Plans for apartments at former YMCA site revised

Tribune-Star/Howard GreningerFuture housing site?: This vacant area next to the former YMCA building, at Sixth and Poplar streets, is slated for a new two-story apartment building. It is part of a revised project plan that will also convert the former YMCA into apartments.

In a reversal, the Terre Haute City Council on Thursday denied property tax breaks for an affordable housing venture at the former downtown YMCA building.

The council voted 5-4 against a 10-year, $170,000 tax abatement for a $10 million project proposed by Wisconsin-based Commonwealth Companies that would result in 40 low- and moderate-income units at 200 S. Sixth St.

Council members had granted preliminary approval in May with Earl Elliott, D-2nd, Don Morris, D-at large, and Karrum Nasser, D-2nd, voting no. This time, Amy Auler, D-1st, and George Azar, joined in opposition. Voting yes were Curtis DeBaun IV, D-at large, Neil Garrison, D-5th, Todd Nation, D-4th and Council President Martha Crossen, D-6th.

Commonwealth and Tommy Kleckner, regional director of Indiana Landmarks, defended the tax break, noting the building has been vacant since 2006 and is listed among the state's 10 most endangered landmarks.

Richard Shagley, local attorney for the project, pointed out several firms involved in other recent residential projects in the city looked at the building but chose not to develop it.

But council members raised several concerns, including whether the local tax break is truly needed in the face of $8.2 million in income tax credits approved by the Indiana Housing and Community Finance Authority and up to $500,000 in infrastructure improvements from the Terre Haute Redevelopment Department.

Elliott also questioned the number of local contractors to be used on the project and Wendy Bennett of Sharp Flats college rentals spoke against the tax break.

“We chose to invest in this community and it's a slap in the face to give out-of-town — or people who are competing with us — an unfair advantage.”

Elliott proposed a smaller tax break or a payment in lieu of taxes to make up some of the difference while Nasser suggested a break lasting eight years instead of 10. But Kevin McDonnell, vice president of development with Commonwealth, said no.

After the vote, McDonnell told reporters outside City Hall, “We hope to continue to work with the city to try to find a way to save this important building and get the project done. It's a setback but hopefully we can figure out a way to … put the pieces together in a way that works for the council and the community.”

McDonnell earlier told the council his company has already invested hundreds of thousands of dollars in the property but stands to receive a projected $450,000 developer fee.

“We're really stretching on that one,” he said. “Most of the time that figure is much larger.”

Upon learning that McDonnell indicated a willingness to continue working with the city, Elliott said, “I think that would be great. I look forward to having further discussions with him.”

Elliott said he had broached the subject of a payment in lieu of taxes in a phone conversation with McDonnell on Wednesday.

“Maybe he didn't think I was serious,” he said.

The council tabled until next week a tax abatement request that promises to be less controversial. It involves a business expansion that will create an estimated 50 new jobs and $3.8 million per year in salaries and benefits.

The request from Pyrolyx USA is for a $7 million, 60,000-square-foot manufacturing facility with $34 million in equipment to recover carbon black and other materials from shredded tires.

The 10-year abatement would forgive an estimated $756,791 in real property taxes and $1.55 million in personal property taxes. The plant will still pay a projected $772,079 in real property taxes and $1.04 million in personal property taxes during the period.

The new plant will be the second one in Fort Harrison Business park for the German-American company. Announcement of the expansion came even before the first plant begins operating, which is expected to be later this summer. Projected completion date for the second facility is January 2021.

The council Thursday approved a revised plan for the downtown tax increment financing district to incorporate via exhibit property descriptions of 15 parcels that may be involved in the new Terre Haute Convention Center project.

The council had earlier approved a plan to provide for convention-center-related work but state law requires the extra step of identifying the parcels.

The Vigo County Area Plan Commission approved the revised plan Wednesday. Council action paves the way for a public hearing and final action by the Terre Haute Redevelopment Commission.

Dave Taylor can be reached at 812-231-4299 or Follow him on Twitter @TribStarDave.