City hits pause on plans to end tax abatements for developer Dave Matthews
SOUTH BEND, Ind. -- The city of South Bend is putting a pause on its plans to end tax abatements for a downtown developer.
A resolution to terminate the tax abatements for the 300 East Lasalle apartments, owned by developer Dave Matthews, was ultimately tabled during Monday's South Bend Common Council Committee meeting.
The city asked the council for the two-week extension because it's having ongoing discussions with developer Dave Matthews and the bank that holds the debt on these properties.
"The bank has stepped up," says Troy Warner, South Bend Common Councilman. "They probably have the most to lose, and so I think that's a good sign."
Warner believes renewed talks between the city and Matthews is a sign that the more than $600,000 of unpaid property taxes in Matthews' name could soon be paid off. He points to the delinquent property taxes and "unkept promises" from Matthews as to why the 10-year real property tax abatement for the 300 East Lasalle apartments was on the chopping block to begin with.
"With all developers, we want taxes paid, bills paid, and your commitments made and promises made and code enforcement issues taken care of and so, if there's an opportunity to get those done, we're willing to give some time to get those done," explains Warner.
Warner says Key Bank has a $32 million outstanding loan on the property to Matthews and his investment group.
Just last week, Matthews told ABC57 that if the council ends the abatement, the East Race Market grocery store would close, and the bank would sell off his 144-unit apartment building.
While ABC57 has learned Key Bank is directly involved in discussions, it's unclear what stance the bank is taking in negotiations between Matthews and the city.
"Generally, in these cases when we see these, what happens is when the foreclosure is filed, a receiver comes in, takes over management of the building on behalf of the bank and the other investors, anyone else that has a financial interest," Warner explains. "That keeps the property generating cash and managing the property until some kind of foreclosure sale or something happens."
Developer Dave Matthews is holding out hope, telling ABC57 in a statement:
“It’s so important to our community that we find a path forward. I’m pleased that the city staff are working well with our team to make a solution that’s a win win for the city and 300 East LaSalle.”
Warner still hopes, no matter the outcome, this sets a precedent of accountability for future developers.
"It doesn't happen very often, but these are tax dollars, and we have to be stewards. When you have somebody who's not holding up their end of the bargain, we have to act on behalf of the taxpayers," says Warner.
The resolution to end the tax abatements will be back on the table in two weeks, on August 26th, for the common council to vote on.