By KEVIN NEVERS

Is a Wal-Mart in the future of Chesterton?

It is, under one of two scenarios in a study on tax increment financing commissioned by Chesterton Development Partners LLC (CDP), the Lake Erie Land Company’s new joint-development partner, whose principal is James Gierczyk, a Chicago-area developer and builder.

The purpose of the document—prepared as it happens by H.J. Umbaugh & Associates, the town’s own contracted financial consultant, but at the expense of CDP—is to estimate the revenues which the Town of Chesterton’s TIF district would capture under two different development scenarios and which could be used to repay a bond issue with a lifetime of approximately 22 years.

The first scenario envisions a 340,000-square foot big-box development plus 170,000 square feet of “junior-box” development. The document does not specify any particular retailer.

The second scenario, however, envisions the same square footage as the first one plus a 180,000-square foot Wal-Mart.

That document is scheduled to be on the agenda of the Chesterton Redevelopment Commission at its next meeting, 6:30 p.m. Oct. 23, at which time Gierczyk or a representative could pitch to members the possibility of a bond issue, to be repaid with TIF revenues, for the purpose of financing infrastructure for one of the two scenarios.

That, at any rate, is the understanding of Town Attorney Chuck Lukmann. “I believe that he wants to pursue funding from the Redevelopment Commission for some infrastructure,” he told the Chesterton Tribune today. Lukmann was unable to say what infrastructure Gierczyk may have in mind.

Since the establishment of the TIF district in 2000, the commission has yet to float a bond issue on the strength of TIF revenues, and under a consensus—though not a formal—policy its members have generally agreed not to use those revenues to build infrastructure for a private developer.

Apparently neither scenario is affiliated with the retail mall which PBR Development of Chicago is looking to build under a planned unit development ordinance in Coffee Creek Center, although CDP and Gierczyk are joint-venturing that project to some degree.

Instead, Lukmann said, he has the understanding that Gierczyk is looking to develop one or the other of the scenarios on property which CDP owns on the west side of Ind. 49. “To my knowledge there are no plans or talk of that sort of facility”—by which Lukmann was referring to Wal-Mart—“at Coffee Creek Center.”

Lukmann did say that the preparation of the document caught him off guard. “I was surprised when I saw it because neither the Redevelopment Commission nor the Town Council to my knowledge commissioned such a study. It appears to me that it was something that the developer wants to discuss with the Redevelopment Commission.”

This would not be the first time a representative of Gierczyk has approached the commission with an idea. At their August meeting members heard a presentation from Jim Shanahan of Ice Miller, representing CDP, on an instrument known as Special Improvement Bonds, which are sold to investors to finance infrastructure and repaid with the revenues of an additional tax on all lots in a designated district. Shanahan did not indicate in his presentation what sort of project CDP might wish to develop through the use of Special Improvement Bonds.

In June CDP and Lake Erie Land inked a joint-partnership deal for the build-out of Coffee Creek Center over the next 10 years. The details of that partnership have not been released but Lake Erie Land attorney Tom Godfrey has said that under its terms CDP has purchased an unspecified number of acres and could purchase more, and that CDP has the option of building on those acres itself, of selling them to a third party, or of joint-venturing them, as it is doing with PBR.

Posted 9/28/2006