Council holds ordinance on EID technical corrections after public questions about LLC transfers and transparency

The Michigan City Common Council took public comment and heard legal explanations on an ordinance that would ratify and reaffirm certain findings in a previously passed ordinance establishing an Economic Improvement District (EID) related to a proposed solar project.

City legal counsel explained that the Redevelopment Commission transferred parcels to two limited liability companies to satisfy a state statutory requirement that a majority of petitioning property owners in the proposed EID be for-profit entities. Counsel said that transfer was an interim step to avoid transferring property directly to the private developer before the developer demonstrated its ability to close financing. "At that point, the RDC had two options. Transfer the property before they were ready to close, which was not prudent, or transfer to third-party LLCs," counsel said, describing the practice as commonly used in similar cases.

Attorneys told the council the LLCs were for-profit entities that now hold title and that the LLCs would transfer property to the solar developer at financial closing; if the developer fails to close the LLCs would transfer property back to the Redevelopment Commission. The attorneys said Beacon (the county property record site) might still show parcels as tax-exempt for the prior tax year and that parcel coding should update to show for-profit ownership on the next tax-cycle display.

Public commenters questioned the timing of transfers, transparency and whether members of the public had an opportunity to bid for city-owned property. Rodney McCormick said he believed the transfers avoided an open bidding process and called the sequence of LLC names confusing and nontransparent. Some citizens asked about the county property website showing parcels as still tax-exempt; attorneys said the public record lags and that the transfers were legal and recorded.

Council members asked clarifying questions about the statute and the practical effect if the solar developer fails to close. Redevelopment staff said they were meeting weekly with the developer and that the developer had produced an offering sheet and was pursuing bond buyers; staff said a December 19 deadline had been set for financial closing. The ordinance was held for third reading to allow continued review; no final council action was taken tonight.

The council's discussion focused on legal mechanisms to enable an EID petition while protecting public interest if a private developer does not meet financing commitments. Attorneys and staff described the LLC step as an interim, legally defensible arrangement used to satisfy state EID petition rules rather than an attempt to avoid public process, and stated steps exist to transfer property back to the Redevelopment Commission if necessary.