Indiana Furniture housing project stalls, developer seeking resolution

The proposed housing development at the former Indiana Furniture facility on Mill Street, which was stalled after being denied the low-income tax credits, is back on the table as developers renew their efforts to secure crucial financing for the project.

Flaherty & Collins and Krempp Corporation are working on solutions to move forward with the $40 million-plus workforce housing project, according to attorney Bill Kaiser.

Kaiser met with the Jasper Common Council to discuss renewing the tax abatement for the project as the developers explore options for bringing the housing to fruition.

“Flanerty & Collins and Krempp are still open to pursue the same or similar project for housing and the possibility of low-income tax credits to finance, at least in part, this project,” Kaiser told the council.

The original project aimed to transform the vacant 200,000-square-foot former Indiana Furniture building at 1224 Mill Street into much-needed housing units with potential commercial space. The development had previously secured a 10-year tax abatement from the city, which would only apply to improvements made above the property’s baseline value.

Last year, Flaherty & Collins applied for two different tax credit programs, filing in July and September, but were unsuccessful with both applications. The project was contingent on the tax credits being awarded.

“They are committed to try to pursue and solve the financial problem and make the application,” Kaiser said. “The question is what sort of application. And depending on the amount of tax credits, depends how much additional funds, gap funding, because this is a $40 million plus project.”

The council discussed whether to find the developers in substantial compliance with the tax abatement requirements, which would allow them to maintain the previously approved incentives. The tax abatement was described as “significant” when “all the dollars” were stacked for the project.

When asked whether something could move forward this year, Kaiser told the council he couldn’t answer that at this point.

City Attorney Renee Kabrick advised the council that they had a lot of discretion on whether they could find the companies in compliance with the abatement or not. However, she advised them that they could not just let it “drag on” indefinitely.

The council ultimately made a motion to find the developers in substantial compliance with the potential project, contingent on their refiling necessary forms by May 1, with an extension until December 31 of this year.

“I think that’s fair,” Kaiser responded. “We’re going to know before then.”

The developers are currently working on determining what type of tax credits to pursue. Krempp Corporation continues to maintain the building while those plans develop.

Kaiser explained that there are “some less competitive tax credits, but they don’t provide as much. That means if you do apply, it’s more likely that you’ll get those credits…but you also have to come up with additional money to fill the gap.”

If Flaherty & Collins and Krempp Corporation cannot secure financing or if another developer becomes involved, they would need to return to the council to amend their application and potentially present a revised project.

The council expressed support for continuing the tax abatement, recognizing the significant time, money, and effort that went into establishing it initially.

The council’s decision provides the developers additional time to secure financing while maintaining the tax incentives that make the project more financially viable.