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The Columbus, Indiana, City Council has advanced a payment-in-lieu-of-taxes agreement that would allow Gene B. Glick Co. to rehabilitate Fairington of Columbus, a 136-unit Section 8 senior housing community built in 1978, in a $23.76 million preservation deal, The Republic reported.
The council voted 7-0 to move the ordinance out of first reading, with members Chris Bartels and Elaine Hilber absent. Second reading could come as soon as November 4. Under the negotiated terms, Glick would pay the city at least $68,000 annually instead of traditional property taxes for 30 years, with the payment increasing 3 percent each year. The property's current tax liability is $160,000, according to Jake Sipe, the city's director of community development.
A payment-in-lieu-of-taxes agreement lets a municipality substitute a negotiated payment schedule for conventional property taxes, typically for a property serving a public purpose. Affordable and low-income housing developers use PILOTs because the programs that fund their projects, tax credits, tax-exempt bonds, and federal rental assistance, constrain revenue for decades, making unpredictable or rising tax bills a genuine threat to feasibility. Cities use them because the alternative is often losing the housing entirely. In a conventional property-tax regime, a rehabilitated affordable building can face a higher assessment precisely because the rehab improved it, a perverse outcome PILOTs are designed to prevent.
In the Fairington case, the PILOT request is tied to the construction budget rather than the whole $23.76 million project cost, a structure that lets the city argue it is discounting taxes only in proportion to the public benefit being produced. The negotiated 3 percent annual escalator gives the city revenue growth over the 30-year term while keeping the payments predictable enough for lenders and tax-credit investors to underwrite.
Fairington of Columbus is an age-restricted affordable community for seniors whose 136 units are all supported by a HUD Section 8 Housing Assistance Payments contract. Glick plans to rehabilitate the property and keep operating it as affordable housing, with improvements to residential units, elevators, common areas, exterior areas, and accessibility features.
The total project cost, including acquisition, is $23.76 million. Construction is expected to cost $6.9 million, about $51,344 per unit, and the PILOT request is directed toward the construction costs, according to city documents cited by The Republic. The financing stack leans on the Low-Income Housing Tax Credit program: Glick expects $12.5 million from tax-exempt mortgage bonds, about $7 million in LIHTC investor equity, a $2.5 million sponsor loan, and $1.7 million in deferred fees.
Glick originally proposed annual payments starting at $40,800 with a 3 percent annual increase over 30 years. Negotiations with the city raised the starting figure to $68,000. In total, a little more than $3.2 million would flow into the city's affordable housing fund over the 30-year term. The fund, established last year, supports citywide housing preservation and affordable housing projects.
That routing matters politically. Rather than simply forgoing revenue, the city can point to a dedicated, growing fund balance financed by the agreement itself. For council members, supporting the PILOT becomes a vote for a visible housing investment rather than a vote for a tax break, a framing that helps explain the unanimous first-reading vote and the absence of public opposition at the meeting, where members asked only clarifying questions.
Council President Kent Anderson described the agreement as "a contribution from the city via sacrifice" of taxes, and called it a "win-win," noting the property is some of the most affordable housing the city has. The math behind that framing: in exchange for accepting $68,000 a year with escalators instead of a $160,000 current liability, the city preserves 136 deeply affordable senior units, directs $3.2 million into its affordable housing fund, and gets a major private rehab of a 1978-vintage building without spending city capital dollars.
Glick will sign a land use restriction agreement at the closing of the tax credits requiring the property to remain affordable, and with the multiple agencies involved, the commitment runs at least 40 years, said Janine Betsey, Glick's director of tax credit development. "We do not turn them into market-rate apartment homes, so it's a 40-year commitment," she told the council.
Betsey also emphasized what preservation protects for current residents. "The Section 8 contracts that are on the property allow the residents to not pay more than 30 percent of their income towards rent, and we don't get those anymore," she said, referring to the scarcity of new project-based Section 8 contracts. "So preserving this also preserves it long term for the seniors that live there."
Glick outlined an unusually detailed relocation plan for an occupied rehabilitation. Residents would be out of their units for two nights while the company renovates kitchens, bathrooms, and mechanical rooms, with the company paying for hotel stays and providing transportation. Exterior work, roofs, and other items follow separately and generally do not require residents to leave. Residents in ADA-accessible units face longer relocations, about 30 to 45 days, because those renovations are more extensive.
"We really work hard with the residents to make it as easy as possible," Betsey said. The company also maintains a small fund so that at the end of the project, residents can choose improvements such as new community room furniture or a grill station.
The per-unit construction figure, about $51,344, is the number that explains why preservation dominates the affordable housing policy conversation. New affordable construction in most Midwestern markets now runs several times that per unit before land costs, and it cannot be built at all for senior properties in established neighborhoods without lengthy zoning fights. Buying and rehabilitating an existing Section 8 property at roughly $175,000 per unit in total project cost, including acquisition, keeps 136 affordable homes in service for a fraction of replacement cost and without the years of delay a new development would require.
Council member Grace Kestler, who serves on the Columbus Housing Authority, framed the deal in the context of the region's shrinking rental-assistance resources, describing a "never-ending" conversation about how the city can hold onto as many Section 8 vouchers as it can "since not many are coming down." Preserving a project-based Section 8 property keeps those subsidies attached to local units rather than risking their loss if the property aged out of the program or converted to market rate.
The deal also shows how much of the preservation burden now lands on local negotiation. With no new project-based Section 8 awards flowing, the federal contribution to this transaction is largely confined to the existing HAP contract and the tax expenditure embedded in the bonds and credits; the city supplies the tax discount, and the developer supplies the equity gap through a sponsor loan and deferred fees. Communities without an affordable housing fund or a practiced PILOT process often cannot close that last piece, which is one reason aging Section 8 stock keeps converting or deteriorating in smaller markets.
The proposal arrives as the city quantifies its housing needs. Columbus's 2024 housing study found a need for housing of all types, from affordable housing to senior downsizing options to units for higher earners. Age-restricted properties with project-based contracts are among the hardest assets to replace once lost, because new project-based Section 8 awards are rare and construction costs have risen well beyond 1978-era replacement budgets.
The Fairington structure is a textbook current-era preservation stack: LIHTC equity with tax-exempt bonds, a municipal PILOT sized through negotiation, sponsor lending, deferred fees, and a long land-use restriction, all wrapped around an occupied Section 8 building with minimal resident displacement. For owners of aging project-based Section 8 properties, the deal illustrates three practical points. First, PILOTs are negotiable: Glick's starting ask moved from $40,800 to $68,000, and the final number still sits well below the $160,000 full liability. Second, the municipal affordable housing fund gives cities a policy rationale to accept the discount, because the payments become a visible, recurring contribution rather than a tax write-off. Third, resident-relocation planning is now a core part of the pitch to local officials, not an afterthought; Glick's two-night displacement plan and ADA-unit provisions were central to its council presentation.
Owners considering a similar approach should also note the sequencing: Glick arrived at the council with its financing stack, per-unit budgets, and resident plan already assembled, so the PILOT was the last piece rather than the first question. Municipal officials respond better to a tax-discount request when the rest of the capital structure is visibly committed, because it demonstrates that the discount closes a real gap rather than padding returns.
Second reading of the ordinance could come as soon as the council's November 4 meeting. If approved, Glick would proceed toward a tax-credit closing, with construction phasing to follow. Items to watch: whether second reading amends the payment schedule, the timing of the bond and LIHTC closings, and the publication of the relocation schedule for residents. NSPIRE Wire will track the final vote.
The Columbus, Indiana, City Council voted 7-0 to advance a PILOT agreement supporting Gene B. Glick Co.'s $23.76 million rehabilitation of Fairington of Columbus, a 136-unit Section 8 senior property built in 1978, The Republic reported.
Glick would pay at least $68,000 annually with 3 percent yearly increases for 30 years, below the property's $160,000 current tax liability; more than $3.2 million would flow to the city's affordable housing fund.
The financing includes $12.5 million in tax-exempt bonds, about $7 million in LIHTC equity, a $2.5 million sponsor loan, and $1.7 million in deferred fees; construction runs about $51,344 per unit.
Residents would be displaced only about two nights for interior work, longer for ADA units, with hotels and transportation paid by the developer; a land use restriction keeps the property affordable for at least 40 years.
Second reading could come as soon as November 4; the deal is a current model for preserving aging project-based Section 8 stock through negotiated local tax relief.
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