An excerpt from Louis Mahern's editorial in the Indianapolis Business Journal:
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When a TIF district is designated, the current property tax base in the district is established. Property taxes paid on the existing base continue to go to the taxing units: public safety, schools, parks, libraries and so on. This step is quite important because it ensures that only the additional developments will fund the developer’s subsidy.
However, there are two TIF area expansions the mayor is pressing the City-County Council to approve. Both districts have existing developments the mayor wants excluded from the base in order to increase the developer’s subsidy.
The Tech 16 proposal is an expansion of an existing TIF. This is the proposal that will turn old Bush Stadium into apartments and purportedly create a science and tech corridor between Fall Creek and 16th Street along Indiana Avenue.
The city wants to subsidize the Tech 16 developers by capturing the new property taxes that will be paid by, among others, two new apartment complexes: the Avenue, a $20 million housing and retail development on the old site of the YMCA; and 1201 Indiana, a $27 million student housing and retail development. Both developments are essentially complete, which pretty much destroys the “but for” argument since neither development resulted from the TIF designation and subsidy that has yet to be approved by the council.
The same situation exists at a TIF district expansion the mayor wants to create on Massachusetts Avenue. To ensure enough cash flow to retire the hoped-for bond issue and developer subsidy, the city is proposing to capture the property taxes that will be paid by Trail Side at Mass Ave, a mixed-use housing and retail development in the 800 block of Massachusetts Avenue. The project is completed and soliciting tenants.
The two completed Tech 16 projects and Trail Side at Mass Ave have a combined cost of $57 million. That is $57 million in property tax base that should be available for parks, schools, libraries and most especially a public safety department facing its own multimillion-dollar shortfall.
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See the full article here:
http://www.ibj.com/article?articleId=35451
