A plan to buy about 165 acres of land to use for economic development will now go to the Shelbyville Common Council following approval by the Shelbyville Redevelopment Commission.
The city’s redevelopment commission has voted unanimously to OK the purchase of what’s commonly known as the Presbyterian property.
Most of the acreage is owned by the First Presbyterian Church, 124 W. Broadway St. The site is on East State Road 44 past Walmart, just beyond Interstate 74.
A legal ad published in The Shelbyville News stated that a tax levy would be used to pay for up to $4.1 million in bonds to be issued for the land deal.
Bonds are essentially IOUs. Investors buy the bonds and are repaid the price they pay plus interest over time. In return, the bond issuer gets cash immediately to use for a project.
Following the Redevelopment Commission meeting Monday, Mayor Tom DeDaun said there would be no tax levy by the city to pay for the bonds.
“We’ll use racino money,” DeBaun said.
The $4.1 million is the total price; the city is due to split the cost with county government, he said.
In presenting the proposal to the Redevelopment Commission, the mayor said the reason for buying the property is to make the city more competitive and attractive to site selectors and business prospects.
The city has been in the running but has lost more than one prospect because there’s no large site ready for a project, he said.
“So what we’re finding is ... first and second round is becoming the elimination round,” DeBaun told the commission.
Bruce Donaldson, an attorney with Barnes & Thornburg in Indianapolis, said a bond issue to pay for the land purchase would not exceed $4.1 million.
“The primary retainer source would be the city gaming fees,” he said.
Also, the county is expected to cover half of the bond payments, so there would be two sources of repayment, Donaldson said.
Kay Koenig attended the Redevelopment Commission meeting and asked about the price since the assessed value of the land listed by the County Assessor is far less than $4.1 million.
DeBaun replied that the assessed value is for agricultural land; the purchase price is for the site’s use as commercial property which is worth much more.
Koenig also asked about acquiring an option to buy the land, and DeBaun said land prices may be higher when it came time to renew an option.
City Councilman Brad Ridgeway (R-4th Ward) also questioned the proposal, concerned about the transparency of the process and putting taxpayers at risk for a large expenditure.
He mentioned the Methodist Building loan and the Krone NA project as examples of poor deals for the city.
Developer Mitch Genser is in default on a $280,000 loan made to him by the city for the Methodist Building, 23 Public Square.
Krone bought the land directly from the Presbyterian church, and the company has offered to sell the land back to the city for the purchase price, DeBaun said.
Brian Asher, executive director of the Shelby County Development Corp., the county’s economic development group, said companies want to move quickly and not wait on a land sale.
“The prospects coming forward don’t allow that amount of time,” he told the Redevelopment Commission.
After the meeting, Asher said there are three potential projects for the Presbyterian site now, but he was unable to give details due to their confidential nature.
There is no formal written agreement with the church to buy the land, but there is a verbally agreed price, he said.
The City Council, and the Shelby County Commissioners and County Council, still must approve the purchase, Asher said.