The city of New Carlisle has agreed to sell the defunct Twin Creeks Subdivision — finally ending a nine-year ordeal and recouping some of a roughly $1 million bond it co-signed.
Residents applauded after New Carlisle city council members agreed this week to sell 27 Twin Creeks lots for $189,000.
The proprieties will be sold to Don Gilliam of Hal Don Properties, who has for years sought to purchase the lots from the city.
“This has been a very long process. Longer I think for some of you sitting right behind the council there and some citizens in the audience,” City Manager Randy Bridge said.
The debt owed on Twin Creeks has been the underlying cause of New Carlisle’s recent financial issues.
The city has been required to pay about $86,000 annually from its general fund because the city co-signed the bond for the project. The parcels were originally purchased by a Michigan investor in 2004, but the development stopped when he died three years later.
Proceeds from the sale will drop the balance owed on the bond from $675,000 to $486,000, Bridge said. He also plans to refinance and lower the interest rate on the bond.
“We’re getting rid of parcels of land that have no houses on them. There’s no benefit to having a vacant parcel of land in your city. We need a house on there, we need people in it, making money and in return supporting our income tax,” Bridge said.
The total city debt owed is $86,000 per year, but the city generally pays about $70,000 to $72,000 after the city gets reimbursed from the $750 annual infrastructure and road assessments paid for by current residents on the developed properties.
Council Member Rick Lowrey, who lives in the area, said residents agree to 20 year assessments when they purchase a home there. There’s also a homeowner association fee, he said.
Lowrey said he’s happy the city found a buyer for the lots, but wished the city could have received more money for them. He also added that the buyer is taking a gamble because there’s no guarantee that he’ll be able to sell or develop them.
“But it’s a burden on the city so I’m glad they’re gone,” Lowrey said.
Mayor Mike Lowrey said he was pleased the city was able to sell the property.
“It’s amazing to have it behind us and move forward. We can pay down some heavy debt that’s out there and it will be a nice burden off the city’s shoulders,” Mike Lowrey said.
Last year, New Carlisle made more than $100,000 in cuts to its general fund, including cutting the number of deputies who patrol the city in half.
The development also became one of the county’s largest delinquent property taxpayers.
Council Member Lowell McGlothin was on city council when the New Carlisle officials co-signed for the bond for Twin Creeks and became responsible for payments after the developer’s death.
The housing bust and the Great Recession followed.
McGlothin said at the time a former law director told council members it would “never come back to bite us.”
“Guess what, it came back to bite us and it’s been a thorn in our side ever since,” McGlothin said.
McGlothin said the city was hit by a “perfect storm” when the developer died and the recession hit.
“I’m so relieved that it’s over with,” he said. “I would be very, very happy if we start getting houses on them.”
Vice Mayor John Krabacher and Council Member Ethan Reynolds said they too were happy about the sale.
“Very excited to see us selling these things and paying down our debt. I know we’ve discussed this for three or at least four years … Definitely one of, I would say, my proudest moments with this city,” Reynolds said.