Carmel Redevelopment Commission took brief ownership of former AT&T site to maximize TIF funds for proposed mixed-use project 


The Carmel City Council’s finance committee took a closer look May 4 at plans to redevelop the former AT&T building in Midtown with a mixed-use development, as several residents who live nearby and a city councilor raised questions about the project and plans to finance it.

Working in conjunction with the Carmel Redevelopment Commission, Buckingham Companies, Pure Development and Merchant’s Bank are partnering on the proposed $133 million project that would expand the existing Merchant’s Bank headquarters, add 37,000-square-feet for Pure Development’s relocated headquarters and include 244 luxury apartments and a parking garage at 210 3rd Ave. SW. The proposal also includes demolishing two homes on Emerson Road behind the site and rebuilding them on smaller lots.

The city is considering authorizing up to $20.5 million in developer-backed tax increment financing bonds to help fund the project, with developers set to receive 95 percent of TIF revenues for the life of the bond, up to 25 years. TIF captures tax revenue generated through redevelopment in a designated area to help pay for the improvements over a certain amount of time. The proposed project is not expected to affect the tax rate, and developers will be responsible for covering costs if TIF funds come up short.

During the meeting, Councilor Tim Hannon questioned CRC Director Henry Mestetsky about why county records show that the CRC took ownership of the 4.3-acre parcel from PST Land Holdings for four days in January before transferring it back. Mestetsky said the CRC temporarily took possession of the site to reset the amount of tax revenue being collected for the site to $0, as properties owned by the CRC do not pay property taxes.

Because TIF captures tax revenue generated above the amount being collected when a TIF area is established, which has been reset to $0 in this case, all tax revenue collected from the site will go toward the developers and CRC. Mestetsky said the process will result in approximately $27,000 per year being used for the project rather than being distributed among the regular taxing units.

“On each (redevelopment) deal, we try to negotiate and get – on behalf of the taxpayers – the best possible project. Sometimes it requires us to reset the base to zero, or else the project doesn’t happen,” Mestetsky said. “Our view of this should be over 100, 200 years, not what happens next year.”

As of press time, Mestetsky did not respond to a request for information about how many times the CRC has temporarily taken ownership of a site to reset the baseline amount of tax being collected in a TIF district.

Mestetsky said at the meeting that state law limits how much a municipal budget can grow annually and that the growth in assessed value in the city more than makes up for the taxes previously collected for the site that are now going to the TIF district. Councilor Kevin “Woody” Rider said that because the project is eventually expected to generate $143,000 in annual taxes for Carmel Clay Schools, it is worth shifting $27,000 in taxes to support the project.

A handful of residents who live near the proposed site shared other concerns, including inconsistency created by changing setbacks and creating smaller lot sizes for the two new homes, sightlines and shadows of a six-story building adjacent to residential homes, light pollution and increased traffic.

Mike Hollibaugh, Carmel’s director of the Dept. of Community Services, said the project is set to go before the Carmel Board of Zoning Appeals and Carmel Plan Commission for thorough reviews.

The committee did not take a vote at the meeting. Additional meetings to discuss the project and others are set for 5 p.m. May 9 and 16.



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