The Highline at Delaware Park Mixed Use Apartment - NO
The Proposal The Fishers Economic Development Department has been working on the Highline project for over a year. I first read about it in IBJ on August 12th. The proposal is asking for a bond to be sold and rezoned. This link is a great presentation about the project. Link IBJ - August 12, 2021 |Kurt Christian - “Fishers-based development firm Envoy Inc. has plans to build a $52 million project with 280 apartments and 23,400 square feet of commercial space near 106th Street and Lantern Road… a request for the city to issue a $10.13 million developer-backed bond that will be paid back using tax increment finance..”
Rezoning The Fishers District (The Yard) is trendy and highly successful. I cannot blame Envoy for profiting from this project too. I like the Market at Fishers and remember that development was prized. It added much needed independent restaurants. However, the Highline development is different. My first thought was this land was set aside for business, perhaps some retail and not apartments.
I’ve always viewed this parcel as an opportunity to bring jobs to Fishers. Even more so today with the recent success of a few Life Science companies. The property was no concern for me because of my belief that the city would find an appropriate commercial development. This apartment project breaks a long-standing promise to those who live here. The Math
For years now, Mayor Fadness has said that Fishers, with just single-family homes, would not be sustainable. Our Mayor is correct because of the way our tax laws are designed. The solution is more density, more development of rentals and business properties. An apartment complex will bring in more dollars per square mile versus a neighborhood with larger lots and homestead exemptions. I do believe we can have a balance.
This deal is very complicated. So much so, I can admit what I will post may not be wholly accurate. but I will give it my best shot and anyone is welcome to correct me. Please remember that things do change. The proposal wants a $10 million bond to be sold. It is my understanding that Envoy will buy these bonds. The area is in a Tax Increment Finance (TIF) district called the Downtown-Fishers TIF. A TIF has a base and an increment. The TIF base is an assessed value before any added value to the properties and all the taxing authorities receive these tax dollars. The increment is the added value of the new assessed value and the tax dollars go into TIF district. The property taxes collected by the Highline project will pay the bond payments. Today, for reference, the Highline land is assessed at $34,300 and only pays about $959 annually in property taxes and is already included in the base. The Economic Development conservatively estimates the future assessed value will be around $42 million by building this project and this will be the increment.
Using the same tax rate as today, the math will look something like the following: 1) $42 million/$100 x 2.3119 cents = $992,365 property taxes paid 2) Less Referendum $152,365 3) Less Bond Payment (2026) $$632,000 ================================= Excess TIF funds $208,000 A TIF will last for 25 years, but as you can see, there is likely no risk of the long-term ability to make the bond payment. Plus, Mayor Fadness will include a clause that the developer will make up any difference should the taxes collected be less than the bond payment. The excess from this project I view as a safe buffer and could currently be used for more business incentives or pay for certain improvements. I believe recent excess TIF funds were used to pay for re-paving in the same Delaware Park. After 25 years, all of the assessed value of the project and the tax dollars will be distributed like any non TIF property.
A TIF does not affect tax dollars distributed to HSE given the HSE operational fund is levy limited. In fact, should HSE keep the referendum rate the same, more dollars would flow to the district should the project get built. Using the budget order for 2021, the cost to property owners is about $4,830 per HSE child. Given the project would net referendum of $152,000/$4,830 collected per child, the break-even is about 32 children. Could this Apartment be organic? I don't know for sure. There have been comments that the apartments are market priced. But in reality, they are subsidized using the TIF tool. If Envoy would charge the real market rate, the rent price would be higher by $632,000 divided by the apartment and commercial space rents. If this project was organic within this TIF, the excess TIF funds would be about $840,000 that the city could use for other TIF related incentives or infrastructure. What happens if the project is rejected? Essentially, nothing changes, but the property is subject to different opportunities to grow. I'm not sure what can be built there but this document indicates what cannot. Link
What are the neighbors in the immediate area saying? I knocked on random doors east of I-69 and discussed the project with 44 households. The sample included Wellington Apartments, Summerfield, Delaware Pointe, Pine Bluff Overlook, Lantern Pines, and Covington Grove. Let me start by saying that about 1/2 of all the people I spoke with did not know about this new development until I brought it to their attention. Some comments against the project: “… Congestion and traffic” “The school traffic is already a mess…” “More Apartments aren’t wanted or needed…” “I want that area to be businesses…. “ “ We are growing too fast already…” “ I’m afraid these apartments or others will eventually be section 8…” “ We already have enough retail around us… “ "My input doesn't matter. The decision has already been made..." For the project: “I would like to walk to more restaurants... “ “The mixed retail apartment developments are a neat concept...“
It should be noted that nearly all those in favor of the project are new residents of Fishers. Don’t Care: “I’m moving soon, so I don’t want to influence the community…” “It’s not going to affect me, so what do I care…” The Feedback
My Position I'm assuming most people outside the immediate area haven't given this project much thought. It is my hope that my fellow council members consider listening to those already living in the immediate area. It is clear that apartments are not wanted. Of all of the households in Delaware Township, about 36% are apartments. In my opinion, to ensure that we maintain a vibrant community, new apartments projects must be an appropriate neighbor as Fishers continues to grow.