said the contract allows Needler’s to opt out at the five-year mark if it doesn’t hit a certain number of sales. Benge didn’t provide the number but said it is “a figure easily achievable for them.”
If Needler’s were to leave before five years, Benge said the grocer would have to pay the remaining term on the contract and reimburse the unamortized costs related to the improvements on their space.
“It would be a rather expensive penalty for them to leave in such a short time frame,” Benge said.
Benge said some of the center’s other tenants indicated they didn’t want to stay unless an anchor tenant was found. He said the center is more than 80 percent occupied and that he is in discussions with other potential tenants for the former bank building and vacant space next to Needler’s site. He said Carmel Veterinary Clinic plans to expand its footprint in the center and that the nail salon next door, which recently was the site of a fire, moved to another vacant space in the center and plans to reopen soon.
Rider said he supports the bonds because of the improvements the project will generate for the city with no risk to taxpayers.
“This would continue to be a blighted center without a grocery story without this investment,” he said. “All the risk is still with the developer. If the grocery store goes away, the developer has to go find another tenant, be it a grocery or whatever it would be, but they would still have to pay the taxes.”