MICHIGAN CITY – The civic plaza planned for the city’s downtown is one step closer to fruition after the Michigan City Redevelopment Commission took its first step toward financing the project.
According to Joel Baldin of the Hitchcock Design Group, Phase I of the plaza project will cost $7 million, including construction, design and engineering, contingencies, administrative costs, general conditions and other allowances.
As a result, the Redevelopment Commission unanimously voted to seek financing in the amount of $8.8 million dollars, which calls for the money to be repaid at a lease rental amount of about $800,000 per year.
A cushion was added to account for unforeseen issues, such as a change in interest rates. And the maximum annual payment would be $975,000 for a period not to exceed 22 years. TIF revenues are expected to be the primary source of repayment, but local taxes were factored in as a backup in order to secure a lower interest rate.
A public hearing on the matter was set for July 8 – the next regular meeting of the Redevelopment Commission.
Baldin presented a breakdown of what he believes revenues and expenses for the plaza will look like by the year 2022.
"It's pretty much trying to balance the equation every year,” he said. “Some years are closer than others. But the intent is not to make a substantial amount of money, it's just to make enough money to operate the space.”
According to his calculations, the plaza’s revenue sources can be divided into three main categories: sustaining revenue (46 percent), program revenue (33 percent) and event program revenue (21 percent).
He anticipates those will total around $896,000 per year by 2022.
The expenses the space will incur, Baldin said, can be split into six categories: capital expenditures (3 percent), program expenses (5 percent), event program expenses (11 percent), direct overhead expenses (15 percent), direct payroll expenses (19 percent) and indirect overhead expenses (47 percent).
He estimated the total expenses will be around $843,050 per year.
Baldin will make his full plaza presentation to Michigan City NOW at the Blue Chip Casino on Monday morning, and is prepared to go into further detail at a joint workshop of the Redevelopment Commission and Michigan City Common Council on Monday night.
Between then and the final presentation, scheduled for the council’s July 16 meeting, Baldin’s group will work to finalize the schematic design for the plaza and draft bylaws for its governing board.
Construction at the plaza site is anticipated to begin in the fall and to last through Summer 2020.