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Pushback to a Payment In Lieu Of Taxes (PILOT) agreement for Courts of Colfax came not only from several members of the public and a Colfax resident’s family, but also from Warsaw Common Councilman Juergen Voss.
Monday’s nearly three-hour city council meeting was the second time the PILOT agreement was discussed by the council with Warsaw Community and Economic Development Director Jeremy Skinner and House Investments LLP CEO Matt Gadus, after first hearing about the PILOT program at their regular Oct. 19 meeting.
Courts of Colfax was originally built in 1993 by Partnership for Affordable Housing (PAH). House Investments are co-partnering with PAH to put $10 million worth of renovations into the property and already have tax credits from the Indiana Housing and Community Development Authority (IHCDA) for the project.
Skinner reintroduced the PILOT agreement Monday by reminding the council affordable housing was something the city did long before he came to work for the city, citing Pike Lake Apartments and previously Canterbury Apartments as examples. Canterbury’s affordable housing expired and was not renewed and went to market-rate housing.
“So how did that impact us? Well, when they went to market rate, all of a sudden Harrison, which had a pretty solid number of kids there, plummeted. All of those families went up to Leesburg, so now we have Harrison Elementary, which has a lot of space for kids. So, affordable housing developments do impact our communities in a lot of different ways and they have a life span,” he said.
In the last nine years, Skinner said the city did four affordable housing projects and two prior to that. “So like any housing segment, we’re always trying to hit different segments and trying to incentivize different types of housing. Affordable housing is one, whether it’s family or senior, both are important,” he said.
PILOT is not something the council will say no to and never see again, Skinner told them. They will see it repeatedly from here on out because state legislation has changed, starting in Indianapolis. As they became successful in Indianapolis, other cities wanted the same opportunity, which is why Warsaw was seeing it now, he said.
PILOT incentivizes affordable housing by putting the money received from a PILOT development into a fund specifically for affordable housing, Skinner said. “As we would create these PILOTS, we’d be taken that money in, putting it into a fund that would be specific to creating future affordable housing opportunities,” he said. “So it is unlikely that this is going to get away. It’s only going to get more prolific and we can either accept the opportunities that are in front of us, to create the housing that we need for our residents, or we can not. But the reality is, you’re not going to say no and then it not reappear. We’ve already had another applicant that has requested a PILOT.”
He said he didn’t know if a decision had to be made Monday night, but whether it was Monday or the next council meeting, a decision had to be made to move the project forward.
“This is 78 senior housing units that exist now, and without these types of incentives, will not exist in the future,” Skinner stated.
A tax abatement was how the city historically contributed to the housing projects because it was the easy avenue, but Skinner said it’s not the only avenue, citing 802 Center and 2525 Durbin as affordable housing examples the city partnered in. He previously gave council members a calculation in what the difference between a tax abatement and PILOT agreement would be.
“If you look at a 100% tax abatement, which we’ve done for senior housing projects the last two times, that would amount to roughly a 50% tax abatement over a 20-year period,” Skinner said. “If you do this PILOT, you’re looking at, depending on where the final assessed value would come in at, it could be 42% to 34% tax abatement over the 20-year period.”
Councilwoman Diane Quance said as she recalled, the PILOT agreement wouldn’t mean they wouldn’t pay any taxes. Skinner said the agreement is specific on what the owners are going to pay. Currently, the taxes are roughly $23,000, which will increase 3% annually over the next 20 years if the PILOT agreement is approved. Gadus acknowledged later in the meeting he misspoke at the previous council meeting and said 1%. The agreement is for 20 years, with the option by the council to renew it for another 20 years.
Councilwoman Cindy Dobbins asked if Courts of Colfax had flexibility in changing its affordable housing figures or not. Gadus said as of now, no.
“So the project was originally developed with 16 units at 50% and 62 at 60%. So when we reapplied in December 2025, we wounded up with those same set-asides. So those are staying the same as they were originally developed,” he said. “So we have to close. So, a couple things, we’ve been awarded tax credits. We have to close and then that affordability commitment kicks in. So we’re planning on doing that in December.”
He said they’ll have an extended use agreement as part of that, which will go with the land and keeps those restrictions in place. Rents will stay the same if the PILOT agreement is approved, but Gadus said they have to go through the recertification process to be a part of the program.
Gadus also talked about a meeting he had last week with 42 of the residents, and he said he thought it went very well.
The maximum rent a resident would pay is $950 per month. Voss asked when the process is finished, is there a guarantee it would still be $950 or would the rent go up.
“The income limits and rent limits are released and updated every year in April/May. So it would be the only way it could go up, is if those limits go up next year. HUD (Housing and Urban Development) releases those tables ... so they can’t go above that,” Gadus said.
Voss was confused about the ownership of Courts of Colfax. Gadus said PAH owns Courts of Colfax and when the PILOT is completed, PAH will be the general partner and the controlling member.
City attorney Scott Reust pointed out Public Law 74-2021 was what was enacted to create the PILOT statutes. He said it was newsworthy at the time because it was approved unanimously and had bipartisan support down at the Indiana House (94-0) and Senate (48-0) and signed by then-Gov. Eric Holcomb in 2021.
“I looked into that because this is what’s going to happen for affordable housing financing,” he said, but clarified the PILOT statute was created so that an agreement was made for the developer to make payments in lieu of taxes. The payments are made into a fund for affordable housing in lieu of taxes so it’s not called a tax.
Voss said he was glad they got clarification “that there will be zero taxes paid for 20 years, perhaps 40 years. I would just like to remind everybody that taxes pay for schools, city services, the library, county sheriff’s department and every other office that provides a public service. With this PILOT program, there will be no taxes paid for 20 years, perhaps 40 years. All those services will then have to be taken up by homeowners that pay high property taxes that go up every year. I find it very difficult to support a program that provides no money from 78 units for schools, city services. I just can’t wrap my head around giving someone 20 to 40 years of zero taxes. Yes, they will paying money into a fund. That money can’t be used for schools or anything else that the city provides. I have a real problem with that.”
Skinner asked if the county or school corporation were creating affordable housing projects. “The school corporation, which by the way gets $7,000-some per a head, affordable housing project may have 50 kids in it, so when you say that school doesn’t get any benefit, Juergen, it gets a huge benefit. Way more benefit than they ever get from property taxes. My job is to create housing opportunities to keep our schools afloat so they have kids instead of decreasing kids. This is a way that we’ve done that.”
Voss said someone is making lots of money from Courts of Colfax that will not provide money for services or schools like everybody else does.
“That is the perspective you’ve taken, but here’s the other side of that perspective. We’re going to have to invest in affordable housing regardless, whether it comes from this fund or another fund that is supported by taxes. We’re going to have to invest in it because it is something that the community needs regardless,” Skinner replied.
Voss said it might be preferable to give them a tax abatement than the PILOT. Skinner reiterated that the PILOT was an opportunity to invest in needed affordable housing and the schools would benefit in the long run.
Gaddus said nonprofit organizations don’t pay real estate taxes, and Courts of Colfax right now is eligible for property tax exemption. The owner has not filed that yet, but would consider going forward, too, but wants to redevelop the property to continue their 30-plus-year relationship in Warsaw to provide affordable housing in the city for another 40 years. Housing Investments is for-profit, but PAH is not-for-profit.
Council President Jack Wilhite said it seems to come down to whether Warsaw wants affordable housing or not, while Councilman Mike Klondaris said he thought PILOT was the future and he was going to have to support it. Dobbins said she felt like she needed more time to digest all the information.
After the council’s discussion on it for over 90 minutes, in which Voss and Skinner often butted heads, Mayor Jeff Grose opened it up to the public.
Attorney Travis J. McConnell, who doesn’t live in Warsaw but owns two commercial properties in the city, said, in part, “It’s not the government’s job to provide housing to people, but there is a legitimate public interest in assuring that residents can find housing that they can afford. Local governments influence that outcome through zoning, infrastructure and development policy, but that does not answer whether the public should subsidize a particular privately owned development like this one. A nonprofit doesn’t mean that an owner isn’t getting a salary necessarily either. Keep that in mind. Some nonprofit salaries are reasonable, some are not. This one may or may not be, it wasn’t talked about tonight, but that’s a question I think is worth asking.”
He said before the city approves a PILOT agreement, it should have ordinances and standards in place for them.
Chris Plack, a Warsaw resident who has indicated he may run for city council in 2027, was concerned about PILOTs defunding schools, libraries and fire departments.
Julia Radford, whose father lives in Courts of Colfax, said she was there on his behalf because financial and other details have changed from the very first meeting. Her daughter, Beth Brooks, talked about how there’s been no updates to the building in years, despite the money that came from residents. She also talked about how residents had to often fend for themselves.
County Councilman and attorney Will Stockdale, who is not a Warsaw resident, said government involvement in housing does not make housing more affordable. “Housing costs what housing costs. We’re just shifting the burden to the people who do pay the taxes. So that’s a concern,” he said in part.
After some numbers provided by Dane Koontz, Gadus said he’s had Courts of Colfax residents thank him for the renovations that are planned. He said they do have a manager there five days a week and a part-time maintenance person. He said he could prepare some numbers for what a 10-, 15- and 20-year tax abatement would look like if the council preferred to go that way instead of PILOT.
Skinner reminded the council that the city has done a lot of affordable housing projects in the past and what Courts of Colfax is asking for is no different than what the city has done in the past.
Wilhite eventually made the motion to table the matter, with Klondaris provided the second. It was tabled 6-0, with Councilman Josh Finch absent.
