FORT WAYNE – The block of vacant lots and rental homes next to Parkview Field could be city-owned and earmarked for new downtown residential development by Opening Day of baseball season.
The Fort Wayne Redevelopment Commission voted 4-0 Monday to authorize staff to obtain appraisals on the properties, which state law requires before purchase. Two members were absent.
Redevelopment Director Greg Leatherman said the commission already has options on all but one of the properties it is pursuing, giving the city the sole right to buy them until July 1.
The block, bordered by Fairfield and Ewing streets on the east and west and Jefferson and Brackenridge on the north and south, covers about 4 acres.
About 1.2 acres is already owned by the city, purchased as a staging area for construction of The Harrison. The city is not interested in the Shell gas station at Jefferson and Fairfield, Leatherman said, and is in final negotiations to purchase the auto-repair shop at Jefferson and Ewing.
The new purchases, if approved, would give the city almost the entire block.
The remaining properties cover about 2.7 acres, officials said, and the prices negotiated total about $1.8 million.
Leatherman said the idea is to create a nearly 4-acre site that is prime for development, especially residential development. A 2006 study by New Jersey-based Zimmerman/Volk Associates said there is market potential for residential housing downtown; city officials have long said having more people live downtown is needed to spur yet more development there.
Likely development options for the site would be apartments for rent or row houses for purchase. Two developers have already approached the city about row house developments. The Zimmerman/Volk study said there is a market for up to 42 new row house units a year.
"I defy you to find a city block of space like this in the heart of downtown," Leatherman said, saying the parcel would provide the "critical mass" needed for a developer to move forward.
Leatherman said the money for the purchases – if ultimately approved by the commission – is already in hand, thanks to the Jefferson Pointe Tax Increment Financing District. That district was extended downtown to cover Harrison Square, because these properties are immediately adjacent to the district and development there would serve the district, Leatherman said, that district can pay for the purchase and demolitions needed.
Tax increment finance districts use the money from the increase in assessed value to pay for infrastructure needed to create the development.
For example, before it was developed, the property owners where the Courtyard hotel is now located paid about $5,800 a year in property taxes. After the taxes are fully applied to the hotel, its bill will be about $450,000 a year; that increase will go toward the sewers, streets and parking garage that made the hotel possible.
But because these properties are outside the district, the increase in property taxes will be distributed as usual, which means more money for the city, county, schools and library.
That increase in the tax base was key to some commission members, who noted that critics will ask why the city needs yet another catalyst project.
Leatherman said developers can build in the suburbs on land selling for $40,000 an acre and will expect a similar price to build downtown, which means most of the money spent to buy the land will not be recouped. However, he said, developers are not asking for other subsidies, which means the price of development to the city should not be higher than the cost of the land, and the increase in the tax base will pay for the purchase quickly.
Leatherman said the next step will be to get the appraisals; after that, the commission will need to authorize staff to pay the prices negotiated, which will likely be more than the appraised amount. After the land is purchased and demolitions begin, the commission will issue a request for proposals, seeking developers to buy the combined parcel and build on it.
"If you want downtown housing, I think you're going to have to accept the fact that you're going to have to step in and level the playing field," commission member Karl Bandemer said.
Because the money will come from the TIF district and the commission has authority to purchase land, Leatherman said, no City Council approval is needed for the project.