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Kosciusko County Redevelopment Commission discussed existing tax increment financing (TIF) districts and whether the economic impact maps should be drawn differently than the assessed areas during a Tuesday, Oct. 6 meeting.
Due to several members missing the meeting for various reasons, the members in attendance discussed actions but did not pass any motions since there was a lack of quorum.
Commission President Doug Hanes also noted the commission did not meet in August due to severe weather, which marked June as the last time the commission met.
Hanes told those in attendance that members of the commission, as well as Kosciusko Economic Development Corporation (KEDCO) Director of Projects and Operations Dawn Wilkinson, had met separately from the usual meetings as part of the Redevelopment Task Force, with a goal of revisiting existing TIFs and whether those TIFs should have the economic impact map drawn differently than the assessed area.
A TIF is a tool that captures new assessed value and property taxes from new development in a designated area. It captures increases in real property taxes and, at times, depreciable personal property taxes.
Wilkinson discussed two different TIF districts that currently exist, 30 West and South Shore. Both districts have “ample development” occurring, she stated. Other districts may be looked at in the future as economic development impact area expansions occur.
“Economic impact areas … will allow us to spend dollars that are collected within those TIF districts on a more broad spectrum area than just the TIF,” Wilkinson said. “Knowing there is economic development occurring within those is a good time to start thinking about, let’s go ahead and proceed with that impact area so we can capture that and make sure we continue growth around those bubbles.”
Commission member Dan Brown further explained Wilkinson, along with other commission members, tried to look at where development was occurring, and the economic impact maps were a suggestion of what the economic impact areas could look like.
“We tended to make (the areas) larger rather than smaller, and, so, they probably need some refinement … of course, it takes in the allocation area, but the whole thing is not an allocation area,” Brown said. “The idea is we can establish within that area additional allocation areas as needed, but the increment can be used for anywhere within that economic development area.”
Wilkinson said the economic development areas help KEDCO know where development is occurring and identify areas where they can be “proactive in growth and not behind the 8-ball when it gets here.”
In response, Hanes said when the South Shore TIF area was completed, owners said, “If developers or builders see that the county sees us as an area of growth and support this project, by way of a TIF existing, it promotes growth.”
He asked Wilkinson if she had ever had a conversation with a developer or builder who’s distinguished between an economic development area and a TIF, meaning, if someone wanted to buy land and develop in one of the TIF areas, would it matter if they were in the economic development area or if they were in the assessed value area.
“Primarily what I would say to that is, yes, there may have to be revisions as developments come online within the impact area,” Wilkinson said. “Because, to your point, most developers, especially now, that is one of their ways to capital stack their projects, is to be within a TIF district.”
She added the commission made a “good proactive move” when they made the decision to TIF the South Shore area “as accurately as (they) did,” because that is “an advantage to the developer that’s coming in.”
That will allow for potential improvements to infrastructure to draw more development, and if development comes on-site, their developer’s plan may include plans to have TIF around their area to capture it as part of their capital stack, she said.
“This allows for more add-on development as it comes online as opposed to bonding it and then getting it stuck,” Wilkinson said.
“You’d lose your ability to finance it,” Brown added.
Hanes asked Brown about the areas that needed refinement.
“I think this commission would probably struggle with setting these areas because we don’t really know what’s going on,” Brown said.
The commission, as well as attorney Adam Turner and County Auditor Alyssa Schmucker, also discussed the benefits and drawbacks to making the economic impact areas larger than necessary.
“The way I see it, is, since … that map is not the assessed area, while it does include the assessed area, it just gives us a lot of latitude as to where projects may end up lying and our ability then to direct funds there,” Hanes said.
Turner said the economic impact study still needed to be done to explain why the map is being drawn this size.
“At some point, it becomes disingenuous if you’re just drawing broadly,” Turner said. “I would lean a little bit on those legal advisors; they can help assist in doing that …”
Wilkinson addressed Brown’s earlier statement about the farmland enclosed in the South Shore TIF.
“I think that you’re right in that there is a lot of farmland encompassed in that one,” Wilkinson said. “I could definitely see narrowing it more along the 13 corridor, kind of encompassing out past that middle school and down toward Webster … because I see that’s where … we’re going to see that growth.”
“It’s really helpful to work with KEDCO, because KEDCO is talking to people who would like to do things,” Brown said. “A lot of times those conversations are confidential … at the next meeting, I would like to suggest that we disband this task force and task KEDCO with bringing recommendations as it relates to the TIFs.”
“We’re happy to participate in that way and attend the meetings,” Wilkinson said on behalf of KEDCO.
Wilkinson stated while KEDCO wouldn’t be able to share the specific activity happening in an area due to confidentiality clauses, it could share if there was activity that may be happening, allowing the commission to make “intentional moves.”
In other business:
• Hanes announced his, as well as the commission’s, appreciation for KEDCO’s alignment with the Kosciusko County Redevelopment Commission.
“We’re going to look to them, really, as the client-facing, the developer-facing entity for the county, and then, as appropriate, when able, to bring those to us,” Hanes said. He said KEDCO will be in charge of vetting existing businesses who want to expand in the Leesburg TIF.
• Wilkinson and Hanes attended an event hosted by Wabash Valley Power Alliance in Kendallville, where Baker Tilly presented a PowerPoint on how they would explain a TIF. Hanes highlighted a few points in the presentation but reminded those in attendance that while TIFs are “broadly understood,” they are also nuanced and that the presentation is not the single answer for TIFs.
Hanes shared highlights from the presentation, including the purposes of TIFs, which further included the following points: to finance incentives or infrastructure needed to induce private investment, to encourage orderly economic growth in targeted areas and to redevelop blighted areas.
The commission discussed and determined that residential TIFs capture all assessed values, including commercial values, that are intended to go in an area.
• Kosciusko County Community Coordinator Amy Roe updated the commission on a project in the research and development phase concerning the wastewater plant in Etna Green.
The commission discussed the option of moving the bimonthly meetings to monthly meetings, but will discuss that further at the next meeting set for 1:30 p.m. Tuesday, Dec. 1.
