BATESVILLE — About 30 Franklin County government officials and citizens were intent Nov. 7 on learning about how a county redevelopment commission could boost the area economy.
Franklin County Economic Development Commission member Bill Schirmer confessed, “I’m a rookie to this, on the job a few months” after director Franklin Thompson and President Michael Hiles resigned. Schirmer, the Brookville/Franklin County Chamber of Commerce president, wanted to explore the ability to help finance some economic growth projects without involving taxpayers. Creating a Tax Increment Financing (TIF) is one way, but a redevelopment commission must be formed to oversee it.
After examining how the Greendale redevelopment commission was set up, “there are tons of questions to be asked and answered.” He invited Ice Miller, Indianapolis, partner Lisa Lee, who has set up a number of redevelopment commissions across Indiana, to enlighten all three commissioners and four of seven council members.
Lee explained the concept and tried to clear up misconceptions. “You draw an area that has a certain number of parcels in it,” which are assessed on March 1 annually. “That becomes the base assessed value for that TIF area. Overlapping taxing units are counting on that (money) for their budgets. That base value will continue to flow to those taxing units.” Each March 1 after the TIF area is defined, taxes from any new assessed value above the base value are captured and deposited into an allocation fund for a maximum of 25 years. Those dollars can be used for capital projects within or benefitting the area.
“The goal is to have a project sustain itself. You have a company come looking for a site, officials want incentives, maybe it needs infrastructure, such as a rail spur. You want to use the new taxes they’re generating to build projects they need” to get them to come here.
A company within a TIF area still must pay taxes.
The attorney emphasized, “TIF does not take money from the overlapping taxing units.
“It doesn’t create an appointed board with no oversight.” Three redevelopment commission members would be appointed by commissioners and two by the county council. “The body that appointed them can remove them at will at any time.” A sixth member has to be a school board trustee, who does not have voting rights.
“Creating a TIF area does not give a redevelopment commission any more rights to the land in the area you draw. If you’re a property owner and you saw ... my property’s in there.” You get nervous ... they would have to acquire it like any other citizen. They can’t change your land use. They can’t change your zoning.”
A TIF area must be approved by redevelopment commission, planning commission and commissioners.
Some redevelopment commissions get involved in buying or selling land. Land might be sold at a lower price to make the acreage more attractive to a company bringing jobs. “You may be in a situation where land is the incentive they're looking for. You pay for that land with the taxes they generate.”
If a city has its own redevelopment commission and TIF areas, such as Brookville and Batesville, those areas wouldn’t be a part of the county TIF district. Two redevelopment commissions would have to cooperate if an annexation occurs.
Then it was time for questions and comments. Ken Konradi, Salt Creek Township, observed, “We’ve got several boards already that have taxation powers. If this board is appointed, that’s taxation without representation.” According to Lee, “The redevelopment commission is not going to levy a tax on you. They don’t have the power to levy taxes except in the situation” of a potential bond issue, which has to be approved by commissioners and the council.
Konradi quizzed her, “How many counties in Indiana have” these commissions? “More than half” was the expert’s answer.
Jeff Franks, Brookville, who owns property near the former J and J Packaging facility, wondered, “Why would a landowner want his property in a TIF district?” Lee said its property value could improve.
Paula Keller, Whitewater Township, asked, “Are companies going to be bringing employees with them from somewhere else or will they be creating new jobs?” Commissioner Scott McDonough pointed out an incentive package can specify what percentage of employees will come from the county.
Commissioner Tom Wilson asked if the panel would have rights to eminent domain. The general answer was no. She explained, “In a blighted area, the (redevelopment) commission can declare eminent domain with approval of a legislative body,” such as the commissioners. Wilson needed a definition of blighted area. The attorney answered, “Brownfields, (land with) environmental issues, old dilapidated buildings, obsolete buildings. If you acquire them, you can demolish them.”
Council member Aaron Leffingwell asked, “Can council members or commissioners appoint themselves to the board?” Lee recommended that one faction not have the majority. For instance, all three commissioners should not be appointed, but one or two could be.
Council member Daryl Kramer fretted about a worst case scenario. What if a company locates within a TIF area, the redevelopment commission issues bonds, then the company fails? She advised, “You hope you have good bond counsel,” who insures the company is taking the risk on the bond issue. “The company may be required to buy the bonds or guarantee the bonds. If TIF money is short, the company may be required to pay the shortfall.”
McDonough questioned whether TIF funds could be used for road maintenance and the answer was yes, even if roads are outside of the area, but lead to it.
Jim Suhre, Brookville, said, “I would be all for spurring the economy” with infrastructure improvements made possible with TIF dollars. “Maybe this is the way to do it.”
Schirmer predicted job growth will happen slowly. When a county group chatted with Lawrenceburg officials, “they indicated there were seven companies’ lured to Indiana that employed over 100. “Don’t get your hopes up” for a gigantic firm. “As an economic development board, we're looking for (firms that employ) 10s and 20s.”
Lee observed, “Every county has different things that are important ... the number of jobs, salaries, types of jobs.” She urged, “You have to assess each opportunity as it presents itself to you.” If incentives the company wants are greater than the benefits it will provide, the parties must negotiate.
Konradi said, “I still don’t see the reason to rush. Our governor will entice people here. I just think we have enough boards in this county already.”
Schirmer pointed out the three-member FCEDC doesn’t cost taxpayers any money now that there’s no director to pay. “I’ll bet you we’ll show you more progress in the next six months than you’ve seen in the last six years” if the TIF tool is established.