HANCOCK COUNTY — Developers behind proposals for large buildings are expressing a willingness to participate in a new approach officials want to take on tax breaks for such projects.
The latest round of big developments comes as leaders continue to mull ways to maintain incentives while easing the burden on entities that rely on tax funds.
A majority of the county’s fiscal body supports tax abatements for the millions of square feet on the horizon, all of which is speculative, meaning no occupants have yet been identified.
On second and final consideration, the Hancock County Council this week unanimously approved a tax abatement for multiple buildings totaling about 4 million square feet that Indianapolis-based GDI Construction wants to develop on about 260 acres near the northeast corner of county roads 700W and 400N. A previous Daily Reporter article incorrectly reported the abatement would be for five buildings totaling 3.5 million square feet, but the number of structures has yet to be determined. The project is estimated to result in a value of $160 million.
Hancock County’s standard tax abatement schedule for real property improvements is 100% in the first year before declining by 10 percentage points over the years that follow until taxes are fully phased in.
GDI Construction’s abatement, however, will follow a new schedule — 80% the first three years, then 70% in year four, 65% in year five, 50% in year six, 35% in year seven, 25% in year eight, 15% in year nine and 5% in year 10. The modification allows more tax funds to get to sectors like public safety and schools in the beginning of the abatement.
Council members will review the tax break annually to determine whether it continues to be merited, as they do with all abatements.
Mary Noe, a Hancock County Council member, expressed a desire for the number of buildings and their sizes to be identified in GDI Construction’s paperwork. Ron Pritzke, a lawyer with the Greenfield law firm Pritzke & Davis representing GDI, said that can’t always be determined right away. He pointed to similar circumstances for GDI and other developments in the past.
“We’ve had several other petitions that have been passed without knowing exact square footage, and that’s because they’re market-driven and speculative buildings,” Pritzke said.
Council members also unanimously supported, in their first of two votes, an abatement for a speculative e-commerce/logistics facility of over 263,000 square feet Cincinnati-based Al. Neyer wants to develop on the west side of County Road 700W between county roads 350N and 400N. Its value is estimated to be $20.3 million.
While the initial resolution includes the county’s standard abatement schedule, council members asked Al. Neyer representatives if they’d be amenable to a modified one or a payment-in-lieu-of-taxes program, as long as it netted out the same as the standard abatement.
“From the developer’s perspective, you know the numbers have to work,” said Briane House, a lawyer with Pritzke & Davis representing Al. Neyer. “So if the overall benefit is the same, we’re good. I don’t think the developer cares what pocket the money goes in.”
Council member Keely Butrum said her support for the abatement stemmed from learning from the Hancock Economic Development Council that demand is growing for buildings in the 200,000-square-foot range; Al. Neyer’s project not requiring any infrastructure investment from the county or request for assistance from the Hancock County Redevelopment Commission; and that the site is already surrounded by similar zoning and uses.
“I think those are the positives,” Butrum said.
Council member Kent Fisk said he also is drawn to the proposal’s smaller size.
“I’d like to introduce it for the simple fact it’s not the standard 500-door warehousing facility, that it actually can be something else and it’s not set up for just bringing a hundred trucks in and dumping stuff and taking a hundred trucks back out at the same time,” he said.
The council is slated to hold a public hearing and final vote on the abatement at its October meeting.
Council members voted 6-1 in favor of initial approval for an abatement on a proposed building over 523,000 square feet Exeter Property Group wants to develop near the northeast corner of county roads 300N and 400W. Noe, Fisk, Jeannine Gray, Jim Shelby, Bill Bolander and Robin Lowder voted in favor while Butrum voted against.
The site still needs to be rezoned before the proposed development could occur, which Butrum felt should be addressed first. The Hancock County Area Plan Commission is slated to consider a recommendation on the rezone to the Hancock County Commissioners later this month. Butrum said her vote could change during the council’s second and final consideration slated for next month.
Exeter currently estimates predominant wages in the building of $12 to $15 an hour, a range not welcomed by Noe. While it’s not uncommon for developers to aim low when listing payroll figures in their paperwork — especially when tenants remain to be determined — it’s also often an irritant of officials who want more of an inclination that higher-paying jobs are coming.
Matt Price, a lawyer with Dentons law firm representing Exeter, said a wage and benefit survey on jobs in the site’s vicinity is underway that will refine the proposal’s wage data to reflect market conditions.
“It’s going to be some effort to do that but we’re prepared to do that effort,” Price said.
He also said Exeter is open to a payment-in-lieu-of-taxes program and/or modified abatement schedule.
The council voted 5-2 in favor of initial approval for an abatement on a proposed project involving two buildings Exeter also wants to develop at the northwest corner of county roads 500W and 500N. One of the buildings would be over 1 million square feet, and the other would be over 677,000 square feet. Shelby, Bolander, Fisk, Butrum and Lowder voted in favor while Noe and Gray voted against.
Noe said the site is too close to McCordsville’s Woodhaven neighborhood on West County Road 600N’s north side and in an area she thinks would be better suited for commercial development. McCordsville officials granted approval earlier this year to Al. Neyer, however, for a speculative e-commerce/logistics facility just across 600N from Woodhaven.
“For me this is a project I can’t support because of location,” Noe said.
Council members unanimously supported, on first consideration, an abatement for three buildings VanTrust Real Estate wants to develop in the northeast quadrant of county roads 700W and 400N. The buildings would be over 900,000 square feet, nearly 590,000 square feet and nearly 300,000 square feet. The developer plans to fund road and sewer improvements through a bond that would be repaid from taxes it would pay, a process permitted due to the site’s location in one of the county’s tax increment financing districts.
[sc:pullout-title pullout-title=”Spec buildings at a glance” ][sc:pullout-text-begin]
GDI Construction, Indianapolis
- Near northeast corner of 700W and 400N
- Multiple buildings totaling about 4 million square feet
- Estimated value: $160 million
Al. Neyer, Cincinnati
- West side of 700W between 350N and 400N
- 263,498 square feet
- Estimated value: $20.3 million
Exeter Property Group, Indianapolis
- Northeast corner of 400W and 300N
- 523,260 square feet
- Estimated value: $27.8 million
- Northwest corner of 500W and 500N
- 1,015,740 square feet
- 677,160 square feet
- Estimated value: $86 million
VanTrust Real Estate, Kansas City, Missouri
- Northeast quadrant of 700W and 400N
- 903,960 square feet
- 589,680 square feet
- 294,840 square feet
- Estimated value: $115 million
[sc:pullout-text-end]
