VALPARAISO — A $5.3 million development proposed along Barley Road could bring as many as 70 jobs to the city.
Bluejay 1 and Holladay Properties came to the Valparaiso City Council Monday night with plans to erect a new building just north of the Indiana Beverage campus at 2850 Barley Road.
The $5.3 million building would be a flexible space that could be used for multiple industries like small logistics, small manufacturing or offices. The interior would be built according to a potential tenant's needs.
Michael Micka, a Holladay representative, told the City Council Monday evening that given the size of the proposed development, 50 to 70 jobs could be created.
Micka said they had no tenants in mind for the building, but stressed the space's flexibility would be a key selling point along with the abatement.
“There's a market for this type of building in Northwest Indiana, especially in Valparaiso,” he said. “It's going to fill a niche. There is no building like this in Valparaiso right now.”
“The tax abatement we're asking you to grant will definitely benefit the tenants more than it will Bluejay,” said Todd Leeth, an attorney for the company. “As incubators, new businesses starting out, maybe existing businesses growing, these businesses will have the ability to capture and take the benefit of the deferred real estate taxes.”
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The property tax abatement would last from January 2020 until 2027, starting at 100% and dropping about 14% each year. Bluejay 1 would also pay a 15% abatement fee each year toward the city's redevelopment commission. Valparaiso Economic Development Director Patrick Lyp said the building itself would have to be finished by 2021, but would likely be completed in 2020.
"When a city grants a tax abatement, taxes do not go down. The increase (in assessed value) is just phased in over time,” Leeth said. “The revenue the city is making for the undeveloped land will continue unabated at its current 100% rate, so there's no loss in tax revenue. We're not asking you to forgo taxes you already receive.”
The abatement was approved 5-1, with Councilman Robert Cotton, D-2, voting against the measure. Councilman George Douglas, R-5, abstained due to professional conflicts.
Cotton said he was concerned about overuse of abatements and said he didn't want them thrown around too freely “like Monopoly money.”
“It seems to me you're actually passing the benefit onto the actual tenant so the developer really doesn't need it, except to make it more marketable,” he said. “I want development in Valparaiso. My question is really how freely we use this tool, particularly — as I have repeated in the past — how it relates to our portfolio and what we get.”
Other council members voiced strong support for the abatement.
“This is a great project,” said Councilman Matt Murphy, R-3, “I don't think we have anything else like it in the city, this type of flexible space, that's really going to be attractive.”