Redevelopment Commission – Special Meeting 01/17/2019

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The Charlestown Redevelopment Commission met for a special meeting on Thursday, January 17 at 9:30. Following is a summary of the meeting with full audio available at the end: 

  1. Call to Order/Pledge of Allegiance
  2. Determination of a Quorum and Roll Call: Members present were John Spencer, Ted Little, George Roberts, and Mayor Bob Hall. Eric Vaughn was absent. Also in attendance were city attorney Michael Gillenwater and Clerk Treasurer, Donna Coomer
  3. Renaissance Project Agreement– ARC’s Alan Muncy, President
    • Mayor Hall explained that he distributed the agreement that has been approved by attorney.
    • Mr. Muncy addressed the commission. He thanked the commission for being involved in the project and said that he’s excited about development in southern Indiana. One of the reasons he has been developing in Jeffersonville is because of their progressive thinking. The reason he’s in Charlestown is that he thinks there is opportunity in Charlestown due to the growth coming up highway 62. He anticipates homes, retail, and commercial space opportunities.  He has worked in New Albany, Clarksville, and in Jeffersonville.
    • Regarding the project: It will include 40 apartment units and 3,000 sq ft of retail space with 1-2 retail potential restaurant tenants. This is phase one. Phase two might also include restaurants. He hopes this will be a catalyst for future development. With an approved agreement they will finish their due diligence and hope to begin building in June or July. It will be an 8-10 month project (weather permitting).
    • Mayor Hall asked what will rent rates be? Mr. Muncy replied that they will build 1-2 bedroom apartments. They’re finding people requesting 1 bedroom lofts so they will construct 20% 1 bedroom (approximately 750 sq ft) and 80% 2 bedroom (approximately 900 sq ft). Rent rates will begin at about $850 per month. Rates will increase as occupancy fills. He thinks the market can withstand higher rates since the average salary in southern Indiana is $51,000-53,000 per year. 
    • Mayor Hall asked the overall project costs on phase one? Mr. Muncy said they will be about $4 million (total investment), possibly a little higher based on interest rates and construction material.
    • Mayor Hall said that this is a public-private partnership. The redevelopment commission is designed to do this. TIF (tax increment finance) will cover the cost. He explained that the City takes the increment of taxes that ARC would have paid on the development, and use it to pay off a bond to fund the project. He said it will be a self-sustained project because the taxes ARC would have paid will instead pay for the project. Mr. Muncy has put $20 million of his own in projects in other downtown areas. Mayor Hall believes that Charlestown will become the largest city in Clark County in the future because we have more real estate. He said our concern has always been what we’ll grow into.
    • Ted Little asked if the lower level will be businesses. Mr. Muncy said that a portion will be. Mr. Little asked if someone wants to expand can they do that? Mr. Muncy said they will have 3,000 sq ft that will hold two small businesses or one large one. Mr. Little asked how parking and access around the building be? Mr. Muncy said they’ve made no significant changes from the initial plan they presented and don’t anticipate any.
    • Mr. Muncy said he hopes to create a live, work, play lifestyle in Charlestown with this project. He said this project will provide Charlestown a true identity for people to follow. They do not intend to build and sell. They intend to build and manage.
    • Mayor Hall entertained a motion to approve the development agreement between the City of Charlestown and ARC
      • Motion to approve made by Ted Little
      • Seconded by John Spencer
      • John Spencer then asked for an explanation of the agreement from he City Attorney. 
      • Mike Gillenwater said this is a two phase project.
        • The first phase is north of Green Ally. The second will be south of Green Ally. He said there are currently no conceptual designs for 2nd. The City is selling the property for Phase 1 to ARC for $1. They are obligated to develop it in the way they’ve explained (apartments and commercial.)
        • The city will contribute to the development by helping with the infrastructure, sidewalks, paving, utility, waiving permit fees, etc. Once the project is completed there will not be a request for abatement because they will capture the increment of the tax increase.
        • Mr. Gillenwater explained, if it’s a $4 million project on a vacant lot at zero current value, the city captures all the tax revenue for up to 25 years. ARC has an option on phase 2 as well. By next year they have to exercise that option and present a development plan.
        • If the Redevelopment Commission accepts the agreement in the future then the city will sell the land for the second phase to ARC for $1 as well and it would be constructed. There is an agreement that the city will also help market the project. There is no current obligation for the city to invest money into the second phase. That option has to be exercised within the year of the commission approving this agreement.
        • If ARC decides not to do the second phase the city can market it to another developer. On the second half of the project, the former gas station will not allow residential, but commercial can be built. Mayor Hall added that IDEM is still testing and the property might be able to be mitigated to a point where residential can be built there. Mr. Gillenwater said that the police department has started and will be finished next year.
        • If this project begins in June or July it will be done within 14 months. He thinks other people will be interested in coming to Charlestown after this agreement.
      • John Spencer asked, when you say we’re participating, are we using TIF money to get a bond? Mr. Gillenwater said yes, the city will need to borrow the money to fund the project for phase one, so the city will capture the tax increment in TIF to pay off that debt. He said the city might be able to pay off the debt in 10 years and the TIF will go for 25 so the city might be able to invest in other projects.
        • John Spencer asked to clarify, once they city has paid off the debt, it’s still capturing TIF and can continue to use that money in support of that economic area? Mayor Hall said  yes.
        • John Spencer asked if the city decided to take the area out of the TIF in the future would they still capture tax revenue? Mr. Gillenwater, said yes.
        • John Spencer said, so the city will have a source of revenue? Mr. Gillenwater said yes, whether by TIF or regular city tax, the city will have money from this.
        • John Spencer asked Mr. Gillenwater if he reviewed and approved of this agreement. Mr. Gillenwater said yes, he has gone over it. He said he has given the commission a summary and there is more information in the agreement that covers deadlines and things.
      • Mayor Hall said this is nothing new, that the city has done this for the hospital. This agreement will cover infrastructure and construction costs. The city is pledging ARC’s tax dollars to pay for this project. Who wouldn’t buy an apartment building that you can own and pay off with just the rent structure? He said the city will get somewhere in the neighborhood of $60,000-70,000 funds through other taxing revenue streams. He said this is a win/win situation. This will bring more money for the city and provide a boost in retail.
      • Mr. Muncy asked if the commission is aware that the west side of Market street is in an Opportunity Zone that allows an investor to have all capital gains forgiven after 10 years. He recommended the city market that information. Mayor Hall said yes, he’s aware. 
      • Mayor Hall again noted that the city did this same process with the hospital and Springville Manor. He said there hasn’t been anything built downtown since the 60s. He appreciates Mr. Muncy taking the risk.
    • Mayor Hall called for the vote and received unanimous approval
  4.  Adjournment
    • Motion to adjourn by John Spencer
    • Seconded by George Roberts
    • Unanimous approval 

Audio:

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Author: Treva Hodges

Resident of Charlestown, Indiana. Advocate.

One thought on “Redevelopment Commission – Special Meeting 01/17/2019”

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