Muncie negotiating development agreement with Michael’s Place apartments if tax abatement fails
After the Muncie City Council tabled a tax abatement agreement for a new apartment complex, Muncie’s mayor and redevelopment commission have come up with another option to contribute to the project. As IPR’s Stephanie Wiechmann reports, an economic development agreement is in the works.
Without a tax abatement from the city, Muncie Mayor Dan Ridenour says Horizon Companies is ready to sell the land it already bought. That’s what he confirmed to Muncie Redevelopment Commission president Jeff Howe on Thursday.
“And you tell me,” said Howe, “are they walking if it doesn’t happen?”
“They are,” responds Ridenour.
The developer from Georgia says it will spend about $52 million on the 276-unit apartment complex, known as Michael’s Place, on Memorial and Tillotson.
At the city council meeting earlier this month when considering a tax abatement, Ridenour and the company answered questions about its founder, Preston Byrd, who was convicted of wire fraud and money laundering relating fraudulent business loans. He served time in federal prison and is paying restitution.
City council members and the public had other questions for the company, like estimates on what the low-income complex would charge for rent and if the tax abatement could be tied to use of local labor in construction. Member Aaron Clark has said he motioned to table the issue so council could have further talks.
On Thursday, the MRC has approved and voted on what it’s calling a “plan B” – negotiating an economic development agreement that would pay Horizon Companies the value of the tax abatement for Michael’s Place if it doesn’t pass.
As presented to the city council, the abatement is estimated to be worth $1.6 million. The value of an MRC agreement, which Ridenour says will be used for infrastructure around the future apartment complex, is $2.5 million over five years.
If the economic development agreement is what ultimately is agreed to, Horizon Companies would pay its full share of taxes, but would essentially be reimbursed a portion of those.
Read More: Muncie Mayor: City Will Grow If We Build Housing
Isaac Miller is both a city councilman and member of the MRC. He says one body isn’t taking away the power of the other.
“Council still has the ability to take whatever action they prefer to do, and that’s fine. But then this also allows us as the commission to do our due diligence and do our job, which is to redevelop property in Muncie.”
MRC president Howe says he’s looking at how much value in tax revenue the city will get from the project for the next 50 years.
“Return on the investment the city would be making in this is $50 million. That’s about a 5,600 percent return on investment.”
The MRC voted on two resolutions on Thursday. The first supports the tax abatement that’s been tabled at the city council. The second approves the negotiation and execution of an economic development agreement with the Michael’s Place developer if the tax abatement dies on the table or fails.
Correction: This story has been updated to reflect that the MRC meeting took place on Thursday, March 16 and not on Wednesday, March 15.
