The Fort Wayne Legacy Joint Funding Committee on Wednesday approved a loan and a grant for two major downtown improvement projects.
In a unanimous vote, the committee recommended City Council approval on a $10 million request for the first phase of Fort Wayne’s downtown riverfront development project.
That phase of the project will focus on the creation of a park adjacent to the St. Marys River. Plans for the park include a promenade, park pavilion, event lawn, entry plaza featuring a sculpture or signage, and an urban bioswale, which is a landscape element designed to remove silt and pollution from water. Plans also include an educational water feature, urban streetscape, central plaza, urban riverfront terraces, an elevated boardwalk, dock, interactive sculpture and child play area.
The park would be managed by the Fort Wayne Parks and Recreation Department.
The Legacy Fund consists of money from the lease and sale of the city’s old power utility. It holds about $37.5 million.
Parks Director Al Moll, whose department is overseeing construction of the park, said without Legacy Fund money, the project will not happen.
Other sources of funding include the state’s Regional Cities Initiative and private donors. Organizations such as the Community Foundation of Greater Fort Wayne and the Allen County Fort Wayne Capital Improvement Board have pledged money toward this phase of the development.
The overall construction cost is estimated at $20 million.
Ron Turpin, chairman of the Legacy Fund committee, said one of his big concerns about the request was that the fund’s balance would dip below the $30 million, which the committee has said it prefers to keep in the fund at all times.
However, Turpin said it’s important to remember that the riverfront project will take several years to complete, and the grant would not be dispersed as a lump sum. Withdrawals would be made as the money is spent and as the project moves along.
City Councilman Paul Ensley, who also sits on the Legacy Fund committee, said he voted in favor of moving the request forward because City Council has expressed the desire to evaluate the request.
In other business, a $2.5 million loan request from The Model Group for The Landing redevelopment project was also approved Wednesday.
"This creates another great space in Fort Wayne right downtown where folks can go," said Steve Smith, CEO of The Model Group, which is redeveloping the site. "But it’s also authentically Fort Wayne, and by authentically Fort Wayne I mean not just the architecture but the businesses we want to recruit."
The $35.7 million redevelopment project will include a mix of retail, office and residential space, including a new building at the site of the former Rosemarie Hotel at 111 W. Columbia St.
In addition to the Legacy Fund loan – if it is ultimately approved by the City Council – funding will come from a variety of sources including tax increment financing, federal tax credits and Regional Cities Initiative funding.
Ensley was the only one of seven members present Wednesday to vote against the loan request. Although Ensley said he was impressed by the designs, describing them as "very cool," he said he’s concerned about the amount of public subsidy being applied to the project as well as the estimation that commercial rent in the redeveloped area would be below market rate.
Plans estimate that retail rental prices would be about $11 per square foot.
"It’s very troubling to me that in a tax-incremental-financing situation, we’re actually going to have people like the PNC Bank building – I’m not sure who owns that – but their tax dollars going to subsidize their competitors, who are then going to come in and offer below-market-rate rent on some of this retail space," Ensley said.
Smith said it’s hard to compare commercial space like what’s offered inside the PNC building with what will be offered at The Landing. Additionally, Smith said it’s possible the development will attract higher rent than what is currently estimated, which will help pay down the Legacy Fund loan faster.
Turpin said it appears to him the majority of public funds come from state or federal sources, not local tax dollars. Turpin said his sole concern is the loan component, since the Legacy Fund committee was not intended to negotiate loan agreements, despite supporting the concept of loans to help preserve the fund’s longevity.
"My hope would be that if the city promulgates a loan document with you, ... that it would have some sort of accelerator built in as a guarantee that would have increasing interest rate with that, so that it gives a carrot and a stick to pay it back," Turpin said. "Because the faster we get that back, the faster we can perpetuate that to other projects."
Both funding requests are expected to be introduced to the City Council on Nov. 22. Discussion on both requests could happen as early as Dec. 6.