South Bend council to consider Matthews’ extension request

Years of controversy over a new apartment high-rise in South Bend could come to a head at tonight’s joint council meeting.

Developer Dave Matthews says due to construction delays caused by the pandemic, he should have more time before having to start paying full property taxes at 300 E. LaSalle in the East Bank Village area in South Bend.

In 2017, after months of contentious hearings over the height of the proposed apartment building, Matthews and the city finally agreed on terms of the massive development deal. The city agreed to give $5 million and a significant package of tax breaks that will allow Matthews to pay virtually no property taxes for 10 years. This 10-year abatement period began in 2021, but Matthews is requesting that the period begin in 2022, meaning he would begin paying full property taxes in 2032.

At its last meeting, the council tabled the resolution.

Mayor James Mueller declined to back him, citing the city’s ongoing lawsuit against Matthews that seeks to have him return the money, as well as penalties, for opening the apartments without a grocery store on the ground floor. Matthews eventually opened a store himself and says he’s been losing money so far.

Martin’s Supermarkets initially signed on, but left Matthews hanging a few months later when it was sold to Grand Rapids-based Spartan Nash, which had no interest in the project.

Matthews says the city has granted such extensions to 14 other tax abatement recipients whose projects were delayed by the pandemic.