Project awaits tax changes
Marcela Berrios | Thursday, August 30, 2007
During a time of town-gown tension, the construction of the $200 million, 25-acre Eddy Street Commons may help connect the campus to its surroundings with blocks of shops, restaurants, residences and offices.
“We hope Eddy Commons will be a place where students and South Bend residents alike can go to spend an afternoon shopping or enjoy a good dinner,” said David Compton, vice president of Kite Realty Group, the project’s developer.
The South Bend Common Council approved the developer’s proposal for the planned unit development on July 16, authorizing the rezoning of the property near the intersection of Edison Road and Eddy Street, said Gregory Hakanen, Notre Dame’s director of asset management and real estate development, said Tuesday.
The first phase of the project, which will include retail, office and restaurant space, hotels and residential space, will be completed during 2009. But ground cannot be broken until the city works out tax issues, Hakanen said.
Developments such as the Eddy Street Commons, which allow for multi-purpose units, require special permissions from the city, he said.
The Council unanimously approved the proposal Notre Dame and its Indianapolis-based developer, Kite Realty Group, submitted in early May.
Before the Council approved Kite’s plans, the developer had to make concessions to receive the votes of council members who were skeptical about the project’s impact on traffic, downtown businesses and the environment.
Some of the commitments included Kite’s promises to use environmentally friendly building materials and designs, include bike lanes and relocate the animals that lived in the wooded property before clearing it for construction, a University news release said.
Compton told WNDU earlier this month more than 100 small animals have been relocated since mid-June, and that 60 percent of the evacuated wildlife is made up of raccoons.
Once the animal eviction is complete, Kite will be allowed to clear the woods.
But before construction can begin on the site, the developer will also have to obtain a second permit, Hakanen said.
“The tax increment financing [TIF] is still working its way through the city,” he said.
Tax increment financing refers to the additional tax revenues the city expects to receive from the finalized project – money that can be used to cover South Bend’s costs throughout the development, which may include road improvements, additional power lines and sewer modifications, Hakanen said.
“You take the additional taxes that would come from the new constructions, and you use them to pay for the bonds that built the roads, the parking garage, and the improvements to the water and sewer systems,” he said.
Once the city works out the project’s tax increment financing this fall, Hakanen said, Kite Realty will be able to begin constructing the first phase of the Commons, which is slated to include 85,000 square feet of retail and restaurant businesses, 75,000 square feet of office space, two hotels, 250 deluxe apartments, 120 condominiums and 80 town homes.
Although a University news release said the hotels would be a 248-room Marriott and a 123-room Springhill Suites, Hakanen said he could not talk about potential tenants of the retail and office spaces yet.
Compton similarly said he would not discuss possible retail or restaurant tenants until the tax increment financing was finalized and the developer could move forward with its plan, which includes negotiations with interested renters.
“We’re in preliminary discussions with different types of interested tenants, but we will only move on to the next stage in the development of the Commons once the TIF is completely finalized,” Compton said.
He said the University and Kite have agreed on certain types of businesses they would like to see along Eddy Street.
“We are looking for an Irish-themed restaurant, a bookstore and a cafÃ©,” he said. “And we want these shops to keep the street lined with old-style painted signs.”
He said there would be no bars in the Commons, or any other type of business – such as funeral homes – that could detract from the project’s mission to strengthen the University’s ties to South Bend in an amenable space.
“Hopefully the University and the city will have a college town kind of setting that will benefit everyone,” Compton said.