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Commission grants preliminary OK to Gary State Bank building project

A local development group is purchasing old Gary State Bank historic building 5th Broadway downtown Gary plans redevelop site lure

A local development group is purchasing old Gary State Bank, a historic building at 5th and Broadway in downtown Gary, and plans to redevelop the site to lure new businesses. | Post-Tribune File Photo

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Updated: April 7, 2014 1:17PM



GARY — The city’s Economic Development Commission gave preliminary approval to local developers to work on the former Gary State Bank building, using TIF money as security, but the commission’s blessings did not come without a fight.

On a 3-1 vote, the commission approved an inducement resolution, or a preliminary approval of Gateway Partners’ $2.8 million renovation of the bank building, using two tax-increment financing proceeds from two districts to back the financing.

It is a key development to financing the project, which Gateway Partners and city officials seem bent on expediting.

The Hobart-based Gateway Partners bought the bank building at 504 Broadway last month from EFN Gary Property.

J. Forest Hayes, director of Gary’s Economic Development Corp., which is strongly pushing for Gateway Partners, told the commission the building’s former owners paid about $52,000 annually in property taxes to the TIF fund.

Gateway must return to the commission for approval, but two board members insisted Vance Kenney and his partners include language guaranteeing Gary people and contractors will get at least part of the renovation work.

“It has not been the history of persons doing (business) with (Gary) in the past” to put such promises in writing, said member Marion Williams.

“(Developers) know the City of Gary is not going to do anything, so they keep abusing us,” complained member Charles Prewitt, though he vouched for Kenney’s character and promise to hire locally.

Prewitt also criticized city officials for letting larger projects, like the CN railroad’s expansion of its Kirk Yard and the Petro truck stop, go forward without requiring that developers use Gary people and companies for better-paying construction jobs.

In 2012, the city consolidated two TIF districts and has been using those funds for improvements to City Hall, the Genesis Convention Center and more. In a TIF district, additional property taxes paid due to increases in property tax values within the district boundaries are put into a special fund and used to pay for more improvements in that district.

The most recent secured existing revenue in the consolidated TIF being eyed by Gateway Partners is $1.3 million, but it is expected to rise to $13 million over the life of the nine-year bond the company is seeking.

After Prewitt recommended delaying a vote on the inducement resolution, Hayes said his team and Gateway Partners have laid out a schedule to conclude all plans and approvals by April 30.

“The way we have this planned, this weeklong wait would’ve cost us three weeks” in the plan, Hayes said.



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