Marsh Property Removed From Development Area Expansion
June 6, 2017 at 4:23 p.m.
By David [email protected]
Monday afternoon, the Warsaw Redevelopment Commission approved a confirming resolution to expand the tax increment finance area as originally proposed at its May 1 meeting but exclude the Marsh property at 500 S. Buffalo St. included that had been added to the expansion area by two other city boards in May.
The expansion will take in property along Ind. 15 from Fort Wayne Street to Gilliam Drive, east to the railroad tracks and west to include Center Lake and much of the central business district south to Winona Avenue.
On May 8, the Plan Commission approved a resolution to expand the Central Development Area but added the Marsh property to it on the recommendation of City Planner Jeremy Skinner. The City Council followed suit.
But in the confirming resolution presented to the Redevelopment Commission Monday for final approval, the Marsh property was absent.
Mayor Joe Thallemer told the commission, “The reason that that was changed is the ‘dark store,’ the way they’re being appraised. There’s a potential that if Marsh was in the TIF district, if the Marsh building was appraised low, that could have a negative impact on the debt obligation in the TIF district. It may not happen, but rather than take that risk, the thought was to not take the risk and leave the Marsh property out of it.”
The dark store theory primarily concerns the property taxation of big-box stores, behemoth department stores, hardware sellers and other outlets often running to 50,000 square feet or more, according to the website comptroller.texas.gov. The theory of property valuation, championed aggressively by many big-box retailers, suggests that commercial properties should be appraised and valued the same whether they’re operating or shuttered. They favor appraising all big-box properties as if they were vacant or “dark” to calculate property value, arguing these locations will be difficult to sell because they have little appeal to subsequent buyers. In essence, they’re asking that these properties be appraised according to how the next occupant may use it.
Dark store proponents often ask that the value of their property be reduced by more than half. Appraisal districts, by contrast, appraise such buildings according to their “highest and best use,” which in practice means appraising them as operating locations.
Thallemer said there’s been other box stores that move on and leave store buildings behind. “There’s been court cases in Indiana that have issues with business personal property tax and evaluation of those properties could be lowered and that could have a negative impact on our TIF district,” Thallemer said.
Randy Rompola, bond counsel with Barnes & Thornburgh, said the “dark store” would be an issue but “even an obsolescence credit, even if (Marsh) remained closed next year, it’s possible they might seek an appeal from their current assessment for obsolescence because now it’s a vacant building. The mayor is correct, there also could be impact based on the ‘dark store’ theory.”
He said the Indiana Department of Local Government Finance is supposed to come out with rules based on legislation adopted last year that might take away some of the “dark store” negative impact but it hasn’t come out with any yet.
“In either case, the decision was made it would be better to leave (Marsh) out. At some point in the future, if there’s a project there that requires some incentives, it would not be that difficult to add it back in,” Rompola said.
As part of the legal process for the resolution, the commission held a public hearing. North Detroit Street resident Steve Brown asked what the expansion would do to the property taxes within the district expansion. Rompola said on individual properties it has no impact on the property taxes.
After closing the public hearing portion of the meeting, the commission approved the confirming resolution.
Rompola said now that all three boards have approved the expansion, when Skinner returns from vacation next week, the confirming resolution will be recorded and the county auditor will be notified.
In other business, the commission approved:
• Claims, including $113,800 to Medtronic Asset Management for the Warsaw Economic Development Bond of 2000 payment; $58,931.25 to Regions Bank Corp. for a Warsaw Commons bond payment; $94,552.50 to Regions Bank Corp. for city hall project bond payment; $15,000 to Seal Master of Indianapolis for 3,800 gallons of liquid road for the east half of Polk Road, the west half was done in 2016; $98,354 to Xylem Water Solutions USA for the Danek lift station pumps; and $72,516.45 to Wessler Engineering for the wastewater plant engineering.
• An hourly contract with HJ Umbaugh & Associates to complete a fiscal plan for the Airport Industrial Park Annexation.
After the fiscal plan is completed within the next several months, the city can move forward with the public hearing process to start that annexation, which will take another six to eight months.
The annexation area in general is between the current airport and U.S. 30. It includes the whole industrial park, and is about 400 acres from CR 200N to 250N, but may change during the public hearing process.
The purpose is to provide sanitary sewer service to industries in the park.
• A statement from the commission that its Warsaw Central, Northern and Winona Interurban TIF districts do not have any “excess assessed value” that may be allocated to overlapping taxing units. The state passed a new law requiring the city council’s affirmation of the notice if the district exceeds 200 percent needed for debt obligations and/or other projects. The city council approved the statement at its meeting Monday night.
The statement will be sent to the Kosciusko County government, county council, Plain and Wayne townships, city of Warsaw, Warsaw Community School Corporation, Warsaw Community Public Library, the county’s solid waste management district and Prairie Township.
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Monday afternoon, the Warsaw Redevelopment Commission approved a confirming resolution to expand the tax increment finance area as originally proposed at its May 1 meeting but exclude the Marsh property at 500 S. Buffalo St. included that had been added to the expansion area by two other city boards in May.
The expansion will take in property along Ind. 15 from Fort Wayne Street to Gilliam Drive, east to the railroad tracks and west to include Center Lake and much of the central business district south to Winona Avenue.
On May 8, the Plan Commission approved a resolution to expand the Central Development Area but added the Marsh property to it on the recommendation of City Planner Jeremy Skinner. The City Council followed suit.
But in the confirming resolution presented to the Redevelopment Commission Monday for final approval, the Marsh property was absent.
Mayor Joe Thallemer told the commission, “The reason that that was changed is the ‘dark store,’ the way they’re being appraised. There’s a potential that if Marsh was in the TIF district, if the Marsh building was appraised low, that could have a negative impact on the debt obligation in the TIF district. It may not happen, but rather than take that risk, the thought was to not take the risk and leave the Marsh property out of it.”
The dark store theory primarily concerns the property taxation of big-box stores, behemoth department stores, hardware sellers and other outlets often running to 50,000 square feet or more, according to the website comptroller.texas.gov. The theory of property valuation, championed aggressively by many big-box retailers, suggests that commercial properties should be appraised and valued the same whether they’re operating or shuttered. They favor appraising all big-box properties as if they were vacant or “dark” to calculate property value, arguing these locations will be difficult to sell because they have little appeal to subsequent buyers. In essence, they’re asking that these properties be appraised according to how the next occupant may use it.
Dark store proponents often ask that the value of their property be reduced by more than half. Appraisal districts, by contrast, appraise such buildings according to their “highest and best use,” which in practice means appraising them as operating locations.
Thallemer said there’s been other box stores that move on and leave store buildings behind. “There’s been court cases in Indiana that have issues with business personal property tax and evaluation of those properties could be lowered and that could have a negative impact on our TIF district,” Thallemer said.
Randy Rompola, bond counsel with Barnes & Thornburgh, said the “dark store” would be an issue but “even an obsolescence credit, even if (Marsh) remained closed next year, it’s possible they might seek an appeal from their current assessment for obsolescence because now it’s a vacant building. The mayor is correct, there also could be impact based on the ‘dark store’ theory.”
He said the Indiana Department of Local Government Finance is supposed to come out with rules based on legislation adopted last year that might take away some of the “dark store” negative impact but it hasn’t come out with any yet.
“In either case, the decision was made it would be better to leave (Marsh) out. At some point in the future, if there’s a project there that requires some incentives, it would not be that difficult to add it back in,” Rompola said.
As part of the legal process for the resolution, the commission held a public hearing. North Detroit Street resident Steve Brown asked what the expansion would do to the property taxes within the district expansion. Rompola said on individual properties it has no impact on the property taxes.
After closing the public hearing portion of the meeting, the commission approved the confirming resolution.
Rompola said now that all three boards have approved the expansion, when Skinner returns from vacation next week, the confirming resolution will be recorded and the county auditor will be notified.
In other business, the commission approved:
• Claims, including $113,800 to Medtronic Asset Management for the Warsaw Economic Development Bond of 2000 payment; $58,931.25 to Regions Bank Corp. for a Warsaw Commons bond payment; $94,552.50 to Regions Bank Corp. for city hall project bond payment; $15,000 to Seal Master of Indianapolis for 3,800 gallons of liquid road for the east half of Polk Road, the west half was done in 2016; $98,354 to Xylem Water Solutions USA for the Danek lift station pumps; and $72,516.45 to Wessler Engineering for the wastewater plant engineering.
• An hourly contract with HJ Umbaugh & Associates to complete a fiscal plan for the Airport Industrial Park Annexation.
After the fiscal plan is completed within the next several months, the city can move forward with the public hearing process to start that annexation, which will take another six to eight months.
The annexation area in general is between the current airport and U.S. 30. It includes the whole industrial park, and is about 400 acres from CR 200N to 250N, but may change during the public hearing process.
The purpose is to provide sanitary sewer service to industries in the park.
• A statement from the commission that its Warsaw Central, Northern and Winona Interurban TIF districts do not have any “excess assessed value” that may be allocated to overlapping taxing units. The state passed a new law requiring the city council’s affirmation of the notice if the district exceeds 200 percent needed for debt obligations and/or other projects. The city council approved the statement at its meeting Monday night.
The statement will be sent to the Kosciusko County government, county council, Plain and Wayne townships, city of Warsaw, Warsaw Community School Corporation, Warsaw Community Public Library, the county’s solid waste management district and Prairie Township.
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