A local developer withdrew its request for a tax break to build 160 market-rate apartments at Franklin’s Eastside Gateway after it became clear the city would not support it.
Local developer MultiPro, LLC on Tuesday announced its plans to invest $19 million in two-bedroom, two-bathroom apartments, all with attached two-car garages, on a 32-acre property at King Street and Umbarger Lane, less than a mile west of Franklin’s Interstate 65 interchange, and was asking for a five-year real property tax abatement.
The property, between Franklin Fire Station No. 22 and Waffle House, is mostly open ground, with a field on Umbarger Lane northwest of the National Guard Armory.
MultiPro is a newly formed Franklin-based development company with a local board of investors. Independently from MultiPro, Chris Dowty, MultiPro’s managing partner and director of development, recently redeveloped Main Street Commons, an 18-unit apartment complex at 401 N. Main Street, Franklin.
The new development would be built in two phases across 25 one-story buildings with three to eight units each, Dowty said. Smaller units would be about 1,200 square feet, and larger units would include a sunroom, making them about 1,350 square feet, he said.
Rents would be around $1,500, with the larger units costing more, Dowty said.
MultiPro also wants to extend the Franklin Greenway Trail on the property. The trail runs alongside King Street and ends on the property, Dowty said.
Mayor Steve Barnett and Dana Monson, the city’s community development specialist, told the Economic Development Commission the project does not fit with the city’s goals — or state regulations — for tax abatements.
Since the abatement would be for market-rate housing, the city’s usual method of providing tax abatements — declaring an Economic Revitalization Area — would not be allowed under state law, attorney Rob Schafstall said.
An Economic Revitalization Area would only be allowed if the proposed development included at least 20% low-income housing. Even then, the city would have to declare that the property is in a “residentially distressed area,” meaning that there is low-quality housing in the area, Schafstall said.
Housing in the area is not distressed, and declaring it as such could be detrimental to growth at the city’s eastern gateway, Monson said.
“It is important to consider that is a growing area and a gateway (into the city). This is something pretty serious that we need to consider; do we want to have that designation of residentially distressed area on that growing gateway?” Monson said. “We have Hillview to the north, Jefferson Meadows to the west, these two new hotels and new developments that are coming in (at I-65). I just think, from the staff’s point of view and the mayor’s point of view, that these findings are not true for that area.”
Another option would be declaring the area an Economic Development Target Area, which would be a declaration by the city that the property is not likely to be developed without an incentive, Schafstall said. However, because the property is in an area that is growing, that is a stretch, he said.
“The bottom line is this project can proceed with or without an incentive. (But) the only way you can get involved is to do statutory gymnastics, basically,” Schafstall told the commission.
State law aside, Barnett said approving the abatement would set a bad precedent and provide an incentive where one is not needed.
City leaders recently spoke with about eight other multifamily housing developers and several single-family housing developers, which shows there is already significant interest in the local housing market, Barnett said.
Additionally, tax incentives for housing, especially for market-rate housing, are not needed on the local level, because there are state and federal housing incentives, he said.
Barnett, Monson and several commission members emphasized that their opposition to the abatement is not based on the project, but the idea of incentivizing the project.
In fact, the site was envisioned for multifamily housing in the city’s comprehensive plan and is already zoned for that type of development.
After a lengthy discussion at the meeting about what would need to be done to accomplish an abatement, the board seemed ready to act against it. However, Dowty spoke briefly with his board of directors and chose to withdraw the proposal instead.
MultiPro plans to move forward with the proposal, but will have to run the numbers after learning a tax abatement is out of the question, Dowty said.
Their hope is to start construction on the property in June, he said.
“We knew this was going to be an uphill battle. We know that the city hasn’t done this type of abatement in the past,” Dowty said. “But we still felt like we had a pretty good argument so we wanted to make that today.”
