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CALL6: Tax trouble for once touted Kokomo building

Posted: 10:28 AM, Oct 07, 2017
Updated: 2018-12-28 15:28:39Z

KOKOMO, Ind. --  A once touted Kokomo project is now in tax trouble and is struggling to find viable tenants, Call 6 Investigates has learned

 

The Firestone building, 219 North Union Street, is listed on the county’s October 13 tax sale, records show.

 

In 2014, then Governor Mike Pence and mayors from Kokomo and Carmel gathered in front of Firestone Plaza to tout the expansion of California tech company Systems in Motion, now known as Nexient.

 

Job creation in Kokomo and Carmel was the hot topic of the 2014 news conference, and a state news release announced the tech company would create “up to 400 new high-wage jobs by 2017” and lease “up to 25,000 additional square feet of office space in the Firestone Building in downtown Kokomo.”

 

Instead, Nexient moved out of the Firestone Plaza in 2016, citing “maintenance and safety issues,” and relocated to North Washington Street in Kokomo.

 

Nexient was unable to tell Call 6 Investigates how many jobs they’ve created since the 2014 announcement.

 

“I apologize that I don’t have exact figures for you, but it’s not a massive number,” said Cristin Balog, Chief Marketing Officer for Nexient, on Friday. “I can see that we are currently recruiting for an open position in Kokomo on our website now.”

 

The deeded owner of the Firestone building is Home Banc Center, a Jeff Broughton company, records show.

 

Broughton has not paid taxes on the Firestone building in more than two years, according to the Howard County Treasurer Weston Reed.

 

“We have not received a payment on this property since May of 2015,” said Reed. “A tax sale is just a vehicle for us to collect delinquent property taxes. There’s schools, cities, towns, police departments that are all expecting this money and if it doesn’t get paid, then we can’t distribute it to them.”

 

Call 6 Investigates raised questions about the developer’s past back in 2014, including that Broughton settled charges with the Federal Trade Commission and is banned from providing mortgage loan modification and foreclosure relief services, although Broughton is not barred from doing real estate activity.

CALL 6 | Kokomo investor's past raises concerns | Work stopped on Kokomo development project amid planning concerns

 

The Firestone Plaza sign advertises coffee and lunch, but you can’t find those inside, more than three years after the announcement.

 

When Call 6 Investigates stopped by the Firestone building this week, we found missing glass, the elevator not working, construction debris and vacant offices.

 

Home Banc Center Inc, the deeded owner of Firestone building, is listed as “delinquent” status by the Nevada Secretary of State’s office.

 

The company has not filed required annual reports in several years, according to the Nevada Secretary of State’s office.

 

As Call 6 Investigates reported in 2014, Kokomo Mayor Greg Goodnight sold two of his personal properties to Broughton for $100,000.

 

As of October 2017, Broughton has not received any city tax dollars for any of his projects including Firestone, according to deputy mayor David Tharp.

 

“Since it is owned and operated by a private developer, at this point we don’t really deal with any of the interactions,” said Tharp. “It isn’t really our place, it isn’t really local government’s place to get in between a tenant and landlord dispute.  For any of the tenants that didn’t’ work out, that’s really between them and the landlord.”

 

Tharp said beyond the city deeding over the Firestone building years ago to one of Broughton’s companies, the city does not have a relationship with him.

 

“We have no other ties,” said Tharp.  “I’m a firm believer, as is everyone here at city hall, that folks should pay their taxes. Those property taxes help fund our parks, our libraries and our schools.”

 

When Call 6 Investigates stopped by the Firestone building, Broughton’s assistant was sitting in Nexient’s old space and said Broughton was out of town and unavailable for an on-camera interview.

 

Broughton’s attorney released a statement to Call 6 Investigates in which Broughton pointed out only three of his properties, or 6% of current property holdings, have unpaid taxes.

Broughton said the other delinquent properties, 117 East Sycamore Street and 204 North Main Street, are both unoccupied.

 

“The Firestone Building, which is occupied, however, do not have a lease that extends past a point where we could lose ownership in the building by not redeeming the tax certificate,” said Broughton in a statement. “I can say without reservation, if the tax certificate were to be sold at the tax sale, it would be redeemed within the 12 month redemption period.”

 

Broughton also pointed out there are more than a dozen property owners who owe more than his.

 

Broughton said his project, The Candy Shoppe, is open for customers.

 

“The space is currently occupied by a great business that is beneficial to the community,” said Broughton in his statement. “Take a look at downtown Kokomo and all that has occurred over the past four and a half years. I am proud to have been a small part of it. I’m looking forward to the next four and a half years.”

 

The Firestone building has several tenants, including a counseling office, a radio station and an IU Kokomo Art Gallery.

 

Indiana University Kokomo has no problems with the space we occupy downtown,” said Marie Lindskoog, spokesperson for IUK. “We continue to operate a successful art gallery.”

 

Howard County Commissioner Paul Wyman said he’s hopeful someone can turn things around.

 

“To me a best-case scenario is getting it up for tax sale and getting it back on the tax rolls, getting someone to buy it and hopefully paying taxes and providing services,” said Wyman. “The right players can come to the table and try to turn some things around. That's certainly our hope.”

 

The tax sale is scheduled for October 13, but Broughton has until October 12 at 3 pm to pay $15,635.54 to remove the Firestone building from the list.

 

The Firestone building is valued at $212,100, records show, but someone could potentially buy a lien against the property for a starting bid of $19,678, Reed said.

 

Home Banc Center would have a year to come in and redeem the property and pay back all the taxes and interest.

 

If the taxes are not paid by then, the lien holder could take Broughton to court and get the property deeded over to them.

 

“It would then be completely up to the new owner to determine what they want to do,” said Reed.

Broughton and his companies owe $28,805.65 in delinquent taxes, Reed said.

 

Call 6 Investigates also reached out to Kipcor 219 LLC, the company formed to get the property financed, but we were unable to get a comment.

 

Call 6 Investigates also checked with the Indiana Economic Development Corporation to find out if Nexient received any tax dollars to create jobs in Kokomo.

 

IEDC spokesperson Abby Gras said the company has not claimed any tax credits, nor has IEDC awarded any funding to the tech company.

 

“There are a number of reasons why companies may not claim incentives – sometimes growth plans are delayed, sometimes business strategies shift, sometimes they simply can’t fill the jobs,” said Gras. “That’s the great part about the state’s incentives. Because they are conditional, we are able to incentivize companies to grow, but the companies must uphold their commitment in order to be eligible to claim those incentives, which protects taxpayer dollars.”

 

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