Future uncertain for East Race Market

SOUTH BEND, Ind. -- A downtown developer is in a standoff with the city and isn't standing down.

Monday the South Bend Common Council voted to deny a one-year extension on the construction period for tax abatements Dave Matthews and the City agreed upon in 2017 for the 300 E. Lasalle Apartment Building and its connected grocery store the East Race Market.

Matthews says despite the vote he is not done fighting despite the 6-2 vote that packed the council chambers Monday, with many speaking on behalf of his developments.

"It was interesting to see a room that seemed to be about 90% supporters of which I don't know 40% is a packed room 40% of them spoke in favor to watch their elected officials vote completely contrary to what the public opinions seemed to be," said Adam MacMillian who spoke Monday supporting the extension for Matthews.

"To me... it seems like a lot of the descent or opinions that are against are more about the developers, other developments or developers personality but those are separate issues," MacMillian added.

The City of South Bend is currently suing Matthews in a multi-million dollar lawsuit for failing to meet deadlines on developments.

Those against the resolution adding his properties are now hundreds of thousands of dollars behind in property taxes.

But Matthews says he's brought 10s of millions of dollars of investment to the downtown area over the past 15 years including townhomes, The Emporium, The Commerce Center, and the 300 E. Lasalle Building.

"If you look at Google view from 2012- 2013 to see the development that has changed this neighborhood it's it is it's amazing," said Matthews.

And couldn’t believe the council’s decision Monday.

"Disappointing. It was shocking... I think we had 140 letters of support. We had two hours of people telling stories of how our developments have 300 Commerce Center has impacted their lives,” Matthews added.

Representatives from the City of South Bend weren’t available for an interview, but said in a statement:

"We are proud of the record investment across the city. South Bend continues to be a great place to invest and do business, and we look forward to the nearly $1 billion of transformational investments on the way with proven partners who have a track record of success,” said City Spokesperson Allison Zeithammer.

Matthews says he still hopes to reach a compromise with the Common Council by August.

Otherwise, he suggested the apartment complex and market could be at risk of closing and he is unsure what this will mean for his other developments.

"You know if we don't fix this property tax issue, the project can't pay it... It was never designed to be able to pay this much until it's a decade later and the bank will force the sale,” he said Wednesday.

One Council Member said her decision was based on a number of factors specifically the original “MOA” that said if at any time the developer was delinquent, they would pay in full.

Now she says Matthews will either have to come to terms with the agreement or reach a settlement with the city.