KEVIN LEININGER: Electric Works developers looking for more help; will state ride to the rescue?
The developers of the Electric Works project have already received pledges of $65 million from the city, Capital Improvement Board and the Allen County Commissioners. But now, various sources tell me, they’re seeking another $24 million or so in local public funding to deal with a cash-flow problem — a problem some suggest could be overcome with another significant contribution from the state.
It’s no secret RTM Ventures has been seeking additional financial support for the $250 million redevelopment of the former General Electric campus, and the city, county and CIB have all agreed to extend the developers’ deadline for securing tenants and dollars into April. In the meantime, however, efforts to close the deal are creating expenses that must be met.
As a result, I’ve been told that RTM has approached the CIB and county about providing what could be called a “swing loan” that could be repaid once other financing is finalized. The property itself could be offered as collateral, some say. But even if that additional funding could be secured — and that is by no means assured — the project still lacks the so-called “anchor tenant” that could provide the critical mass of occupancy and rent needed to generate success.
That’s where the state comes in. Maybe.
RTM partners aren’t talking, but I’ve been told by credible sources the developers have been in touch with high-ranking state officials about a deal that could account for about 100,000 square feet. I haven’t been able to confirm that, but Indiana’s interest in Electric Works’ success is already a matter of record. Two years ago, the Indiana Economic Development Corp. awarded the project an Industrial Recovery Tax Credit of $50 million.
This is all somewhat speculative, I admit, and the devil would be in the details. Local officials would be understandably and properly reluctant even to consider any additional financial pledges without proper guarantees in place. But if the state really does become a major player, the pieces may finally be in place to make the up-and-down project a reality.
It’s appropriate that this column is being published on election day, because politics has been and remains a big part of the Electric Works story. Many have long suggested that Mayor Tom Henry does not support Electric Works despite his public statements of support, and a new book published by former Greater Fort Wayne Inc. CEO Eric Doden, “Turning Rust to Gold,” offers several anecdotes intended to make that point.
Henry’s Republican challenger, Tim Smith, has said he supports Electric Works and would be willing to renegotiate the city’s deal with RTM if necessary. Conversely, if Henry is re-elected and really does want to kill Electric Works, it should become apparent soon enough.
But what if the state really does make a major commitment, which would presumably give Indiana officials an incentive to help market Electric Works regionally and even nationally? Would Henry, who has said he will not run again no matter what happens Tuesday, try to pressure his appointees to the CIB to reject RTM’s request for a loan even if the deal could be structured in a way that helps the project without exposing taxpayers to undue risk?
The time will come — perhaps as early as April — when the local officials who have pledged the $65 million will have to decide whether they have given RTM enough time to make Electric Works work. True, that money won’t be turned over to RTM until the development deal’s leasing and financial benchmarks have been met, but in the meantime it is unavailable for other purposes. Some of those purposes, perhaps, are more attractive to certain people than Electric Works, and it’s legitimate to suggest RTM shouldn’t be able to tie up that much money indefinitely.
But this community, public and private sectors alike, has invested considerable time, money and hope in Electric Works. If a request for short-term financial backing and the purported state interest really do provide a legitimate chance for the success of a potentially transformational project, they will deserve to be considered on their own merits — no matter who occupies the mayor’s office.
This column is the commentary of the writer and does not necessarily reflect the views or opinions of The News-Sentinel. Email Kevin Leininger at firstname.lastname@example.org or call him at 461-8355.