Developers of Gary’s $11.6 million Broadway Lofts project are seeking city support for a second component to what is being described as a potential investment of more than $50 million into the city’s housing stock once complete.
Broadway Homes will be a 46-unit town home community off of Broadway in the Emerson neighborhood, Pete Schwiegeraht, vice president of development Midwest for Broadway Lofts LLC, said.
Schwiegeraht appeared before the Planning and Development Committee May 11 to seek similar support from the council as was granted for the Broadway Lofts project, a mixed-use development at 6th Avenue and Broadway including retail space and apartments.
Last fall the city provided Broadway Properties LLC with a 10-year 75% tax abatement on the 38-unit development. The tax abatement served as the needed local incentive to qualify for Moving Forward funding from the state. Schwiegeraht said developers are seeking the same tax abatement deal which will serve as the local incentive for this phase as well.
The project will draw from the same pool of state tax credit funding but will not be part of the Moving Forward program like Broadway Lofts. That program has ended.
Schwiegeraht said the project was among 60 development applications for state tax credit funding and one of only 15 such applications to be approved.
“It’s a very competitive process to secure those funds. They are a big resource and tool,” Schwiegeraht said. The proposed townhomes will be built on scattered sites owned by the Gary Redevelopment Commission and are currently generating zero property tax revenue.
If the city agrees to provide the tax abatement, developers will begin a community input process, he said.
Phase two Broadway Homes in the Emerson neighborhood that will include two-, three- and four-bedroom townhomes. The project targets Gary’s working class earning between $25,000 and $60,000 a year with affordable, new high-quality homes in the core of Gary, where many homes have been lost to blight. The townhomes are not rentals and are intended to provide to create ownership opportunities for people within that income range, he said.
Schwiegeraht said developers ultimately would like to continue with a third phase that will be a mix of single-family homes and townhomes. The last step in the process would be senior lofts, a multistory senior building with scattered-site independent living villas for residents 55 and older.
“By the time we are done here, it will have a pretty big impact in the neighborhood,” he said.
The project will be co-owned and codeveloped by the not-for-profit arm of the Gary Housing Authority, the Northwest Indiana Development Corp.
Schwiegeraht said the second phase of the project could begin as soon as late fall or early spring, depending on approvals and weather. Developers will apply for state funding for the additional phases in July.
Councilman Ron Brewer, D-At large, chair of the planning committee, said the city currently does not receive any tax dollars from the properties being used in the development, making the 25% in property tax dollars the city would receive from the improved land a plus.
“They are not collecting any taxes at this time anyway,” Brewer said.
Schwiegeraht said the ultimate goal is to bring the properties back into a tax generating status. A 75% tax abatement would generate about a $600,000 local incentive captured over the 10-year period. The project would create about $275,000 in new tax base. The abatement also has a 15% give back, which would mean about $130,000 to $150,000 worth of community development dollars that benefit the city, Schweigeraht said.
Mayor Jerome Prince reserved comment Thursday on the proposal until he has more information about the developer’s plans.
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