Developer seeks 20-year, 25% tax pilot to fund $15.6 million Garden Estates West rehab in Michigan City

Ashley Feldman, a developer at Fairstead, told the Michigan City Common Council workshop on June 10 that her firm has an executed purchase-and-sale agreement for Garden Estates West Apartments at 909 Pineree Court and expects to close in July 2027.

Fairstead proposes a comprehensive rehabilitation of the 174-unit, 29-building property built in 1970 and located in the Fourth Ward. Feldman said the firm plans to invest about $15.6 million — roughly $90,000 per unit — substantially above the $35,000-per-unit minimum for Indiana tax-exempt bond applications.

The developer outlined the financing plan as relying primarily on low-income housing tax credit (LIHTC) equity and tax-exempt bonds from the Indiana Housing and Community Development Authority (IHCDA). Feldman said 171 of the units are currently subsidized under a HUD housing assistance payment (HAP) contract and that subsidized residents would remain subject to HUD rules, including rent caps tied to 30% of household income. "There would be no impact to those residents and how much they would pay for rent unless their income actually changes," Feldman said.

Fairstead described a scope of work that includes in-unit upgrades (new cabinetry, solid-surface countertops, stainless-steel appliances, adding dishwashers, in-unit washers and dryers, new HVAC and mechanical equipment as needed), new exterior work, improved site lighting, a new community building and leasing office, playground and picnic areas, and 24/7 security cameras with shared access for the police department.

On resident relocation, Feldman said all relocation costs would be covered by the developer and that the firm typically hires a full-time on-site relocation coordinator. Fairstead described a phased approach — renovating three buildings at a time, using some off-site corporate-leased market-rate units and on-site temporary "hotel" units to minimize school-district disruption and to allow most families to remain nearby during construction.

Fairstead formally requested that the city approve a 20-year tax pilot under which the property would pay 25% of full assessed property taxes during the pilot term. The consultant analysis prepared by Dan Bodish of DEF Consulting, presented at the meeting, projected assessed real-property taxes of about $134,000 per year; under a 25% pilot that translates to roughly a $33,000 annual pilot payment, about $669,000 in total pilot payments over 20 years and approximately $2 million in foregone tax revenue to the city over that period. Feldman characterized the pilot as a tool to secure financing and preserve amenities in the scope of the rehab, but stated Fairstead could proceed without a pilot if necessary.

Council members voiced broad support for upgrading the property but said the pilot mechanics will require careful public explanation. Several council members and members of the public raised questions about displacement risks, citing past redevelopments elsewhere. Feldman said HUD transfer and compliance rules require owner re-certification and tenant notices; she said Fairstead would coordinate with HUD and the property's compliance team and that if a resident does not qualify under HUD or program rules, the resident would be asked to relocate.

Other items discussed included site improvements such as accessible walkways, anticipated mill-and-overlay of asphalt and restriping of parking, and the possibility of extending sidewalks to improve pedestrian connections. Fairstead also said it plans to work to hire local subcontractors where possible and to explore state energy-saver qualified local trades.

Next procedural steps Feldman cited included a planned presentation to the first city council public hearing on July 7, with second and third readings proposed to take place concurrently on July 21 to meet an IHCDA tax-exempt bond application deadline in late July. The workshop closed with the council noting there will be public-comment opportunities when the item is formally before the Michigan City Common Council.

The Michigan City Common Council workshop recorded questions about the proposed resident services staffing for the new community room, details of renters insurance on offer (Fairstead said it would provide specifics after consulting its risk department), and the timing of moves so as to minimize school disruptions. Fairstead projected construction would last 12–15 months after closing, with projected completion in October 2028 under current assumptions.