TIF district expansion proposal gets committee OK

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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.



  • Not quite
    Perhaps we'll just disagree on whether additional development brings about a need for additional property tax revenue. You certainly can't presume that all or even most of these residents will be new to Indy. In regard to your comment about the finances being there to support the TIFs, this blog post would suggest otherwise: http://hadenoughindy.blogspot.com/2012/08/big-time-bailouts-of-indys-tifs.html I don't claim to be an expert on Indy's TIFs, but I don't know how anyone can claim with a straight face that we need to provide subsidies in order to spur development on Mass Avenue or anywhere else downtown. If we can't get market-rate, privately financed development in our crown jewel, our downtown, how we can expect to ever see a privately financed, sustainable development anywhere in Indy?
  • reply
    These projects are in town, there will not be additional schools built (IPS already has more buildings than they can handle), there will not be additional library's built (the Central library would serve both of these proposed TIF locations). Hopefully, those moving into the new apartments may have some children that would go to the schools and increase enrollment, but they wont. These are generally yuppy and dink apartments, not family oriented. You also have to take into consideration the additional taxes the new residents pay. Take for example an estimated 1.5 residents for the new 330 unit apartments at the One America project, at 1.65% Marion county income tax, assuming a modest income of $50,000 (for downtown living), we get a total of $440k extra/year. This also does not include any additional revenue from parking, retail and the residents themselves who would be spending money around the adjacent businesses. The finances to support the TIF are there. When we get near the need for more schools and more libraries, Great!, but these projects and this TIF are not creating any problems. But, as previously mentioned, all TIF's should have an expiration date.
  • @PJ
    Just how do you pay for additional schools, libraries, transit, etc for the residents of these TIF-funded projects when the schools, libraries, transit, etc, are barred from getting additional revenue? No, the TIF itself (if adequate to pay back the debt) doesn't take away existing tax revenue, but it prevents any increase in tax revenue to go to schools, libraries, transit, etc, not to mention to the general fund for police, fire, and other essential services. When a City is growing, it needs additional revenue just to maintain a flat level of services. TIFs prevent the collection of the revenue that would allow for maintaining current levels of public services to a now larger base of constituents.
  • @Fred
    A TIF does not take away any money from schools or libraries. People need to understand how TIF's work. It is only the NEW value that is added to the TIF fund, this is new value that wouldn't be there otherwise because the project wouldn't be developed without TIF financing. The main problem is that the downtown TIF does not have a timeline, it will continue forever. There needs to be a set 20-30 year expiration date so that at some point, yes the new value will actually flow into the base.
  • Progress?
    Todd, These TIF districts are not "progress." They are taking property tax dollars away from things like public safety and schools and giving those tax dollars to private developers. There is no reason to do a TIF for the Mass Avenue project as that area is doing fine already and would develop without a TIF. Plus the TIF expansion includes area a long ways from Mass Avenue. All this is is about creating a slush fund for the Mayor so that he can spend it without council approval. Last time, he gave the Pacers $33.5 million of our property tax dollars...from a TIF. You think he's not going to do that. It's a myth that TIF is only about the increase in property taxes caused by the development. If the increased TIF revenue doesn't support the borrowing on the TIF, they have to dip into the base. And they do that all the time. We taxpayers are paying hundreds of millions of dollars to prop up these TIFs. TIFs inevitably lead to higher taxes.
  • Not quite?
    Forgive me if I'm wrong, but the projects still generate tax revenue for the city (and state) coffers in the form of income taxes, correct? And residential projects in these TIF districts bring in.... whats that? Residents? I too am glad that they were able to reach a solution.
  • You don't actually...
    ... add to City coffers by building things financed through TIFs because all the new tax revenue goes to pay back the money you "invested" to build the properties. So, there's no new revenues in the City coffers. The only way this makes sense is if there would never be any private development without these subsidies, and I don't believe that. They tell you that, by why wouldn't the developers tell you that when it's an easy way to get free money? If none of this development would ever occur here without these subsidies, then our City must be a really bad place with a very terrible future ahead.
  • Resolved issue
    I am glad the two sides could come together for the common good and resolve this issue. That is what makes Indy great is our city can work together to make progress happen. Development is good. Despite people like Mahern. Just my opinion, but he seems like he enjoys holding back progress. I understand looking out for the tax payer, but when you build apartments, restaurants, office space, etc... You add annual tax revenue to city coffers which is very good. Just my two cents.

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