ELKHART — A group of local investors is proposing to build 100,000 square feet of mixed-use development to surround the Elkhart Health & Aquatics Center in the River District.
The group, Elkhart Opportunity Fund LLC, said it would build retail space, Class A office space and roughly 40 townhomes and apartments near the aquatics center, Lundquist Park and Jackson Boulevard.
Elkhart Opportunity Fund, led by local investors Bob Deputy, Tom Pletcher, Brian Smith and David Weaver, has given the City of Elkhart Redevelopment Commission an offer of $0 for the property. The group said it is not requesting any incentives for the development.
“We believe this is consistent with the progression of the River District and its market adoption,” their proposal said.
No other offers have been received.
The proposed mix-use development would be in a similar modern-industrial style as the high-end condominiums that the same investors plan to build at the former Alick’s property on the eastern end of the River District.
The mixed-use development, along Jackson Boulevard, would be three to four stories of 13,487 square feet per floor, except for the fourth floor, spread over two buildings. The first floor would be house retail, while the second floor would be Class-A office space and the third floor would either be the same or residential.
Each building would have a rooftop space that could have amenities and be a social area.
By the St. Joseph River on the east side of the aquatics center and on Clark Street, Elkhart Opportunity Fund has proposed the construction of 27 three-story townhomes that the group describes as “middle-market.”
The first 17 townhomes would be three-bedroom units at 1,900 square feet, while the remaining 10 would be four-bedroom units at 2,100 square feet. Each unit would have a two-car garage.
Investors said they would like to give the townhomes sidings with a mix of brick and cement to “create a pleasing and contemporary aesthetic.”
Prices for the townhomes would likely start at $250,000, according to Elkhart Opportunity Fund.
The Redevelopment Commission has forwarded the proposal to city staff, which is evaluating the offer and will get back to the commission with a recommendation by its next meeting in November.
Elkhart Opportunity Fund said that if the project is awarded, it will immediately move into final design, permitting and preselling units. It expects to break ground in February. Construction is expected to be completed by the spring of 2021.
Century Builders, which is involved in the project, estimates total construction cost for the townhomes of between $7.8 million and $9.4 million. Once completed, the townhomes will provide a $100,000 annual property tax increment for the city, the investors said.
The mixed-use development construction is estimated to cost between $8.1 million and $10.8 million. The investors anticipate that the city will see an annual property tax increment between $250,000 and $300,000 from this part of the project.
Weaver, who led the presentation of the offer to the Redevelopment Commission, said it was important to the investors not to ask the city for any incentives. The expected cash-on-cash return is 0.92 percent over 10 years, according to the proposal.
“This team is dedicated to Elkhart, we’re dedicated to making this work,” Weaver said. “This is not the best financial decision we’ve made, as a team, over our lives, but we are committed to Elkhart and the success of the River District.
Elkhart Opportunity Fund and Century Builders’ offer was given on the conditions that the soil is shovel-ready and free of contamination, and that there are appropriate utility connections.
The team behind Elkhart Opportunity Fund is also involved in the district in other ways, as Weaver, Deputy and Smith make up three out of four private-sector members of the River District Implementation Team.
The four investors, through Portage Place Development LLC, won the bid to develop the former Alick’s property in the 900 block of Jackson Avenue earlier this year.
Follow Rasmus S. Jorgensen on Twitter at @ReadRasmus