UPDATED: Development agreement reached on massive Electric Works project
Calling it a “great day for Fort Wayne,” Mayor Tom Henry and backers of the Electric Works project Thursday announced completion of a development agreement after two months of negotiations.
“There’s been a lot going on behind the scenes,” Henry told a crowd gathered for the press conference in the gymnasium of the former General Electric campus, a reference to suggestions the talks had been dragging or that his administration did not fully support the $221 million project. Both he and developer RTM Ventures “want Electric Works to be successful. It must be a point of destination.
The city in June issued a draft of an agreement stating terms for the administration’s support for the developers’ bid for $62 million in local public financing. Terms announced Thursday include: city approval of environmental conditions at the former industrial site; evidence RTM can complete phase one of the project within the terms stated in the agreement; city approval of commitments to lease a minimum of 250,000 square feet; and city approval of studies showing a market demand for the project’s offices, apartments, shops and other features.
RTM partner Josh Parker praised the city and other government leaders for “taking very seriously their stewardship of tax dollars. But we’re not here to celebrate an agreement. This is about the next step.”
That step will include approval of the deal by the city Redevelopment Commission, the Fort Wayne-Allen County Capital Improvement Board, City Council, the County Commissioners and others. The project has already received a $3 million loan from the Allen County Commissioners and CIB for environmental clean up. Additional local sources of funding to be sought include $45 million from the CIB, $10 million from the city’s Legacy fund and a total of $7 million in economic development income taxes from the city and county. RTM would add nearly $32 million in equity and fees and a bank loan of about $65 million
As The News-Sentinel reported earlier this month, RTM recently lost a $16 million federal New Market Tax Credit awarded by an out-of-state private investor due to the uncertainty of the deal. And with the agreement to be announced today calling for financing to be in place by June 2019 and construction not being complete until 2022, millions of dollars in previously approved Historic Preservation Tax Credits could also be lost. RTM is expected to seek additional New Market credits in the next round of availability, but that won’t happen until next year. Parker, however, expressed confidence the necessary credits could be secured.
Street and lighting improvements and other infrastructure needed to support the project are also expected to cost millions more and are not included in the $62 million package. Those expenses would be funded by taxes generated by the project.
Sweetwater Sound founder Chuck Surack, who previously suggested the Henry administration didn’t seem interested in moving the project forward, has said he would be willing to invest in Electric Works should it materialize and was present at Thursday’s news conference. The News-Sentinel has also been told Parkview Health is considering a substantial investment.
The project has already received a $3 million loan from the Allen County Commissioners and Capital Improvement Board (CIB) for environmental clean up. Additional local sources of funding to be sought include $45 million from the CIB, $7 million from the city’s Legacy fund and a total of $7 million in economic development income taxes from the city and county. RTM would add nearly $32 million in equity and fees and a bank loan of about $65 million.
“Given the strong public support, we’re excited about the next phase of this process, starting with the Redevelopment Commission on Sept. 10,” Parker said.
City Councilman John Crawford, R-at large and a candidate in next year’s Republican mayoral primary who previously suggested Henry did not support the project, issued a statement following the press conference. “I am pleased to see that the city administration, after months of indecision, has finally stepped up to take action. I believe (this) has huge economic potential for downtown Fort Wayne and will be a game-changer for our entire region,” he said.
Electric Works includes 39 acres, 18 historic buildings and more than 1.2 million square feet of space that will include innovation/education space, residential, commercial, community and hospitality uses.