TERRE HAUTE —
The City of Terre Haute is being asked to help cover part of the cost of the planned Indiana State University downtown housing project.
The project, which would provide housing for more than 200 ISU students in the heart of downtown on Wabash Avenue, came before the Terre Haute City Council on Thursday night. The city’s Department of Redevelopment is asking the council to approve issuing bonds worth up to $1.25 million to help pay for the project, expected to cost close to $17 million in total.
Approval of the bonds would allow the developer, Thompson Thrift, to combine a portion of the project’s debt repayment with property tax payments. In other words, property taxes generated by the new building would be used to repay the city-issued bonds.
Another 25 percent of the property taxes paid by the new building would go to the Department of Redevelopment for future projects, said Cliff Lambert, executive director of the department.
Early estimates indicate annual property taxes from the project could total about $180,000, said Jason Semler, a financial consultant to the Department of Redevelopment and a CPA with H.J. Umbaugh & Associates of Indianapolis.
Approval of the bonds is “absolutely essential” to the project moving forwards, said Paul Thrift, a principal of Thompson Thrift, reached later Thursday evening. In order to make the project appealing to investors and lenders, the bonds are badly needed, he said. This is especially true in light of rising interest rates, he said.
The Department of Redevelopment would likely spend between $150,000 and $175,000 on new sidewalks and curbs around the new building, Lambert said in response to questions from Councilman Todd Nation, D-4th.
First Financial Bank has shown an interest in purchasing the bonds, Semler answered in response to a question from Council President Norm Loudermilk. At present, the interest rate being contemplated for the bonds is 4.67 percent, Semler said in response to another question from Loudermilk. The rate would be variable every five years with a cap of 7 percent, he said.
The nine-member City Council could vote next Thursday night at its regular July meeting to approve issuing the bonds, which must also be approved by the five-member Terre Haute Redevelopment Commission, a body whose members are appointed by the council and the mayor.
Loudermilk, meanwhile, asked whether the council might want to table consideration of the bonds for a month in light of a decision Wednesday by the State Budget Committee in Indianapolis to hold off on making a decision on the project.
The State Budget Committee, which includes state lawmakers, must approve the overall project, which calls for ISU to lease student housing space in the building from Thompson Thrift for 30 years at approximately $1 million per year.
Members of the budget committee were concerned that the project calls for ISU to enter such a long-term lease, Lambert said. The budget committee in the past has approved leases of up to only four years, he said.
However, Lambert expressed confidence that the budget committee will ultimately approve the project.
“The are reviewing it,” Lambert said. “Every member of that board, I dare say, is supportive of this project.”
State Sen. Tim Skinner, D-38, who is a nonvoting Democratic member of the budget committee, attended the City Council meeting and told council members a meeting is planned for later this month between ISU officials and members of the budget committee, including Sen. Karen Tallian, a Democrat, who expressed the deepest concerns about the project.
“I will be there [at the July 23 meeting] to make sure Sen. Tallian is comfortable with this,” Skinner told the council.
Part of the problem faced by the budget committee Wednesday involved a break in communications somewhere between ISU and the committee members, Skinner said. Information was sent to the committee, but didn’t make it to the individual members of the committee, he said.
Despite the non-decision in Indianapolis, Lambert urged the council to approve the bond issue saying “we would be doing ourselves a disservice” not to act on the measure next week. The overall project is part of the “renaissance” of the downtown and will provide much needed property tax money for years to come, he said.
In the event the state does not approve the project, the city’s economic development bonds would not be issued, Semler told the council.
Reporter Arthur Foulkes can be reached at 812-231-4232 or email@example.com