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Developer proposes $15.6M rehab of Garden Estates West and asks council for 25% PILOT over 20 years
Summary
Fairsted proposed a $15.6 million rehabilitation of Garden Estates West (174 units) and requested a 25% payment-in-lieu-of-taxes (PILOT) for 20 years to make the project financeable; council heard details about resident relocation, HUD recertification, and safeguards and carried the PILOT request to 2nd/3rd reading to meet tax-exempt bond deadlines.
Council members on July 7 heard a detailed presentation from Fairsted, a national affordable-housing developer, about plans to acquire and comprehensively rehabilitate Garden Estates West at 909 Pine Tree Court.
Developer Ashley Feldman said Fairsted proposes a $15.6 million investment — about $90,000 per unit — to renovate the property’s 174 apartments, build a new community building and leasing office, install playgrounds and security cameras, and expand resident services. Feldman said 171 of the 174 units are currently subsidized under HUD’s HAP contract and that 100% of units would remain reserved for households at or below 60% of area median income after the work.
Feldman asked the council to approve a 25% PILOT over a 20-year term to give the financing package “resiliency” for an Indiana tax-exempt bond application that has a July 27 filing deadline. According to the developer’s analysis, the PILOT would result in approximately $35,000 in annual payments (about $720,000 total over 20 years) while producing just under $2 million in gross tax savings to the owner over that period.
Council members pressed the developer on tenant outreach and relocation. Feldman said the property’s owner has not yet transferred ownership and that HUD-required notices associated with an acquisition have been submitted; she said there were no resident attendees at an earlier open house, and that communications to residents are typically handled through HUD notices at the time of acquisition. On relocation, Feldman said no resident would be permanently displaced: the work would proceed in phases, residents would be temporarily relocated (the developer will cover moving and off-site housing costs), a relocation coordinator would be hired, and units would be renovated and offered back to qualifying residents. She said residents must submit standard HUD recertifications — paperwork that tenants already complete annually — and that continued tenancy would depend on meeting HUD eligibility rules.
Council members also asked whether contract language guarantees the construction of promised amenities. City counsel and staff confirmed that certain guarantees and conditions can be written into a PILOT or development agreement; councilmembers requested those assurances be explicit if they vote to approve a pilot in later readings.
Councilman Dabney and other sponsors voiced support for the project’s potential to improve housing quality for low-income residents; Councilman Nelson asked how outreach would be done and whether residents would be required to “reapply.” Feldman and city staff reiterated that HUD recertification is a standard, not a new condition added by the developer.
Because the tax-exempt bond application deadline requires documentation within a narrow window, the developer asked the council to consider combining second and third readings on July 21. The council did not take final action on the PILOT; the item was carried over to a subsequent meeting for further review and to permit staff to draft any contract safeguards requested by council members.
What’s next: The council will consider the PILOT and related ordinances at second reading; staff said they will provide contract language that ties promised amenities and relocation protections to any PILOT approval.
