Council Approves Market Square Arena Site Funding

A 28-story mixed-use complex on the former Market Square Arena site has the green light.

The City County Council voted 18-9 in favor of financing a portion of the project.

The city is bonding up to $23 million for the $81 million development.

Deputy Mayor Deron Kintner points to the overall economic return on investment as reason for the deal.

"Projected, conservative, new taxes resulting from it of over $1.8 million, that's a greater than 10 percent return on our money," he said.  "There are no funds the city is investing elsewhere that's generating a 10 percent return, so this is a strong investment.  It always has been."

CEO of developer Flaherty and Collins Properties, David Flaherty, says the new revenue is what makes the city's investment worth it.

"We're anticipating about 135 permanent jobs and then the tax revenue - the real estate taxes that we pay -  and then you couple that with the income taxes from all the new people moving in, it'll far exceed the cost to the city for the development," said Flaherty.  "So, just in direct dollars there is a lot more coming in than will be going out."

Part of the agreement is that 30 percent of hires for construction of the project come from Marion County. The complex includes retail, 300 luxury apartments and 550 parking spaces.

Some councilors such as Democrat Angela Mansfield believe the city’s financial commitment is too much.

"We've got to be more thoughtful in our approach, recognize what we can and can't do given our budget constraints," she said.  "I can't go to my constituents and say 'sorry we can't hire more police officers because we've been spending millions instead on luxury apartments.'  It just doesn't sit well with people."

Republican Councilor Christine Scales is against the deal because she thinks it’s unfair for tax payers to finance a private project.

"This kind of generous incentive - I believe - provides an unfair advantage to larger, politically connected firms with leverage to negotiate and receive favorable deals with our city," said Scales.

Construction is slated to begin this summer.

It is expected to open in phases in late 2016 starting with the retail portion.  The apartments will then open four to six months after.