Committee backs lease-financing plan to purchase community center under redevelopment authority

Budget Finance Committee members recommended that the city approve a lease-financing structure to purchase a new community center being built under a build-operate-transfer arrangement. Finance staff described the plan as a lease between the redevelopment authority (the lessor) and the city to allow debt service to flow through the authority rather than creating direct city general-obligation debt.

A finance presenter told the committee the structure is commonly used in Indiana because leases of this kind are not subject to the statutory debt limit. The presenter estimated a potential financing amount at about $62,000,000 to purchase the facility, and said the redevelopment commission has already held public hearings and taken preliminary actions; the commission will meet again before the full city council takes up the resolution.

Committee members asked questions about enrollment and operating projections and whether the redevelopment authority's debt would be included on consolidated debt statements; finance staff said conduit and redevelopment authority obligations are listed in audited materials and in the city’s cap calculations. Members also asked about insurance and ownership timing; staff said the developer (identified in discussion as Hagerman) retains owner responsibilities, including insurance, until legal transfer of ownership occurs.

Action taken: a committee member moved to recommend the council adopt the resolution approving the lease-financing structure; another member seconded and the motion carried with a recorded "aye." The committee directed staff to place the resolution on the upcoming council agenda.

No final sale or operational budget for the center was approved at the committee meeting; the item advanced to the council for formal consideration.