Pete Schwiegeraht, left, and Tai Adkins

Will Gary's Community Benefits Agreement have teeth

Contributed By:The 411 News

A new law that calls for residents to have a seat at the table when the City of Gary negotiates development projects is now being tested in the city council.

Gary's new Community Benefits Agreement, approved in December 2019, places demands on developers to give something back to the community when the developer receives a benefit issued by the city.

At Tuesday's Gary Common Council virtual meeting, the council learned the developer of Broadway Lofts, a 38-unit housing complex coming to downtown, wants to sidestep the new ordinance. The council was presented with an amendment to CPR 2020-07, a resolution asking for lower property taxes on Broadway Lofts.

Broadway Lofts is asking for a 10-year property tax abatement. Instead of ,paying $911,000 in taxes over the 10 years, the tax bill for MVAH Partners will be about $242,000; a $669,000 savings.

According to the community benefits ordinance, "a city-issued benefit shall mean any property, land, tax abatements, tax incentives, grants, guaranteed loans, other financial incentives, or any in-kind assistance given to a Developer in consideration for bringing a development to the City of Gary."

Pete Schwiegeraht, vice president of MVAH, is asking for his development to be exempted from compliance with the CBA.

Broadway Lofts "was conceptualized" to the city and council before the city created the CBA ordinance, Schwiegeraht said, and he described the housing complex as already providing almost $400,000 in community benefits .

A $250,000 greenhouse will be built for a local nonprofit to grow fresh produce for the community. The developer is funding a car share program. The project will bring over $100,000 in improvements to street, alley, curb, and a new bus shelter, Schwiegeraht said.

The CBA requests any developer that receives any City-issued benefit agrees to invest 15% of the total value of that benefit in community benefits.

Additionally, the CBA asks the developer to commit to Gary's local hiring ordinance, and pay a living wage of at least $15.50 hourly The agreement asks that hiring preferences be given to contractors that participate in a Department of Labor registered apprenticeship program and provide health insurance to employees.

Schwiegeraht said he met last week with the Coalition for a Gary Community Benefits Agreement -- city residents who drafted the ordinance -- and believes the developer can comply with the CBA on some things.

"We will be doing substantial local hiring and we have worked with city staff to locate those resources," Schwiegeraht said. In September 2019, the general contractor for Broadway Lofts BWI/Equiteam JV sought bids from subcontractors on the work. "A living wage was not part of the bidding. We will go back to the subcontractors to see if they could accept it," Schwiegeraht said.

The project will create about 200 temporary construction jobs.

City Councilwoman Tai Adkins, whose 4th district includes the site for Broadway Lofts, asked to be removed as a sponsor of the tax abatement resolution. Regarding the CBA, Adkins said no interaction or info has come from the other city sponsors of the tax abatement. "Can we get information from Community Investment, the Redevelopment Department on why the council should support it. We need to know the city's vision for the area."

"I am for development, redevelopment. As a body, we have to make sure of due diligence. We have to have support from the administration and know we are aligned," Adkins said.

Broadway Lofts is behind schedule, Schwiegeraht said, and the developer has a deadline to complete the project.

Tuesday was the 2nd time for the tax abatement resolution coming before the council. When it was presented in June, the resolution failed to include the creation of an Economic Revitatlization Area, necessary for a development project to earn a tax abatement. The amendment includes the creation of the ERA.

Two years have passed since MVAH first approached the city with Broadway Lofts. It was one of two housing projects slated for northwest Indiana by Gov. Eric Holcomb's 2018 Moving Forward initiative for affordable housing that came with partial funding from the Indiana Housing and Community Development Authority.

The second was Harbor Square in East Chicago. That project is under construction with a completion date of Spring 2021.

Broadway Lofts had a start date of Fall 2019 but that was delayed when the developer and the city sought to expand the project, adding townhomes. But funding didn't come.

The city council approved the amendment to resolution CPR 2020-07 and it will be another 2 weeks before the resolution returns for a vote. Compliance with the CBA could have an impact. A decision the wrong way will likely impact the Redevelopment Department's plan to demolish the remains of Memorial Auditorium, part of the Broadway Lofts project.

Carolyn McCrady, a member of the coalition, told the council, "Those are nice things Pete proposed -- the greenhouse, the bike and car share. But, that's part of their project; that's not the community benefits described in the ordinance."

McCrady said, "Gary has a lot of vacant lands and we know developers are interested."

Speculations are many, but details are thin on discussions the city is having with a developer for the purchase of Gleason Park and Gilroy Stadium.

Story Posted:07/09/2020