KENDALLVILLE — The Kendallville Redevelopment Commission has narrowed its focus of how it would like to utilize its nearly half-million dollars in tax increment financing revenue each year, with the focus remaining primarily on assisting individual businesses and providing structural and financial support for ongoing downtown revitalization.
After a follow-up meeting to an initial brainstorming session held a few weeks ago, commission members narrowed down their list of ideas to focus on five goals.
The consensus was anything but unanimous, with commission members spraying votes across 14 different topics, but with a few topics rising to the top of the list.
The most popular idea on the block right now — provide incentives for new businesses to locate in Kendallville.
Kendallville’s redevelopment commission has been in a transitional period after finishing funding the city’s downtown streetscape, trying to figure out the next project or projects in need of the commission’s healthy bank account.
In 2020, the city collected $491,378.48 in total TIF funds from the city’s Downtown and Eastside districts.
TIF money is captured from increases in property values, with taxes on that increase, the “increment,” being diverted to a separate fund for use in economic development as opposed to flowing directly to local governments as they normally would.
The captured funds are controlled by the redevelopment commission and can be used for development projects within the city’s approved allocation areas. In 2020, Kendallville connected and expanded its TIF districts to include basically all properties along Main Street from Drake Road to U.S. 6 as well as the entire U.S. 6 corridor stretching the entirety of the city limits east to west.
Right now, outside of its facade grant program and a few distributions toward special projects like the McCray site solar field and a planned pocket park across from City Hall, the redevelopment commission has no other major pending projects or financial obligations.
When it came down to making a priority list of the top new ideas, finding ways to incentivize new business development was the top agreed-upon idea on Monday morning.
What that actually looks like, whether it’s direct financial support to startups, forgivable loans, marketing and promotional assistance, grants not tied to building improvements or bonuses for companies that open and stay operating for a period of time is less clear at this time.
After some discussion about whether some one-vote ideas could be combined in with other topics, the other four ideas gaining the most support included raising the city’s facade grant matching dollars and/or introducing some codified design standards attached to grant dollars; providing financial support for interior renovations of buildings; funding an electronic billboard and/or welcome signs at city gateways; and providing financial support annually to Experience the Heart of Kendallville, the city’s official Main Street organization.
Commission members didn’t propose any type of major construction or renovation projects, instead focusing on an approach that would offer a more individual benefit to building owners and businesses that want to participate.
To start Monday’s meeting, commission members listened to a long presentation from Heidi Amspaugh of financial consultant Baker Tilly and bond counsel Lisa Lee of Ice Miller about other possible options available for financing projects, such as TIF bonds or other kind of economic development loans the organization could offer.
Commission members heard some information about the possibility of implementing residential TIFs to help pay for infrastructure improvements needed ahead of new home development. That’s kind of a moot point as of right now, as the only planned subdivision located off Sherman Street is moving ahead and the city has no immediate prospects for new subdivision development.
Members also heard extensive information about the prospect of creating a new community development corporation, which would work as a pass-through for TIF dollars to fund certain types of business development projects.
Redevelopment commissions already have the ability to fund projects on a “pay-as-you-go” basis, Amspaugh said, or commissions can borrow via bank loans of take out municipal bonds to be paid back with TIF revenues to fund larger projects.
“You have a revenue stream to work with on pay as you go projects … or you can leverage the annual revenues that are coming in over a certain period of time to a larger municipal bond,” Amspaugh said.
With about a half-million dollars coming in annually right now, the city has a lot of financial firepower to move on projects.
That revenue stream, however, isn’t permanent and a chunk of it will be evaporating in 2025.
The Downtown TIF is set to expire in 2025, meaning the $111,327 the district captured last year will no longer be captured after that point, with those taxes instead flowing to the local government budgets.
The more lucrative Eastside TIF has more time, with that district not set to expire until 2033.
Kendallville’s new 2020 TIF was created in the hopes of generating new revenue in the future, but that will only happen if the 25 properties inside of it actually develop and increase in value.
The city can renew any of those TIF areas or create new ones, but doing so sets a new base value for those properties and the city won’t start capturing taxes on the incremental growth until the values, well, grow.
After setting their list of five priorities, commission members were in general agreement that they should start implementing changes and developing new programs immediately.
Commission member Keith Ballard said he’d prefer not to keep discussing month after month, which can snowball into tangible changes never getting implemented or long-delayed.
Board member Patrick Hess said he’d also like the city to start exploring some of the alternative funding mechanisms at their disposal, in case they’re needed for future programs.
“If we have more tools, let’s use them,” Hess said. “I think we have the ability to do a lot more impact in our community.”