With a series of small steps and a leap of faith, the New Castle Redevelopment Commission moved forward Wednesday morning to turn a potentially transformative downtown dream into reality.
The RDC unanimously adopted a bond resolution of up to $2,125,000 to finance construction of the 1400 Plaza. The plaza, years in the making, is regarded as a key piece of revitalizing downtown New Castle, along with the existing Arts Park and planned restaurants in the remodeled Jennings Building.
“It’s been a long road,” RDC Chair Bill Aitchison said. “I think everyone’s glad to get this thing started.”
The leap of faith was necessary due to the RDC’s plans for paying back those bonds.
The RDC intends to use Tax Increment Finance dollars to make the $170,000 annual payment for the bonds over a 15-year period. TIF funds come from municipalities diverting future property tax revenue increases from a defined area or district toward an economic development project or public improvement project in the community.
Officials with Umbaugh confirmed there is plenty of money in the TIF fund to pay for the project. But ...
“What makes this TIF area a little unique is the majority of the TIF is coming from one taxpayer, Crown Equipment,” said Jason Semler, a representative from independent municipal adviser Umbaugh. “As you know, tax increment is a more risky security than just property taxes or income taxes. So to make these bonds marketable, we’re recommending the board put a special property tax-backed special benefits tax. What that means is if the TIF isn’t sufficient and doesn’t come in as anticipated, you’d be obligated to put a tax rate on the district in the city to cover that debt service.”
“And that’s about the only way it’s going to be marketable?” Aitchison asked.
“Yes, and that’s because most all your eggs are in one basket,” Semler said. “Anybody who’s going to be looking at this will be looking at worst-case scenario – what happens if the company leaves? How are you going to make that payment back? So they’re looking for something to fall back on.”
Officials emphasized Crown Equipment is in a healthy position. Local attorney and RDC member Dave Copenhaver added the TIF district has always had enough funds to pay its bills.
“Have we ever had a problem like that since the start of this district?” he asked.
“TIF revenue has gradually increased every year since 2008,” Jason said. “You have a pretty strong revenue stream and that’s continuing to increase.”
So, officials agreed the property tax fall-back plan was a safe one and unlikely to be needed.
Actions by the RDC may help accelerate the reopening of 14th Street for two-way traffic.
“If this gets approved today, we’re going to start on 14th Street right away,” York said. “But 14th Street will be open before this project is done.”
Catherine Puckett, a landscape architect from HWC Engineering, presented an updated drawing of plaza plans, including portable shaded canvas structures on either side, moveable tables and chairs, big boulders for kids to play on, a small stage and attractive archway themes.
“We think it will support a lot of the activities going on in the arts park,” Puckett said.
One resident at the meeting suggested a place for ice skating in the winter, an idea officials said was possible.
Some of the early cost estimates associated with the project include:
• $400,000 for pavement needs at the 1.3 acre site that encompasses parts of 14th and 15th streets. “That includes all the asphalt, all the concrete sidewalk, all the crushed, decorative stone we’re using.
• $250,000 for the restroom building. “I know that is jaw-dropping, but we just had a restroom building of the same size built in Crawfordsville for $270,000. There’s always opportunities for cost savings if the city were to do some of the work on its own.” City Council member Aaron Dicken suggested building one “family” restroom instead of two, one for men and another for women.
• $100,000 for a stage structure and platform.
Total costs currently were reported to be $1.7 million.
Copenhaver, who was been involved with downtown revitalization efforts for many years, said the project could represent a culmination of many previous efforts.
“Our goal was to incorporate as many interests in this project as possible,” Copenhaver said. “We tried to come up with a design that would be multi-purpose. We wanted to have a place where festivals could locate. It could easily be a Farmers Market site. It could easily be a winter carnival site. Yes, it can also be used for parking, so if we have three healthy restaurants downtown that brought people in from Richmond and Muncie, there would be places for them to park. But on a weekend, it would be blocked off for a festival at times. You’ve got to keep the multi-use element of this in mind.”