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'Taking on more debt is something they can't afford': Small businesses still struggling with construction in New Albany

A New Albany City council member says it wasn't smart to pay $3.3 million in tax bonds for a hotel, while several Main Street businesses struggle with construction.

NEW ALBANY, Ind. — It's been one year since construction started on Main Street in New Albany, Indiana.

The city started plumbing and water improvements on the stretch of Main Street from State Street to East Third Street in May 2022. Business owners say there was a brief opening before the Main Street Revitalization project began on Sept. 7.

Since September, it has been nonstop construction.

"They (customers) would call us, and they couldn't navigate their way around the construction site," Todd Coleman, owner of Classic Furniture and Sleep World on Main Street, said.

In April, one-way traffic was reopened eastbound, and sidewalks on the south side of Main were completed.

Now the loose gravel sidewalks and orange fence have moved to the north side of the street. Business owners have been given October as an estimated completion date, right before Harvest Homecoming.

"It's hard for me to imagine a timeline, coming up on a year and a half with the water, to get a quarter mile of road done. And how are our businesses going to survive?" City Council member Josh Turner (5th-District) said.

Coleman made his furniture shop downtown an appointment-only location. The "OPEN" sign is dark. He opened a third location in Jeffersonville and moved his base of operations there.

"We really had no choice," Coleman said. "I don't feel like the city council or the mayor has put forth their best foot to help the businesses in downtown."

The city and Floyd County both contributed $50,000 to a fund that was run through One Southern Indiana for business relief. Business with a shop downtown and less then 50 employees could apply for a zero-interest loan up to $25,000.

Coleman said for his business, that wasn't enough money to make a difference. He calls it a "godsend" he was able to find a new showroom in Jeffersonville at an affordable price.

Many other business owners were unhappy with the terms of the loan program.

"For a lot of these business owners, taking on more debt is something they can't afford," Turner said.

About 100 yards north of the construction, plans are underway to revitalize the historic Elsby Building at the corner of Pearl Street and East Springs Street. 

A development group led by Steve Resch and Chad Sprigler is turning the building into an 82-room boutique hotel.

The project has a price tag of $29 million, and on May 1, the City Council agreed to carve the building out of an existing tax increment financing district (TIF) and create a new one just for the building.

As part of the new TIF, the City of New Albany will give the developers $3.3 million in bonds and incentives.

"I just think we're setting a bad precedent to cut out a TIF and give preferential treatment to certain developers while these Main Street businesses are suffering," Turner said.

Turner voted against the project and said he has many other reasons for doing so besides the struggling businesses.

A spokesperson for the City of New Albany did not respond to WHAS11's questions before the deadline.

"With a hotel, you think, 'What's the draw?' Well, if we're killing our Main Street businesses, what're you going to do when you come to the hotel?" Turner said.

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