Judges resist call for new courthouse
Terre Haute civic leaders view facility, which could cost up to $18 million, as a key part of downtown revitalization.

By R. Joseph Gelarden
Indianapolis Star

joseph.gelarden@indystar.com
June 13, 2004

TERRE HAUTE, Ind. -- A major Terre Haute real estate deal -- hailed as a key element in the city's downtown revitalization effort -- has hit a snag.

Chief U.S. District Judge Larry J. McKinney said the judiciary does not want to vacate the historic federal courthouse and move into a proposed $16 million to $18 million building because McKinney said the rent would be too high.

The art-deco Federal Courthouse and Post Office at Seventh and Cherry streets in downtown Terre Haute was built in 1931.

Attorneys and judges love the district courtroom -- acknowledged as one of the most dramatic in the state -- featuring a walnut judge's bench, magnificent lighting and windows with velvet curtains, topped off with a 12-foot-by-18-foot oil painting representing the signing of the Magna Carta.

Faced with increased upkeep costs of the older building and security upgrades for government buildings mandated after 9/11, postal officials decided to move out of the building.

Since 2000, Terre Haute officials have worked with Sen. Evan Bayh and Sen. Richard Lugar to help repair the old building and turn it over to Indiana State University. Tentative plans call for the university to relocate its business school in the building. In 2001, Bayh announced $2 million in federal money for repairs and in October 2003, the U.S. Postal Service, which owns the building, signed a deal to give it to Indiana State University.

Under terms of the deal, the General Services Administration, the government agency in charge of buildings, pledged to upgrade the building before it was turned over to Indiana State.

In January, Congress appropriated an additional $4.6 million to upgrade the building. The GSA then proposed to build a new downtown courthouse and has begun the preliminary work to find a site and design a building.

For years, parts of downtown Terre Haute have been in a downward spiral. Civic leaders hoped a new courthouse and reuse of the old building would provide a spark to revitalize the center of their community.

McKinney's recent pledge not to vacate the old courthouse took community and political leaders by surprise.

"Everything was fine until the judge told us the rent situation would be difficult," said Tom Sugar, Bayh's chief of staff. "We are trying to sort all this stuff out."

Terre Haute Mayor Kevin Burke was stunned. "We find it puzzling. We have had people working on this for years," Burke said.

In addition to the district and bankruptcy judges, the building houses court clerks, the U.S. Marshal's office, federal probation offices, conference rooms, a law library and a holding cell for prisoners.

Two weeks ago, McKinney told Bayh the judges do not want to move out of the old building. He said the courts are faced with a budget crunch and said he had to lay off two workers this year.

"The current budget crunch limits our ability to pay rent. We have to think of different ways of accommodating our needs," McKinney told The Indianapolis Star recently.

The national arm of the federal judiciary backs up McKinney's concerns.

The Administrative Office of the Courts told the General Services Administration it is imposing a moratorium on projects similar to the new facility at Terre Haute, said GSA spokesman David Wilkinson. Current building rent is $500,000 a year. Projected rent for a new $18 million building could reach $1 million a year, he said.

Instead of a new building, McKinney said Indiana State could take over the building as planned and the courts would pay rent to the university.

Indiana State officials rejected that idea.

According to a statement from Greg Goode, executive assistant to Indiana State University President Lloyd W. Benjamin, "The United States General Services Administration has identified the Terre Haute Federal Building as a significant security risk while the federal judiciary remains an occupant. Realizing the security risks associated with the Federal Building that includes the presence of the federal judiciary, Indiana State University could not in good conscience subject its students to these risks."

Burke and McKinney say they want the federal courts to stay in Terre Haute. "It is part of what we are," Burke said.

He said there is a need for a federal courthouse in Terre Haute with the federal prison nearby. However, statistics show there is little criminal business for the federal judges in Terre Haute. In 2002, the Terre Haute division presided over cases involving 47 defendants, while in 2003, there were 35, according to court statistics.

However, bankruptcy cases are booming. There were 2,356 bankruptcy petitions filed in 2002, and 2,460 in 2003, according to court records.

McKinney, Bayh, Burke and others say they are trying to save the historic courthouse. Burke said he thinks the city and its redevelopment hopes are caught in the middle of a tenant-landlord squabble.

But he said the city still hopes to rescue the project. "The city stands ready and willing to accommodate the federal courts in any fashion we can produce," he said.

Sugar said Bayh is trying to work through the fiscal crisis and to please all the parties. "We are trying to find a way to keep the court in Terre Haute and get the rent situation under control," he said.

As for the new building, Sugar admitted the GSA plans might be "a bit oversized and overboard for Terre Haute."

"Senator Bayh will be involved in a fiscally responsible solution," he said. "Senator Bayh will not support a Taj Mahal federal building in Terre Haute."

But if the judges don't go along, it could be the end of the new building, Sugar said.