Cities, county at odds over I-65 TIF district

The county’s proposed Interstate 65 tax-increment financing, or TIF, district caught leaders in Franklin, Greenwood and Whiteland off guard.

While cities and towns in Johnson County have long-established TIF districts, the proposed I-65 district and another in the future Interstate 69 corridor in White River Township would be a first for the county.

Leaders from three cities and towns along I-65 say the proposed TIF district would hurt their communities more than it would help the county, given the steep hill the county would have to climb to provide new developments in the area, mostly east of the highway, necessary public safety and utility infrastructure.

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Franklin Mayor Steve Barnett, Greenwood Mayor Mark Myers and Whiteland Town Manager Kevin McGinnis each expressed concerns to members of the Johnson County Redevelopment Commission. All three had no idea the county was planning an I-65 district, though they were aware of the county’s plans for an I-69 district, given the expansion of the highway through the county.

“The county, the cities and the towns in Johnson County are all trying to work as a region. You would think that the communications would be better,” Barnett said.

Rob Henderson, chairman of the redevelopment commission, took some responsibility for not sharing plans with the cities and town, but said the county was not hiding its plans either.

“While it may have caught them off guard it was talked about openly in our meetings,” Henderson said. “I, as president, should maybe take responsibility for not taking affirmative action in talking to them.”

Tax revenue from new construction within the TIF districts would fund infrastructure projects within those areas. TIF is an alternative source of funding that local governments use to complete infrastructure projects or make investments in amenities that would be harder to take on within the constraints of a traditional tax base.

The I-65 TIF district is drawn around parcels that the commission says is primed for development in Clark, Pleasant, Franklin and Needham townships. The TIF district would include all of Clark Township, areas of Pleasant Township around Tracy Road, Emerson Avenue and Combs Road, and unincorporated areas east and south of Franklin.

Franklin officials discovered the TIF district would include about 500 acres south of the city that are already annexed into Franklin and are already in a city TIF district, Barnett said.

What’s at stake

Each city and town has unique circumstances that make leaders opposed to the TIF district plan as it is proposed.

For Greenwood, the county establishing the TIF district would halt growth the city has been working toward for more than 20 years, Myers said. The city has extended its sewer system and improved roads in some portions of the proposed TIF district already, which the county would benefit from, he said.

“We did all the work,” Myers said. “For them to come in and take it away would just not be right.”

Franklin is in a similar position. The city has invested millions to grow the city’s eastern gateway and truck bypass to further growth, Barnett said.

To have that growth suddenly stop would be disappointing, given how long Franklin has waited for interest to increase this far south of Indianapolis and how much has been invested in the area to draw that interest, Barnett said.

“They should not do this on the I-65 corridor. On the I-69 corridor, it is fine,” Barnett said. “We have already invested millions of dollars in our infrastructure. We don’t need for the county to come in and take over what we and our citizens have invested in.”

In Whiteland, the TIF district would mean the town is stuck west of I-65 with no possibility of future industrial growth east of the highway, McGinnis said. Right now, there are only about five properties that could accommodate industrial growth up for grabs within town limits on the east side, he said.

If forced to grow west exclusively, the town would be limited in its economic development prospects, McGinnis said. And industrial use would be unlikely given the westside of town is more primed for commercial and residential development, he said.

All three say the TIF district, as it is presented now, would halt all incentive they have to attract new businesses and housing east of I-65.

Until the details of the district are sorted out, three projects in Greenwood and two in Franklin are on hold, the mayors said. Developers want to be part of a city through annexation to benefit from tax incentives, but would not want to bring a project to an unincorporated area with fewer services, they said.

Obstacles to growth

Barnett and Myers both say the county will likely not have the expertise or funding that is needed to spur growth considering how new the redevelopment commission is.

Their cities have the resources to do so already and have been preparing infrastructure and public safety to serve the areas impacted, they said.

“The county is going to have to build their own sewer plant if they do this. They are going to have to have their own fire and police protection. We already have that in place. Why waste tax dollars to recreate a wheel that doesn’t need to be recreated?” Barnett said.

Economic development tasks would also fall to the county, which does not have employees dedicated to economic development. All three cities and towns do.

Before any improvement can be made in the areas using TIF dollars, TIF dollars have to be collected. It would likely take years to attract businesses and collect enough money to make the necessary changes, Myers said.

“Even if they were to do this today, they would not capture any money for three to four years. These roads need to be built now, not in four years,” Myers said.

Creating the TIF district in unincorporated areas would likely produce less revenue for the county than would a TIF district in a city or town, said Krista Linke, Franklin’s community development director. A financial adviser for Franklin found that a city TIF district would produce 49% more income, based on TIF finance mechanics, the city’s tax rate and Indiana tax caps, she said.

Though Franklin would get the property tax dollars generated by new developments, the county would keep the tax base and some of the new income from personal property taxes, Barnett said. Splitting new revenue would be more profitable than stifled growth, he said.

The way forward

City and town officials hope to work out something with the county redevelopment commission that would give Franklin, Greenwood and Whiteland more space to grow. County officials are also willing to work on some arrangement that would be mutually beneficial, Henderson said.

City and town officials had planned to share their grievances with the Johnson County Board of Commissioners on Monday. The commissioners were set to review and vote on the I-69 TIF district, but had already dropped discussion of the I-65 TIF district from the docket prior to the meeting.

Due to the concerns, the commissioners chose to put off both until a future meeting to facilitate discussion with the full redevelopment commission.

All three county commissioners serve together on the redevelopment commission with Henderson, a Johnson County Council member, R. Lee Money, a Greenwood attorney and a non-voting school board member.

McGinnis was tapped earlier this year to join the redevelopment commission but has not taken a seat on the board in light of his position with the Town of Whiteland and the ongoing I-65 TIF district debate. If the Whiteland Town Council approves and the TIF district debate is settled appropriately, he would still be willing to serve on the commission, he said.

A public hearing is set at the county’s next redevelopment commission meeting March 22 to discuss both TIF districts. Since the commissioners delayed discussion on the I-65 TIF district, city and town leaders were asked to share their concerns with the commission at that meeting.