City budget and City Government and Local Government and City-County Council and Government & Economic Development and Government and Economic Development

TIF district expansion proposal gets committee OK

August 28, 2012

A proposal that would expand a downtown tax-increment financing district to the northeast and northwest was approved Monday by the City-County Council's Metropolitan and Economic Development Committee.

The plan, which awaits consideration of the full City-County Council, is intended to support redevelopment of the Massachusetts Avenue fire station site and projects such as downtown apartments, a new Marsh grocery store and a high-tech corridor along West 16th Street.

The measure wasn’t on the committee’s agenda. The 5-1 vote came in the last moments of the 90-minute committee meeting and after committee chairman Steve Talley attempted to adjourn the meeting. He walked out before the vote took place.

Talley, a Democrat, previously said he wouldn’t give the vote a hearing until the city adopts new policies on TIF districts.

But other Democrat council members, including Vop Osili, had resolved their concerns with officials of Mayor Greg Ballard's administration who sought the TIF district expansion.

The agreement that won over Democrats on the committee includes using more than $13 million in city funds for workforce training programs and use of minority employees on projects in the district.

“It’s something we’ve been working with them on. It’s something they’ve been concerned about,” Ballard spokesman Marc Lotter said of the workforce provision in the agreement with Democrats.

So-called TIF districts capture the additional tax revenue generated by projects in the district to cover the costs of new infrastructure or other government spending that make the projects possible.  TIFs have grown more popular since Indiana capped property-tax rates four years ago.

But the growing use of TIF districts has drawn concerns that new tax money is diverted to the detriment of public entities such as schools that rely on tax revenue.

Democratic counselor Brian Mahern created a study commission – chaired by Talley – that developed recommendations on future uses of the economic development tool.


 

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