Building corporation to finance Michigan City project

It’s a process similar to that used for major school construction projects. The building corporation technically owns the building and leases it to the intended owner when the bonds are paid off. This allows the government bond rating to be used to lowest-cost financing.

The City Council passed a resolution last week to make this happen.

The station block development is a big project. Brian Prince, vice president of Flaherty & Collins, the developer, put it in perspective.

The $93 million project will have at least $200 million in direct economic impact, he estimated.

That comes in part from bringing new people to the community, who then not only pay rent for their apartments in the new development but also shop in local stores.

“The state’s objective is to steal people away from Illinois,” Prince said. Based on experience elsewhere, at least half of the new residents will become permanent residents of Michigan City. “You bring them in, and you keep them,” he said.

The development will be especially attractive to empty nesters, he predicted, but studio apartments will offer the city’s workforce an opportunity to get a foothold there.

Flaherty & Collins, based in Indianapolis, has 13,694 multifamily units across 82 properties in eight states.

“I’d say we are one of the most active mixed-use P3 (public-private partnership) developers in the country,” Prince said. “99.9% of what we do across the country are these types of development.”

When it’s finished, the city block’s assessed value will be over $50 million, he predicted.

“I think this is a very exciting project for Michigan City for a lot of reasons,” bond counsel Andy Mauser, of Baker Tilly, said. When finished, it will account for 2% to 3% of the city’s total tax base, which is about $1.5 billion, he said.

Keith Cole, of Flaherty & Collins, said there will be 6,000 square feet of commercial space in the development along with 220 total residential units and a parking garage with 540 spaces.

The roof of the parking garage will be a passive garden space. That gives residents in the tower above something better to look at than parked cars, and it reduces operating costs for the parking garage because snow won’t need to be plowed, city Planning and Development Director Skyler York said.

The city will pay about 15% of the cost to maintain the parking garage, a far cry less than when it was originally envisioned that the city would operate it, York said.

The city’s share will amount to perhaps $20,000 to $25,000 a year, bond counsel Adam Collins said.

The city will retain exclusive rights for use of the rooftop and could recoup some of its annual cost by renting it out.

Some 400 parking spaces will be owned by Northern Indiana Commuter Transportation District, which operates the South Shore Line, for use by commuters. After mid-afternoon, though, those spaces would be available for public use. The fifth floor of the parking garage would be reserved for residents’ use, Collins said.

Parking downtown is “incredibly important” for nightlife and other activities, he noted.