A public hearing on the lease between the city of Warsaw Building Corporation and Redevelopment Commission related to the Gatke development project drew no comments from the public Monday.
As Warsaw Community Economic and Development Director Jeremy Skinner told the Redevelopment Commission, the public hearing and approval of the lease resolution by the commission were the final steps in the lease agreement, which ultimately will result in a bond issue for the project.
The approximately $20 million rehabilitation project of the existing Gatke warehouse, 2321 E. Winona Ave., by Rebar Development includes restoring the current steel structure, 12,000 square feet of eight flex units, 4,300 square feet of commercial space and at least 75 market-rate one- and two-bedroom apartments with amenities.
The lease agreement came before the Redevelopment Commission the first time at their December meeting, followed by the Warsaw Common Council and Building Corporation, all of whom approved their resolutions.
“This is the final accumulation of all of those approvals,” Skinner stated Monday. Once the commission and the Building Corporation signs the lease agreement, he said they will get it posted and the process will be complete.
He estimated the bonding will probably take place sometime in March after all the bonding requirements are handled. The Warsaw Common Council approved the first reading of the bond ordinance at their last meeting and will be asked to approve it on second reading at their next meeting.
“So, everything’s moving forward, but as far as the lease is concerned, this is the final step in this lease being approved. You will sign it today. The Building Corporation has already approved it, but I need to get their signatures once you have signed it today,” Skinner said.
The bond issue for the project is not to exceed $3 million for a period of not more than 25 years.
Commission member and former Warsaw Mayor Dr. Joe Thallemer asked Skinner, “I noticed that the financing was through the TIF (tax increment financing), and you also had the EDIT (Economic Development Income Tax) back there. Is this kind of another backstop?”
Skinner said there were three backstops and then the final special tax backstop.
“The first is TIF, we’d rather it come from TIF. The second is the developer-backed guarantee, so the developer guaranteeing the taxes on it. ... If there’s a shortfall on either of those, then EDIT would pay. And ... after all of that, would be a special tax backup, if needed,” Skinner said. “But keep in mind, the council, the Redevelopment Commission prior to that would always have the option to fill that gap with any other funding, which is what we would do before issuing any tax.”
If everything fails, a special tax rate backup would have to be issued, he said, but there’s a lot of measures in place to prevent it from getting to that point.
Commission President George Clemens then opened the hearing up to the public, but no one was present or spoke, except for Mayor Jeff Grose.
“As mayor, another positive step. We’re getting closer to the goal line, and I think of the council, I think of the previous administration, Mayor Thallemer, this board’s efforts and then so many others in play. This is going to be a good thing, not only for that specific site, but for the entire community, so I want to thank you and I appreciate your efforts,” Grose said.
After Clemens closed the public hearing, Thallemer made the motion to approve the lease agreement, Commission member and Councilman Mike Klondaris seconded it and the resolution passed 5-0.
The board was then asked to approve a resolution to provide for a special tax if necessary to pay lease rentals in connection with the Gatke development lease.
“Here’s that resolution that pertains to issuing a special tax if all of those different backup mechanisms were to fail, if we had no money whatsoever, and then we would have to choose to issue this special tax that would be necessary to pay that lease rental. That’s what this resolution is basically doing, it’s giving us the ability to do that,” Skinner explained.
He said it will never get to the point where the special tax would need to be issued because of the different funding mechanisms involved.
“But this is a bond security issue. The reason we’re doing this is, because by doing it, we lower the interest rate where we get that bond at,” Skinner said.
Thallemer made the motion to approve the resolution, Klondaris seconded it and it was approved unanimously.
Also during the meeting:
• A change order for an additional $60,083.53 from Wessler Engineering for the airport sanitary sewer lift station was approved. The increase makes the total cost of the project $2,225,868.97. Roughly $1.8 million of the contract was paid for by State Revolving Loan Funds.
• The commission approved an agreement with Kosciusko Economic Development Corporation, Kosciusko Development Inc. and Kosciusko Development Land Trust Inc. for the Owens mixed-use development project, and payment for the property and demolition of the property.
Skinner said the commission has no financial ties to it, but its signature is on the agreement.
Thallemer said, “This is a long-time coming. There were some issues to overcome, and we’re at a point right now with the Land Trust to get this thing finalized. We approved it at the Board of Works last month.” He made the motion to approve the agreement, with Klondaris seconding the motion. The commission approved the motion.
Exhibit A of the agreement includes all the closing costs paid by the city of Warsaw, totaling $1,301,271.98. Those include land acquisition, closing costs, building demolition, asbestos testing and removal, environmental site work, survey, predevelopment work and TIF analysis.
“We need to get moving on this project,” Thallemer said.
• The claims were approved, with the largest claiming being $204,563.50 to HRP Construction for the airport sanitary sewer lift station.
• Grose gave the board their oaths of office, including new members Common Council President Jack Wilhite and Thallemer.
• The commission elected Clemens to serve as president for 2024, Klondaris to continue serving as vice president and Bill Curl as secretary.