Apartments bond issue advances

March 3rd, 2016

News Coverage:

March 2, 2016

Apartments bond issue advances

Council gives initial OK for renovation of Lillie Gardens

Dave Gong | The Journal Gazette

A southeast Fort Wayne housing development took a step forward Tuesday after securing a $5 million economic development revenue bond issue from Fort Wayne City Council. 

The development will remodel 140 units at the Diplomat Apartments complex, 3323 Diplomat Drive. Renamed Lillie Gardens Apartments, the renovated complex will be marketed toward younger renters. Vop Osili, of A+X LLC in Indianapolis, the firm developing the project, presented the project to Fort Wayne’s Housing and Neighborhood Development Services board last March. The company has owned the property since December 2014. 

In a 7-2 preliminary vote Tuesday, the council approved the bond issue. An economic development revenue bond is a tax-exempt bond. Once the bonds are issued, a borrower essentially uses the city’s credit rating to obtain a better interest rate on a loan. The city puts no money toward this type of bond and is usually not on the hook if the borrower defaults on their payments.

At the March 2015 HANDS board meeting, Osili said about 50 percent of the complex’s 140 units were vacant and in a significant state of disrepair, as were the parking lot and nearby streets.

The interiors of the renovated units will feature a more open floor plan, separate unit entrances and improved backyard privacy. 

“What I end up seeing is units that feel sort of B class or C class that I wouldn’t want to live in and – this is the honest-to-God truth – that I wouldn’t want my mother to live in,” Osili told the council Tuesday. 

The improvements are expected to attract more stable renters and reduce illicit activity that has been known to take place at Diplomat Apartments, Osili said last year. 

The firm’s request was not supported by Councilmen Paul Ensley, R-1st, and Jason Arp, R-4th, who both voted against the measure. 

“This was a tough one and it really was. It’s another development that I really want to see happen, and it’s going to happen,” Arp said. “But for me, frankly the city of Fort Wayne is going to be on the hook and, if for whatever reason, the payments don’t get made it’s going to come back to us, regardless of what the council said.”

Arp said he voted against the resolution because he does not think the city should select developers to sponsor and support financially. Private development should stand on its own legs and credit, he said. 

A final vote on the issue will be held at the council’s meeting Tuesday.