The Indiana Financial Authority (IFA) has approved the “aggregating” of more than $23 million in recovery-zone bonds sought by the Portage-based developer looking to build an indoor sports complex in the Town of Chesterton.

Tony Czapla, a principal of Portage-based Persistence LLC, told the Chesterton Tribune today that he received an e-mail on Tuesday from IFA allocating a total of $23,499,000 in recovery-zone bonds and assigning those bonds—committed by a total of six Indiana counties—to Porter County.

With a commitment already of $8,561,000 in bonds from the Porter County Commissioners, Persistence LLC currently has authorization to sell a total of $32,060,000 to finance the sports facility.

Czapla—who has previously put the cost of the project at $40 million—said that he and his partners “will continue to go after additional bonds.”

The breakdown in county commitments: Elkhart, $7 million; Jasper, $1.581 million; LaGrange, $3.484 million; LaPorte, $6.898 million; Marshall, $3.828 million; Newton, $708,000; Porter, $8.561 million.

“I can’t personally tell you how humble and grateful we are that these seven counties have together—both Republicans and Democrats, all bipartisan—recognized that this project is not only in the best interests of Northwest Indiana but will benefit their children. You’ve got all these county commissioners who could have stood on regional differences but instead who came together. That’s the real story.”

The next step in the process will be for the Porter County Commissioners to assign the “aggregated” or bundled bonds to the Chesterton Economic Development Commission (CEDC), which would—if it agrees to greenlight the project—be responsible for administering those bonds. The Chesterton Town Council is currently seeking to fill several vacant seats on the CEDC, which has been dormant for years.

The facility would be built on approximately 28 acres of the so-called Rossman property, 55 acres sited immediately south of the Indiana Toll Road and east of Ind. 49 and annexed by the Town of Chesterton in 1997.

The complex would feature three “air-supported structures”—that is, pressurized domes—having an aggregate of well over 100,000 square feet.

Those domes would be capable of providing venues for a wide variety of athletic competitions: baseball and softball, basketball, volleyball, track and field, soccer, and even extreme or “action” sports. There would be training facilities too and a golf driving range.

Czapla has said that Persistence LLC is also in discussion with hoteliers and is considering an indoor water park.

In addition to hosting local, regional, and even some national athletic tournaments, the facility could also attract music and other entertainment events, Czapla has said.

Recovery-zone bonds have been made available through the American Reinvestment and Recovery Act (ARRA) of 2009. Under ARRA, eligible companies may sell those bonds to banks and other lending entities at a low interest, while—as an inducement to buy them—those banks are exempt from paying income tax on the interest earned on the sale.

As Porter County Redevelopment Commission (PCRC) Director John Shepherd explained, “If the banks don’t have to pay income tax, the interest rate they charge goes down. It’s an incentive for lenders to lend and borrowers to borrow. And it’s on the federal dime.”

Shepherd—who emphasized that the PCRC is not itself in any way connected with Czapla’s project but is merely speaking for his own part as someone familiar with recovery-zone bonds—noted that the advantage to counties whose commissioners have declared their jurisdictions “recovery zones” under ARRA is that they “can decide which businesses they want to see get the money.” It’s a way, in other words, of controlling development.

The Porter County Commissioners declared Porter County a recovery zone in April, exactly with the idea of accessing subsidies for developers under ARRA.

Recovery-zone bonds are not backed by local property or income taxes. Who then is on the hook if a company which has sold these bonds goes belly up? “The bank is on the hook,” Shepherd said. “It’s like any other loan the bank would made. Before they make a loan, the bank will do its due diligence to see if it’s a worthy loan.”

“Just because this or that business has the ability to borrow” under ARRA—as Persistence LLC does now with Tuesday’s decision by IFA—“doesn’t mean that there’ll be a bank willing to lend the money,” Shepherd added.

Czapla told the Tribune today that he and his partners “have been in active discussion with banks, brokers, and hedge funds about buying these bonds.”

There is one last catch. There’s a time limit. Under ARRA, the bonds must be sold before midnight on Dec. 31, when authorization for the recovery-zone facility formally expires.