NEW PALESTINE — Officials with the Town of New Palestine continue to move forward finalizing the paperwork associated with the $61 million Becovic high-end apartment complex project. An ordinance associated with the project passed a first reading during the most recent council meeting as final approval inches closer.
The project is located in a Tax Increment Financing area behind the Wellness Center near the intersection of U.S. 52 and CR West 600S with developers asking for a $5 million bond. However, there was some confusion with the breakdown in tax funding payouts surrounding the $5 million bond.
The ordinance, authorizing one or more series of taxable economic development revenue bonds and approving and authorizing other actions related thereto, basically approves the town issuing the bonds associated with the project. The measure passed 3 to 2 after the topic was once again tied in a 2 to 2 vote with the town’s clerk treasurer having to cast the deciding vote.
For months, council members have been divided on the project and have struggled to find common ground with two members in favor of the project, two opposed and one member abstaining.
Before the vote was taken on the latest paperwork, council member Angie Fahrnow objected to the breakdown of how the tax monies would be shared between the town’s Redevelopment Commission and the developer. The breakdown states the town’s RDC will get 25% of the monies with the developer getting 75%.
Fahrnow was adamant the figure had changed and stated she had an email from last March showing the town’s RDC would get 30% of the tax monies. It’s a figure council president Bill Niemier disagreed with as did a representative of the developer.
“When did it change that the RDC was going to get 25%?” Fahrnow said. “Originally it started out at 30% and I didn’t see any documentation where that changed.”
Niemier noted he was not aware of any documentation that ever stated the RDC would get 30%. Fahrnow said she had the information in an email from March 7 indicating the RDC was to get 30% of the monies, an estimated $200,000 annually.
“Everything I recall from it’s inception was at 25%,” Niemier said. “That 25% from day one has equated to $167,000 per year going to the Redevelopment Commission.”
An official representing the Becovic project also noted at the meeting the only numbers they’ve ever seen is the 75% to 25% split. The Daily Reporter story on the breakdown of the bond monies in April also noted the figures at 75% to 25%.
“Every presentation we received publicly was at 25%,” Niemier said.
Council member Clint Bledsoe, who has voted with Fahrnow against the project raised the question about fees for the bonds, asking who would pay them. He was told by Niemier the cost for the bonds was being paid for by the developer.
Niemier noted the town received a much larger cut than in a deal they did during the construction of the Wellness Center where the RDC received $50,000, money the town just recently received.
Niemier noted the $167,000 the town will be getting per year in taxes as a result of the Becovic project is more than three times the amount they’re getting from the tax breaks presented for Hancock Regional Hospital’s $7.2 bond which was needed for the construction of the Wellness Center.
“In hindsight, we probably sold ourselves short,” Niemier said. “It was the first TIF ever done.”
The bond surrounding the Becovic project is the second TIF project associated with the town’s TIF district which the town’s council created hoping to attract major projects. Bledsoe insisted the two projects were completely different and shouldn’t be judged in the same manner.
“The Wellness Center is an entity that did not have to pay taxes,” Bledsoe said. “This was a way for our RDC to get some money and also help with the financing of the Wellness Center.”
Bledsoe also express displeasure with the ordinance, saying there were too many documents surrounding its passage and he didn’t have time to read everything.
In the end, Niemier and council member Chris Lytle voted for the ordinance while Fahrnow and Bledsoe voted against. Council member Brandee Baston abstained because she works for the land developer, HRH. That allowed clerk treasurer, Yvonne Jonas to break the 2 to 2 tie which she did with a favorable vote.
The measure officially passed the first reading and is expected to face a second reading vote at a future council meeting. Niemier told the Daily Reporter following the meeting that it will be several years, probably three to four, before the town’s RDC will actually see the benefit of the bond, due to construction, assessment and other taxing issues that take a while to materialize.
