The newly reconstituted Economic Development Commission will — per state law —issue up to $25,860,000 in tax-exempt bonds. Urschel Laboratories will then purchase the whole of that issue. For the 20 years following the completion of the project, the company will repay those bonds with 85 percent of the taxes on real and personal property which itwould have paid to the town as a property owner in a tax increment financing (TIF) district.
In that sense, the arrangement is like tax abatement. Except it’s not. Because Urschel Laboratories will use a large portion of the $25.8 million to install infrastructure: $3 million for a bridge over Coffee Creek, to make the site accessible in the first place; some $2 million for sewer and water infrastructure; and an unknown amount for road improvements.
In other words, Lukmann said, a large portion of that $25.8 million will be used to install infrastructure which the town itself might have had to build to make that property developable.
Over those 20 years, Lukmann added, the town will nonetheless receive an estimated $4,566,455 in property tax revenues from Urschel Laboratories—that is, the 15-percent balance of the company’s tax obligation—which the town would not have received had that property remained fallow.
Although the property in question is located in a TIF district—under which the town alone normally captures the whole of the increment—under a relatively recent change in Indiana Code, the Duneland School Corporation will also receive its increment during the seven-year lifetime of the new property-tax referendum. Lukmann estimated that total amount at $822,000. “Those are moneys which would otherwise have been captured by TIF,” he said.
...
See the full article here:
