TIF education

TIF districts and redevelopment commissions.

What are they? What can they do?

Ed Curtin of CWC Latitudes and former executive director of the Columbus Redevelopment Commission shared information with local leaders and members of the public Wednesday night during a session hosted by Jay County Development Corporation at John Jay Center for Learning.

Curtin and his company specialize in design planning, economic and redevelopment services. He led the Columbus Redevelopment Commission from 2007 to ’12 and previously served as the city’s assistant director of parks and recreation.

His presentation was designed to serve as a refresher for those already involved with TIF districts and an introduction to the concept for those communities that do not currently have one in place.



What are

TIF districts?

TIF (tax increment financing) districts are an option allowed by the state to finance or incentivize projects in a designated area.

“This is one of the tools state’s provide local communities with that help provide incentives,” said Curtin. “Really, it’s about economic development. Small businesses and large businesses, you do have a vested interest in using whatever tools you have to help them be successful.”

A municipality or a county determines the need for redevelopment and assigns a redevelopment commission, which, in turn, establishes boundaries for the redevelopment area and creates a plan. The proposal must then go before council, plan commission and a public hearing before being officially established.

Once in place, the TIF district begins capturing tax dollars from the increased assessed value of property within the district, typically for 25 years. (For example, if a new business went into operation on property that was previously bare ground, the TIF district would capture the new tax dollars created by that business.)

Those funds can then be used in a variety of ways to make improvements within, or in support of, the redevelopment area.

There are 848 TIF districts in the state — Jay County and Portland each have one.

The county TIF district is related to the POET Biorefining facility, with funds generated paying for the infrastructure upgrades (sewers and roads) that were needed to make the plant a reality when it was constructed in 2007. Portland’s TIF district was created in 2006 in part to capture additional tax dollars from the construction of the Walmart Supercenter on Votaw Street. It has helped support projects such as studying potential flooding solutions, Portland Water Park and the Lafayette Street extension.



What are

redevelopment

commissions?

Redevelopment commissions administer the TIF district. They are in charge of defining priorities and distributing the funds captured through the TIF process.

Boards — six members for municipalities and eight for counties — are appointed. Half are appointed by the executive branch (mayor, town council president or commissioners). A non-voting member is appointed by the school board. Remaining members are appointed by the legislative or financial branch (city, town or county council).

Curtin said those appointments are at-will — they can be added or removed at any time — and are typically up for renewal at the beginning of each year. (Portland’s city ordinance states that redevelopment commission members serve a term of one year.)

Redevelopment commissions are tasked with studying the areas in need of redevelopment and the reasons that are causing that need. They have a long list of ways in which they are allowed to spur or incentivize development, including:

•Purchasing property

•Selling, leasing or granting property that it owns

•Clearing property for redevelopment

•Assessing property for environmental issues and remediating those problems.

•Repairing or remodeling structures

•Providing financial assistance

Listing common uses of TIF funds, Curtin mentioned recreational facilities, public safety projects, site acquisition, infrastructure and job training.

“There are a whole lot of rules and regulations that go along with this,” he said. “But you have a lot of flexibility and latitude.”



To TIF or

not to TIF?

Opinions vary on whether TIF districts are an effective economic development tool.

Ball State University economist Michael Hicks has argued that TIF districts are overused and have no significant impact on economic development. He’s said in newspaper columns that the TIF funds that flow to redevelopment commissions would be better off if they stayed on their normal path, flowing to city and county government, schools and libraries.

Curtin took a different view in his presentation Wednesday, saying they can be a valuable tool for economic development.

“The reality is that this is a competition,” he said. “You’re out there competing with everyone else in the state, regardless of size or location. It’s so easy for somebody to go on down the road because they’re looking for reasons to check somebody off the list of why they don’t have to build there.

“In my experience, if you don’t have redevelopment or tax increment financing, it’s a sign that you may not be open for business.”

Still, he said, it’s up to the leaders of each community to decide whether a TIF district should be implemented.

“I think you’re better off having it because you remove a potential barrier for somebody that’s looking to do something,” Curtin said.

“It really doesn’t cost a whole lot to do that, but you’ve got to decide whether that makes sense for you.”