Richard A. Carlucci Center
The Town of Plainfield is selling the Richard A. Carlucci Center for $14,120,000 to the Plainfield Parks Facilities Corporation (a not-for-profit corporation) and then leasing the property back.
“. . . a lease which would be entered into between the town and the Plainfield Parks Facility Corporation in connection with the Lease Rental Revenue Bond which we’re planning to issue in probably late February – is my best guess. The lease in question will involve the sale of the Carlucci Rec Center to the Plainfield Parks Facility Corporation and lease back to the town. The payments made on that lease would then be used by the Parks Facility Corporation to pay debt service on the bonds. And then the second hearing is the Additional Appropriation of Real Estate Proceeds. So, once the bonds are issued the Parks Facility Corporation will use those funds to buy the Rec Center from the town, and the town will actually use those proceeds to fund the projects that they plan to perform.”
- excerpt from January 9, 2023, Town Council Meeting Minutes
The Town will use the $14+ million “. . . for the acquisition of real estate and constructing, renovating, improving and equipping park facilities through the Town” by the Plainfield Parks Facilities Corporation selling bonds.
- see Resolution 2023-03 and Resolution 2023-04
You may be asking yourself.....why would the Town be doing this?
Here's an excerpt from the Association for Governmental Leasing & Finance: An Introduction to Municipal Lease Financing: Answers to Frequently Asked Questions”.
Advantages of Municipal Lease Financing Municipal lease financing enables a state or local government (referred to in this booklet as a “Government Body”) to:
(1) finance a variety of governmental projects without incurring a “debt” or an “indebtedness” that is subject to the voter approval and debt limitation requirements contained in most state constitutions or otherwise provided by statute;
(2) implement a flexible financing structure that best serves its particular needs and that is frequently not subject to certain restrictions that may be imposed under applicable state law on other types of financing, such as public sale requirements and interest rate limitations;
(3) acquire all of the equipment that it presently needs and spread the cost of such equipment over time rather than merely acquiring equipment on a pay-as-you-go basis, which limits the amount of equipment that may be acquired to the current year’s available revenues in light of other demands on the current year’s resources;
(4) finance facilities for which obtaining voter approval is extremely difficult or even impossible, such as jail facilities, law enforcement facilities or public schools in areas where older populations will not approve general obligation debt to pay for public school facilities; and
(5) take advantage of cost-effective financing for the acquisition and construction of property over time rather than depleting existing reserves.
Has the Town done this before?
Yes, the Richard A. Carlucci Center was “sold/leased back” before:
In 2002
Richard A. Carlucci Center sold to Plainfield Parks Facilities Corporation for $25,000,000.
A lease agreement was entered in October 2002 for lease payment of $2,280,000/year for 22.5 years.
The Plainfield Parks Facilities Foundation secured 2002 Bonds to obtain the monies for the $25,000,000 purchase.
In December 2002 the lease payment was reduced to $2,078,000/year starting in 2004.
In 2010
Plainfield Parks Facilities Corporation refinanced for $19,075,000. The monies were used to pay off the 2002 Bonds.
The Plainfield Parks Facilities Foundation secured 2010 Series A and B Bonds (2010 Bonds) to repay the outstanding balance of the 2002 Bonds.
How Much Debt Does the Town of Plainfield Have?
According to reports that were performed on March 2, 2023, on the Indiana Gateway website the following debt exists:
Town of Plainfield:
Principal Outstanding $ 81,189,000
Interest Outstanding $ 18,599,090
Lease Payments Outstanding $ 255,838,000
Total Current Obligations Outstanding $ 355,626,090
Examples of Debt:
Performing Arts Center (total) $ 26,885,000
- Series A Bonds $ 22,000,000
- Series B Bonds $ 4,885,000
Government Center $ 22,380,000
Made@Plainfield $ 32,510,000
Parking Garage (Downtown) $ 7,090,000
For Comparison of Total Outstanding Debt by Town:
Danville $ 29,427,842
Avon $ 34,149,275
Brownsburg $150,075,021
Plainfield $ 355,626,090
Plainfield Community School Corporation
Principal Outstanding $ 10,465,000
Interest Outstanding $ 1,376,700
Lease Payments Outstanding $ 146,608,015
Total Current Obligations Outstanding $ 158,449,715
For Comparison of Total Outstanding Debt by School District:
Danville $ 24,126,930
Plainfield $ 158,449,719
Avon $ 344,473,329
Brownsburg $ 367,013,036
Editorial Comments and Thoughts by Kim White
Why is all of this an issue to me?
The Plainfield Parks Facilities Corporation has been administratively dissolved as a business by the Secretary of State for failure to timely file their required regulatory reports on 3 separate occasions since its creation in 2002. Dissolved on March 19, 2005, March 14, 2013, and August 19, 2015.
Is the Plainfield Parks Facilities Corporation a good steward of our town’s assets? If they can’t even file simple paperwork with the State of Indiana as required, they shouldn’t be managing our assets. What happens if we as citizens don’t file our taxes every year?
We have taken on all of this debt that we the tax payers haven’t voted on. Take for instance Danville, for the last couple of years the citizens of Danville have voted on a referendum regarding a tax levy to build a new high school. Why haven’t we voted on big ticket items like that? We built a new elementary school; do you remember voting on it?
You may have been asked one day, while visiting the Richard A. Carlucci Center, to sign a Petition of Taxpayers. If so, you were probably presented with information about all of the wonderful upgrades to our park facilities the Town wanted to do and they needed your signature to do it. The petition had text that included the cost "not to exceed $ 17,000,000" . . . but did they tell you how much debt the Town was in when you were asked to sign? For example, in 2022 when the Petition was signed for selling/leasing back the Richard A. Carlucci Center, the Town had over $ 217,000,000 in debt already on the books. If you knew that we would be taking on almost an addition 10% of our total debt, would you sign?
Selling and leasing back may be “legal” but is it right? These types of financing don’t pass my sniff test. This is a lot of money being spent on a lot of things.
Is this the way we want to continue to allow business to be done in Plainfield?
I know Plainfield loves to be #1. . . but do we need to be #1 in the amount of debt/obligations we the taxpayer have to bear?
Just stuff to think about . . .and look in to for yourself.