Investors

Frequently Asked Questions

People have lots of questions about Electric Works, as you can imagine. Below, we answer the ones we’re most frequently asked.

What’s the plan for Electric Works?

A redevelopment and adaptive re-use of the former General Electric campus in downtown Fort Wayne, Electric Works is a mixed-use district of innovation, energy, and culture, developed as a public/private partnership between RTM Ventures and the City of Fort Wayne. Electric Works includes 39 acres, 18 historic buildings and more than 1.2 million square feet of space for office, education, retail, residential, hotel, and entertainment uses.

Does the plan reflect the priorities and input of the community?

The master plan considers and supports the goals and objectives of the Downtown Blueprint, Walk Fort Wayne, Bike Fort Wayne, Front Door Fort Wayne, and Plan-It Allen! The vision for Electric Works, however, began with the priorities and approach of the 2015 GE Property Task Force, convened by Geoff Paddock and Tom Smith. The task force identified four main themes that the local community wanted to guide the redevelopment vision: 1) historic preservation, 2) environmental remediation, 3) placemaking; and 4) scalability.

We believe a community will support what it helps to create. The design and development team began engaging with neighborhood residents and community leaders to refine the master plan even before acquiring the property; those conversations continue today and will be a priority in the future.

Who is behind the development? Are they experienced at this type of project?

Electric Works is a development of RTM Ventures LLC, a joint venture of Baltimore-based Cross Street Partners, Indianapolis-based Greenstreet Ltd., and Decatur-based Biggs Development. RTM Ventures LLC, along with local and national investors, formed Broadway Redevelopment Partners LLC, which owns the property and is providing the private equity for the project.

With a strategic focus on redevelopment and community revitalization, the principals of RTM Ventures have developed more than 17 million square feet of real estate, and thousands of market-rate and mixed-income residential communities in Indiana and throughout the United States. Cross Street Partners is a leader in historic adaptive reuse and the development of innovation districts. The Indiana-based Biggs and Greenstreet companies bring critical local knowledge and insight to development of Electric Works, as well as property management, construction, and marketing capabilities.

Are local and Indiana-based firms involved in the project?

Coupled with nationwide experts, Electric Works taps the talents of leading Indiana and Fort Wayne-based architecture, landscape architecture, and engineering firms to reimagine the future of this historic campus. For example, Weigand Construction of Fort Wayne has been retained as the construction manager for Electric Works. A fourth-generation family business, Weigand Construction has annual revenues of more than $150 million and is one of the premier builders in the Midwest. Other Fort Wayne- and Indiana-based firms involved include Design Collaborative Architects + Engineers, Hoch Associates, Elevatus Architecture, Viridian Architectural Design, Martin Riley Architects + Engineers, MSKTD & Associates, and SCO Engineering. Other Indiana firms include Spark Placemaking, Anderson + Bohlander, and Hull Associates.

Who has supported or endorsed the project?

In addition to overwhelming public support, we’ve received formal support and / or endorsements from a number of local, regional and statewide groups and organizations, including:

  • Indiana Economic Development Corporation
  • ARCH, Inc.
  • Upstate Association of REALTORS
  • Young Leaders of Northeast Indiana
  • Greater Fort Wayne, Inc.
  • Northeast Indiana Regional Partnership Governing Board
    • Regional Opportunities Council
    • Mayors’ and Commissioners’ Caucus
    • Local Economic Development Organization (LEDO) Council
    • Emerging Leaders Alliance (ELA)
  • News-Sentinel Editorial Board
  • Journal-Gazette Editorial Board
  • West Central Neighborhood Association
  • Fort Wayne Public Market, Inc.
  • GE Quarter Century Club
  • GE Campus Coalition

How is the project being financed?

The project is structured as a public-private partnership. Redevelopment of the West Campus is the first phase and is financed as follows:

  • 37% Private Equity and Debt: $82.2 million
  • 29% Local: TIF, CIB, County, Legacy: $65 million
  • 14% Indiana Industrial Recovery Tax Credits: $31.5 million (net)
  • 14% Federal Historic Tax Credits: $31.5 million (net)
  • 5% Federal New Markets Tax Credits: $10.7 million (net)

Why can’t the developers finance this with private capital?

The economics of urban redevelopment, particularly in America’s heartland cities, requires collaborative partnerships between the public and private sectors. Each sector brings tools and resources that together can accomplish redevelopment at a scale that can be transformative to a city and region. With the decades of declining employment at the former GE campus, the surrounding neighborhoods have suffered increasing rates of unemployment and poverty, and declining property values and household income. Market rents in Fort Wayne, like many Midwestern communities, can only support a limited amount of traditional financing, creating a significant gap in the project budget.

For the West Campus of Electric Works, for example, total project costs per rentable square foot are $319.59. Layering and leveraging tax credit programs like Federal Historic Tax Credits, New Markets Tax Credits, Industrial Recovery Tax Credits, and local incentives help to bring the total project costs down to $118.81 per rentable square foot. At this level, the project will attract private capital to finance the balance of the project at market rents in Fort Wayne.

Do the developers have “skin in the game”?

Yes. Unlike other recent public-private partnerships in Fort Wayne, the private sector is “first money in.” The developers acquired the property directly from General Electric through a competitive RFP and have incurred all the pre-development costs and risk. The developers first started accruing costs in December 2015 and have invested more than $10.5 million to date of private capital to acquire the property and pay for pre-development costs, including architecture, engineering services, and environmental remediation – the vast majority with local firms. They will not receive any compensation for that investment until the project financing closes, as expected this summer. This represents a two-and-a-half year investment across three firms that collectively employ 105 people.

How much money will the developers make?

Because the project is utilizing Federal historic tax credits, the developers are eligible to take up to a 20 percent developer fee under federal guidelines. However, the Internal Revenue Service will review the project and an independent accounting firm will evaluate the appropriateness of the developer fee to the project. For Electric Works, the developers are assuming a 9.6 percent developer fee, based on federally qualified rehabilitation expenses of approximately $173 million.

About half of the developer fee is paid at closing. A portion of the fee goes back into the project in the form of equity after the development team is reimbursed for costs incurred over the past two-and-a-half years to date. The balance is earned over the years of construction and leasing; the developers do not get fully compensated until the project is completed and leased.

Why $65 million in local support? It’s unprecedented for a public-private partnership.

As the catalyst for downtown redevelopment, the Harrison Square/Parkview Field project was approximately $120 million, with $64 million in local public funding or 56% of the total project costs. Since then, several public-private partnerships have resulted in Skyline Plaza and Tower and The Landing. These important projects have been critical to building the market momentum to attract private investment, as well as state and federal funding to Electric Works. By comparison, Electric Works is a significantly larger project and $65 million of local funding, as a percentage of the total is only 29%; the developers are bringing more private investment as well as state and federal funding into Fort Wayne. And, Electric Works has by far the most significant economic impact.

Will local government own any of the Electric Works property, like Parkview Field? What does the community get for its $65 million investment?

Even though local government won’t own any of the Electric Works property, they will get plenty in return for its investment.

For starters, assets owned by local government require long-term funding for maintenance and upkeep and do not generate property taxes. Assets under private ownership, on the other hand, contribute tax revenues, and economic growth.

In terms of fiscal and economic impact, Novogradac & Co. LLC, an independent accounting firm, projected more than $100 million in local tax revenue over 20 years, and nearly $400 million in annual economic impact for Allen County from the redevelopment of the West Campus.

Beyond the tax and economic impact, the West Campus of Electric Works will:

  • Reimagine and repurpose 691,478 sq. ft. of existing, vacant, dilapidated buildings into vessels for new economy jobs.
  • Support and enhance local innovation infrastructure with a downtown center of innovation and entrepreneurship, in a dense, mixed-use innovation district model to retain and attract talent.
  • Feature a diversity of housing options, including attached and detached homes, rental and for-sale, at a variety of price points. It will also connect the neighborhood and community to health, educational, and cultural service and amenities.
  • Promote accessible, safe, and efficient connectivity to Downtown, the Broadway Corridor and the surrounding urban neighborhoods through its extensive public space and pedestrian-oriented infrastructure.
  • Mitigate and remediate the environmental contaminants affecting the site, and return it to the tax rolls as a major contributor. Electric Works is designed to LEED Gold standards.
  • Honor the site’s historical significance as an economic engine for Fort Wayne and Allen County and establish an innovation district in a high-quality, dense urban format.
  • Provide community programming and educational, health, and recreational services to Fort Wayne and Allen County residents.

Is there a market for this project? Do we really need more downtown development?

Electric Works will introduce unique Class A office space to downtown, compelling retail space, and new downtown multi-family units in a dense, walkable, and amenity rich district. It is this space, and this type of environment, that Fort Wayne needs to remain competitive with its peer cities in the attraction and retention of talent.

What’s the timeline?

Project financing is expected to close this summer, pending local government approvals. Construction is planned to take 24 months. Under federal tax reform legislation, if the project is not completed by December 31, 2020, the Federal historic tax credits will be worth less, creating a further gap in the project budget. It is in the developers and community’s shared interest to move forward with the project as soon as possible.

If the project doesn’t happen, what happens to the local funding?

The $3.0 million of local funds, which have been committed by the County and Capital Improvement Board will be invested in cleaning up the property. This increases the assessed value of the property, and the property taxes it’s generating, even if the project doesn’t move forward. As to the remaining $62.0 million, it is not invested until our pre-leasing threshold is achieved and all other funding, including the construction loan, is secured.

If the project fails during construction, what happens to local funding?

In the unlikely event that the project fails during the development period, it will be foreclosed by lenders, who will sell the asset. Because the property will be remediated and have the necessary zoning and development approvals, it will have a higher value than it does today. Local government, by virtue of its taxing authority, is always in a first position to get paid back through property tax revenue.

Since it’s an old industrial site, is it contaminated? How do we know it will be cleaned-up and safe?

Until it closed in January 2015, the site was in varying stages of manufacturing and production for more than 125 years. There were documented releases of chemicals over the years, and General Electric investigated the nature and extent of those releases to ensure that there was no harm to workers at the facility or to the neighbors surrounding the facility. Prior to selling the facility, GE had been working with the Indiana Department of Environmental Management (IDEM) to investigate contamination of soil and groundwater.

As part of the property acquisition, RTM Ventures agreed to continue that investigation, and will enroll the facility in the IDEM’s Voluntary Remediation Program (VRP). The VRP allows the developer to investigate the contamination and develop a cleanup plan, all under strict IDEM supervision, to ensure that human health and the environment are not harmed. After the cleanup plan is implemented and completed to IDEM’s satisfaction, the owner receives a “no further action” status in the form of a Covenant Not-to-Sue from IDEM, indicating that no further impacts to human health or the environment are present at the site.

When will environmental remediation start and how much will it cost?

The development team is working to start environmental remediation as soon as possible. Environmental remediation is projected to cost approximately $7.0 million. The Capital Improvement Board and Allen County have committed $3.0 million, with the developers providing a majority of the funding to clean up and prepare the property.

I want to expand my business. What are the lease rates?

We have a variety of office and retail spaces available at different rates, depending on the location within the district, the building, floor, view, etc. Please contact us so we can learn more about your needs.

Do you cooperate with real estate brokers?

Yes, we welcome tenants represented by real estate brokers.

I want to start a new business. Is there a place for me?

As a district of innovation, energy, and culture, Electric Works is made for you. If you’re just starting out as an entrepreneur, or an established company that wants to grow, Electric Works will provide the different types of creative spaces and active programming that foster the growth of new ideas and innovative companies.

I want to live at Electric Works. What are the lease rates?

The West Campus will include market rate loft apartments in Building 26, a century old historic factory. Sign up for the interest list on our website and we’ll keep you informed as the residential opportunities become available.

Are tours still available?

The good news is we began offering tours to the general public in May. The bad news is that all the initial scheduled tours filled up completely within 24 hours. The good news is we are working to add additional tours open to the public in June and beyond. We’ll have details on more tours available on our site soon. In addition, we are happy to try to schedule private tours for groups.

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