Gary lawmakers are set for a third and final vote on an ordinance authorizing the sale and leaseback of the city’s public safety building at their meeting Tuesday night.
Sponsored by Mayor Karen Freeman-Wilson and city Controller Angelia Hayes, the ordinance would re-approve the Gary Building Corp., a nonprofit created for the sole purpose of owning and leasing facilities to city government.
The city would sell the building at 555 Polk St. to the nonprofit for as much as $40 million, then lease it back in a rental agreement spanning up to 22 years. Lease payments would be financed through bond debt, with interest not to exceed 8% annually, according to the ordinance.
The proposal passed by a 6-3 vote in first and second readings last fall, but has been stuck in a holding pattern since then. Freeman-Wilson has billed the deal as a necessary measure to shore up the city’s shaky finances, arguing that other forms of short-term financing are no longer sufficient to keep the government running.
Ahead of Tuesday’s vote, the Gary Common Council members who previously opposed the ordinance reiterated their displeasure with the sale-leaseback idea. Councilwoman Rebecca Wyatt, D-1, said any decision on long-term debt obligations should be left to Jerome Prince, who unseated Freeman-Wilson in the Democratic primary and is almost certainly set to take office in January.
“Now, my objection is twofold — I don’t think it’s a good financial decision,” Wyatt said. “And second, we have a new administration coming in. To burden them with this big debt is unnecessary.”
You have free articles remaining.
Also opposed to the deal is Councilwoman LaVetta Sparks-Wade, D-6, who shares Wyatt’s reluctance to approve a deal that “ties the hands of the next administration,” she said. Sparks-Wade questioned whether adding to Gary’s long-term debt burden was the best way to keep the government afloat in the short-term.
“Any time you’re incurring debt to pay debt, it’s not good — it’s bad debt,” Sparks-Wade said. “That is is not going to solve this problem. Another loan is not going to solve the underlying issue.”
Through a spokesperson, Freeman-Wilson declined to comment for this story. Hayes also declined to comment.
Opponents contend there are viable alternatives to the sale-leaseback deal that could help Gary find operating cash. Reducing what city government spends on professional services could help until Prince is able to implement his fiscal blueprint, Sparks-Wade said. The city could also free up money through tax anticipation warrants or transfers from the Gary Redevelopment Commission to the general fund, Wyatt said.
“To me it looks like a household, when your debt is more than what you’re taking in, so you pace yourself, you do without (what you can),” Wyatt said, adding the alternative is to “put a whole lot of money on your credit card.”