Carmel’s building boom raising debt concerns

(WISH Photo)

CARMEL, Ind. (AP) — A central Indiana city that has received widespread national attention for one of the nation’s longest building booms is doing so at the expense of road repairs, sewer work and improvements to public amenities, a new report says.

Now Carmel Mayor Jim Brainard wants the city to issue millions of dollars in bonds to a private developer to build a parking garage and other infrastructure, with no guarantees that taxpayers won’t ultimately wind up footing the bill.

“We, on the council, call it a shell game,” Councilman Rick Sharp told The Indianapolis Star. “The city is moving money from one area to pay for another and at the same time saying there has been no tax increase.”

Brainard said he wants to complete the vision he launched 16 years ago.

“We have made tremendous progress in Carmel building a walkable, bicycle friendly, urban core,” Brainard said. “But we have yet to finish it.”

But the city’s redevelopment commission is so strapped for cash that the city council in 2012 agreed to back most of its debt with property taxes. In October, the panel sold a former delicatessen building for $2.1 million to Pedcor, the city’s main redevelopment partner. The price was about $400,000 less than the city paid for the building three years ago, but the commission needed cash to pay $1 million in redevelopment costs.

Critics of the growing debt load say the city needs to move cautiously on future projects.

The group’s financial adviser, Umbaugh, said the commission’s tax-increment financing districts will fall $43 million short of paying the $486 million it owes through 2037. The panel has diverted money from two other taxing districts to close the gap, but the commission could still fall $9 million short without additional funding.

The commission also has tapped about $1.7 million annually from the Civic Theatre and other funds to help it meet obligations.

Meanwhile, the city has slashed more than $2 million from its road funding budget and has been diverting $1 million a year from a sewer-project fund to the city’s general fund since 2009. It’s also delayed other repairs and has used savings to pay for a study of flooding.

“When we are shorting funding for some of those basic services to perhaps fund newer and more glamorous projects, it can only go on for a year or two before the cracks in the system are noticed,” council finance chair Luci Snyder said.

Brainard said the recession slowed growth in the tax-increment financing districts but argues Carmel weathered the downtown better than most cities.

He’s budgeted $4 million for road repairs next year and has submitted a plan to pay for about $800,000 in repairs to the city’s reflecting pool.

Council president Eric Seidensticker said most council members support Brainard’s projects but are leery of taking on more debt that ultimately could land on taxpayers’ shoulders.

“The real crux of the matter is who is going to be paying for what,” Seidensticker said.

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