Friday, January 11, 2019 1:00 am
Pieces coming together
Interest of tenants, case for tax credits bode well for Electric Works
Fort Wayne Metals is the latest in a growing group of high-profile entities that plan to become part of the Electric Works development southwest of downtown Fort Wayne. As The Journal Gazette's Sherry Slater reported, the company, which manufactures precision wire for medical devices, has signed a letter of intent to lease space in the multi-use facility.
Only last summer, the ambitious project seemed stalled as a consortium of developers known as RTM Ventures had a long back-and-forth with the city over how the local public contribution of $65 million for the $248 million first phase of the project would be structured. But in the months since, RTM has negotiated agreements with Fort Wayne Community Schools, Indiana Tech, Medical Informatics Engineering and Parkview Health, with Indiana University also indicating strong interest.
One of the fears expressed during the long debate over the commitment of local public money was that the rehabilitated General Electric campus would only uproot and relocate local companies looking for a new, hipper place to replant jobs. But the initial commitments to Electric Works appear to involve new efforts and new employees, not a business version of musical chairs for existing businesses.
Parkview Health, for instance, plans a clinic for the now-underserved area and is considering getting involved in the planned food hall/farmers market. And IU is said to be interested in partnering with Parkview on medical research. Fort Wayne Metals, which had already announced plans to add jobs last fall, also wants to pursue research and development at the site. RTM officials say more significant commitments will be coming to light during the next few weeks.
RTM was required to submit to the city its first progress report on those leasing efforts by Dec. 31. The developers won't comment directly until the city finishes reviewing that update, but it appears they have cleared the first hurdle of acquiring commitments for at least 100,000 square feet from new organizations or expansions of existing ones. To tap into public funds, RTM must show the city commitments for at least 250,000 square feet by the end of July.
“We continue to be encouraged by the response we've received from prospective tenants and by the market in general,” Jeff Kingsbury, one of the RTM partners, said in an interview Thursday. “Indeed, we're seeing new-company formation and expansion of existing companies populating most of our recent pipeline.”
The first-phase funding plan also calls for $40 million in New Markets Tax Credits, which RTM can sell to private investors to help underwrite Electric Works construction. The U.S. Treasury Department periodically issues the tax credits to “Community Development Entities” – cities and private organizations interested in helping economically challenged areas and furthering historic redevelopment. As one of those entities, Fort Wayne dedicated $12 million in New Markets Tax Credits to the Electric Works project last year. RTM is hoping to pick up the remaining $28 million from other locations and organizations after the Treasury Department issues another round of credits within the next two months or so.
Kingsbury said he is confident that the credits will materialize. As an “underserved state,” Indiana is considered a prime target for New Markets Tax Credits funding, he said. “Second ... the scope and scale of the project will create a significant impact. New Markets Tax Credits allocatees want to demonstrate they're making a difference.”
So hurdles remain before Electric Works becomes a reality. But if the plan to wrap up the funding and begin construction this summer remains on track, parts of this potentially transformational development could be opening in two years.