A rendering of the project (Credit: Instagram)
Struggling Rust Belt cities are working to turn around their fortunes by redeveloping vacant industrial plants — and are using a familiar, if risky, financing mechanism to jump start the process.
Post-industrial cities in the Midwest and beyond are turning to local-government bonds to fund ambitious redevelopment projects, according to Bloomberg. The project could help the cities move beyond their manufacturing heydays, though the bond issuances and the bet on real estate could be a gamble.
In Fort Wayne, Indiana, city officials are issuing $45 million in bonds to help turn a former GE plant into a 30-acre mixed-use complex featuring apartments, retail and office space. Over 20 years, the $440 million development is expected to bring in more than $100 million to local coffers.
The Fort Wayne project and others like it seeks to create the trendy live-work-play developments that have come to bigger cities. The hope is the new development can lure young, educated workers who may be priced out of cities like San Francisco and New York, developers told Bloomberg.
The strategy has proved successful in some cases.
In Allentown, Pennsylvania, the city used tax-exempt bonds to finance a retail, dining and office complex. After the exodus of Bethlehem Steel and Mack Trucks, the development has helped lure some big employers to the downtown, including Bank of America.
The Fort Wayne project has already seen a number of employers, including Indiana University, announce plans to move into the development. [Bloomberg] — Joe Ward