Developers outline $303 million Sola project, seek EID and TIF financing; council hears timeline, public-access concerns

Developers of a proposed $303,000,000 mixed-use project called Sola briefed the Michigan City Common Council at a July 7 workshop and asked the council to consider establishing an Economic Improvement District (EID) and approving tax-increment financing (TIF) bonds that developers say are needed to complete the financing.

Sola—short for “South Of Lake,” according to developer Alan Schockman—would include a nationally branded hotel and spa, roughly 242 hotel rooms, about 188 residential condominiums (including townhouses), roughly 21,000 square feet of retail, and enclosed parking. Schockman told the council that the development would provide public benefits including a publicly accessible fourth-floor deck, public parking in the garage, infrastructure work around the site and a $450,000 one-time donation to affordable housing to be used at the city's discretion.

Why it matters: Developers said the EID and TIF bonds are central to the project’s capital stack and that without bond proceeds the development’s metrics become difficult. The council received detailed explanations of how the EID assessments and TIF increment would work, and asked several questions about public access to amenities, parking operations and the financial risks to the city and residents.

The financing plan and tools described

At the workshop, Schockman and co-developer Scott Freeman presented a financing “capital stack” that the developers said includes cash equity, construction debt, mezzanine financing, condo deposits and bond proceeds. The presenters described bond financing as a site-specific tool. “There are no city guarantees, no city cash contributions, and no balance sheet impact to the city at all,” Schockman said. He added: “The city has 0 liability or risk associated with this.”

Developers said two site-specific mechanisms would be used: - TIF bonds paid from tax increment generated by new assessed value at the project site; and - An EID financed via special assessments/fees on the project (described as an occupancy/innkeeper-type fee on hotel room nights, short-term-rental stays and a portion of parking revenue).