Council advances Western Avenue PILOT to back 156‑unit mixed‑income redevelopment

The Common Council’s Committee of the Whole heard a detailed presentation on substitute Bill 31‑26, a payment‑in‑lieu‑of‑taxes (PILOT) agreement for Western Avenue 1 LLC to support the Western Avenue Transformation District.

"This project really is a collaboration, years in the making," Joe Molnar, deputy director of the Department of Community Investment, told the committee. Molnar outlined a phased redevelopment of former public housing on the southwest edge of downtown. Phase 1A would create 156 units in mixed‑income buildings: 48 units affordable to households under 50% of area median income (AMI), 62 units at or under 60% AMI, and 46 unrestricted units. Molnar said the package of financing for Phase 1A was diverse and included a $10,000,000 HUD Section 108 loan, federal low‑income housing tax credits, Lilly Endowment funds routed through the community foundation, private equity and local partners.

Steve Licki, vice chair of the Housing Authority of South Bend, and Andrea Keeney of the Michaels Organization (the selected developer) described developer selection by competitive RFP, the prioritization of previously displaced residents for return to the site via a housing authority wait list, and planned on‑site childcare and streetscape improvements.

Molnar said the PILOT would generate net new revenue because the site was previously tax‑exempt; state law requires PILOT receipts be deposited in a special account for reinvestment in affordable housing. Committee members asked questions about the timeline, affordability terms, and outreach to district representatives. The zoning and annexation committee reported a favorable recommendation and the Committee of the Whole voted to send the bill to the full council with a favorable recommendation.