Gary comes to new agreement over parking space payments
By Michael Gonzalez Post-Tribune correspondent December 5, 2012 2:30PM
Updated: January 7, 2013 7:17AM
GARY — The Board of Public Works and Safety on Wednesday approved a deal amending a 20-month-old memorandum of agreement to clear up issues with expensive, underused parking spots at the O’Bannon Center, 673 Broadway.
Ten years after the city reached its first deal with Broad Ridge LLC, it will now make up $509,400 in back payments with six payments over four years, as long as Broad Ridge, the company that owns the property, pays its taxes for the property located in a specially created tax increment financing, or TIF, area.
“The four-year clock starts running now,” said assistant city attorney Richard Leverett, who helped broker the new deal. “For a while, the city just stopped paying, but this gets everyone back on track.”
According to the amendment, which changes a deal the city entered into with Broad Ridge in April 2011, Broad Ridge will have to pay property taxes to the state, and the city will have to pay the $509,400 as user fees for the parking privileges it has rarely used.
If the company fails to pay its share of real estate taxes to the state, the city “is off the hook” in paying the fees, Leverett said.
As structures and properties in TIF areas improve, their property values, and resultant property taxes, increase. Those increases form the basis for many economic development plans.
The original 2002 deal between Gary, Broad Ridge and the state was a cycle. Broad Ridge paid property taxes to Indiana, which then refunded the amount to the city. Then, Gary used those revenues to pay its user fees for 10 years of parking rights at the site.
When the Broadway project failed to generate more TIF increases a few years later, the state stopped paying refunds to Gary, which stopped paying Broad Ridge. That threw the city into arrears.
The city and Broad Ridge reached its first MOA in April 2011, with Gary offering to make payments to the company.