Tuesday, March 18, 2014

Indianapolis Council Votes to Give Away $23 Million in Corporate Welfare; Next Up a Tax Increase for Public Safety

The Indianapolis Business Journal reports:
Proposed Market Square Tower
A proposal by Flaherty & Collins Properties to build an $81 million, 28-story apartment tower on part of the former Market Square Arena site passed its last big hurdle Monday evening.

The Indianapolis City-County Council voted 18-9 to provide up to $23 million in city financing for the project, with the stipulation that 30 percent of the workers hired to build the tower live in Marion County.


The proposed Market Square Tower—if it’s built as planned at 28 stories and 370 feet—will be one of the 10 tallest buildings in Indianapolis. It would rank as the tallest apartment building in Indianapolis.

The tower would include 300 luxury apartments renting for $1,300 to $2,400 per month. About 500 parking spaces and 43,000 square feet of ground-floor retail space would be included. Flaherty & Collins said it prefers that a specialty grocer occupy the space and is pursuing Whole Foods as a tenant.
 Over at Advance Indiana, Gary Welsh outlines attempted amendments to the measure:
The only change made by council members was an amendment offered by Councilor Vop Osili to shorten the repayment term for the $23 million bond issue from 25 to 15 years. An amendment offered by Councilor Zach Adamson to reduce the amount of the bond issue to $19.5 million, which is actually the minimum amount the developer had indicated would be acceptable, along with reducing the repayment schedule to 15 years was rejected by a majority of the council members. Osili claimed his amendment saved taxpayers $7.6 million, while Adamson's proposal would have saved at least $14.7 million. Tonight's vote also paved the way for the gifting of land on which the high-rise building will be built to the developer worth at least $6 million.
Welsh picked up on the real reason this project was being financed by bonding instead of the City making the payments directly from the downtown TIF:
The discussion with the developer, David Flaherty, and the city's chief economic development official, Deron Kintner, demonstrated the extent of the ignorance of a majority of the council members. When Kintner was asked why the City didn't just make the $23 million grant directly to the developer rather than borrowing the money through the issuance of bonds, he told council members that the downtown TIF district had sufficient funds to pay the entire amount of the grant upfront rather than borrowing it, but the administration thought it would be more prudent to borrow the money because interest rates of about 5.5% were too good to pass up. Not a single member asked a follow up question to that response.

Kintner could not have been more disingenuous in his response. The project is being driven by the law firm of Barnes & Thornburg, which will earn hefty legal fees, along with other financial firms, which contribute heavily to the politicians' campaigns. If there is no bond issue, they don't receive their kickback for their share of the project in consideration for their large campaign contributions. An equal concern of Kintner is making sure there is more money laying around in reserves so the city's bond bank can issue even more bonds to fund future outrageous public giveaways like the one witnessed at tonight's council meeting. 
While our Council is bestowing the $23 million on a politically-connected developer to building luxury apartments on one of the most expensive pieces of real estate in the City, which property we are simply giving to the developer, the Council is about to take up a local tax hike to fund public safety.  The priorities of this administration continued to be skewed toward handing out corporate welfare to politically-connected companies while sticking it to hard working men and women who continue to see their taxes raised to fund the giveaways.

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