TERRE HAUTE —
The State Budget Committee has approved a multi-million dollar project to provide downtown housing for Indiana State University students, part of a public/private partnership.
The committee endorsed a 30-year lease agreement between ISU and private developer Thompson Thrift, which would build an $18.7 million, five-story retail/residential building in the 500 block of Wabash Avenue.
ISU officials were relieved to finally get approval. The committee had tabled the lease agreement at its July meeting, with committee members saying the lease agreement needed changes that were more favorable to ISU.
“We appreciate the bi-partisan support of the State Budget Committee and are pleased Thompson Thrift was able to work with us on a revised lease that addresses the committee’s concerns,” said university President Dan Bradley.
On Thursday, Diann McKee, ISU vice president of business affairs, said the university and others “have put a lot of effort into this. We feel we’ve made our best effort to answer questions and concerns the state has had.”
She believes the project will have “an enormous impact for the university and local community … It truly can be a transformative project for downtown Terre Haute.”
During the meeting, she outlined changes to the lease agreement.
State Sen. Karen Tallian, whose questions about the financing of the project back in July delayed approval, said Friday that she was pleased with the changes that had been made to the contract between ISU and the private developer.
“I appreciate the fact that you’ve done a lot of work to improve this,” Tallian told McKee.
State Sen. Tim Skinner said state budget committee members had toured the project site earlier in the year and with that, had a better appreciation of the project’s goals of providing more housing for students in a way that would help revitalize the Terre Haute’s downtown.
“This is going to be a tremendous addition to our downtown area,” Skinner said, noting that it will bring more young people into the area. “This is something we’ve needed for a long time.”
Skinner is an alternate member of the committee.
In July, members had concerns about the long-term commitment, costs and the fact that ISU would not own the facility.
Last week, State Sen. Luke Kenley, R-Noblesville, told the Tribune-Star, “They [ISU] did quite a bit of re-negotiation of the overall agreement and contract,” he said. “I think they’ve done a good job of trying to answer our questions.”
The project would consist of retail space on the first floor with student housing on the upper four floors. It will house 228 students in four-bedroom units with common living and dining areas.
Funding will be provided by the university’s residence hall system operating budget.
Paul Thrift, president of Thompson Thrift, said he is pleased the project can move forward. He applauded Bradley’s efforts to see the project through. “Only through his leadership has it been possible to reach the point we are at today,” Thrift said. “I can’t overemphasize the importance of this student housing and retail project to the city’s and the university’s futures. Its impact on developing downtown into an attractive and active business, retail and residential center will be significant.”
Key changes in the revised lease include:
n An option for ISU to purchase the housing portion of the structure is now included. This option may be exercised by the university at any point during the lease term.
n The developer is required to use prevailing wage for the construction of the project.
n Preservation of the existing façades has been eliminated. This reduces the university’s initial costs by an estimated $2 million.
n Monthly base rent is fixed at $385 per month, per bed for the first two years of the lease and at $495 per month, per bed for the remainder of the lease term. Any escalation based on average increase in on-campus room and board rates or other inflation factors has been eliminated.
Total expected cost over the 30-year lease is about $40 million, McKee said.
n Senate Enrolled Act 517, recently passed in the 2013 session of the General Assembly, provides that real property leased by a state educational institution is exempt from local property tax effective Jan.1, 2014. ISU will file for an exemption upon occupancy. The developer agrees to cooperate and support exemption filing.
n Use of TIF dollars to assist in funding the project has been eliminated.
The lease document, while in substantial final form, is under review by legal counsel and unsigned by either party at this time, McKee said.
Maureen Hayden, Indiana Statehouse bureau chief for CNHI, the parent company of the Tribune-Star, contributed to this report.
Sue Loughlin can be reached at 812-231-4235 or email@example.com.