UPDATE: As expected, the land deal closed May 23.
Zionsville’s cash-strapped school district could collect almost $5 million from the town’s tax-increment financing district over the next 15 years if an unusual land deal is finalized later this month.
Zionsville Community Schools plans to use $3.4 million from a 2005 bond issue to buy 91 acres of prime Dow Chemical Co. property along 106th Street, keeping about nine acres to house a new warehouse and maintenance facility and selling the rest for $3 million to the town, which will make payments to the school district through 2028.
Indianapolis-based Rockland Development LLC, which struck the original land deal with Dow, has exclusive development rights for the site. It expects the first commercial building to be complete in 2015, and construction should continue for at least five years.
Members of the Zionsville Redevelopment Commission authorized the property acquisition at a special meeting May 10. Closing is scheduled for May 23.
A financial analysis prepared by accounting firm Crowe Horwath estimated development on the site, located within a TIF district, will generate more than $1 million a year in additional property tax revenue once buildout is complete.
And the town has agreed to split that bounty with the school district, which has struggled financially in recent years due to state property-tax caps and a new school-funding formula.
If the projections—and time line—hold true, Zionsville Community Schools could receive more than $4.8 million in TIF proceeds over the life of the deal. (The Redevelopment Commission also will repay $3 million in principal, plus $2.3 million in interest.)
It’s a creative way to find additional money for the school district, which cannot use the 2005 bond proceeds for anything other than land acquisition and construction projects. Payments from the town, on the other hand, are likely to be directed into the schools’ largely unrestricted General Fund.
The Redevelopment Commission also hopes to see a return on its investment. The town has agreed to spend an estimated $1.5 million on infrastructure improvements and expects the developed property to sell for about twice as much as the raw land.
What’s your take on the deal?