The Fort Wayne City Council on Tuesday approved an update to the city’s residential tax abatement ordinance.
The approved ordinance corrects an oversight with regard to property tax abatements for residential properties following a change in state law two years ago.
The newly approved schedule limits residential property tax abatements at five years.
The ordinance was approved by a 7-2 vote.
"This all came about a couple of years ago when they changed the rules on abatements at the state level," said Council Attorney Joe Bonahoom, who drafted the ordinance’s language.
"At that time, you may recall, we modified our ordinance with regard to commercial abatements concerning the schedule of abatements," he said.
A schedule refers to the number of years it will take to completely phase in property taxes on a development that received an abatement.
When the state changed the statute, the council did not initially modify its ordinance or set forth a new schedule for its residential tax abatement ordinance, Bonahoom said, which could cause a problem if someone applies for a residential abatement in the future.
State statute does not mandate a residential abatement schedule, leaving that decision to the issuing city or county, he said.
"What we’re trying to do is just provide something to (Elissa McGauley, an economic development specialist for the city) and her office and to the auditor in the event there’s a residential abatement applied for, that we have some schedule to use," he said.
There haven’t been many applications for residential tax abatements in the past two to three years, Bonahoom said, noting that the process is similar to how the city handles commercial tax abatement applications.
Also on Tuesday, the council moved forward with a tax abatement request for property for a new housing and business development on West Rudisill Boulevard.
That project, which caused controversy over a requested zoning change Monday at the Fort Wayne Plan Commission meeting, would create 48 one-, two- and three-bedroom live/work apartments on land that was once part of the Taylor University campus.
The apartments, which would have an affordable-housing component, would be geared toward young entrepreneurs and offer programs to assist tenants in their business endeavors.
In order to move forward, Ambassador Campus Properties, which owns the property, needs to secure approval for a zoning change from the city’s Plan Commission; City Council approval of a tax abatement for the project; and competitive tax credits from the state.
Once all of that is obtained, the property will be transferred to Brightpoint, formerly known as Community Action of Northeast Indiana.
If the endeavor fails, the property would revert back to Ambassador.
Representatives for Ambassador have requested that the property be rezoned from its existing residential designation to a C-2 commercial designation.
Councilman John Shoaff, D-at large, said much of the concern generated by neighboring residents stems from the uncertainty of what will happen to their property values if the project fails.
"If they get C-2 zoning and it fails, the property remains C-2, and whoever owns that property is free to do whatever C-2 permits," he said. "This is of great concern to the neighborhoods."
Shoaff noted that another option would be to leave the area’s residential designation alone and include a variance for the property that would allow residents to operate businesses out of their homes.
Though the measure ultimately passed with five votes in favor, Shoaff abstained because he serves on the Fort Wayne Plan Commission. Councilman Glynn Hines, D-6th, abstained because he is employed by Brightpoint.
Councilmen Mitch Harper, R-4th and Geoff Paddock, D-5th, voted against passage.
The public hearing on the project is scheduled for 5:30 p.m. June 23.