SOUTH BEND — South Bend officials on Monday voted to allow developer David Matthews two more weeks to make his case that the city should alter a plan for tax breaks on his high-rise apartment complex because, he argues, the COVID-19 pandemic delayed construction.
Matthews wants the South Bend Common Council to amend its 2017 agreement that waived almost all taxes on the 300 E. LaSalle Ave. property for 10 years — an estimated $4.4 million tax abatement that was to begin in 2021 — so that the abatement period instead would begin a year later, in 2022, and last until 2032. The change is necessary, Matthews said, to account for delays due to supply chain difficulties and labor shortages wrought by pandemic shutdowns.
Matthews said a St. Joseph County tax assessment in 2021 found the building was about a third finished, thereby lowering the amount of taxes to be waived over the entire 10-year period. He said the tax abatement must reflect the finished building’s assessed value, as of 2022, or else the project will fail.
“Nobody in 2017 could anticipate a global pandemic in 2020, a global pandemic that shut down the entire country,” Lyle Hardman, Matthews’ attorney, said to councilors Monday.
But the administration of South Bend Mayor James Mueller and several councilors strongly oppose the bill, citing the city’s ongoing lawsuit against Matthews for his alleged failure to open a full grocery store, along with other promises, such as a 500-space parking garage, by a 2022 deadline.
The Mueller administration also says that Matthews owes $512,000 in unpaid property taxes — which Matthews claims would be wiped out if the proposal passes — and more than $15,000 in utility payments on the 300 E. LaSalle building.
“As a council, we have to set a minimum bar for providing any incentive to a developer,” said 4th District councilor Troy Warner, whose district encompasses the property. “That bar at least should be your water bill is paid, your code enforcement fines are paid and your property taxes are paid. I have a really hard time supporting this based on just that.”
Councilors Oliver Davis Jr. and Sherry Bolden-Simpson, who introduced the amendment on behalf of Matthews, argue the plan would stay unchanged beyond the one-year extension of his construction deadline.
The pandemic should be reason enough to grant the extension, they argue. They say the 144 luxury apartments, a new grocery store on the ground floor and a pharmacy in the adjacent Commerce Center, all finished within the last two years, are a boon for the neighborhood.
After more than two hours of public comment and debate among councilors Monday night, the proposal was tabled to be heard at the council’s June 24 meeting. The Mueller administration indicated on Monday that if a similar bill were to reach his desk, he would likely veto it.
The supporters and detractors who spoke Monday generally held two competing visions of Matthews’ work in the East Bank neighborhood over the past decade.
Some see the high-rise apartments and grocery store as emblematic of an infusion of life Matthews has brought to downtown South Bend, naming other projects, such as the East Bank Townhomes, the Emporium building and the Commerce Center, which provides an inexpensive home for places like Merriman’s Playhouse and the Cat Lady Café.
“He provided to us an opportunity to provide service for our community,” said Michael Bush, the marketing director of Healthy U Rx pharmacy, which moved into the Commerce Center at 401 E. Colfax Ave. “We are the only pharmacy downtown. I believe Mr. Matthews has the city of South Bend on his heart.”
But others note a legacy of failed or unfinished projects that taint the neighborhood east of the St. Joseph River. They say Matthews’ reputation is exemplified by the city’s lawsuit attempting to take back $5 million — in addition to a $2.5 million penalty — given to Matthews in 2017 for the high-rise apartments, a grocery store and a pharmacy.
“Mr. Matthews does not complete projects in a timely manner, not only in South Bend but in other communities in Indiana,” said Matthew Barrett, a professor emeritus of the Notre Dame Law School who spoke on behalf of several opponents. “He does not take care of his properties. I have numerous violations — weed and grass, litter and housing violations.”
Matthews says the 144 units at 300 E. LaSalle are 90% occupied. And while the East Race Market, his grocery store on the bottom floor, is stocked with affordable foods and fresh produce, it’s losing money. He expects it to close if the council doesn’t amend its 2017 tax abatement.
Contact South Bend Tribune city reporter Jordan Smith at JTsmith@gannett.com. Follow him on X: @jordantsmith09
This article originally appeared on South Bend Tribune: South Bend hears from developer David Matthews on property taxes
EMEA Tribune is not involved in this news article, it is taken from our partners and or from the News Agencies. Copyright and Credit go to the News Agencies, email news@emeatribune.com Follow our WhatsApp verified Channel
