We'd like to present a real-life example of why fiscal conservatives are so desperately needed in Hamilton County government. Consider Carmel's "City Center" as case in point...
In 2014/15, Carmel taxpayers were presented with a "deal" by developer Pedcor. Pedcor's "2nd Phase: 2015-2019" promised to build "10 New Buildings; adding 575,000 square feet (of new development) and $80-$100 Million of Private Investment" with the condition being that the taxpayers fund a new parking garage
In 2015, Carmel Taxpayers paid $17 million on the promise of 10 new buildings, 575,000 sf of new development and $80-$100 million of Private Investment.
The media coverage, especially by the IBJ (Indianapolis Business Journal), stated that, if the City built the garage, Pedcor was "on the hook" to build the 10 buildings necessary to complete "City Center." In 2015, the City approved $20 million in public debt, with some performance guarantees by Pedcor (but the debt is ultimately guaranteed by a 'special benefits tax which the rest of us will pay').
So, in 2018, it's fair to take a look at what has actually happened and how well Pedcor has performed. Sadly, the answer is 'the taxpayers held up their end of the bargain, but Pedcor's commitment remains unfulfilled.' Rather than '10 buildings adding 575,000 square feet of taxable development,' Pedcor has built only one building (but they did manage to give it two names). As of 2018, the County Assessor reports that taxable assessed value of the improvements promised in 2015 is exactly $0.
Instead, this is what the taxpayers got.
Which leads to the obvious question ... what happened to Pedcor's performance guarantees?
And now Pedcor wants another $40 million of public debt to build a hotel. The problem is that a hotel was actually promised, on exactly the same site, as part of the 2015 proposal. Pedcor worked hard to muddy the hotel part of their commitment, but the CRC shows that the Pedcor proposal for the "Motor Court East" site was to construct "A building, of approximately 76,000 to 91,000 square feet, which will include luxury apartments and commercial office/retail space designed so that in the future it could be in whole, or in part, converted to hotel rooms and/or hotel amenities." It really doesn't get much clearer than that.
So, the Carmel City Council is now considering giving the same developer, who failed to fulfill its obligations in 2015, another $40 million in taxpayer subsidies to build a building that the developer promised it would build in 2015, if the taxpayers funded a parking garage.
Which leads to another obvious question ... why would taxpayers pay an additional $40 million to subsidize a hotel that the same taxpayers already subsidized and the developer has thus far failed to perform? Perhaps even more bizarre, 'why would a City Council which is responsible for monitoring these 'deals,' even consider additional funding when the developer has failed so miserably?'
You might want to ask the Carmel City Council.
About Mike Shaver: Mr Shaver is a Carmel Resident. Mike has asked that the FCoHC share his concerns on our blog site in order to begin a larger conversation about the activity occurring in Carmel. We will gladly publish any response in defense of Pedcor by any elected official representing the City of Carmel.
INDY STAR March 26, 2018 by Chris Sikich - Carmel's financing, ownership, of $40 million luxury hotel creates the opportunity for risk or reward
IBJ August 19, 2017 by Lindsey Erdody - Proposed Carmel hotel raises questions about risk, private sector
The Reporter -Carmel unveils name of future City Center hotel