City seeking to realign TIF areas
South Bend Tribune (IN), 2014-08-28
Aug. 28 -- SOUTH BEND -- The Department of Community Investment is proposing changes to the city's tax increment finance, or TIF, districts in order to better meet the city's economic development needs, reduce the negative impact of property tax caps and lower the burden on taxpayers.
The Redevelopment Commission will consider the changes this morning, followed by the Area Plan Commission and Common Council in September, Executive Director of Community Investment Scott Ford said Wednesday.
Assuming adoption by those three bodies, the changes will then come back to the Redevelopment Commission for final approval in October, Ford said, taking effect at the beginning of next year.
Among the proposed changes, drafted by Community Investment staff with input from the law firm of Faegre Baker Daniels and H.J. Umbaugh and Associates , a public consulting firm:
--The Airport Economic Development Area would be expanded to include Lincoln Way West and Western Avenue as well as the old Drewrys property and those portions of the South Bend Central (downtown) and Central Medical ( Memorial Hospital ) Development areas west of the St. Joseph River . The CMDA will be retired a year earlier than its 2015 scheduled date.
--The Douglas Road Economic Development Area would be retired at the end of 2018.
--The Northeast Neighborhood Development Area ( Eddy Street Commons /The Triangle) would be expanded to include Eddy Street south to the river, those portions of the South Bend Central Development Area east of the river, the Farmers Market, and Mishawaka Avenue east to Indiana University South Bend.
--The South Side Development Area would be expanded to include Scottsdale Community Center on York Road , with the included Erskine Village Allocation Area (Target/Kohl's) retired in 2018.
--The West Washington Chapin Development Area would be retired in 2018, excluding two small portions on its south and east sides, which would be included in the expanded Airport Economic Development Area.
Inclusion of Lincoln Way West and Western Avenue in the Airport Economic Development Area would enable the city to make recommended improvements to those two corridors as part of the "Main Streets Revitalization Plan," formerly the West Side Corridors Plan, Ford said.
"This gives us the tools to follow through and implement some of the things called for in that plan," he said.
In addition, property tax revenue that is currently captured in the areas set for retirement under the plan would be released to local taxing units such as schools and libraries, Ford said, reducing the overall tax burden in the city.
Those areas, including the South Bend Central, Central Medical and West Washington Chapin Development Areas and the Erskine Village Allocation Area, currently generate about $5.76 million annually in economic development revenue, Ford said.
"This is a very rational plan that serves the city and residents well by maximizing available resources while also reducing our overall tax burden and giving more resources back to the local taxing units," he said.
It also presents an opportunity for a "plan-driven economic development agenda," Ford said.
Ford said H.J. Umbaugh and Associates , the public consulting firm that helped draft the new TIF boundaries, is working on a financial analysis to determine the effect of the changes on tax rates and revenue.
The changes would reduce the total number of TIF areas in the city from six to four. At the same time, they would increase the amount of land tied up in TIF from about 9,100 acres to more than 9,800 acres, or about 37 percent of the city, Ford said.
Ford said the changes are not a response to recent legislation retiring so-called legacy TIF districts such as the airport and downtown TIFs, however, "We know TIF legislation continues to change ... and this is probably the best opportunity to address the boundaries of TIF in the near future."
Nor are the changes meant to funnel money from the Airport Economic Development Area downtown to fund the city's "Smart Streets" initiative, which seeks, among other things, to return two-way traffic downtown.
"This isn't being done for Smart Streets, but we will be looking to use TIF revenue to make infrastructure improvements as we continue to invest in the city," he said.
Ford added that property owners who end up in a TIF area as a result of the changes should not be concerned. "They will not experience a difference in how they pay taxes," he said. "'There's no increase in assessment associate with being in a TIF."
Common Council member Dave Varner , a member of the Redevelopment Commission , said Wednesday he is aware of the changes and in favor of moving the process forward.
"I don't have any reason to be standing in the way of it," he said. "Something has to be done. If it's a well thought out plan that makes sense ... and the proposed expenditures can be laid out, I think it makes sense."
Fellow council member Valerie Schey , for her part, expressed concern regarding the fact the proposed changes would increase the total amount of TIF area in the city. Schey also serves on the Redevelopment Commission .
"I had thought the goal as a city was to reduce the amount of land captured in TIF Districts, so when I looked at the two maps, I guess I was a little disappointed to see that's not the direction we're going," Schey said.
She also questioned the need to expand the Airport Economic Development area to include downtown, noting downtown, as opposed to other areas of the city, benefits from "a number of specialized funding sources" such as the Hotel-Motel Tax Fund and Professional Sports Development Fund .
"I'm supportive of expanding the Airport TIF to include Western Avenue and Lincoln Way West ," she said. "At the present time, until I hear more information, I have my concerns about expanding the Airport TIF to include downtown."
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