Tuesday, December 31, 2013

IBJ Reports Panel's Use of TIF Funds Spurs New Flap in Carmel

From the Indianapolis Business Journal:

The cash-strapped Carmel Redevelopment Commission is revising its 2014 budget to account for the loss of a six-figure income stream critics say it was not entitled to use in the first place.

Rather than set aside revenue from the Legacy development’s tax-increment financing district when construction there stalled, the beleaguered agency applied the annual windfall to the mountain of debt it ran up rebuilding downtown Carmel.

But with a new developer resurrecting Legacy, the money now must be redirected to its intended purpose: paying for infrastructure improvements in and around the project at 146th Street and River Road.

Two City Council leaders say the CRC never should have touched the money, calling the late-year financial scramble further evidence of the panel’s poor internal controls and shoddy recordkeeping.
“The ball got dropped on this the moment they started collecting revenue in 2011,” said outgoing council President Rick Sharp. “A little over $1 million has been misappropriated to this point.”

CRC President Bill Hammer denied any wrongdoing, saying the commission spent the “excess revenue”—about $210,000 in 2011 and nearly $505,000 in 2012, for example—on other redevelopment expenses.

There are plenty of those. Over more than a decade, the CRC borrowed $240 million to support ambitious projects like Carmel City Center and the Arts & Design District, paying the tab with revenue from more than two dozen of the city’s TIF districts.

Its activity slowed this year, after the City Council agreed to refinance $184 million in CRC debt—and gained more control over spending.