You know that a deal stinks to high heaven when the powers that be are forced to rename it.
So it went the other day, when Mayor Greg Ballard helped break ground on the renamed North of South (aka No-So) project. The new name is City Way (aka City No Way To Run A City). Lest the Google bots not find sufficient linkage between the worst deal for taxpayers to come out of the Ballard years as Mayor and its new name, let me provide some contextual linkage here.
City Way is the new name for North of South.
This project takes all of the risk off the developer and puts it squarely on the taxpayers of Indianapolis.
The taxpayers loaned the City Way (No-So) developer $86 million that it got by floating a $98 million bond that was secured with property taxes gathered from the Consolidated Downtown TIF district. The developer gets to pay the loan back with whatever money it would pay in property taxes on its development, in effect granting the developer a 10-year 100% abatement on the project. Should part of the project be profitable, swell -- the developer can pay back the City for that portion and pocket the rest of the profit. Should part of the project be unprofitable, no problem -- the developer can default on that portion despite the fact the rest of the project is profitable.
The developer is supposed to seek refinancing for the project in ten years. But, the City floated 30 year bonds - and whether or not the City will use the money to pay off the rest of the $98 million bond at that time is anyone's guess. Should there be a problem with the development, no problem - the City will foreclose on it and add millions more taxpayer money to finish it.
The City will also put in some $9 million of streets and sewers and parking meters.
With about 30,000 square feet of office space and, hopefully one small wet lab, the State of Indiana designated it a Certified Technology Park and tossed a free $6 million to the developer.
Eli Lilly stands to benefit substantially. Although they are credited with donating $30 million to the project, half is a way early payment from the City on another TIF district set up specifically to benefit Lilly and half is credit for the value of the land upon which City Way (No-So) will be built. The latter is not really a contribution, as Lilly will retain ownership and lease the ground to whomever owns the buildings erected on it.
The developer is only putting up $6 million. The developer could not get a bank to finance the deal. So, Mayor Ballard stepped up and put the taxpayers on the hook.
Hopefully the Google bot has enough clues in this blog entry to make sure that City Way and North of South both come up whenever City Way is the search term. The taxpayers of Indianapolis need a good historical record about how huge a boondoggle this City Way (North of South) project is.
If you want more information about the City Way boondoggle, you can read my earlier blog entries "North of South - Details of Proposed Deal", "No-So Field of Dreams - Lie And They Will Build It", and "No-So Deal Worse Than Even I Thought" for the highlights.
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Mark Small posted a blog post
8 hours ago
7 comments:
Some things are just more important than ensuring IMPD can afford to fly its helicopter(s).
I thought perhaps there was a trademark concern with North of South that led to the change in names. The web address, northofsouth.com, is registered to a company named North of South Capital.
DI - its not that we provide too little money to public safety, IMHO. Its how they decided to spend it. A couple of budgets ago, they decided that the utility of the choppers wasn't that great and wanted to spend the money on other things.
That's interesting Gary. You might be right.
Lilly would have done this itself, but it wanted Indy's bond rating to lower the interest rate. Once again the city ends up with higher AV, and Lilly won't let it fail, so it's a decent project. More cops on the street is always nice, but until Indy can afford more jail beds, that's just more fishermen all doing catch & release when the catch rate it still pretty good.
anon 8:38 - "Lilly won't let it fail, so its a decent project"?
That's what you call specious reasoning. The city floats bonds at its lower rate for companies every year, without promising tax revenues for the repayment stream. Repayment of the bonds is the obligation of the company. AND the city doesn't give out 10 year 100% abatements to help the company make the bond payments.
Sure Lilly wants the project, it needs every dime it can get its hands on to stave off being gobbled up by a bigger company. Let's face it, Lilly has some significant problems. But, that doesn't justify this horrendous deal for the taxpayers.
I'm not sure "North of South" is distinctive enough to be trademarked. It would be a close call.
I think maybe they got tired of us calling it the No-So project. I thought the nickname was pretty cool, especially the "No" part which should have been the council's vote on the taxpayer giveaway.
Don stinson retiring....real or rumor....what is his package?
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