Several Indianapolis neighborhood groups are taking issue with the city’s plan to spend up to $26 million in tax revenue earmarked for neighborhood redevelopment to acquire the new Broad Ripple Park Family Center.

The $19.7 million family center at 1426 Broad Ripple Ave. opened in January after nearly two years of construction. The project was developed by a partnership between Indy Parks and BR Health Holdings LLC, a holding company made up of Community Health Network and Indianapolis-based Avenue Development.

The city since 2021 has said it planned to purchase the 40,000-square-foot building within a year of the facility’s opening in order to take full control of the property and avoid shelling out nearly $1 million per year as part of a long-term lease agreement with BR Health.

The City-County Council and the city’s Metropolitan Development Commission this week are beginning the process of hearing a resolution to authorize bonds for the purchase of the building. The council on Monday night introduced the resolution and sent it to the MDC for a recommendation, which will be heard during the board’s meeting Wednesday.

The bonds, which would be issued through the Indianapolis Local Public Improvement Bond Bank on behalf of the city, would be paid back over as many as 20 years and carry an interest rate of up to 8%. The total allocation includes a reserve fund as well as financing costs and interest.

But neighborhood groups such as the Broad Ripple Village Association and Midtown Indy Inc. are raising concerns about a mechanism by which the city plans to pay for the acquisition.

A so-far undefined portion of the debt is expected to be covered by revenue generated through the Midtown tax-increment financing district created in 2014 to incentivize private development in five neighborhoods: Broad Ripple, Butler Tarkington, Mapleton-Fall Creek, Meridian Kessler and Midtown.

The TIF was first used to finance The Coil apartments, 6349 N. College Ave., which were completed in 2017, and has been used on multiple other Broad Ripple developments since then, including the EightEleven Group headquarters and River House apartments.

“Community stakeholders have serious questions and concerns about city’s approach to [purchasing] the Broad Ripple Park Family Center,” Michael McKillip, executive director of Midtown Indy, told IBJ. “I think it’s fair to say they have grave concerns, and organizations are meeting and holding votes and preparing to speak to the city about their concerns.”

On Tuesday night, the BRVA’s board voted to oppose the resolution by the city and MDC as presented. Other neighborhood organizations, including Midtown Indy, Butler-Tarkington and Mapleton-Fall Creek, are expected to draft their own oppositions to the proposal in the coming days.

In written comments, Department of Metropolitan Development spokesperson Hannah Thomas said the full $26 million would not be covered by only the Midtown TIF. The debt service would anlso be paid in part by facility-generated revenue and other parks department revenue.

Rental payments from Community Health, which has a 25-year lease to operate a health clinic in the building, will also be applied to the debt service. Community is paying $493,350 in rent this year and will pay $412,500 next year, with lease payments increasing by 2% each year after 2024.

Thomas said the Midtown TIF has previously been used for smaller projects related to public spaces, including $1 million in improvements for Tarkington Park and “represents an appropriate funding source for the purchase of this critical community asset.”

Wednesday’s meeting is not expected to include an opportunity for public comment on the bond resolution, but that will come later in the process.

Under its deal with the BR Health, Indy Parks agreed to lease at least 25,000 square feet in the family center for 30 years, with the option to buy the building. While rent was waived for the first year, the department would be required to pay $79,900 per month in rent—$958,800 per year—as well as contribute funds toward maintenance and upkeep of the property.

The price tag for the purchase of the building was established in the lease agreement between the parties. Thomas noted the price to purchase the facility will increase by $1 million per year if the city fails to purchase the facility by the end of the year.

She said a failure to close on the purchase by Jan. 3, as planned, would result “in cuts to critical parks capital investments.”

The family center was initially proposed as part of a $70 million master renovation plan for the park approved in 2018, replacing the existing 11,000-square-foot facility that Indy Parks officials argued was too small to meet the growing demand for space.

The city requested proposals for development of the building in 2019, with BR Health Holdings winning the public bidding process.

In addition to health care uses, the two-level facility houses a gymnasium, group meeting space, a children’s play area, a two- or three-lane running track, administrative areas, and a multipurpose room.