KENDALLVILLE — The city of Kendallville is one step closer to the establishment of a new combined TIF district after Monday night’s city council meeting.
The combination of the two existing districts within the city would include a new district, which runs along the U.S. 6 corridor.
Lance Harman, acting president of the Kendallville Redevelopment Commission, said the larger TIF district will ultimately generate more dollars that can be used to benefit businesses within the city.
He said the U.S. 6 corridor was added to the district, because that is where city leaders see the growth in the community.
“There is a lot we can do to help the businesses along U.S. 6,” he said.
TIF districts are special tax districts that allow communities to capture tax revenue for development projects. When created, property values are frozen at a baseline and then as time goes on or new development happens, the taxes on the increased value — the increment — is captured by the redevelopment commission.
Local government units — the county, city/town, schools, library, township — still get their share of annual taxes from the baseline amount, but all of the taxes on the increment go to the redevelopment commission.
By combining the districts and adding the new district will allow the city to intermix the funds from its Downtown TIF, which generates about $121,000 per year, and the Eastside TIF, which is significantly more lucrative capturing about $410,500 annually. By expanding the Economic Development Area, the city can also spend those TIF dollars for any projects within the entire zone.
Those expenditures could include things like facade grants that the city currently offers to downtown building owners; matching funds for grants like the city is doing for the downtown streetscape or did with the Fairview Boulevard construction project; or other direct expenditures for improvements such as utility work, streets, sidewalks or other infrastructure.
The second purpose of the district would be to establish a new “allocation area” consisting of 25 properties that would have their taxes captured as new revenue in the future. The hand selected properties mostly include blank lots on the U.S. 6 corridor that may develop in the future and, therefore, lead to significant increment that could be captured.
The current Downtown TIF is set to expire in 2025, while the Eastside TIF has a little longer life until 2033.
Harman said the redevelopment commission currently invests $40,000 back into the downtown from its TIF.
“It is well worth it,” he said.
Money collected from the Downtown TIF is currently being used to help fund the new streetscape project in downtown. The expanded TIF district will free up money to finish the streetscape project from Harris Street to the tracks. The portion of the project has a price tag of $123,000.
Mayor Suzanne Handshoe said she will be working with the Redevelopment Commission and Ice Miller LLP, as they move forward in the process.
A completed detailed will be presented to the council and a public hearing will have to be held as the process moves forward.