INDIANAPOLIS — On Monday night, the City-County Council will introduce a proposed ordinance to establish a downtown Economic Enhancement District to raise a fee from property owners in the Mile Square to fund public safety, cleanliness and homelessness services in the core of Indianapolis.
”Basically, it’s an HOA-type structure that property owners downtown control and can raise an assessment of dollars to invest in key priorities,” said Taylor Hughes, vice president of the Indy Chamber. “The groups we’ve talked to say those priorities are homelessness response, public safety and cleanliness in the Mile Square. We are the largest city that we have been able to identify in the country that doesn’t have a district like this in its central business district in the urban core.”
The assessed value of all properties downtown is pegged at $3.5 billion.
In the most recent General Assembly, state lawmakers voted to provide Indianapolis with $20 million to construct a low-barrier shelter housing hub to provide services and temporary shelter to persons experiencing homelessness, many of whom spend their days congregating on downtown streets and in parks while spending the night in homeless shelters and sleeping in the open.
That allocation was contingent on Indianapolis determining an ongoing funding mechanism to operate the shelter.
Indianapolis Mayor Joe Hogsett has already targeted $12 million in city funds for a low-barrier shelter that would not only house homeless persons but provide services to get them through the day and into more permanent housing.
Concurrently, Downtown Indy Inc. has relied on $3.7 million in American Recovery Rescue Plan Act funds over the course of 18 months to step up downtown cleaning schedules and other services as well as additional spending on public safety and homelessness outreach.
That money runs out next June, leaving downtown advocates to scramble for immediate continuing funding and a long-term fiscal solution.
The Indy Chamber has proposed an initial $5.5 million budget for the first year of the EED beginning in 2025.
”We put together a proposed budget that focuses on three priorities which is public safety in the Mile Square, homelessness response which includes housing navigators that can help individuals who are experiencing homelessness in the Mile Square and operating funds that go to a housing hub or low barrier shelter,” said Hughes. “And then the last piece is cleaning services and beautification for the Mile Square, making sure that we’ve got a sufficient number of boots on the ground going around picking up trash, cleaning up graffiti, spray paint and the like.”
An eight-member appointed board would be responsible for the budget and oversight of the revenue collection and a funding formula that would be based on inflation.
City-County Council President Vop Osili said it was undecided if the EED Board, dedicating approximately 40% of the revenue from the downtown assessment to addressing homelessness issues, would have any input or oversight into those services or the low barrier shelter which is planned for the vicinity of Georgia and Shelby streets, just east of downtown.
Hughes said planners determined $5.5 million as a starting point to maintain the level of services now being performed downtown.
The proposed budget would allocate $1 million to public safety, $2 million to homelessness outreach and operation of the low-barrier shelter, $2 million to cleaning services and $365,000 to administrative costs performed by Downtown Indy Inc. based on a federal oversight formula.
There are more than 1300 parcel owners downtown, ranging from residents to parking garage operators to hoteliers and commercial building landlords.
”Your pay into the district will be relative to your investment in downtown,” said Hughes. “The relative value of your property, gross assessed value, will determine what your rate is. Now that’s for commercial payers. For residential non-commercial payers, it’ll be a little different. For commercial it will be their AV. For non-commercial residential, it will be a flat fee.”
Homeowners would pay a flat $250 fee. Office property owners would average about $14,000 a year, hotels would pay an average of $38,500 annually and apartment complex owners would be charged an average of $36,000 a year.
Past attempts to establish similar limited investment or enhancement districts downtown failed, in part, due to the strenuous objection of apartment building owners, many of whom received tax breaks to build in the Mile Square.
Hughes said as more multi-family sites come on board, owners have come around to the realization that the safety of their tenants and the desirability of their properties are impacted by the livability of downtown Indianapolis.
”The vast majority of stakeholders downtown that we talked to see this as a strategy to continue to invest in the Mile Square and that’s something that we really need in a post-pandemic context,” said Hughes. ”The property owner community recognizes that we like this level of service that we have seen, we acknowledge there are a few refinements we can make to make it even better, but that one-time money we need to have a replacement for.”
Osili confirmed that the revenues raised by the EED would be in addition to city budget commitments to downtown, not as replacement funding for diminished spending.
Hughes also said that the EED is a crucial component in the city’s goal of reimagining downtown’s evolution from a place to work to a place to play and stay.
”EED is a really critical part of the solution but there needs to be an overall strategy writ large and many of those pieces are already in play. One of the things we’re gonna start seeing in the next couple of years is many folks in office towers have signed long-term leases that come due. When it looks at office vacancy, when it looks at what public space activation on a place like Monument Circle looks like, those are all pieces of the downtown strategy that need to be put in place as well.”
While the EED, by state statute, is limited to property owners within the boundaries of West, East, North and South streets, Hughes said the benefits will spread beyond those limits and perhaps lead to similar contiguous districts.
”The benefit will be concentrated in the Mile Square, so, when you see cleaning crews going around, if there’s something on one side of East Street that they need to clean up, they’ll do that, but the primary objective of these cleaning crews will be focused on the Mile Square,” said Hughes. “That’s true for public safety, off-duty patrols, that’s true with the housing navigators working with individuals who are experiencing homelessness, that will be concentrated in the Mile Square district.”
The proposed ordinance will be introduced on Nov. 13 with a public hearing before the Metropolitan and Economic Development Committee on Nov. 20 and final Council passage on Dec. 4.