JEFFERSONVILLE — A dispute that has hovered over a piece of downtown Jeffersonville property for several months has hit a turning point.
On Monday, a newly-reshuffled Jeffersonville City Council met for the first time in 2020, where members voted to approve an urban enterprise zone tax credit for the development of a parking lot that sits at the corner of Spring and Market streets. There, Alan Muncy — founder and chief creative officer of developer arc — is set to construct a $3.5 million mixed-use development, composed of 22 residential units and three businesses.
The council's decision is likely to have an effect on the ongoing legal case regarding the property between arc and the Jeffersonville Urban Enterprise Association (JUEA), though the specifics of how things will shake out is not yet known. JUEA legal counsel Zach Stewart said he and his team will now reevaluate how to move forward.
"It's hard to tell at this point," Stewart said of the vote's implications. "It does change the framework that we were working under, because the argument was basically that the contract was null and void for failure to fulfill the condition precedent, which was the granting of the tax credit back in May. Now, we're in a situation where I'm not really sure what the effect will be."
The JUEA and arc have been battling in the courts since a suit was first filed in June. At the center of the litigation was whether or not the $1 sale of the land was valid, with the JUEA arguing that without the tax credit, the deal should be considered null and void.
With the tax credit, the JUEA is expected to receive $450,000 over a 10-year period. Without it, the entity would see no direct return.
Council members favored the move in a 7-2 vote, with Ron Ellis and Scott Hawkins dissenting. Ellis was vocal in his displeasure with the matter being brought before the council, as it had already previously failed three times.
Changing his vote from the most recent one was council member Joe Paris. During council comments near the end of the meeting, he addressed his change of heart, referring to it as "hard." Ultimately, he viewed the decision to approve the tax credit as a positive for the "big picture," noting that some of his previous concerns have since been rectified.
Among those concerns was the nature of the original transaction and transparency regarding the JUEA's financial operations.
"The council's going to be more involved in getting feedback on what's going on, where the money's going and what's happening to it," Paris said. "The other reason was that it was explained to me that the litigation would go on for a year. The cost of that, that was a big factor. The other factor is that the JUEA will get their tax credits now... It was a hard vote. I didn't really love it, but I tried to look at the big picture. Hopefully, in the end, it's going to be the best thing for Jeffersonville."
Before the council's vote, downtown resident Deborah Henderson told the council that she did not believe the development was a good fit for the city. Her list of concerns included the "duplicated" design of the building, the $850 rent price and lack of downtown parking.
"It's very disappointing," she said. "I was glad that Mr. Paris did address it afterward, but for this to even be decided while this is in litigation seems ridiculous. The project in and of itself is not good for the growth of Jeffersonville. There's too many things wrong with it."
Last November, Muncy fenced off the parking lot, closing it to the public. A groundbreaking ceremony was held shortly thereafter. Since then, the site has not been physically altered.
Muncy said he was pleased with the outcome of Monday's vote, calling it a "step in the right direction." Like Stewart, he was unsure of the impact on the legal case.
"It sounds like there’s a new council in place, and certainly a positive attitude," Muncy said. "It sounds like they’re looking forward to moving this project forward as much as I am. I don’t know the implications of the vote on the lawsuit. I’ll guess we’ll have to see what, if anything, the JUEA does at their next meeting."