Differing viewpoints: Council members disagree on purchase of Sears property from Cummins

Mike Wolanin | The Republic An exterior view of the former Sears building recently owned and occupied by Cummins in Columbus, Ind., Friday, May 24, 2024. The City of Columbus recently purchased the building from Cummins.

A divided Columbus City Council has approved a resolution to allow for the city’s purchase of the former Sears building downtown, now owned by Cummins Inc., by a 5-2 vote.

Councilmen Chris Bartels and Jay Foyst voted against the purchase, Councilwoman Elaine Hilber recused herself because she’s a Cummins employee, and Councilman Jerone Wood was absent.

The Columbus Redevelopment Commission during a March 18 meeting executed a purchase agreement with Cummins Inc. for $4.2 million to acquire the 91,380-square-foot property at 323 Brown St., including the adjoining parking lot.

City officials have proposed a potential conference center at the site, though no final decisions have been made on the building’s future use.

Director of Redevelopment Heather Pope said city officials have already completed a couple-hour walk through of the building and the closing of the property is set for May 30. YES Cinema’s lease will be re-assigned, access to the building will be set up and utilities will be transferred over. Pope said any utilities costs will be covered by redevelopment’s general fund, which captures interest on the city’s tax-increment-financing (TIF) districts.

The existing parking lot to the west of the building and south of Hotel Indigo will be open to the public and considered free long-term parking until the site is ready to be developed, Pope said.

The $4.2 million was derived from TIF funds from the Central Economic Development Area, Pope said. YES Cinema would remain as a tenant, but its rent would increase, according to Pope, adding that redevelopment had been in conversation with YES Cinema and officials there are OK with the increase.

Columbus Redevelopment Commission President Al Roszczyk told the council the central TIF had a beginning balance this year of approximately $21 million and the projected balance at the end of the year is $23 million.

“We have a healthy balance,” Roszczyk said.

The purchase price of $4.2 million was substantially less than two appraisals redevelopment had commissioned for the property, according to Roszczyk.

The resolution came before the city council because it’s required for city expenditures greater that $500,000.

City officials said they intend to move quickly and not possess the building for long, and that the building’s ultimate use is contingent on what comes out of the Columbus Downtown 2030 plan.

Members who approved the purchase felt as though the city should act as a steward, purchase the building and then seek input from the community through the new plan to decide on its ultimate use, continuing a city strategy of utilizing public-private partnerships to encourage cohesive development.

“I believe possessing this type of property allows us to really think about our downtown strategically, it’s very rare that such a large block of downtown might pop up like this,” Councilwoman Grace Kestler said.

Roszczyk said the city has demonstrated a history of successfully using public-private partnerships and that the acquisition of the Sears Building and the new plan present a unique opportunity.

“I believe this project in this purchase, along with the downtown 2030 plan, is one of the most transformative undertakings that we can do to enhance our downtown for the next generations,” Roszczyk said. “I don’t think it’s just for the next 10 or 20 years, I think it’s for the next 50 or 100 years. As I reflect on how we got all these things done in the last 40 years plus, it’s been because we just don’t let things happen. We’re very intentional about what we do.”

However, some members who ultimately voted to approve the purchase—namely Council President Frank Miller and Councilman Josh Burnett— did express some trepidation about the agreement and the manner in which it came together, but felt comfortable approving due to conditions that tie the resolution to the 2030 plan.

Councilmen Kent Anderson, who described himself as “extremely libertarian,” said even though he was concerned about the amount of commercial property the city is involved with, he felt as though a successful downtown “does require some government intervention at times.”

Those opposed said they city was engaging in real estate speculation and should leave the fate of the building to the free market and not spend city funds.

Community member John Burnett said he was grateful for a new plan, and said “plans create context for things like what we do when we are at our very best, that is to bring together the public and the private sectors to improve the human condition, which is what I hope we’re all about here,” he said.

Redevelopment Commission Vice President Kyle Hendricks also attended to support the resolution.

“Downtowns require some government intervention, and from the plan that is being built, I’m confident that we will get there sooner rather than later.”

Community member John Fairbanks came forward during public comment to say that he had assembled a plan for the building to fill 65,000 square feet of it and that he had submitted a $6 million offer to buy the building from Cummins.

Fairbanks said his plan for the building would house sports entertainment, including bowling and simulated golf, plus sports therapy and a restaurant. He said he has been in contact with potential tenants about it and brought to the meeting a representative from Franklin-based 10 Pins bowling who signed onto the plan.

“The big question is why, if we have developers like our team, like our group who want to take this building on, are willing to take it on, why don’t we get it under contract? We want to start developing this and I think we could be operational in nine months,” Fairbanks told the council.

Fairbanks distributed a copy of a plan to council members who had not seen it, but he took copies of the plan back after saying it was proprietary. Fairbanks was approached by The Republic to try to confirm its contents, but he gave no comment.

Councilman Chris Bartels said he didn’t believe the city had done its due diligence on the building and that it shouldn’t acquire a property that a group seemingly had organized a plan and purchase offer.

“I do look at probably three to five properties a week, I invest in real estate, I’ve looked at this property and I passed on it,” Bartels said. “… As a city council member in my district after I’ve spoken to several people, I don’t feel fiscally responsible saying yes to this.”

Several members members, however, were confident the property is in suitable shape.

“The property itself has been pretty much maintained by Cummins, they made major investments into the property over the period of time that they’ve had it,” Councilman Tom Dell said.

Bartels asked Dell if he had seen those improvements and Dell said he had personally seen work being done on the heating and air conditioning units in the building.

“But we don’t have an inspection report,” Bartels responded.

Bartels and Foyst held a town hall on April 30 where they discussed “city acquisition of properties” and “property taxes” that Fairbanks attended.

“The free market will figure that out if it’s the best plan, but I’d much rather prefer it figure it out on the investor’s dime, versus our taxpayer’s dime,” Bartels said.

Pope called Fairbanks’ plan “exciting,” but emphasized the city wants to be purposeful about what comes of the building.

“It’s not Al (Roszczyk) and I sitting in a room making a decision, it’s not Chris (Bartels) and I sitting in a room make a decision— it’s the community’s decision. And that’s the whole purpose of purchasing this, is to influence that what goes there is the right use,” Pope said.

Mayor Mary Ferdon said as a Republican, she does believe in the free market, but observed the downtown area is a place that often needs city help.

“When we talk about free markets, I think that’s great, I’m a Republican, I love the free market. But businesses come to us all the time and violate the free market— TIF funds, tax abatements— so many businesses need a little bit of a help to get their businesses up and going,” Ferdon said.

“… Very few things happen in the downtown community, or in one of our large industries, all by themselves. They oftentimes come to the city for financial assistance.”

Pope and Roszcyk disagreed with Fairbanks on whether he had informed the redevelopment department of the plan and the avenues through which redevelopment potentially learned of it.

Both Pope and later Foyst noted that the city acquiring the property in the lead up to the new downtown plan doesn’t preclude Fairbanks’ plan from coming to fruition later.