If you happened to find yourself thinking, “It’s never been this hot over Memorial Day weekend,” simply put: You were right.FORT WAYNE – Developers for The Harrison reached a key financing target, after selling millions of dollars' worth of federal tax credits.
With contractors working on the site for weeks, the news that the final major financing hurdle has been overcome greatly raises the probability the long-delayed project will be completed.
Mayor Tom Henry confirmed the tax credit sale Monday, one day before the deadline to complete the work on the new markets tax credit.
"The Harrison's private-sector partners are committed to the success of this final piece of Harrison Square," Henry said in a prepared statement. "The completion of the new markets tax credit process and the ongoing activity on site are strong signals that this exciting addition to downtown Fort Wayne is confidently gaining momentum."
New markets credits were created in 2000 by Congress to spur investments, including real estate projects, in low-income communities, according to the U.S. Treasury.
The program allows investors to receive 39 percent of their original investment refunded over seven years in credits to their federal income taxes. The credits can be sold to a third party to generate immediate capital for project developers.
The Harrison is an estimated $18.5 million project that includes first-floor retail, second-floor offices and apartments on the third and fourth floors. It is being constructed just beyond the left-field fence of Parkview Field downtown. The original project was to include condominiums and be finished by June 2009, but it was plagued by financing problems that eventually prompted a change in the development team.
Last June, Henry announced the New Harrison team that took over the project. It consists of Mark Hagerman, CEO of The Hagerman Group, and Simon Dragan, president of Whitley Manufacturing Co. Numerous Hagerman trailers have been placed in the construction staging area across the street from the project site.
The federal tax credits were a vital piece of the financing for the development. The program creates a tax credit for equity investments in certain areas to encourage projects. The credits, along with separate state tax credits, were estimated to have generated $6 million for the project. No final sale numbers on the credits were provided by the city.
In December, the city completed $80,000 of site preparation work for The Harrison. Crews have been working on the site since then beginning to construct the project – although no official groundbreaking has taken place.
The contract between the city and developer requires the project to be built 14 months after the developer closes its loan with PNC Bank and buys the property from the city.
According to the city's release, an update from New Harrison is expected in the near future.
