Shelbyville and Local Government and Taxes and Regional News and Government and Shelby County and Economic Development

Casino-tax controversy lit fire under residents of Fairland, a long-forgotten town

April 20, 2009

To its 19th century founders, the town of Fairland must have appeared poised to become a booming metropolis.

The Cincinnati-St. Louis rail line ran diagonally through the center of town, laid out in a perfect rectangle. And, title researcher Rick Daily was amused to find, the original maps show street rights-of-way that are 66 feet wide.

"The people who laid out the town of Fairland thought it was going to be Indianapolis," Daily said with a laugh.

Daily also is a member and president of the first town council to serve Fairland in more than 100 years. The town of 559 was revived last August after rural Shelby County residents lost a battle with the city of Shelbyville over tax revenue from the Indiana Live Casino.

With a town government behind them, Fairland-area residents hope any future growth will be to their benefit.

"We want to control our own destiny," said Craig Larkey, co-owner of a family insurance business that's based in Fairland. "We found out we weren't in control."

Until 2008, Fairland was an unincorporated area in the rural northwestern part of Shelby County. Although Exit 109 on Interstate 74 is called the "Fairland" exit, key developments immediately east—including the opening of the Indiana Downs horse track in 2002 and the recently opened casino—lie within the city limits of Shelbyville.

Shelbyville's central business district is several miles south, but the city legally annexed the land east of I-74 via its municipal airport, which is off Fairland Road.

The casino's flashing lights, visible for miles across flat fields, serve as a constant reminder that most of the casino's fiscal benefits will go to Shelbyville. Indiana Live could add $947 million to the county's tax base. That's according to the county's March 1 assessment, which included the parking garage and surrounding land.

County Auditor Amy Glackman is one of the Fairland-area residents who fought Shelbyville's proposal last year to create a tax-increment financing district, or TIF, around the casino, Indiana Downs, and other businesses northeast of I-74.

The TIF district will funnel tax revenue generated within its boundaries toward Shelbyville's economic development projects. One of the first projects on the drawing board is an $18 million limited-access road, connecting Shelbyville's industrial park to I-74.

The TIF means the rural Northwestern Consolidated School District can't take advantage of the casino's property tax revenue—estimated at $1 million a year—to lower its rate.

"Everybody in the whole county is losing on this," Glackman said.

Shelbyville Mayor Scott Furgeson contends the TIF opposition was limited, but the city is throwing rural residents a bone. Northwestern schools will get a $1 million lump-sum payment from the TIF district.

Shelbyville's west-side connector would run for 3.69 miles through unincorporated farmland. Starting at Mausoleum Road, west of Shelbyville, the two lanes would take industrial-park traffic north to Fairland Road, one-half mile west of Exit 109, essentially creating a back door to the interstate.

In Shelbyville's long-term plans, the west-side connector is just the first stage of a ring road connecting I-74 and State Road 9. The loop would allow traffic to bypass downtown, encouraging development along the way.

Although Shelbyville may resort to eminent domain to acquire the rights-of-way for the west-side connector, Furgeson said Fairland shouldn't fear encroachment.

"We have no plans to grow or expand past where this road is being developed," he said.

Long-running tension

The battle that erupted last spring over the TIF district reflected a tension that has long simmered in Shelby County, said Jamie Palmer, senior analyst at IU's Center for Urban Policy and the Environment.

"Having worked on a few projects there ... the community is divided over whether they want to grow or not," she said.

As a city, Shelbyville's dominance is typical of rural-versus-urban struggles, Palmer added.

"They have the resources to draw development, and development lets them do lots of things," she said.

Fairland activists insist they aren't antigrowth. Larkey noted that the school district suffers from declining enrollment, a trend that only adds to the tax burden on rural residents. He added that his stance on growth should be obvious.

"I'm in the insurance business," he exclaimed.

Larkey, Glackman and two former county officials, Lynn Bass and Tami Grubbs, organized against Shelbyville's TIF proposal.

They gathered signatures and hired a lawyer, but they lost. Throughout the battle, Larkey said, lawyers advised them that, without the backing of a municipality, their chances weren't good.

The topic of incorporating Fairland has come up several times over the years, Glackman said, but the process always seemed too cumbersome. This time, several members of the group realized it could be simpler than they'd imagined.

A local history book published in recognition of Fairland's 150th anniversary mentions that Fairland had been incorporated once, in 1866. For some reason, the town council stopped meeting before the turn of the 20th century, but never dissolved.

The activists recruited Daily to track down the courthouse documents, and hired a lawyer to help kick-start the process of reactivating local government.

What the folks want

The new council is proceeding with caution.

Daily said he is in no hurry to set up offices, or move meetings out of the local fire department's crew lounge.

Gesturing toward the worn couch and recliners where members of the public sit, he said, "People are more relaxed. You get a lot more conversation, a better idea of what folks want."

Shelby County Republican Chairman J.R. Showers appointed Daily and members John Hanson and Jeremy Creech, along with Clerk-Treasurer Christine Brinson, to serve through Dec. 31, 2011. (State law requires the appointments to be made by the party controlling the Secretary of State's Office.) The Fairland council set a 2009 budget of $39,000, but has yet to receive any share of state and county taxes.

Glackman, who lives outside the Fairland limits, predicted that the town's initial property tax rate will amount to less than 1 cent per $100 of value.

That doesn't mean the municipal government's presence has gone unnoticed. On April 7, the town council moved its meeting into the fire department garage to accommodate the dozen people on hand to hear a presentation from Indiana American Water.

The Voorhees, N.J., company is building a water treatment plant to serve Greenwood and hopes eventually to extend a 16-inch main southeast to Shelbyville. If that happens, Fairland residents and businesses would have an opportunity to connect.

"That's a lot of opportunity for development in that area," said Deron Allen, director of western operations for Indiana American Water. "It could be somebody that puts in a factory. It could be a subdivision."

American Water won't say how soon it could extend the main, as the project would depend on demand from Shelbyville.

Allen noted the number of cars zipping in and out of a new gas station at Exit 109 and plans for a nearby hotel.

"That could easily use a tremendous amount of water, which could help out our schedule on this," he said.

Despite Fairland's fledgling state, Furgeson, Shelbyville's mayor, said he expects to see some competition between the two communities over future developments.

"They have a great opportunity to grow," he said. "They're roughly 2-1/2 miles from [Interstate] 74. That road that leads into Fairland is a very nice road, and it's ripe for development."

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