After debate on council, Gary plan moving forward
The council approved the abatement 7-0 with Council President William Godwin, D-1st, abstaining following back and forth with Councilman Clorius Lay, D-at large, regarding whether the city’s community benefits agreement passed in December should apply and the abatement be approved.
The time-sensitive approval was necessary to ensure the closing of the deal with the banks by the end of August, according to Pete Schwiegeraht, vice president of Westchester, Ohio-based MVAH Partners, the project’s developer.
“We have a cliff date. The project has to be completed by the end of next year,” Schwiegeraht said.
The project along 7th Avenue at Broadway and stretching east a block to Massachusetts Street, where the Memorial Auditorium was razed this week, needs to get started in August. If the project starts later it runs the risk of working through winter conditions that will add $500,000 to the cost of the project and make it unfeasible, he said.
“I’m only mentioning this because I want you to know there is a potential dire risk to the development and future development if we can’t get this across the finish line quickly,” Schwiegeraht said.
Schwiegeraht asked for some leniency from the administration and the city council from the terms of the CBA for the first phase of the $11.6 million project in awarding the tax abatement worth an expected $669,000. The initial request for the abatement was made in October 2019, two months before the CBA was approved.
He said developers are happy to make the 15% reinvestment from the tax abatement, but beyond that some of the CBA requirements simply would require rebidding, delay the project and increase cost.
“We went through the process in good faith to get to this point,” Schwiegerhart said.
The development will include 38 loft-style apartments, 4,000 square feet of retail space and 2,000 square feet of retail space. Two tenants already have been secured for the retail space. A Women, Infants and Children office will be one tenant and a workforce training center will take up the remainder of the space. The offices will provide services to residents of the building and the city at large.
The project also will include a $250,000 greenhouse that will be operated by Faith Farms, which currently operates an urban farm in the city among other features.
Officials initially moved to defer the request to committee as they continue to consider amendments to the community benefits agreement. Lay said the council should not risk losing the development. He said the current CBA likely will be tied in for weeks in committee. Lay said if his amendment is approved, members of the CBA committee would have to be interviewed in committee and selected, a process that takes time. There is also the chance the Mayor Jerome Prince would veto the ordinance.
“Why are we gambling?” Lay said.
Godwin said the CBA became applicable to the project once it was approved by the city council in December. While the developer may have submitted the tax abatement request prior to the approval of the ordinance, that request never made it to the current city council and did not enter the pipeline until after the CBA was approved.
“I would say absolutely the CBA applies,” Godwin said.
Prince urged the council to move forward with the approval. “From the administration’s perspective, we don’t believe the CBA actually applies to this,” Prince said. He said the project began long before the CBA was approved. He also suggested the council recraft the original CBA to deal with some impediments to developers in how it should apply.
“The most effective way is to appeal the current CBA and draft one that is acceptable,” Prince said.
Members of the current Committee for a Gary Community Benefits Agreement spoke out against not applying the CBA to the Broadway Lofts project.
Carolyn McCrady, chair of the Committee for a Gary CBA, argued the CBA should apply to the project. Once a project makes a request for public subsidy it should trigger a discussion on issues like local hiring and job training and other ways the developer plans to give back to the community.
“That has not happened yet. We never even found that out. What we got was a lot of information about the project that has nothing to do with the CBA,” she said.
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