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Rocky, wanna see me pull a rabbit out of a hat?

By Jim Sack

Fort Wayne Reader

2018-02-03


Well!

On January 30th city council regaled with quite a show in favor of the redevelopment of the GE campus downtown, now dubbed Electric Works.

Pretty slides, triumphal music, promises of imperial grandeur, jobs by the oodles, two yoga mats in every pot, tax money gushing forth, surplus money deposited in a community development fund, synergistic partnerships, start-ups, promises of making Fort Wayne a capital of the Internet of Things, shops, a farmers’ market, a brewery and the ever so unsubtle suggestion that the local version of UnderArmour is just waiting for EW space to incubate itself to fame and fortune.

It seems we may we be on the cusp of something truly transformation and catalytic.

But, there is a matter of a few million dollars. Hundreds of millions, in fact.

And, Cinderella’s coach will turn into a pumpkin in early March.

Those who were at the Fifth Tuesday “seminar” got the added bonus of seeing many of the city’s movers and shakers power cheering this behemoth on. Council, however, remains conflicted, as it seems, does the administration. Currently, four councilmen want to support the project, two are dead set against the project and two are sitting firmly on the fence, leaning toward no.

Remember, it takes six votes to dip into the Legacy.

One guesses that an overwhelming majority of Fort Wayners want this fixer-upper to go forward. The GE campus is iconic in Fort Wayne, it is where thousands of us worked over the years. The 45-acre campus on the edge of the heart of the city offers so much, but at a very steep price. A successful rehab, even if only half the promises put forth by the developers and a representative of GFW come true, would meet the criteria for the Legacy — transformational and catalytic. It would dramatically change the center of town, spur redevelopment south, alter the culture of the city, and muscle up our flabby tax base.

So, we come to the question of money.

The developers are a mere $62 million short of the requisite $65 million local match needed to pave the way toward a slew of federal and state credits and incentives, grants and loans that would top out around an estimated $500 million.

Among the hoped for local match is creation of a special TIF, tax incremental financing, which plows tax money back into a project, instead of into the general fund. Currently, the GE site, fallow and derelict, pays $100k annually in county taxes. Should the project come to fruition, the developers estimate that well over a million in annual property taxes would be paid by the complex. The difference, or the increment, is $900k and that would be put right back into the project to pay for whatever is on check list. Normally, TIFs operate over a 20-year period, but this one, by decree of our legislature, may extend 50 years, thus generating $35 million toward the local match.

That leaves $17 million needed to fulfill the local match requirements of the federal government.

All eyes turn toward the Legacy.

Some councilmen are willing to consider up to $20 million either as an outright grant or, more likely, a loan from the Legacy.

But, with each funding source there are questions. Can the simple creation of a TIF suffice as a match? Or, must the many millions actually be in hand, say, guaranteed by a bond marketed by the city? If so, that calls into question whether the available bonding capacity of the city is sufficient, and whether council would approve a guarantor bond.

And, sticky wicket number two, the Legacy requires six votes, a super majority, in order to make loans or grants. Given two members of council are a given to vote against, on principle, that leaves the project on a razor’s edge. Should Councilmen Barranda and Jehl, the two fence-sitters, both natural skeptics, choose to vote no, the project collapses.

To encourage council’s support the slide show promised many multiples in taxes of the cost of development would flow. Additional tax revenue would come from the millions from wages, and from the taxes on businesses housed within the massive complex. It looks, to the untrained eye like a big, big win for the city. You know what they say about things that look too good to be true… So council has a very short period of time, indeed, a couple of weeks, to do their due diligence, and, if that threshold is cleared, to act.

Notable in their absence last night were the big guns from the administration. While the two active county commissioners were there, and while both spoke eloquently in favor of the project, the administration was all but absent. Where was the economic development director or the deputy mayor? Instead, alone, the redevelopment director carried the flag for the administration. Not exactly a robust endorsement.

Word has it the administration is very concerned that Electric Works wants too much of the Legacy, thus leaving little or nothing for whatever projects the administration has up its sleeves today and in the near future.

To complicate things, according to the developers, all the local funding has to be in place by in place by March to qualify for the much bigger pile of federal and state funds. At least one councilman doubts council and the administration can resolve the details so quickly.

Crunch time has arrived.

We suggest those supportive councilmen, the cheerleaders at Greater Fort Wayne, the project developers, and the county officials roll up their sleeves, wiggle their fingers and stick their arms down a top hat in search for a rabbit.



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