INDIANAPOLIS (Jan. 13, 2015) – When the Marion County Justice Complex Board finally begins work next month, it and the City County Council will likely have less than six weeks to examine, debate and sign off on Mayor Ballard’s proposal to build the $408 million jail/sheriff’s department/courts campus southwest of downtown Indianapolis.
The mayor and the developer have targeted March 31 as the deadline for the council’s approval to qualify for optimum financing.
“Hopefully we can get it done as soon as possible because it is the cost of money,” Ballard said on FOX59 Morning News, “so that the developers could go get the money at the rate that we want them to get.
“If they go past a certain point then what we presume to be the deal, if you will, by the cost of money probably would not apply anymore so they have to have their deadline to make sure they can go to the market and do what they have to do.”
WMB Heartland Justice Partners submitted the winning bid to build the project and lease it to the city at the cost of approximately $47 million per year for 35 years.
In 2054 ownership and management of the building would revert to the city.
The lead partner in the consortium is Meridiam, a public pension fund investor, which is arranging financing of the construction.
“Our financing deal is not dependent on the March 30th date, I should say that,” said Jane Garvey, chair of Meridiam’s North American Fund. “If we move it to the summer that would certainly work for us.
“We’ve got pretty good relationships with the various banks. We’ve got financing pretty well set with them. Obviously with the interest rates we would have to see where we are with them but that’s true if you sign next month or in March or in the summer.”
Regarding the volatility of interest rates, Mayor Ballard told FOX59 News that a quick calculation determined that, “if we got it done right now, actually, we were estimating it yesterday that it would probably come in a million dollars annually less, just under a million dollars less, if we did it today.”
A clarifying statement by WMB to FOX59 News indicated that, “June 1 is our goal for start of construction. March 31 has been the goal for financial close which would mean that we would need council approval by early March. Delaying a month exposes the city to interest rate movements which would make the project more costly. A significant delay of much more than that would threaten the loss of committed financing that WMB has been able to secure in the current “low risk” environment.”
With the flexibility noted in the deal approval deadline, some city county councilors are taking a go-slow approach to assure that the council and the board are not rushed into a decision such as occurred with confirmation of the Regional Operations Center project in 2011.
“If the memory of the ROC deal does not weigh on it then something is wrong,” said Councilman Jeff Miller, a republican, who was not on the council when the problem-plagued lease and site were approved with the faulty understanding that the NFL required such an operations center as part of its Super Bowl XLVI contract with the city. “We need to look at the fact that even the administration is saying there were things about that deal that in hindsight should’ve been vetted more thoroughly. That to me says we have to consider that we have to look at why that didn’t happen the right way.”
The five-member Complex Board, made up of council, administration and sheriff’s appointees, won’t be approved to officially begin work until early February, two months after the Mayor’s announcement of the winning bid.
“Now is the time for this board to look at it and for the public to look at it and we want to get lots of questions,” said Miller. “We want folks to ask lots of questions, to really probe.
“The council will work on its own timeline. We will respect the mayor. The mayor would like it to be by the end of March but we’ve got to work on our own timeline. If it takes longer than that, it takes longer than that.”
Veteran Councilman Monroe Gray, a democrat, said the memory of the ROC debate, when councilors later complained they weren’t given the full financial picture of the 25-year $18 million deal, could slow council approval of the justice center project.
Garvey, a former FAA Administrator, is in Indianapolis meeting with stakeholders, judges, councilors and the administration, answering questions in what she called an atmosphere of, “transparency,” mindful of the council’s past ROC experience.
“We haven’t finalized the finance deal with the city,” she said, hoping such a contract with its final lease figures can be signed this summer after council approval, “but generally it is pretty consistent so you can plan for it.”
The Ballard administration said it would release details of the two non-winning bids for comparison with the WMB proposal only after the agreement is approved by the council and signed.
An attorney for the democratic-majority council told FOX59 News that, “The statute says they are to release the “proposals” (not “proposal”) at least 7 days before the public hearing,” of the proposed Marion County Justice Complex Board which hasn’t yet been created.
Garvey is undeterred by the approval process which may initially slow the project.
“The city is doing something very innovative here and the mayor deserves credit for that,” she said regarding the plan that has developers seeking private financing based on the city’s committment to a long term lease. “It is a new way to think about project delivery in the U.S.
“It’s a wonderful opportunity to do it right and we want to do it right. As we say in Boston, ‘It’s wicked cool.'”
The Center is set to open in 2018.