Council OKs Skyline Tower bond

February 18th, 2016

News Coverage:

February 17, 2016

Council OKs Skyline Tower bond

$4.1 million will pay for city's financial role

DAVE GONG | The Journal Gazette

In a 6-2 preliminary vote Tuesday with one councilman abstaining, the Fort Wayne City Council approved a $4.1 million bond issue to finance its side of the downtown Skyline Tower project.

Tim Haffner, the city’s corporate counsel, said approving the bond issue honors the commitment the city made to Ash Brokerage CEO Tim Ash, when the original project was proposed. The last year and a half, Haffner said, was spent finding a suitable residential developer.

“What we attempted to do over the last year and a half is find a developer who could build something which we thought complimented and was appropriate for the site that Tim Ash helped envision and develop,” Haffner said. “And part of the motivation for us to be here tonight is I think we’re honoring the commitment we made to Tim to try to bring this to fruition, to use our best efforts to do so.”

City officials announced an agreement with Great Lakes Capital to build the 12-story residential tower last month. The South Bend firm replaces Fort Wayne developer Hanning & Bean, which pulled out of the project in September 2014. The agreement with Great Lakes Capital took more than a year to complete. 

Councilmen Paul Ensley, R-1st, and Jason Arp, R-4th, were the only council members to vote against the bond, which will be paid for through tax increment financing revenue generated by the project.

Property tax revenue generated within a TIF district can be captured and used for improvements within that district. 

Explaining his vote, Ensley said while he thinks it will be a nice project, he is uncomfortable with the ratio of public funds to private funds represented.

Councilman Tom Didier, R-3rd, said he supported the project because of the overall investment it represents to downtown Fort Wayne.

“Many, many years ago – and I’ve brought this up before at past council meetings – in 1946 or ’47 they wanted a highway through this town and the City Council voted no and we didn’t get an interstate through our downtown,” Didier said. “And I don’t want to jeopardize something that I think will be a catalyst to continue to keep the momentum in downtown Fort Wayne.”

Councilman Russ Jehl, R-2nd, abstained from the vote because of a business relationship with Great Lakes Capital.

The project is expected to cost about $40 million. In addition to the $4.1 million from the city, the project is being funded with about $17 million in federal New Markets Tax Credits, about $5 million in local equity, and about $5.5 million in state Community Revitalization Enhancement District (CReED) credits, Brad Toothaker, managing partner of Great Lakes Capital, told the council. The firm has also asked northeast Indiana’s Regional Development Authority for $2.8 million in Regional Cities Initiative funds to fill the final funding gap. 

“One thing I will note on that is that we are also, in the spirit of truly getting as much introduction of upside funds into the project, we’re working with the state of Indiana to grow the CReED credits that are available based on some project cost allocations,” Toothaker said.

If approved, that would allow the company to reduce its request from the regional development authority.

Greg Leatherman, the city’s director of community development, said the fund from the city’s bond issue will not be released unless all other funding sources are secured. 

A final vote on the bond issue is expected to take place at the council’s Feb. 23 meeting.