Legacy Fund request reveals details of Electric Works development
By Dave Gong | The Journal Gazette
The Legacy Fund request that Electric Works developers have submitted lays out the project's current financial backers and outlines potential site improvements, including a new pedestrian walkway, a possible bike-share program and a Community Enhancement Fund to help the surrounding neighborhood.
The application dated March 30 is modeled after funding possibilities presented to the City Council on Feb. 27. The request calls for about $13.6 million in Legacy Fund money – a $7,583,333 grant and a $6 million loan. The Legacy money requested is part of a $65 million local investment necessary for the project's success.
The city's Legacy Joint Funding Committee will evaluate the proposal May 24. The Legacy Fund is comprised of money generated by the lease and sale of Fort Wayne's old power utility.
The total project cost to redevelop the former General Electric facility's west campus south of downtown is $220,989,800.
RTM Ventures, a joint venture between Cross Street Partners of Baltimore, Greenstreet Ltd. of Indianapolis, and Biggs Development of Decatur, is developing the Electric Works property.
“Both the Fort Wayne Market and the GE campus present a powerful opportunity for commercialization and educational activity in the region,” the application states. “Electric Works will assemble a number of anchor institutions and organizations that together will provide space and programming for the creative and entrepreneurial community around which to coalesce and engage.”
The application highlighted “up to 200,000 square feet of space for colleges, universities and research entities, as well as flexible co-working and designated space for a single entrepreneur or growing company” and noted that Fort Wayne Community Schools is currently exploring creating a regional STEAM school on the site with a focus on entrepreneurship.
About 42 percent of the total project cost will come from private debt and equity sources. That includes a senior permanent loan of $60.4 million and a New Markets Tax Credit loan of $10.8 million.
About 14.3 percent of the funding will come from federal sources in the form of Historic Tax Credits. Another 14.3 percent will come from state sources through $50 million in Industrial Recovery Tax Credits.
Local sources – tax increment financing dollars and funding from the Capital Improvement Board, Legacy Fund and Allen County – comprise the remaining 29.4 percent.
Without money from the Legacy Fund and other local support, the developers say the project will fall through.
RTM is negotiating with four banks to secure its $60.4 million loan and is negotiating possible investments from multiple community development entities regarding the New Markets Tax Credits Loan. That process is expected to close in July. The project has also secured conditional approval for Industrial Recovery Tax Credits and is awaiting approval of Part II of its application for Federal Historic Tax Credits.
The Legacy Fund application lists 13 individuals and businesses who are Electric Works' financial partners.
“The investment strategy of Electric Works is to use private capital to acquire and redevelop the property through a public/private partnership focused on adaptive reuse, attracting capital sources that would not otherwise be available for the project,” the application states.
A detailed budget submitted with the Legacy Fund application detailing what RTM Ventures plans to spend on the development includes $11.4 million in land and site costs; $120.2 million in construction costs; $8.7 million in design and engineering; $1.3 million in permits, licenses and fees; and $35.6 million in tenant improvements such as office, innovation and retail space. The application also outlines $42.3 million in soft costs including legal and accounting fees, syndication costs, liability insurance, among other items.
A significant portion of the Electric Works' application is devoted to the project's potential economic and community impact.
The application estimates the development will generate $284 million in economic impact, create 1,981 jobs during the construction phase and generate more than $100 million in local tax revenue throughout the first 20 years of operation.
According to the developers, the project will complement existing community plans such as the Plan-It Allen comprehensive plan, Bike Fort Wayne, Walk Fort Wayne, Front Door Fort Wayne, the downtown blueprint and the wishes of the GE Property Task Force.
Specifically, the application states the project would improve the Broadway corridor to create a new gateway to downtown and create on-site storage for bicycle commuters, a possible bike-share program. There are also plans for a bicycle retail and repair shop.
To complement the Walk Fort Wayne plan, the Electric Works application states “the plan recaptures the former Wall Street from College to Broadway and restores it as a grand, pedestrian promenade called Dynamo Alley.” The application also notes the site's proximity to McCulloch Park and about 6 acres of common area at the campus.
“Equally important for the long-term sustainability of the project is the long-term sustainability of the neighborhoods surrounding Electric Works,” the application states. “Initially seeded with a contribution form the developers, a Community Enhancement Fund will be directed towards the benefit of the local neighborhood through various improvements, educational and cultural opportunities, homeowner repair programs, and other initiatives that will serve to benefit the local community.”
That fund is expected to generate about $150,000 each year.
Electric Works Financial Partners
- Joshua M. Parker: Cross Street Partners, Baltimore
- Cark W. Struever: Cross Street Partners, Baltimore
- Stephen Hulse: Cross Street Partners, Baltimore
- Joseph Summers: Cross Street Partners, Baltimore
- Kevan Biggs: Biggs Group, Decatur, Ind.
- Jeff Kingsbury: Greenstreet Ltd., Indianapolis
- Larry Weigand: Weigand Construction, Fort Wayne
- BWP Investments LLC, Fort Wayne
- RSMA Properties LLC, Fort Wayne
- Tim Smith, Fort Wayne
- Tall Tree Properties LLC, Fort Wayne
- Octagon Capital Partners, Charlottesville, Va.
- ARG Capital LLC, Fort Wayne