Water Street Townhomes Ribbon Cutting

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We had the ribbon cutting for Water Street Town homes (WST) last Friday, May 15th. Julie Heise and Heather Martis did a great job with balloons, snacks and drinks for the event. There was a good turnout with members of the City Council, Redevelopment Commission and other officials there. The Mayor manned the big scissors to cut the ribbon and said a few words. Everything was positive! (Press Release here.)

All projects present challenges, but ones like these with multiple funding sources and their associated requirements are each unique. This one also involved multiple property owners, both public and private.

Above and beyond the general goals of providing work for our employees and not losing money, there are a myriad of other goals for a project like this. A few of these include: Downtown Revitalization, Work Force Housing, fulfilling comp plan goals and generally contributing to the health of downtown Plymouth. We participated in the two Marshall County housing studies, the Plymouth Comprehensive Plan committee and the Plymouth Zoning Review committee as we worked up to this. We’re still helping with the Zoning Review and have also joined the board of the Marshall County Community Development Corporation. All this to say we understand the issues.

We are pleased when we are able to do a project like this and also provide jobs for local subcontractors. A few of the local subcontractors for this project were: Langfeldt Excavating, Hundt Concrete, Banner Electric, MLE Roofing, Artizan Flooring, ARC Security, Rogers Landscaping and Quality Drywall. Scheduling has become the biggest issue with projects such as these, and having local access to local offices makes this easier. (Easier, not easy…)

Almost all municipalities are welcoming to developers at the elected official level during initial conversations, but it’s the follow-through that makes a difference. Nearly across the board, the various City of Plymouth departments understood the goals and attempted to make things easier to achieve them. This is not always the case. Water Street Townhomes had a sister project in Culver, Spirit Townhomes, that was also included in the Regional READI application, but after initial municipal interest, support evaporated. (A missed opportunity…) I would recommend talking to the City of Plymouth and Mayor Listenberger, if you’re considering a new development in Marshall County.

Water Street Townhomes is an example of urban renew at it’s best. It took two older homes and an underutilized parking lot on the back side of the main downtown street and created new commercial space (already filled), new housing that’s walkable to downtown merchants, entertainment, restaurants and the park, and took a poorly laid out parking lot which paid no taxes and turned it into a tax-paying development… while still adding 18 parking spaces and better stormwater control to the space. The parking lot was paved before returning it to the city. The adjacent alley was improved and new street lights were installed. Hopefully the project is an example of what can be done with public/private cooperation.

The internet trolls have been out in force, complaining that WST is not affordable housing (it was never advertised to be in an affordable housing program), it’s built in a flood plain (it’s not), it takes away public parking (it does not), it displaced existing residents (the existing houses were purchased privately at the seller’s asking prices), it’s ugly (Sorry… there’s no accounting for taste), it’s gentrification (okay, but maybe that’s the point?) and my favorite, for which I don’t even have a pithy retort, “We don’t want no new people”. It’s clear they know more than we do <sarcasm>, so there’s no point in addressing them. It’s still disheartening, when you’re trying to do something positive.

We’re still having some website issues. There were some pictures to include here, but they won’t upload. They may get added in a future update.

Arbitrary and Capricious Fees

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Letter to Culver Town Council

I just received the billing for this year’s Fire Protection Sprinkler System fee for Sand Hill Farm Apartments in Culver. I have discussed this fee here and here in the past. Despite protesting the initial basis for this fee, and the proposed increase during budget season, an 83% increase was passed.

The previous cost, $1,203.81 + sales tax was excessive and unjustified. The 83% increase to $2,198.98 + sales tax is nearly twice as onerous! There is no inspection or scheduled inspections, no maintenance, and no record-keeping. The only justification given is the cost of bringing water to the site, which the municipality would do anyway for residential service. Reasonably, water usage for a fire in a building with sprinkler system would be significantly less than that used to fight a fire using traditional methods, since fire sprinklers generally put out the interior source before the building is engulfed. I’ll just skip over the whole idea of why there’s sales tax applied, other than to ask, what is being purchased?!

In the United States we have a generally progressive income tax system where individuals are taxed more when they make more. Conversely, we often have regressive fees that disproportionately hit the lower end of the income level. Culver’s Fire Protection Sprinkler System fee is an example of a regressive fee. There are not that many buildings with fire protection sprinkler systems in Culver, but those that do have it vary widely in size. A one-size-fits-all per building fee doesn’t take this into account. Of the buildings being affected by this fee, five of them are residential and subject to some form of rent control. Since there was a rather large rate increase to the water bill passed at the same time, this puts these lower income residents subject to a double hit.

7-24-25 email to Council President

Culver recently adjusted building permits. They were changed from a because-we-can high rate to a cost-of-service rate, justified by time tracking completed by the Culver Building Commissioner. This is a much more reasonable and defensible way of determining fees. If this were applied to the Fire Protection Service System fee, it would likely be zeroed out.

In the current Town Council’s defense, the water service fees have been left unchanged too long across the board, resulting in a larger than average increase. The blame for that lies on previous councils. That said, it’s not appropriate to hit the most vulnerable in the town’s population with an extra fee just to save a few cents on everyone’s water bills as the new fee structure is rolled out.

Regressive Fees

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We generally talk about taxes being regressive or progressive. The income tax in the U.S. is generally considered a progressive tax system, i.e. the percentage of tax paid on income progressively increases the more you earn. The Top 10% of taxpayers in the U.S. paid 75% of the total income tax paid, while the bottom 50% of taxpayers pay 2.3% of total income tax paid, per the the Tax Foundation. This is opposed to sales tax, that is applied evenly across the board, but takes a larger percentage of a person’s total income, the lower they are on the income scale. While this is debated incessantly (“Billionaires don’t pay their fair share!”), the various governmental fees are rarely factored in.

I discussed this in a post (Deposit Dilemma) last year, when we first opened Riverside Commons Apartments in Plymouth. At that time, Plymouth required a $150 deposit to start water and REMC required a $350 deposit to start electric, for a total of $500. This for an apartment where some residents were paying less than $400 for rent due to their reduced income level. A similar problem has been brought to light in Culver as the Culver Town Council struggles to meet their water service obligations.

There was a Public Hearing for a new water rate ordinance at the Culver Town Council meeting last week. For various reasons, Covid being one of them, Culver has not raised rates in nearly 15 years. Kicking the can down the road has led to somewhat dire straights and they need to do something. Even those opposing specifics of the rate change, me included, acknowledge that some form of rate increase is needed. Because water service is a service, there is no methodology to do progressive billing. Fairness prevails and the rate goes up across the board with no favoritism. Where this falls apart is in the fire protection fees, specifically fees for fire sprinklers.

The State of Indiana requires new apartment buildings to have fire sprinkler systems if they have more than two units. Somewhere in the past, municipalities were advised to charge fees for these. In reality, it is a tax, as a fee would imply there is some service provided. No service is provided beyond providing water at the street, which they would do anyway. Because it’s termed a fee, there is sales tax attached to this, despite no product or service being provided. We can talk about the life safety benefits of a fire sprinkler system to residents and fire fighters another time, but this cost appears to be without merit.

There is no inspection or scheduled inspections, no maintenance, and no record-keeping. The only justification is the cost of bringing water to the site, which the municipality would do anyway. Reasonably, water usage for a fire in a building with sprinkler system would be significantly less than that used to fight a fire using traditional methods, since fire sprinklers generally put out the interior source before the building is engulfed.

The existing fire sprinkler fee is $1,200. The new ordinance proposed a fee increase of 83% to $2,199. Several points on this:

  • The fee is per system, with no adjustment for line size, square footage covered, commercial vs. residential. On a reducing scale of coverage, CabinetWorks pays the same fee as The Cove, which pays the same fee as Sand Hill Farm Apartments, which pays the same fee as one 8 unit building at The Paddocks. Because there are three separate apartment buildings with fire sprinklers at The Paddocks, they pay this fee three times.
  • This fee had little justification before, but the increase is not tied to any increase in service or increase in cost other than the overall cost of the water system. Whether a structure has a fire sprinkler system or not, does not affect that cost.
  • When this fee is applied to residential units, this results in a double hit, since the resident will experience the increased water bill for their water usage and then a second hit for the fire sprinkler fee. This may come as a rent increase for apartments or a HOA assessment for condos.
  • Because this is labeled a fee, Sales Tax gets layered onto this, further increasing the burden.
  • This unintentionally targets the most vulnerable. Renters often fall on the lower end of the income spectrum, so this fee is extremely regressive, hitting those least able to pay.

The Town Council did listen and delayed a vote on this. (Much Appreciated!) The Town Manager said he would do more research into this. I will be interested to hear the background on how this fee was set and whether there is an option for more fair and equitable sharing of costs.

Water Street Townhomes Update

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I’ve been remiss in posting project updates, but you can always see what’s been posted in the past using the search box at that shows up on most pages. You can click here and see what’s been posted.

This project has had some struggles getting off the ground. Despite having funds from READI and the City of Plymouth to invest, getting a construction loan and securing permanent financing proved a challenge. Construction costs remain high and getting to an acceptable debt service ratio was challenging. We spoke to nine financial institutes before settling on Interra Credit Union for this project. Even after making that decision, the commitment process was slow. All of the financial institutes seem skittish about committing to long term financing in the current market.

Jeff Houin, Taryn MacFarlane, Randy Lehman, Kevin Berger, Lynn Gorski, Mayor Robert Listenberger, Don Ecker,Brent Martin, Linda Starr, Dave Morrow, Mike Miley, Alan Hauger

We have made our first draw request to READI on January 15th and currently are being told it may be another 30-45 days before we see funds released. We made our first draw request to the City of Plymouth on January 8th to start the process for approval with the Redevelopment Commission meeting on the 21st, but despite approval there, the bond fiduciary has not released funds to us. It is hard to complain about the injection of funds that make this project possible, but the delays mean we will incur additional interest expense to cover costs until the payments come in.

We broke ground on the project December 17th, 2024. Those gold shovels have traveled to a lot of sites over the years! Mayor Listenberger asked us to delay actual construction until after Christmas to keep the parking lot open for holiday shopping. We literally broke ground December 26th, with excavation starting that day.

Progress as of 1-27-25

Excavation is mostly complete for the building footprint. We have been fortunate that most of the debris we have uncovered has been relatively easy to remove. As always, there was some “fun” stuff, like an active waterline that ran back under the parking lot, through the excavation, from Water Street before it was capped. That made for a muddy day before being resolved. As of now, footings are in place for the townhomes and a large percentage of the basement walls are complete. We should see basement waterproofing start this week and backfill shortly after that. We’re working through the framing shop drawings to get the wall panels released.

We are still looking for completion in late Fall of ’25. We would love to accelerate that if we can!