City to pay $350,000 to make Alick's lot buildable

Rendering provided The Elkhart City Council on Monday approved spending $350,000 on a property in the 900 block of Jackson Boulevard to make the land ready for construction. The decision settles months of deliberation and allows private developers to build 15-21 high-end condominiums. 

ELKHART — The Elkhart City Council on Monday evening approved $350,000 in funding to install helical piers at the former Alick's property to make the land buildable for developers that plan to construct high-end condominiums.

The decision, postponed on the night before the Nov. 5 municipal election, was approved Monday night in a 7-1 vote, with Dwight Fish, D-4, voting against.

With the City Council's decision, any hopes that opponents might have had for the condominium agreement to be dissolved is lost. The Elkhart Rowing Club had hoped to build a boathouse on the property, which is in the 900 block of Jackson Boulevard on a narrow piece of land between the St. Joseph and Elkhart rivers.

The process has received public attention throughout the year, with supporters of the Rowing Club's bid showing up at previous meetings of the Redevelopment Commission and the City Council. However, the commission and council both have majorities that prefer making the lot residential. The main arguments for doing so have concerned growing the city's tax revenue and avoiding even worse traffic at an already problematic intersection at Jackson Boulevard and Goshen Avenue.

The group behind the condominiums, Portage Place Development, has said that the units would add $120,000 annually in new property tax revenue for the city. The partners of the company are David Weaver, Brian Smith, Tom Pletcher and Bob Deputy. They are also involved in development elsewhere in the River District.

"I'm happy for the City of Elkhart, I'm happy for the taxpayers, I'm happy for the people that are going to be buying those condos, and hopefully we can get things hurried around here and start getting some shovels in the ground," Smith said on Tuesday.

No public opposition

On Monday, no one showed up to speak against the $350,000 appropriation. That caught the attention of City Council President Brian Dickerson, R-at-large.

"I'm also quite shocked that not one person stood up to speak against this, despite the comments on social media," he said.

Dickerson praised the four local investors behind Portage Place Development for sticking with the project "despite some of the negativity that they have faced throughout this process."

One person did wish to speak against the appropriation on Monday but did not get the chance due to confusion on whether he wanted to speak during the public comment section for the ordinance or during the entire meeting's privilege of the floor section, when items already on the agenda are not allowed to be discussed.

The Elkhart Rowing Club's treasurer, Tom Shoff, reacted on Facebook after the decision.

"The Elkhart City Council sold out our community this evening by putting private developers ahead of our citizens," he wrote.

Shoff has said that the rowing club would not have asked the city to pay for making the property buildable, had the club won the bid. Both groups offered $100,000 for the land, but Shoff has indicated that the rowing club would have been willing to pay more over time. According to Sandi Schreiber, the Redevelopment Commission president, the final price paid by Portage Place Development will be $100,000.

No public access to the river

Though the commission's request for proposal required there to be public access from Jackson Boulevard to the St. Joseph River, the agreement includes no public access.

"It was not feasible," Schreiber said. "I'm sorry that we couldn't provide that, but it is not that big a piece of land, and the best anybody could have done was a small park."

According to Brian Smith, the issue is about the condominiums being purchased, not rented.

"Just as you and I or anybody owns their home, we don't want people walking our property to look at things or just to come on our property whenever they want," he said. "From what we had heard from the people that are interested in buying them, they wouldn't buy them if there was public access."

The Elkhart Rowing Club's proposal did include a small park and public access to the river.

Changed number of units

The original bid from Portage Place Development said there would be 21 condominiums, but that has since been revised to 15. The smaller number both ensures that more future owners will have a good view of the rivers and that the cost of installing helical piers does not go over $350,000, according to Smith.

He said the price of a condominium will likely range from $200 to $250 per square foot, with the homes with a better view selling at a higher price. The condominiums will be sold as what Smith called a "vanilla box," allowing buyers to make their own decisions - and thereby also investments - for the interior.

Portage Place Development's bid said condominiums would range in size from 1,600 to 3,000 square feet, which means that they could range in price from $320,000 to $750,000.

Each home will have a boat slip and a two-car garage, according to the bid.

According to Smith, seven buyers have committed to purchasing a condominium. The developers had initially said they required 10 commitments but as the number of planned condominiums has decreased, so has that requirement.

Smith said that, since the process to finalize the agreement has taken longer than first anticipated, the timeline is not the same as expected. The first proposal from the developers projected that construction would be done by the spring of 2021. Smith could not say if that had changed.

The next step, he said, is completing the blueprints so that the construction phase can be put out to bid.

Good or bad for taxpayers

One of the most vocal supporters of building condominiums on the property is City Councilman David Henke, R-3.

"For years, it sat idle, and it's time to put it to best use," he said.

Some have criticized the plan to spend another $350,000 when the city has already spent $800,000 to make the property marketable. But Henke said that $800,000 should be seen as a sunk cost and that nothing will be recovered if the city does nothing.

"Another price tag, but a small price tag in comparison to the $16 million investment and the long-term reinvestment in our city through taxes," Henke said.

He has repeatedly argued that the city should show its gratitude to its wealthy residents, who he said create jobs and have helped establish public amenities such as the NIBCO Water & Ice Park and IUSB Elkhart.

Dwight Fish, the single vote against the appropriation, said the land should go to those who would benefit from it the most.

"I'm still getting emails up to this very moment tonight, getting letters saying, 'No, no, no.' So I have no choice but to represent the people that have contacted me, the overwhelming support against the $350,000," he said.

Fish said that part of his problem with voting for the appropriation would be spending that amount of money for private developers "when the 4th District is dying on the vine."

The 4th District is on the south side of Elkhart and includes the Tolson Center, which the City Council has been criticized for closing in 2018. It was recently reopened.

Henke said the 4th District needs the condominiums on the former Alick's property more than any other district in the city.

"Because this is what is going to pay the taxes to keep everything else flowing that the 4th District can't pay for," he said.

Vote postponed on the eve of Election Day

At the City Council's Nov. 4 meeting, in the evening before the election, the council decided to table to vote when they were told that a contract had not been finalized, meaning that the city was not contractually bound to pay the $350,000.

At the Nov. 18 meeting, the council knew is was not bound to appropriate the money but decided to do so anyway.

Mary Olson, R-at-large, made the motion to table the decision on Nov. 4. That night, she said she had no plans to do so before realizing that the council might not be bound to pay for the helical piers.

On Tuesday, she said that while she voted for the appropriation despite now knowing that she was not bound to do so, the two weeks allowed her and the council to educate themselves on other aspects of the property development.

"I pride myself on one thing," she said. "Responsible, educated decision-making, and I believe we exercised that last night."

Olson said on Nov. 4 that the decision to postpone had nothing to do with avoiding a controversial vote right before the election.

"I thought, with all due respect, that we had a binding agreement with Portage Place," she said then. "We, in fact, do not have that document. Therefore it changed the dynamics of this evening."

Policy change

The councilwoman criticized the Redevelopment Commission for not allowing Portage Place Development to do soil borings earlier in the process when the developers asked to do so and appeared willing to pay for making the land buildable. Fish and Councilman Richard Shively, R-1, talked of dissolving the commission during the Nov. 4 meeting.

Olson has since suggested that the commission should establish a policy to ensure that it does not promise a buildable property without doing proper testing. Redevelopment Commission President Schreiber said on Tuesday that she is in favor of that proposal.

Follow Rasmus S. Jorgensen on Twitter at @ReadRasmus

(9) comments

fire111

Joe can't quite grab the concept. To have quality of life you must be able to provide that commodity! And more than not quality of life is brought to you through tax payer money. Tax exempts very seldom are able to do anything but just exist at the level at which they started! You need tax money to provide basic services. Water, sanitary sewage and drainage. Come from taxes! Law and order and fire and EMS come from taxes. They are NOT free. People entering the city for recreation DO spend money! I agree! But they pay no taxes to pay for services they use! One thing we DO know Joe, is this! The principals investing WILL pay a considerable amount of taxes over the years. And as the value of the property increases. They will pay even more!

Joe King

Hotel tax, fuel tax, sales tax, billed from EMS if they use the service like an ambulance...beyond that, coming to the city and going to a restaurant, or a theater or event helps pay the salary of employees.... unless your one of the 4 investors than yes, you do get paid from the taxpayer...as in the case just over $1 million dollars...or a company that gets awarded tax exemptions by the city....quality or life like parks, theater, trails and public access to waterways....beneficial to all, instead a few in this case....can’t wait till the fiscal democrats take over the administration...

fire111

Joe's idea of taxes and their use is somewhat skewed! He admits taxes pay for services. That is my point! Yes!!! That is why it is important to work towards tax paying endeavors. Not tax exempt ones. And once again Joe states people coming to the city to restaurants, movies an, event, all privately owned, much like a privately owned high value tax based concern like a condo complex, help pay local workers! We are talking the same thing EXCEPT your fixation on a non taxing long boat house! As I said before, there are 10 public access points on the St Joe beginning at McNaughton Park and ending in Bristol. There are dozens of fishing sites. Both on the St Joe AND Elkhart rivers.

Joe King

there was opposition...we spoke to our representatives and there was confusion of when we could speak....regardless, public taxpayer money going to the trough so private individuals can make more money....their greed is disgusting....at the expenses of tax payers in the city.... And, they ignored the request for public space for the taxpayers..... they said all they could do was a small park....ok...that works...put a few benches with trees where people can look and maybe throw a fishing line in.... We now have over a million dollars of tax payers money for a private investment for a few wealthy individuals.... Vote Henke Out!

fire111

Thanks for you very informed post Joe! You should have had BETTER reps buddy. Or maybe attend a council meeting sometime. You know that little podium that faces the council? That's for public input sessions! Anyway I'm glad you care so much for your fellow man. By putting in a little park in you would be wasting somewhere around $120,000 tax money. Worried about "wettin" a line? Step across Jackson Blvd. Probably a half a mile of paved pathways and some benches also for fishing! Oh and Joe? Where ya been buddy? Just east of ex mayor Moore's home is a beautiful public park. Complete with concrete walkways, trash containers and of coarse your benches. All conveniently brought to you by local property taxes.

Joe King

Quality of Life.....look it up.... IT's more than working at a warehouse or grabbing the senior's menu before 4:30.... if you want people to come, give them a reason... I just don't want to hear "we can't pay for that" or "we don't have money" from the members that voted on this. Over $1,000,000 of tax payers money went to fund this private development for wealthy (As henke puts it) people to make a few investors more money..... Mad Anthony's part 2......

DingFod

"No public opposition" That says it all, right there.....

59wall

The city council has sold out the City once again. Can you imagine what the Tolson Center could have done with $350,000?

sidearm

Probably misuse it like they have before. Anyway, the center in the hood will get plenty of new funding now with the new council.

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