The Carmel City Council on Oct. 4 unanimously voted to approve $49.5 million in developer-backed bonds to support a transformation of the former Hamilton Crossing retail center into the Republic Airways headquarters, training facility and hotel for employees and guests.
The bonds, to be repaid through tax increment financing, will finance two parking garages planned as part of the project. Tax increment financing captures new tax revenue generated as a result of improvements in an area to pay for those improvements.
“There will never be any other source of city funds that would be a credit for this particular bond,” said Bruce Donaldson, a public finance attorney who helped the city draft the bond ordinance.
City Councilor Tim Hannon described the use of TIF for the project as a “textbook” example of how it should be used.
“TIF was specifically set up to essentially plow back new tax revenue into areas that were otherwise economically undevelopable on their own,” Hannon said. “I think we maybe stretched that a little bit in the central district, but in this area, without a doubt, it’s an area that had significant issues to be developed.”
Hamilton Crossing, at U.S. 31 and Carmel Drive, struggled to keep tenants after the reconstruction of U.S. 31, which eliminated traffic lights and a direct connection to Carmel Drive. It contains a Hampton Inn, empty former restaurant building and a strip mall, which has become increasingly vacant in recent years. Kite Realty owns the strip mall and restaurant building.
The $200 million Republic Airways project, being developed by Kite Realty Group and Pure Development, is expected to bring 1,900 new jobs to Carmel as Republic consolidates training centers in Cincinnati, St. Louis, Indianapolis and elsewhere. It would make Republic Airways one of the largest employers in Carmel.