MaiaCo’s 2016 contract was to acquire about 3,500 parcels of tax-delinquent property with money provided by the private partner. According to the company’s website, MaiaCo touted the ability to obtain 3,500 properties “in the first year” of the project, whereas the Gary Redevelopment Commission, acting alone, is financially limited to acquiring 90 to 100 properties per year.
MaiaCo receives 65 percent of the proceeds of any property that is resold to developers for projects
MaiaCo must meet yearly land investment milestones under new contract with Gary Redevelopment Commission
Lauren Cross email@example.com, 219-933-3206 / August 4, 2018
GARY — The city’s Redevelopment Commission this week amended its contract with MaiaCo — a private company that’s fronting money and resources for land acquisition to spur redevelopment in the cash-strapped city — in hopes of increasing communication about the company’s progress.
In 2016, MaiaCo — which has ties to former Chicago Mayor Richard M. Daley — entered into a public-private partnership with the city of Gary’s redevelopment commission to help the commission buy up large tracts of land parcels that are blighted, abandoned or tax delinquent.
Under that agreement, the company would receive 65 percent of the proceeds of any property that is resold to developers for projects.
That remains unchanged in the new contract, said Joe Van Dyk, the city’s planning and redevelopment executive director.
Under the amended contract, the redevelopment commission will receive more frequent updates about MaiaCo’s progress in finding financial investors and acquiring land, he said. Certain investment milestones must be met annually and the commission will receive quarterly reports instead of annual reports, Van Dyk said.
Previously, the contract only required MaiaCo to invest incrementally in years five, 10 and 20 of the public-private partnership, but now, MaiaCo must invest $1.5 million in 2019, $2.5 million by 2020, $5 million by 2021 and so on, he said.
With MaiaCo’s help, the commission plans to acquire about 3,500 parcels of tax-delinquent property with money provided by the private partner.
According to the company’s website, MaiaCo touted the ability to obtain 3,500 properties “in the first year” of the project, whereas the Gary Redevelopment Commission, acting alone, is financially limited to acquiring 90 to 100 properties per year.
However, MaiaCo has not yet helped the commission any properties since first becoming partners with the city in 2016.
Frankly, Van Dyk said, the investment wasn’t there in the first year.
“This is a novel project, and one that’s difficult to do,” Van Dyk said. “But we have had measurable progress so far in our conversations about quality of developers we’re talking to and the potential for significant investment from the private sector.”
Several challenges remain including the property tax collection rate and the city’s declining assessed value, a pending lawsuit regarding the project and what the mayor previously described as distractions with people spreading rumors and untruths about the project.
According to MaiaCo, one of five buildings is vacant in Gary, two in five buildings are blighted, 40 percent of property owners do not pay taxes and 20 percent are serially delinquent on taxes. About 12,000 properties on a tax deed sale.
The properties being acquired are those that passed through the county’s tax sale in November 2016. While money from MaiaCo will be used in acquiring the land, the commission will determine what property to acquire and be the owners of the land. Any land development must follow city zoning requirements and legal requirements.
MaiaCo will be reimbursed only after the property is sold, or leased, to an outside entity.
The commission is eyeing three primary locations for the acquisitions. That includes the Broadway corridor between Interstate 80/94 and Interstate 90, several blocks south of I-80/94 between Chase and Burr streets and the Aetna neighborhood north of I-90 and south of the abandoned railroad tracks between Lake Street and the I-90 interchange.
“These are the communities with the highest level of disinvestment, the lowest occupancy rates and the highest level of properties on the tax sale,” Van Dyk said.
Van Dyk said the new contract further limits the city’s risk by ensuring the Redevelopment Commission receives more frequent updates and MaiaCo is held to
The contract is valid through 2036, “assuming they hit their milestones,” Van Dyk said.
“Throughout the contract, there are opportunities for us to mutually agree that it may or may not be working. The onus is on MaiaCo to raise capital and spend capital. The city’s risk is limited,” he said.
Full Article / Source: https://www.nwitimes.com/news/local/lake/maiaco-must-meet-yearly-land-investment-milestones-under-new-contract/article_a6ea262c-65bc-5c2a-add5-ec60ab8869f4.html