Warsaw City Council Approves ERA, Abatement For Rural King

The former Kmart building will become home to a Rural King store. Photo by David Slone, Times-Union.

With Rural King moving into the former Kmart building on Lake City Highway, the Warsaw Common Council on Tuesday approved a resolution designating the real estate as an economic revitalization area (ERA).

The resolution also includes a five-year abatement for the business.

A public hearing on the resolution was held during the Council meeting, but there were no remonstrators.

Attorney Steve Snyder, representing the petitioner, said that at about 10:30 a.m. Tuesday, he received the final legal description for the portion of the overall real estate that Rural King will be purchasing.

“As you are aware from the first hearing, when you approved the declaratory resolution, this will be proposed as a Rural King store. They have purchased the property from the current owner, or are in the process of finishing that now. They will then go in and renovate the store at a cost of approximately $1.5 million and then you will see it branded as a Rural King,” Snyder said.

Once the store is renovated and opened, he said there will be 55 full-time employees.

“The request for abatement, that was preliminarily approved last month, was for a five-year abatement: 100% in first year, 80%, 60, 40 and 20 during that five-year period,” Snyder said. “The building has been empty since 2019. One year will qualify it as a vacant building for tax-exemption purposes, so we have three-plus years under our belt. It has been marketed extensively with no takers; the last marketing taking place, trying to rent it for somewhere between $7-$12 per square foot. That did not occur.”

Tuesday, he said, the public hearing was for the request for the approval of the abatement and the acceptance of the SB-1 form that was filed by Rural King.

Warsaw Mayor Joe Thallemer asked Community Economic and Development Director Jeremy Skinner if the improvements to the building were part of the abatement.

Skinner said yes and it would be a complete abatement on the property.

“Typically, in a situation that’s not a vacant building, you’re only abated for what is improved. In this scenario, you abate the whole for those five years,” Skinner said.

There was a question by Councilwoman Diane Quance if the public hearing was just on the ERA or the ERA and the abatement as the Council typically doesn’t have public hearings on abatements.

Thallemer said the Council has previously designated certain areas as ERAs so abatements could be approved.

“Specifically, we’ve done a number of vacant building. Prior, there was a cap on vacant buildings to three years. That does not exist anymore, so it’s really up to you as a Council to what you want to see,” Skinner said.

After the floor was opened up to the public and no one spoke for or against the petition, Snyder responded to Quance’s question.

“The statute specifically permits the application for designation as an ERA to be combined with approval of the specific abatement within that ERA. And they are combined in the confirmatory resolution that’s in front of you,” he said.

Thallemer asked if the Council then was considering the request for the five-year abatement along with the resolution. Snyder said that was correct. Skinner said how Snyder presented the resolution and abatement was fine.

Skinner said when the state changed the statute three or four years ago, the Council now sets the schedule, including the number of years and amount abated. There is no set schedule.

“It used to be, you would have a 10-year, five-year or a three-year abatement and they would have pre-scheduled amounts. That doesn’t exist anymore. You can set the number of years, however many you want, and you can set the dollar amount abated, however many you want within that framework,” Skinner explained.

Snyder said he had a little insight as to why the state legislature changed that from a three-year limit before to a maximum of 10 years.

“The discussion in the legislature was that if you have a new building coming in, you will abate that typically, if it is approved, at 100% the first year. And they looked at buildings that had been vacant for this period of time and did not appear ready to be occupied. The same as coming in and constructing a new building, they wanted to encourage the use of the vacant buildings rather than going somewhere else and building a new building. It would rehabilitate, which is the intent of economic revitalization areas,” Snyder said.

Thallemer said that made sense to him.

Quance made a motion to approve the resolution, which includes the abatement, with Council President Jack Wilhite providing the second. It was approved 6-0, with Councilman Jeff Grose absent.

Vacant property abatements only apply to real property.

When Thallemer asked Snyder if he knew of a timeline or was allowed to provide one, Snyder said he wished he could have something but he didn’t know.

Skinner then presented a petition from Granite Ridge subdivision for the annexation of about 40 acres along south of the existing Park Ridge subdivision. The Council’s acknowledgement of the request is the first step in the annexation process, he said, but no action was taken Tuesday.

A public hearing, fiscal plan and annexation ordinance will go before the Council at a later meeting after it’s advertised in the newspaper.

Later, Thallemer said the Council committee on the American Rescue Plan Act funding met and went through what the Council previously approved for the 2022 budget. That information will be provided to the Council members.

“We need to have a resolution for a spending plan for that ARPA money that I also would like to bring to the Council next month,” he said.

In other business:

• The Council approved a conflict of interest disclosure for Councilman Josh Finch. Finch serves as the board president of the City County Athletic Complex, which receives grant money from the city.

• Thallemer gave Councilman Mike Klondaris an oath of office for the Warsaw Redevelopment Commission. The oaths have to be completed by Jan. 31, and the Commission did not meet in January and won’t meet until Feb. 7.