The Kokomo Common Council approved a two-year tax abatement last week for construction costs related to the downtown parking garage, specifically the Lofts at Union Street.
In effect, a two-year real property tax abatement will be provided on roughly $13 million of construction costs to the Kokomo Community Development Corp., which owns the parking garage.
While the garage is non-taxable, the entire parcel was abated to include the apartments located on top of the structure and related construction costs.
The abatement benefits will ultimately be granted to the project developer, Envoy, Inc. As city development specialist David Tharp explained, the property taxes will be a fee that gets reimbursed to Envoy by the CDC.
In the first year of the abatement – referred to as 2015, pay 2016 by the Common Council – 100 percent of costs will be abated. In year two – 2016, pay 2017 – 50 percent of costs will be abated. All figures stem from initial construction costs.
As part of the necessary steps to award the abatement, the council also designated the parcel at 101 N. Union St. an economic revitalization area.
Overall, the construction project consisted of the removal of a surface parking lot and the construction of a mixed-use project comprising an approximately 400-space garage and 35 apartments for moderate income residents, according to the council’s resolution.
“It’s important to step back and remember the apartments were one of the very first downtown developments announced,” said Tharp. “Like most other new investments, it is not uncommon for the abatement to be a part of the tool box.
“It is another way the city was able to incentivize the developer to make the investment. It has served as a catalyst for other developments and investments across the city.”