The Allen County commissioners want another local government body to consider an alternative to pulling the plug on the Electric Works project.
The commissioners have asked the Allen County Fort Wayne Capital Improvement Board to approve a complicated new way of financing the project that would not require the Fort Wayne Redevelopment Commission.
The commission ended the city's development agreement Aug. 3 with RTM Ventures, the firm developing the nearly $280 million project of the former General Electric campus along Broadway south of downtown.
RTM was short tens of millions of dollars in construction loans and private equity and had repeatedly missed deadlines, the redevelopment commission said. The developer disputed the shortfall, saying it was closer to $8 million.
Now, the county commissioners believe “the best way forward” is a new economic development agreement between the RTM and the Capital Improvement Board, they say in a Sept. 10 letter.
The local presence of the corporate headquarters of Do it Best, the project's anchor tenant, is too valuable to lose, the letter says.
“We recently met with representatives of the banks committed to Electric Works financing, and they have verified that the private debt and equity is available and committed for closing,” the letter says. “The good news is that the project is now ready for closing if public funds remain on the table.”
The new economic development agreement proposes the CIB would use a “lease-back structure” and pay annual rent from proceeds of the CIB-administered food-and-beverage tax fund for 20 years in exchange for “the rehabilitation of the property and the economic boost to the community,” the commissioners' letter says.
The arrangement would mean all money already committed from the city's Legacy Fund, local income tax and tax increment financing would remain, based on recent discussions with City Council members, the letter states. No issuing of a bond would be necessary, the letter continues, as had been proposed under the previous agreement with the city redevelopment commission.
Longtime Fort Wayne developer Don Steininger, a CIB member, said Friday the CIB might decide the arrangement “is a good idea.”
But the agreement suggests the CIB also administer the agreement, and that wouldn't work, he said.
“We're just not set up to do that,” he said.
Steininger said the new arrangement would not cost more than the original, and could cost less. Bond issues are expensive to prepare and it would take 30 years to pay back the bond, with interest, Steininger said.
The lease would require annual payments of $4.6 million for 20 years, the new development agreement says. The anticipated bond was for $100 million.
The agreement now has an Oct. 16 deadline for the CIB to make a decision and an Oct. 31 deadline for satisfying contingencies prior to a closing by Dec. 31. The project must be completed in three years, the documents say.
The CIB on Thursday met in executive session – one closed to the public and the media – to consider economic development projects, according to the meeting notice. That is a legal justification for an executive session, and there is no requirement for the topic to be specified.
Any action based on executive session discussion must be taken at a public meeting, but it was unclear Friday when that meeting might take place.