MISHAWAKA — The city council easily voted 9-0 to pass an added charge for the city’s electric customers Monday. But it went through a lengthy series of questions before approving the first step in a property tax abatement for about 30 condominiums and a café that Barak Group wants to build next to Beutter Park.
Council members Mike Compton, D-5th, and Dale “Woody” Emmons, D-1st, voiced strong concerns about the abatement and voted against this procedural step. Still, the measure passed 7-2.
Compton said that, while, “I like the idea of what you’re (the developer) bringing to us,” he has a philosophical difference with how the abatement would be used. He feels it should help to lure long-term jobs. And although the project architect estimated Monday that this could mean at least 100 jobs for construction alone, Compton doesn’t see the long-term jobs in such a residential project.
This step in the abatement, a declaratory resolution, merely lets the city begin a process. City staff now can let other taxing units know that the city is looking into the abatement. The council wouldn’t vote on the actual abatement until the Sept. 8 meeting at the soonest.
Architect Thomas Panzica said Barak Group needs the abatement because local construction costs have risen so much, thanks to the demand for contractors, notably for construction at the University of Notre Dame. Meanwhile, the cost of housing hasn’t risen, he said, leaving a gap in making the project feasible.
Jim Scollon, a local Realtor who’s serving as the project’s chief operating officer, said most of the condos could sell for base prices of $350,000 or more.
“And you see a market for it?” Emmons asked.
“Absolutely,” Scollon replied.
“I hope you’re right, ‘cause I don’t see it,” said Emmons, who also doesn’t think the city should abate taxes on a residential project.
But City Planner Ken Prince said he doesn’t think the long-vacant city parcels could attract the “right kind of development” that the city seeks there — pedestrian friendly, mixed use and significant architecture — without some kind of subsidy.
Barak Group is seeking a five-year abatement of 100 percent of the taxes in the first year and 5 percent less each year after that. It applies only to the first of four project phases: the six-story condo building, with first-floor parking, would cost $10 million, plus about $450,000 for the café and plaza. Later project phases call for another $40 million of work, including a similar condo building, plus two more five-story towers with 60 apartments on top of a one-story parking garage. The last phase calls for a high-end hotel/conference center on a nearby island east of Main Street.
But Compton said: “I don’t think it’s fair to fill a gap on condos that will sell for $375,000 to $400,000; I don’t think that’s fair to the public.”
The council voted on separate abatements for the condos and the small café. Compton and Emmons both questioned why the city would abate taxes for an eatery when it doesn’t do the same for other restaurants.
Developers estimate that it would offer a minimum of four to five jobs, or perhaps at least a dozen, which is hard to predict because they don’t know what the hours would be or what franchise it might attract, said Marcellus Lebbin, Barak’s attorney.
Barak added the café to the project after the city asked to see more mixed use, Prince said. Panzica said it could provide a sort of concession for the park and residents.
Also on Monday, the council passed a charge that will be added to the electric bill of Mishawaka Utilities customers, recouping about an $1.4 million increase in the cost of electricity that the city has bought wholesale from Indiana Michigan Power over the past two years. The extra charge, to appear as early as September’s bills, would be extra quarter of a penny for every kilowatt hour used, or about $2.50 if a home uses 1,000 kilowatt hours in a given month.