by Thomas P. Healy
Slowly but steadily, the Midtown TIF has been building its fund balance as a result of continued commercial redevelopment and infill construction within the district. “It’s actually become much more healthy and certainly starting to accrue and grow,” said Emily Mack, director of the City’s Department of Metropolitan Development. “It’s a newer TIF, and any time you implement something like that it takes a while to accrue increment.”
She said the fund balance for the TIF at the beginning of 2018 was approximately $406,000. “We anticipate it will grow through the year and estimate the year-end fund balance will be between $600,000 and $700,000,” she said. The figure is an estimate because it doesn’t take into account delinquent tax payments, property tax appeals, or other elements that go into calculating the fund balance.
Mack said City staff meets with the Midtown Economic Council (MEC) on a quarterly basis to provide a status update on the fund balance, discuss potential projects, and learn about priorities in the TIF district. When the Midtown TIF was established in 2013, a provision stipulated the establishment of the MEC—a unique way to add another layer of community oversight. Each major Midtown neighborhood selects representatives for the MEC to review proposals seeking TIF assistance, provide guidance to the developers to insure projects fit with community development strategies, and make recommendations about investment of TIF proceeds. If a project is deemed suitable, the MEC holds a public meeting to allow for additional scrutiny. While MEC support is not legally binding, development agencies pay attention to MEC recommendations.
Projects are funded on a pay-as-you-go basis or through the issuance of a bond. One of each example is currently under way in Midtown.
City of Indianapolis Department of Public Works director Dan Parker is seeking $100,000 from the TIF fund balance to help defray costs for the $500,000 repaving project on 52nd Street between Keystone and College avenues. “We looked at doing emergency patching this past winter, but realized we couldn’t do strip patching. The entire street had to be done,” Parker said. When asked if depleting the fund balance by 25% was advisable, he said the project was definitely needed and an appropriate use for TIF proceeds. “Building infrastructure in a TIF district is one of the things we’ve done across the city,” he said, adding that in this instance, he views it as a one-time request. A public hearing to discuss the proposal has not yet been scheduled.
The River House mixed-use project on the banks of the White River in Broad Ripple benefited from a developer-backed bond not to exceed $2,665,000 because the parcel is located within the North Midtown Tax Increment Finance Allocation area. Base taxes for the site, approximately $28,718, will continue to flow through to the various local taxing entities. As assessed value increases over time, the amount above the base (called the increment) will accrue to the TIF district to retire the debt. In the event the funds are insufficient, the developer, not the City, will be responsible for debt payments.
In its letter of support, [PDF] the Midtown Economic Council noted: “The financial support requested represents 59 percent of the total increment generated by the project, leaving an estimated $79,000 in annual tax revenue to be used for other eligible purposes within the allocation area.” Further, the MEC approved of the developer-backed bond: “The project financing will be privately placed, minimizing future risk for Marion County taxpayers.”
The funds were used to pay for demolition and utilities work and will support public benefits and streetscape enhancements, including repaving Riviera Drive and adding on-street parking, drainage, and landscape strips. The bond also pays for the installation of lighting along the Monon Trail and Canal Esplanade and improvements to three corners of the intersection of Westfield Boulevard, Winthrop Avenue, and Riviera Drive. [PDF]
The $18.9 million project will be six stories tall and provide 86 residential units, including “workforce housing”—apartments priced at market rate but affordable to employees working at Broad Ripple–area businesses. For the 3,875 square feet of retail, developer Todd Morris said he wants a tenant who will “add something to the Village.” The 5,000 square feet of office space will be occupied by the project architect, Studio M. The project will provide 98 onsite parking spaces, exceeding the 83 spaces required by code. The project will also provide 2 percent, or approximately $50,000, for public art. Morris said the specific artwork has not been selected.
A version of this article appeared in the August/September 2018 edition of the magazine.