County Council allocates $200,000 to rent-controlled developments in Jasper
Two rent-controlled developments in Jasper will receive $100,000 each in Dubois County Economic Development Income Tax funds.
The Dubois County Council voted 5-1 — Councilwoman Martha Wehr opposed and Councilwoman Becky Beckman abstained from voting due to her position with TriCap, a partner in the projects — for the allocating the money to the project after it is 75 percent complete.
A story on the projects is at this link.
Miller-Valentine Group plans on turning the former JOFCO building located at the northwest corner of Vine and 12th streets into 110 workforce development housing units in two phases. The first phase of the Jasper Lofts has already received tax credits from the Indiana Housing and Community Development Authority.
Phase II of the Jasper Lofts and the Vine Street Lofts — a senior development in the building currently housing Monster Recycling which will create 67 apartments for 55 and older — will be submitted to the state for housing tax credits in November. According to Pete Schwiegeraht, a representative of Miller-Valentine Group, the money from the county shows additional commitment to the project and would be important to the project being awarded the necessary points to receive the tax credits.
“I estimate this local source will bring a point and a half to two points to our score,” Schwiegeraht said about the county’s investment.
He added that Miller-Valentine was awarded the tax credits on the Huntingburg senior housing project, The Lofts of St. Joseph’s, by a half a point.
The state tax credits are awarded to firms creating rent-controlled housing. Although the units would be income-based, Schwiegeraht stated that they would not be subsidized with Section 8 vouchers.
Once awarded, Miller-Valentine uses the tax credits to fund the project by selling them to a bank or other investor that uses the tax credits to offset tax liability. In the case of The Lofts of St. Josephs, Old National purchased the tax credits.
Additionally, Schwiegeraht stated the group will also be seeking Industrial Recovery Tax Credits through the Indiana Economic Development Corporation for the projects. Industrial Recovery Tax Credits, also known as Dino tax credits due to their use in abandoned industrial sites, can be used on both projects. Schwiegeraht felt the credits could be worth as much as a dollar for dollar match with what the county and the city allocate to the project.
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Wehr’s objection to the allocation of the money was based on the location of the two projects in the large tax increment finance district Jasper created in March. The improved properties will increase in assessed value and create more property taxes, but the tax increment district will capture that increased increment for the Jasper Redevelopment Commission to use for projects that support the district.
The county will not receive any of the increased property taxes for the life of the district which is 25 years. At the end of 25 years, the City of Jasper can reassess the district and renew it with a base assessed value established at the new rate.
With the investment in the buildings, their assessed value is expected to increase. But the increases in property taxes, which will be capped at three percent of the assessed value, will go into a fund controlled by the Jasper Redevelopment Commission.
“The county has a lot to lose since it [the development] is in the TIF area,” she said. “The base assessed value on the Monster Recycling building alone is $54,000. That base value is going to stay for 25 years. All that money will go into a pot for that large area; that large TIF district.”
Andy Welsh, who brokered the sale of the buildings, told the council that before the JOFCO building was sold to Cash Wagner, Jasper Group had considered spending up to a million dollars to have the building demolished. He estimated the cost to demolish the building housing Monster Recycling would cost the same amount.
Both buildings are also classified as Brownfield sites by the state and have difficult environmental barriers to hurdle to be turned into housing.
Welsh and Schwiegeraht agreed that Miller-Valentine was willing to jump those hurdles for the projects. However, without the housing tax credits, the projects would likely not move forward. “Without this, there is a good chance the building is coming back,” Welsh said. “I guarantee you that some government entity, the city or the county, is going looking at a million dollars to tear it down.”
Monster Recycling is located in the Jasper Wood Products building that reverted to the county’s ownership due to tax liabilities after Wood Products closed its doors. According to Wehr, the county is not required to take ownership of a building for delinquent property taxes if it has environmental issues. County Attorney Art Nordhoff agreed with Wehr’s assessment that the county would be off the hook for mitigating the site if property taxes became delinquent.
The building would likely then become an issue for the City of Jasper.
Councilman Jerry Hunefeld stated he felt the negative impacts of the building not being developed by Miller-Valentine outweighed the impact of the tax increment finance district.
Council president Greg Kendall agreed. “I came here tonight 100 percent against it because of TIF. We’ll reap nothing from the TIF district for the next 25 years. I don’t like it, and I have a lot of complaints,” he said. “But I am afraid of what will happen to this area if we don’t do this. I have gotten so many complaints from so many people about it, and I have a way out.”
“I feel like I am selling something for you, but you make all the profit and I don’t make any. That’s my problem with TIF. That’s what’s bugging me,” he said. “But for God’s sake I don’t want to be responsible for this place staying the way it is.”
Councilman Nick Hostetter stated he estimated the county would receive $30,000 in EDIT and COIT annually from the families that would move into the workforce housing. “I think that is where we are going to have to look at ultimately because our property taxes are capped,” he said. “We are using EDIT now to pay for things that normally came from our General Fund.”
Hostetter pointed out that The Lofts of St. Joseph’s will likely lead to further investment in the area.
He made the motion to give the $100,000 to both projects once they are 75 percent completed. Councilman Craig Greulich seconded the motion, and the vote passed 5-1.
The council will provide two letters of support to Miller-Valentine for inclusion in their applications for the tax credits.
The council also took the following action.
-Approved Jerry Gramelspacher, who handles building maintenance at the jail and community corrections, seeking bids to refurbish and remodel the bathrooms in Men’s Dorm One similar to what was completed in Men’s Dorm Two in 2014. He estimated the work could be completed for about $63,000 but wanted to seek the quotes to be sure.
