This time the Ballard administration has cut a deal with the politically-connected Kosene & Kosene. John Ketzenberger of the Indianapolis Star reports:
A long-abandoned banking center east of the Market Square Arena site downtown would be redeveloped into more than 250 apartments in a proposed mid-rise development before the Metropolitan Development Commission on Wednesday.As usual Gary Welsh of Advance Indiana dissects the details behind the deal:
Kosene & Kosene would develop a second phase of 200 apartments with first-floor retail on a lot just west of the former Bank One Operations Center under the agreement. The total project would be about $60 million.
As part of the deal, Kosene will buy the operations center and a 1,667-space parking garage across Market Street from a partnership headed by Lewis Smoot. The city will buy the parking garage for $18.5 million and use revenue from the garage to repay the bank loan. Kosene would get a 10-year property tax abatement on improvements as part of the agreement.
The deal requires Kosene to show it can finance the project within three months and construction must begin within a year. The city also has a 12-month option on the undeveloped lot if it decides to use the area for a transportation hub.
Developing the lot should encourage redevelopment of the former Market Square arena site, according to Deputy Mayor Nick Weber. It also will help connect downtown with the near eastside in the area where an interstate ramp was recently removed.
There's another downtown development project in the works. Grab your wallets. A $65 million redevelopment plan by by a politically-connected developer will cost Indianapolis taxpayers more than $20 million. That's right. An entity controlled by Kosene & Kosene, Market Square Garage/Ops Partners, LLC, will purchase the old Bank One operations center adjacent to the old Market Square Arena site to construct a $30-$35 million mid-rise, 600-unit apartment building and receive a 10-year tax abatement for its investment. City taxpayers will be asked to purchase the existing parking garage for $18.5 million from the development under an installment loan agreement.Don't count on it Gary. Only Libertarian Ed Coleman feels he has the political freedom to challenge these deals which are nothing more than taking taxpayer money and handing it to private developers who turn around and kick the money back to the Ballard administration and other elected officials. It's only a short step from what the Ballard administration is doing and what we saw from a certain former Illinois Governor. Not that the Democrats didn't do the same thing when they controlled the 25th floor. For three decades now, both parties have sold out taxpayers in favor of big corporate interests, who not coincidentally are big campaign contributors.
The city's payment to the development magically will equal the developer's loan payments to Regents Bank, its lender. The garage is currently owned by Kanawha, LLC, an entity headed by Lewis Smoot. The City, in turn, will sell 600 parking spaces to the developer for an amount equal to $100,000 a year, plus an amount equal to any property taxes abated. After ten years, the parking fees will fall to $100,000 a year for the next 10 years. After 20 years, the developer agrees that property taxes and payments to the City combined will equal $600,000. The City plans to use parking revenues from the balance of the parking spaces in the garage to pay down the cost of purchasing the garage. Oh, and did I mention that the developer gets to operate the parking garage, which supposedly will provide 1,000 spaces to the public at market rates? Or that the developer can, in turn, enter into an operating agreement with a community development corporation to operate the garage? And then there's this kicker. After the development goes forward and if the City decides it wants to purchase part of the property for a public safety facility, it will pay market value to the developer for the property it purchases, which should have escalated nicely by that point.
This proposal goes before the unelected Metropolitan Development Commission for approval this Wednesday. It is an absolute outrage that the Ballard administration is proposing yet another multi-million dollar give-away to a politically-connected developer at a time the City is struggling so much financially. If the purchase of the garage is economically-feasible, then why doesn't the developer team up with Denison Parking or another private garage operator to make this deal happen? Would the City even consider a deal with this developer but for the large political contributions the principals have made over the past several years? It's the same pay-to-play bullshit that has brought this city to financial ruins. $25 million for Kite's Conrad Hilton, $20 million for the Simons corporate building, plus a parking garage, and now $20 million to Kosene to purchase a garage to finance the development of another apartment development downtown. Where does it end?
I would tell you to contact members of the Metropolitan Development Commission, but they won't talk to you outside the meeting. At least a couple of the members, however, read this blog regularly. If you want to let them know how you feel about this deal, you'll have to appear at Wednesday's hearing and ask to speak at the appropriate time. The purchase agreement and tax abatement resolutions should still be subject to approval of the City-County Council following the MDC's action, which I can assure you is already a fete de compli because the administration supports it. I hope someone on the City-County Council questions the wisdom of yet another multi-million dollar give-away to a big political contributor.
The downtown apartment market is booming. There is absolutely no reason for the city to be in the business of deeply subsdizing a private company's building of apartment complex only a couple blocks from the City-County Building. Enough is enough.