The county’s newly formed redevelopment commission established its first TIF districts, to capture revenue that is expected from future development in the Interstate 65 and future Interstate 69 corridors.
The county joined cities and towns in the practice of establishing tax-increment financing (TIF) districts to capture revenue for future infrastructure improvements and municipally-led development.
A redevelopment commission has the ability to create and fix roads, utility infrastructure, buildings, parks, trails or other projects inside an established area, using revenue generated within that area.
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The Johnson County Redevelopment Commission’s step to establish the districts creates a starting point for the county to do what the Johnson County Board of Commissioners created the body to do, said Rob Henderson, redevelopment commission president and a Johnson County Council member.
Since the county commissioners created the redevelopment commission in late 2019, its members, appointed last spring, have been working to create the districts, the first for the county. Cities and towns have established TIF districts.
Tax revenue will continue to flow to taxing units, such as libraries, public safety agencies and schools, but a percentage of future tax revenue will be redirected to the redevelopment commission’s budget for future projects.
How much will go to the redevelopment commission versus the county general fund is not finalized yet, said Heather James, attorney for the redevelopment commission.
The I-65 corridor TIF district includes all of Clark Township, unincorporated areas of Pleasant Township around Tracy Road, Emerson Avenue and Combs Road, and unincorporated areas south and east of Franklin.
The I-69 corridor TIF district includes nearly all land on both sides of State Road 37, which will be reconstructed into the interstate in the next few years. The district also includes areas along Stones Crossing Road, Smith Valley Road, Olive Branch Road, Mullinix Road, Fairview Road and County Line Road.
Most of the areas included in both districts are either undeveloped farmland or rural residential properties, all of which will be prime areas for future development in the county.
The redevelopment commission will not be able to do any projects until development starts to occur within the districts. Right now, the commission has about $77,000, which was allocated to them for start-up activities including paying consulting and legal fees needed to establish the districts.
Tax revenue collected in a TIF district can only be used for projects within the district that brought in the revenue, according to state law.
This gives the county a chance to capture some revenue from developments that it has, so far, missed out on, Henderson said.
Typically, commercial and industrial development has happened on properties that were annexed into a city or town, splitting up the tax revenue gain. Now, the county will retain a larger portion of the revenue.
Once development starts, the first goal will likely be to improve each district’s infrastructure to attract more developments to the areas, Henderson said.
“The intent is to establish that baseline,” Henderson said. “We capture the increment for future reinvestment in the area, most likely for infrastructure. Think streets, drainage, possibly utilities, or whatever is considered the best use of that money to those areas to bring in business that will create jobs.”
How fast the redevelopment commission can start projects will depend on how quickly the areas develop, Henderson said.
“I don’t see this as something that is going to happen this year or next year. It will depend on I-69 and the expansion of the road, as well as what happens east of I-65,” Henderson said. “It is all market-driven. We just hope to be in a position to create that environment and make sure we are at the table.”
The redevelopment commission on Tuesday unanimously approved a declaratory resolution establishing both TIF districts. There was some debate about which parts of eastern Johnson County to include, and commission members ultimately decided to add all of Clark Township and several parts of Pleasant Township as well as parts of Franklin and Needham townships.
The Johnson County Plan Commission also approved the TIF districts later that same evening.
Next, the county commissioners will review the proposed TIF districts at their next meeting March 8. Since all three commissioners also sit on the redevelopment commission, the resolution is expected to pass.
