One of the issues facing entry level workers is the issue of deposits. There is a deposit required for a rental unit. (In the case of a new home buyer, it’s the down payment.) There is a deposit required to get water turned on. There is a deposit required to get the gas turned on. There is a deposit required to get the electric turned on. For someone just starting out, this can be daunting. When someone moves, theoretically they’ll get their deposits back from the previous rental, but not before they have to put them down for the new place.
These have come about due to landlords, municipalities and utilities getting burned by tenants and homeowners skipping out on bills. For that reason, the justification for deposits is there. But… how often is this an issue in the first month when all the deposits are required? I would venture to say that 9 times out of 10, this is an end of occupancy issue, not a starting problem. Theoretically, the landlord renting to the tenant or the bank making the loan on a new purchase have vetted the tenant’s ability to afford their housing choice at least initially.
The new housing in Plymouth at Riverside Commons is geared towards lower wage earners. People that are good workers with steady income, but not at a level to afford good housing. These units are 100% electric and on city water and sewer, so there are only three deposits required. Unfortunately, Plymouth’s deposit requirement for water is $150. REMC, which provides the electric, has a deposit of $350, plus a $10 membership fee for the co-op. That’s $500+ in deposits without counting the rental deposit. This does not make it easy for a renter to move from substandard housing to the new units. The Paddocks in Culver runs into similar issues qualifying tenants, though I don’t think the start-up costs for water, sewer and electric are quite as high.
So, here’s what I would like to suggest for municipalities:
The above isn’t a panacea, but it would help low-income workers with a hand up that shouldn’t hurt the municipality much, if any. If the same principles could be applied to private utilities and maybe even rents, then it would be an equitable way of solving the insurance provided by deposits, while reducing the penalty those deposits put on low income individuals and families. This is just the beginning of a thought on a possible solution… But I think it is something worth consideration and refinement.
At the December meeting of the Culver Redevelopment Commission (CRC), Linda Yoder, Executive Director for the Marshall County Community Foundation (MCCF), made a presentation on One Marshall County. One Marshall County is the new umbrella organization that Marshall County Economic Development Corp (MCEDC) has spearheaded. Linda and I serve on the collaborative council discussing this new initiative and Linda had volunteered to make the presentation of the need for One Marshall County before the CRC. This also included a request for funding.
There were a few math errors in the presentation, but one of these jumped out at me was during the discussion of Stellar and the investment that Marshall County Crossroads brought to local communities. The numbers quite clearly did not include the investment from tax credits provided by IHCDA. The Low Income Housing Tax Credits (LIHTC) provided by IHCDA amounted to the biggest single project investment from any of the State agencies involved in Stellar. In all, through the tax credits and loans, Plymouth and LaPaz shared $14 million dollars of investment in their communities with Riverside Commons. That investment didn’t show up in the presentation numbers. This is no shade on Linda! She didn’t prepare the numbers…
This isn’t the first time for this. Culver received approximately $10 million in tax credits and loans for The Paddocks, but that number rarely shows up in their Stellar discussions. These would be huge contributors to the ROI discussion, since local investment in these projects was largely limited to in-kind waivers and some inhouse work. (Culver contributed nothing to The Paddocks project. Plymouth gave waivers on improvements to surrounding alleys. LaPaz waived sewer tap fees and secured matching INDOT funding to improve the street serving the project.)
I think there are a couple of reasons for this lack of acknowledgment: 1) The Stellar Committees don’t really understand the program and 2) Unlike many of the project which were directly municipal projects, i.e. parks, trails, etc., that required more active involvement, the LIHTC portion of Stellar is directly administered by the project developer, so there isn’t a pass-through of dollars. The LIHTC award creates a private project. Where there was some shifting of dollars amongst the other municipal projects within the Stellar awards, that was not an option with LIHTC.
Despite the success of The Paddocks in Culver’s Stellar Community program, Marshall County didn’t even include a LIHTC request in their first application for Stellar Region. I had lobbied for its inclusion and felt that the group slighted IHCDA by not accepting their offer. I lobbied a little harder in their second attempt and Riverside Commons was included in that application, which was successful. This was probably not the only reason, but I firmly believe it contributed to the success of the second application.
There have been some complaints about The Paddocks, but The Paddocks has met or exceeded all of the metrics set forth for it. The same can be said for Sand Hill Farm Apartments, the precursor project that made Culver Stellar and The Paddocks possible. It’s too soon to document that for Riverside Commons, which has different goals, but I have no reason to believe the results will be different. As far as community acknowledgement, the LaPaz and Plymouth councils have done a great job of recognizing Riverside Commons. They each have a Stellar agenda item on their council agendas and request updates for each meeting. Culver did not include The Paddocks in their Stellar reports to the council.
I think it’s a missed opportunity when the LIHTC investment is not celebrated and included in the ROI… But then, I’m obviously biased!
I attended the introductory meeting on READI 2.0 presented by South Bend – Elkhart Regional Partnership (SEBERP) at the Rees Theater yesterday. Honestly, attendance was pretty poor, but there was some good information. READI 2.0 is a refined repeat of the original READI (1.0) program which was a refined repeat of the Regional Cities Initiative. In various forms, these programs have been designed to incentivize municipal and private investment in statewide goals. As with the past programs, READI 2.0 offers the carrot of up to 20% project investment matched by 20% local government investment and 60% private investment. Whether the entire 20% is granted depends on the quality of the project, its merit for meeting goals and its ranking among other submissions.
Sand Hill Farm Apartments was awarded Regional Cities Initiative (RCI) dollars. Those funds, though only 7% of the project cost, provided some incentive to move the project forward when Culver‘s first Stellar application was unsuccessful. The project was initially to be the LIHTC portion of Culver’s Stellar application. When that wasn’t successful, the RCI funds helped make the project viable as market rate housing. Moving this project forward has been noted as instrumental in Culver’s success with their second Stellar application. Unfortunately, Culver did not follow through on their commitment, so some of those funds never were disbursed by RCI and those that were got redirected to reimbursements in lieu of benefiting the project.
Culver Sand Hill Farm was awarded READI 1.0 dollars for Water Street Townhomes. This is a mixed use building with 11 two-bedroom townhouses, 2 one-bedroom apartments and a corner commercial space. We are still working with the City of Plymouth to create the structure to put those dollars to work. SEBERP awarded less than the initial request, but Plymouth is following through with their entire match in order to make this project possible.
Culver Sand Hill Farm also submitted a townhouse project for Culver, Spirit Townhomes, which was named in the READI 1.0 Strategic Investment Plan. Unfortunately, after the fact, Culver chose to partner with a different developer on the much larger and more controversial project, The Dunes. (Discussed here.) C’est la vie! Sometimes you reap what you sow.
SBERP will be putting in an application for READI 2.0 funds for our region after the first of the year. Yesterday’s meeting was one of several where they are soliciting input on what goals of the SEBERP region fit within the stated READI 2.0 goals. This will help them refine their application. They feel confident that their track record managing the Regional Cities Initiative and READI 1.0 funds put them in a good position to receive the maximum award from READI 2.0. The handout to the right was provided at the meeting, showing some of the impact these investments have had. $878 Million in project investment through those two programs, which is 9.5 times the investment from the State. (See the backside of the flyer here.)
There is a rural component to READI 2.0, directing that 25% should go to rural areas. Of the three counties in SBERP (St. Joseph, Elkhart and Marshall), only Marshall County is designated at rural. That doesn’t mean that Marshall County doesn’t have to have competitive projects, but it gives a 25% set-aside leg up. L:ast time, READI 1.0 projects were rewarded on population, which put Marshall County at a disadvantage.
One of the interesting changes in the program is the option for receiving a loan in lieu of a grant from the program. The funds could be loaned out at a reduced interest rate, with the funds paid back to SBERP for future reinvestment in the region. While the concept is a good one, the implementation appears to be flawed, from my perspective. As it currently stands, the loan would be capped at the same 20% level as the grants. While both a grant and a loan could be awarded, they cannot total more than 20% of the project. I will need to hear more about this, but my initial impression is that there is not much incentive to take the loan in lieu of the grant, but I may be missing nuances here. It would make some sense to see loan amounts allowed to be larger percentages since the money will be recirculated. Then there would be more incentive to take that option.
An interesting sidebar – not only did I sit with Linda Yoder, Executive Director of the Marshall County Community Foundation (MCCF), at the READI 2.0 meeting, I also followed that up with an MCCF meeting at her office to hear from MCCF’s financial advisor on impact investing options for the newly formed Roger Umbaugh Local Impact Investing fund. (More on this in a future post.)
Impact Investing seems to be a great way to influence desired outcomes. Great projects that are good for the community often flounder because the investor ROI isn’t there. If Impact Investing can influence that through grants, loans and other creative means, then it benefits everyone.
I don’t yet know if or how Easterday Construction Co., Inc. (ECC) or Culver Sand Hill Farm LLC (SHF) will participate in READI 2.0. The experience with READI 1.0 hasn’t been bad, but there have been a lot of strings attached to it after the award that weren’t factored into the original project. I’ve been approached about several projects that would fit under the READI 2.0 umbrella. I’ll continue to monitor this and continue to be part of the discussion. Whether ECC or SHF participate or not, it seems that it’s another great opportunity for Marshall County and Marshall County communities.
Marshall County Economic Development Corporation (MCEDC) and Marshall County Crossroads started conversations earlier this year about creating an over-arching organization to coordinate efforts throughout the county. This was looked at as the next step forward for Marshall County Crossroads. (Marshall County Crossroads seems to be faltering. Their website has not been updated since 2021. This is at least partially due to a lack of funding.) They created what was called the Collaborative Council, which has adopted “One Marshall County” as the name for the new organization. I was asked to join this group late in the game as they were missing input on housing; a target on the local, regional and State level. As I understood the initial mission, there were two main goals, 1) to try and coordinate the efforts amongst the various groups to better use funds and personnel, and 2) to form a united front and coordinated funding request when READI 2.0 project requests are announced.
While I’m generally supportive of the effort, I’m feeling a bit of Deja Vu’. I helped form the Second Century Committee in Culver. This came about around Culver’s bicentennial as a collaborative planning committee to coordinate the efforts of the various clubs, organizations and the town government. In Culver’s case, it was started as a subcommittee of the Chamber of Commerce. It did a lot of good things, including helping work through a charrette and motivating a new comprehensive plan. One Marshall County has bigger plans, and is looking for funding, but I don’t know that they won’t suffer from some of the same issues that came to plague the Second Century Committee.
The Second Century Committee had a core group forming a steering committee that pushed hard to get it started. There were regular meeting, agendas and great collaboration. But when the torch was passed to new steering committee members, the passion and vision didn’t follow. Without common goals, the group meetings changed from planning meetings, to just lunches. As the direction faltered, the group meetings had less and less participation, until they ended up being just the steering committee meeting amongst themselves. Then, instead of being the planning and vision for the collaborative group, the steering committee started doing projects on their own. Some of these were great, but without the help of the larger group, funding became an issue and the steering committee members became burned out. Their efforts to be independent from the chamber lost them some of their chamber support. In the end, they could not find replacements for the steering committee and the group withered and dissolved.
One Marshall County has more grandiose plans. They are requesting funding from municipalities and are planning to solicit businesses as well. They plan on having a director to make sure things proceed. I like what they are trying to do, but there are just a few drivers of the initiative and as with the Second Century Committee, I’m concerned what happens when those drivers are ready to step aside. I am also concerned that many of the groups they hope to pull under this umbrella organization are not currently involved in the planning. They can’t just assume that they will have to fall into place. As an example, Argos is not interested in participating and plans to go their own route.
My other concern is for MCEDC. As a founding member and past board member, I know the good that MCEDC has done and the gap that would be left without them. One Marshall County is targeting the same funding sources with MCEDC slated to fall under One Marshall County. That concerns me. For those not in the loop, and that includes a lot of those funding decision makers, it is going to be hard to differentiate between the two and justify doubling their contributions. (I understand the ask to be a match of what’s being giving to MCEDC for most of those involved.)
I will continue to be involved. The idea of One Marshall County is still evolving and I think it has potential. It’s just hard not to look at this through the lens of Culver’s, now defunct, Second Century Committee…
MC Squared
February 26, 2024
Kevin Berger
Commentary, Marshall County, MCCF
Community, Humor
When the Marshall County Community Foundation (MCCF) built their new facility, it was to house MCCF, Marshall County United Way (MCUW) and Growing Kids Learning Center. The building would belong to MCCF. MCCF would continue to operate with joint staff shared with MCUW. Growing Kids would be a rent paying tenant. When it came time to name the building, I lobbied hard for some iteration of MC2. I thought it was a no brainer, since it fit with the joint philosophy of MCCF and MCUW, that the two groups together were more than the sum of their parts, i.e. MCCF x MCUW not MCCF + MCUW. Oh, well… This was one of those cases where what seemed obvious to me wasn’t palatable to others. The building is now known as the Marshall County Philanthropy Center. I’m sorry, but 7 years later, who knows that or refers to that!? We could have had something much more catchy! Ha!
I wasn’t involved at the start of One Marshall County. I do kind of like that name, but I go back to it also being an organization designed to be more than the sum of its parts. Another missed opportunity to use MC2. If I’d been involved at the beginning of Marshall County Crossroads, I would really have hit this hard for them too!
So I’m throwing this out there. Some Marshall County organization or group of organizations should be the first to pick up MC2 and run with it! If your name works in an “E”, even better since you could really roll with all of Einstein’s equation. What group doesn’t strive to be faster than light? Well, I guess there’s always Heinz Ketsup which bragged on being think in their Anticipation commercial. Oooo! Oooo! Maybe MCEDC! They have all three letters in there!
You may not of heard it here first, but I haven’t heard anyone else in Marshall County using MC2. It’s free advice. Run with it!
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