The Methodist Building project is on hold until enough projects come together to meet the minimum dollar requirement for development credits.
According to Shelbyville Mayor Tom DeBaun, through conversations with Mitch Genser, the principal of Purple Vetch Properties and person heading the Methodist Building project, the $2 million project falls short of the $6 million to $7 million dollar range that development credits are awarded at.
"I've talked with several people who have confirmed this, it sounds like this is too small to garner those types of awards, so it needs to be collaborated or grouped in with one or two other projects to really get that mass that the grant makers want to see," DeBaun said.
Development credits, which are credits on your bottom line or income tax credits, come in various forms, such as new market tax credits. Development companies will receive a certain amount of money in new market tax credits and will take those credits and sell them to investors at so much per dollar.
"So the investor will get $2 million in tax credits so they can take a $2 million credit against their income and, in turn, the developer gets $1 million to $3 million in cash," DeBaun said. "That's where a lot of the start-up money in most of these projects comes from is they monetize those credits by selling them to an investor or a group of investor."
The original plans for the Methodist Building, which is located on Public Square in Shelbyville, was to put a public market, collaborative offices, private offices and either an office or condominium on the top floor.
DeBaun and city officials have been looking at creating more opportunities for community members in the downtown area. There have been talks of opening a micro-distillery, a brewpub, additional restaurants, condominiums and hotels downtown.
"We're seeing that in other communities and in order to be competitive and to provide those opportunities, that's what we're looking at.
"It gives residents in Shelbyville and Shelby County an opportunity to experience new things and provides an opportunity to bring in additional revenue because we're bringing more people downtown. The key to any of these efforts is the mass we can bring downtown," DeBaun said.
The city will soon start working with Ken Remenschneider, who has a development group through Remenschneider Associates, to identify potential opportunities.
"We know there's other people interested in buildings downtown, so if we can assemble one, two, three or more projects and they are all under individual ownership, I think that's fine. That isn't out of the norm of other projects I've seen; I'm not afraid of that because you'll have one central group receiving a tax credit and we'll disperse them to the project owners," DeBaun said.