County Council grants $100,000 to assist St. Joseph Hospital development

Pete Schwiegeraht, a developer with the Cincinnati-based Miller-Valentine Group, says the company is ready to close on the purchase of about 30,000 square feet of the 90,000 square foot former-St. Joseph Hospital building in Huntingburg.

He informed the Dubois County Council at Monday’s meeting that if the company closes on the property by the end of February or early March, Miller-Valentine could begin work on the planned 45-unit senior living center before the end of March.

Before that can happen though, Miller-Valentine is attempting to cover a million dollar shortfall in funding for the project.

The development is largely funded through federal tax credits awarded through the Indiana Housing and Community Development Authority (IHCDA). According to Schwiegeraht, the company has secured about $5 million in rental housing tax credits through the IHCDA.

Miller-Valentine was also able to procure a $500,000 Affordable Housing Program (AHP) grant from the Federal Home Loan Bank of Indianapolis through a partnership with TRI-CAP.

Huntingburg has also dedicated about $300,000 to the project through tax abatement, a $50,000 grant from Economic Development Income Tax funds, and public utility and street upgrade and construction.

Unfortunately, Schwiegeraht told the council, in the time it has taken Miller-Valentine to be awarded tax credits through the State of Indiana as well as secure special grants and loans for the project, construction rates have increased.

“These developments take a long time to get from point A to point B,” Schwiegeraht told the council. “A year and a half has gone by from the time we put together our initial application and priced out the project to the time we closed here, which is hopefully within the next few weeks.”

He pointed out that construction costs have changed in that year and a half due to the steady increase in work. “The challenge is that in that year and a half period, construction prices have gone up substantially,” Schwiegeraht said. “Construction companies are busy and to get in the queue, you have to pay more.”

According to Schwiegeraht, bids were receive on the project in January and the construction costs had increased about a million dollars since the process began.

He said Miller-Valentine is examining the construction of the building to make up the difference of the original estimate compared to recent bids. The company has went to the engineers and architects to cut about $300,000 to $500,000 of construction costs. Additionally, the developer, Miller-Valentine, is reducing its fees for the project.

“That leaves us at about $100,000 short of safe feasibility at this point and we are hoping the county will help us with that final gap,” he said. “We requested that you use about $100,000 of your EDIT funds to help us make that last step to get this building across the finish line. We can be closed in as little as a week or so. Starting construction in less than a month and housing your seniors in less than a year with your assistance.”

In ten years, the housing complex is expected to bring in between $50,000 and $60,000 in annual tax revenue after the tax abatement rolls off.

“Housing is something that Dubois County drastically needs,” Council President Greg Kendall said. “My vote is for the $100,000.”

With little discussion, the county council approved advertising the $100,000 of EDIT funds to be granted to the project with six affirmative votes. Councilwoman Becky Beckman abstained from voting due to her employment with TRI-Cap.

Schwiegeraht also informed the council that Miller-Valentine will soon hear if its application for rental housing tax credits was approved to turn the former-JOFCO building on Vine Street in Jasper into apartments for working families. He stated the project had scored well and the company was optimistic about receiving the tax credits for that project as well.

“We will know what the state’s decision is by the end of the week,” he said, “And hopefully we will have some more good news about economic development to share with you.”

The council also took the following actions.

-Heard a Stellar Community update from Huntingburg Mayor Denny Spinner. Mayor Spinner told the council the first Stellar Project, an extension of Ninth Street to Monkhaus Drive, will be started on March 14. He also updated the council on the overpass project. Planning for the overpass is about 80 percent complete and the city and state have been able to save about $300,000 on the project by using state construction requirements over federal requirements. Construction on the overpass is expected to be completed by 2017.

-Approved advertising $10,000 to assist the I-67 Coalition in funding the next steps of efforts to create an interstate grade highway through Dubois County. Coalition board president and CEO of OFS Brands Hank Menke and German American Bank CEO Mark Schroeder both spoke with the council about the importance of the 37-mile connection between U.S. 231 and I-69 in Washington. Menke stated he would raise dollar for dollar matching funds from the private sector for every dollar of public money dedicated to the project now. He said he expected Jasper and Huntingburg to approve a $10,000 grant to the project as well. According to Menke, the public and private partnership is important to get the state involved in the construction of the Midstate Corridor.

-Approved Community Corrections request to pay full-time employees $750 in lieu of a wage increase for the 2014-15 budget year. Community Corrections operates on a July 1 to June 31 budget year. The Community Corrections board did not allow its employees to receive the approved cost of living wage increase the rest of the county employees received for 2015 due to budgetary issues it was experiencing. After the budget was stabilized, the board approved the one-time bonus pending the approval by the county council.

-Decided to not require a payment up to $50 for families that claimed a Heritage Barn deduction on their property taxes. Under the new law that goes into effect July 1, barns constructed prior to 1950 will be eligible for the deduction. County’s can opt to charge up to $50 per deduction to go to the fire departments that would possibly respond to a fire in the exempt barn. The council and county auditor felt the fees would create more paperwork than it was worth to collect up to $50. Additionally, if property owners were charged $50 to claim the deduction, they might opt out due to the low property tax value of old barns.

-Approved the annual $60,000 grant to Dubois Strong and the additional $80,000 for the Grow Dubois County fund that was created by Dubois Strong. According to Kendall, the council verbally committed to the increase in funding to the organization for three years when it approved increasing the funds to Dubois Strong in 2014 to assist in its economic development programs. A planned housing study paid through Grow Dubois County is underway. Additionally, a $3,000 grant was made to a company seeking a patent on a medical technology product. Grow Dubois County is also working with a forming entrepreneurial group dedicated to fostering a start-up community in the county.