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City officials on Tuesday night approved a project agreement to allow for a five-story, 120-unit mixed-use development near the corner of 11th and Washington streets in a split vote.

Columbus City Council members approved the agreement with Rubicon Development, along with the first reading of an ordinance authorizing a direct loan to the developer. Both votes were 5-2 with council members Chris Bartels, R-District 1, and Grace Kestler, D-at-large, voting against.

Ordinances must be passed on two readings to be fully approved. Council members Jerone Wood, D-District 3, and Kent Anderson, R-District 5, were absent.

The agreement includes a city subsidy of $6.4 million as a forgivable loan to cover a financing gap for the $30.9 million project, which will include apartments, commercial space and a parking garage on three parcels at 921 Jackson St. and 1008 and 1020 Washington streets. Rubicon also developed St. Barts Apartments.

As has been done for other mixed-use developments in recent years, including The Taylor and the development at Sixth and Washington streets, the city is creating separate tax-increment-financing (TIF) district bounded by the project site. This is to capture expected increasing property taxes generated in the area due to the development.

Council members in favor of the project view it as a means to revamp a gateway into the city and the 120-units it would bring as helpful in working towards reaching needs for housing identified in the city’s housing study, while also potentially helping activate downtown. All agreed that more dense development in the area is crucial in growing the city.

The housing study showed a total demand of 3,628 units through 2035, made up of 1,995 owner-occupied and 1,633 renter occupied units, spread across all price-points.

Kestler and Bartels also serve as city council liaisons to the redevelopment commission and plan commission, which have considered the project several times this year.

Bartels, for his part, said he wasn’t excited about the $6.4 million subsidy the project would be provided and questioned the proposed pricing of the units, saying they were higher than the market-rate locally based on a report he had from Breeden Realtors.

For Kestler, she said she wasn’t opposed to the project generally, but had concerns about the site and proposed stormwater system, as well as what’s being described as workforce housing. Even the discounted units would still not be affordable for a teacher making about $50,000 a year, for example, she said.

Workforce housing is typically for those making between 80% and 120% of area media income (AMI), which is about $72,000, meaning someone making up to $80,000 could receive a discount.

“My issue lies in subsidizing where we’re not truly subsidizing for those with the most need, when we know that 32%-ish of our community households are earning less than $50,000 a year,” Kestler said. “I actually agree more sometimes with subsidizing for owner projects, because then we’re helping people build equity.”

Redevelopment financial adviser Andrew Lanam said that $6.4 million would be recouped in 21 years. Lanam added that the current assessed value of the three parcels as of this year was $464,000 and projected assessments will reach as high as $15 million if and when the project is built.

Community members who are a part of the Historic Downtown Neighborhood Alliance, made up of neighbors living near the project site, have consistently attended all meetings regarding the project over the past year and have voiced their displeasure about the project, including it’s price-point, comparable size to the nearby area, look and its perceived encroachment on the city’s architectural identity.

The group had also made efforts to potentially refurbish and move 1034 Washington and 1008 Washington, two homes which were listed as “outstanding” examples of the Queen Anne residential style in the 1980 Indiana Historic Sites and Structures Inventory for Bartholomew County. However, the properties are privately owned currently and under contract with Rubicon, so what the alliance has tried had been rebuffed, they’ve said.

Another issue repeatedly brought up by those opposed to the project is that there is an environmental covenant placed on the site, meaning groundwater there is contaminated. Rubicon is proposing a type of expensive underground detention system to address drainage issues, which community members have questioned. City officials said a similar system is under The Taylor and NexusPark.

The house at 1008 Washington St. was built by F.T. Crump for his daughter Minnie and her husband, Joseph Weller, at the end of the 19th century.

The building at 1034 Washington St., also known as the former Joe Willy’s and Overstreet Home, is not included as part of this specific development, but Rubicon has previously presented plans for a potential restaurant in the location, requiring the structure to be torn down. Rubicon representatives said Wednesday that plans for that location are still active and would come at a later time.

Tuesday night before the city council meeting, an excavator and large dumpsters were already placed outside of 1008 Washington St., and demolition of the property had been finished by the next afternoon.

Rick Sprague, of Sprague Rentals, owns 1008 and 1020 Washington, as well as 921 Jackson St, now a vacant drive-thru bank. The structure at 1034 Washington St. is owned by the Columbus Capital Foundation, whose president is Hutch Schumaker.

Both men attended the meeting and recounted their respective histories of restoring and preserving historic homes downtown, saying that they felt they had done everything they could for 1008 and 1034 Washington. Both said the properties have had issues with break-ins as well.

As was the case for the Nov. 18 redevelopment meeting in which the project agreement was approved, city departments heads and professionals hired by redevelopment touched on various concerns the public have voiced about the project for about two-and-a-half hours, followed by about 30 minutes of public comment and further discussion by council members.

Rubicon representatives have stated they received $3.2 million in redevelopment taxes from the Indiana Economic Development Corp. to support the project. Rubicon’s cash equity amount is $2.92 million and they have deferred development fees of $1.4 million. In addition, Rubicon is personally guaranteeing a construction loan in excess of $20 million, representatives have said.

Under the terms of the agreement, Rubicon has until June 30, 2025 to close on their construction loan. The city’s contribution is contingent upon that and the agreement also included a minimum taxpayer agreement, described as like a “property tax lien on the property,” Brad Bingham, an attorney hired by redevelopment, said.

If assessed values on the property lag “or if they don’t keep up with where the expectation is” then Rubicon would receive a bill for the difference and would be required to pay back $8.86 million.

While the loan is described as forgivable, Director of Community Development Robin Hilber said it will actually be paid back through tax dollars, which Bingham further explained.

“What we’re doing is using cash on hand on this forgivable loan, and then the developer is agreeing to guarantee property tax payments for the next 25 years. As those are paid, that revenue stream, it will reimburse the (Columbus Redevelopment Commission’s) coffers for this outlay of cash.”

Ed Curtin, of CWC Latitudes, presented a return on investment analysis, which he said shows what the potential impact of the development could be.

Curtin’s analysis found with the $6.4 million the city is providing, it would receive nearly $159 million “in ancillary benefits” over the life of the TIF, almost a 25-to-1 return. In addition, the project would generate $336,467 in new taxes annually, according to Curtin’s analysis. Currently, the property generates $20,518 a year.

“The reality is, any community would love to have a project like this,” Curtin said. “… We’re going from what was about $20,000 a year in property taxes now to hopefully getting something that’s going to pay 16 times that in the long-run. That helps the community because it gives you more assessed value, which gives you a bigger tax base, which allows you to do more for the citizens.”

Hilber, of community development, discussed how the project will have a hand in satisfying housing stock needs identified in the recently completed housing study.

Hilber talked about a chart that shows the large amount of people who commute into Columbus on a daily basis for work but live elsewhere.

“This shows that 30,000 people commute into Columbus on a daily basis to work. This data has been questioned by our local news media. However, our housing study used this as one point of information. Recommendations are never based solely on a quantitative number. Respondents to the workforce survey conducted earlier this year indicate that many of those who do not live here want to, but cannot find adequate housing.”

“Whether we’re looking at this number of people commuting into Columbus as being 30,000 or 20,000 or 12,000 — commuting into our community for work is definitely happening. And the final message of the study does not change, in that we definitely need more housing.”

Hilber went on to reference a chart from the housing study (figure 1.4), updated to show how the Rubicon development and others in the works would address gaps in the housing study, particularly those regarding multi-family units.

The chart showed that even including the 6th and Washington development, Thrive Alliance’s Haw Creek Meadows and TWG Development’s Flats on 14th, there is still a sizable deficit for pretty much every single type of class of rent-range through 2035.

When asked by Bartels what the target demographic for the development would be, Matt Nolley, principal at Rubicon, said: “We have people running the gamut— people that just graduated from high school that live in our projects with similar amenity packages to people that are retired.”

Council President Frank Miller, R-District 4, said he doesn’t necessarily like all aspects of the project, but was convinced after the city housing study found that 60% of demand for rentals is for units $1,000 a month or greater, with 40% of the demand for units less than $1,000 a month, showing there is desire for the type of units 11th and Washington would have.

Councilor Elaine Hilber, D-District 2, noted that, including both affordable housing projects that made their way through local government this year and an appropriation of federal money councilors approved, the city has put $9.1 million towards affordable housing and homelessness initiatives.

Jay Foyst, a Republican representing district 6, said he went into the meeting “looking for a reason to say no” but was convinced to vote yes after the presentation by city officials.

“I came in here tonight with an open mind, but I came in here looking for a reason to vote no. I’ll be honest, I did, I came in here saying there’s gotta be— I gotta find a reason to vote no,” Foyst continued. “… All the people you brought in to give us a great presentation, you did a great job. And I’ll be honest, I can’t find a reason to vote no.”

The council was next scheduled to meet on Dec. 17, but Miller said that meeting has been canceled. The council will consider the second reading of the ordinance authorizing the direct loan on Jan. 7.
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