EVANSVILLE — A matching grant of $5 million in public money — money from Indiana’s second Regional Economic Acceleration and Development Initiative ( READI 2.0) — will help build a private development in Warrick County.
The $71.5 million mixed-use development at the intersection of Indiana 66 and Grimm Road, dubbed The Dominion, is the first in the Evansville Region to receive funding from the READI 2.0 program.
It's a big project, hence the big price tag. Plans call for 150 market-rate apartments, a five-story commercial building with ground-floor retail and dining and a public plaza. A second phase of the project would bring more residential units, a hotel and more restaurant and retail spaces. Construction of phase one is set to begin in September 2025.
According to an Evansville Regional Economic Partnership (E-REP) news release announcing approval of the READI grant, the "live-work-play" development is primarily funded by private developer contributions. Other help includes $8.46 million in Tax Increment Financing (TIF) money from Warrick County. TIF districts allow local governments to capture all property taxes paid within the district and use them for economic development projects.
The READI grant program, created in 2021, is Indiana Gov. Eric Holcomb's signature economic development initiative. An E-REP news release about the $71.5 million Dominion project includes a quote from Holcomb hailing the state's "unprecedented investments in our local communities to improve the lives of Hoosiers today and tomorrow."
The first round of funding for the READI grant program — $500 million — came from the Biden administration’s stimulus package, the American Rescue Plan . Another $500 million in state funding this year pushed the state's total program commitment to $1 billion.
A July READI news release states the eye-popping sum will "accelerate shovel-ready projects and programs that are expected to transform Indiana communities, attract talent and improve the quality of life for Hoosiers in the short and long term."
The Indiana Economic Development Corp. (IEDC), the self-described "public private partnership" that administers READI 2.0, pointed the Courier & Press for comment to Scion Real Estate Development Managing Partner Philip Rawley. E-REP's news release quotes Rawley saying Southwestern Indiana is "eager for a live-work-play mixed-use development that brings a big-city vibe."
But Rawley did not acknowledge several attempts to reach him.
Public money going to private developments is nothing new, in Indiana or elsewhere. To attract large businesses, public money pays for training incentives, builds highways and bridges, installs sewer lines and more. In Evansville Mayor Jonathan Weinzapfel's administration, loans and grants from the city capital development fund, funded with Casino Aztar lease payments to the city, were used to encourage development of lofts and condominiums Downtown.
And that's just one example.
Words like "encourage" and "accelerate" hint at a power equation that influences the allocation of public money as incentive for private development, said Vanderburgh County Commissioner Cheryl Musgrave, who once headed the Indiana Department of Local Government Finance.
The $5 million READI 2.0 allocation for The Dominion appears to be dwarfed by what E-REP called "private developer contributions," which is how it usually works, Musgrave said. She said such contributions help developers "buy down their risk." On the flip side, she said, state money may come with strings attached that drive up the cost of a project.
But in the long run, Musgrave thinks developers simply hold better cards than the state in this game.
"I'll bet we're rapidly arriving at a situation where developers say, 'Hey, that guy got millions of dollars for his development. I'm just not going to do this unless the state gives me money,'" she said.
"So now we're in this vicious loop — just beginning, in my opinion — where, you have to have state money or they (developers) won't do it."
The state points to projections of the total value of economic development it says READI 2.0 will encourage and accelerate. The money is to be enhanced by an additional $250 million made available by the Lilly Endowment Inc. to "accelerate blight remediation and arts and culture initiatives," according to READI's July news release.
"READI 2.0 allocations, along with the partnership of the Lilly Endowment, is expected to yield at least another $3 billion invested to increase the vibrancy and prosperity of Hoosier communities," it says.
This article originally appeared on Evansville Courier & Press: Millions in public money going for private development in Warrick
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