Logansport is looking at encouraging residential development with Tax Increment Financing.
Creating a TIF district is usually used for encouraging business by a municipality’s redevelopment commission borrowing against future taxes to put in infrastructure such as streets or water and sewer systems.
However, using the TIF process for residential subdivisions is fairly new under Indiana law, said Logansport Redevelopment Commission President Mike McCord at a special Tuesday commission meeting.
On Oct. 27, a representative of Baker Tilly Municipal Advisors will give a presentation about TIF for residential use as part of the annual meeting the company has with the commission, McCord said.
The benefit for Logansport going with a residential TIF is the current lack of available houses and apartments in the city, McCord said.
Bringing businesses into Logansport or Cass County means needing places for workers to live. He described it as a chicken-or-the-egg scenario: Which should come first?
As a member of the Logansport Community School Corporation Board, he knows that newer teachers often end up living in Kokomo or Lafayette. And because of that drive, they end up leaving for school districts closer to where they live, he said.
There are two situations where the commission might use a residential TIF. The one that’s most likely is the Lexington Village subdivision planned for the empty fields behind Walmart and Mary Max Cinema.
The city has planned for years to have housing there and recently developed a plan for 53 homes to be built there. The contractor is Joe Dicosola, owner of Park Development LLC of Chicago and who is also redeveloping the former Logansport Mall. Baker Tilly has given the redevelopment commission a feasibility study for a TIF for Lexington Village.
McCord said that Logansport will likely put in things like roads, lights and other infrastructure.
For a TIF district, the redevelopment commission identifies an area that needs to be redeveloped or improved. The commission borrows money to make infrastructure improvements so a business — or a residential subdivision — can move in.
The commission then recoups the money by claiming all of the increased money from property tax increases due to improvements on the land.
So if property taxes on land go from $60,000 to $100,000, that additional $40,000 will go to pay off the debt.
Other taxing entities such as libraries, schools or parks won’t lose tax money but won’t gain tax money from the increase until the debt is paid and the municipality ends the TIF.
The other possible residential TIF district would be for land the city would buy for growth.
Recently, 57 acres at Chase Road and Davis Road, by the roundabout, went for sale.
Someone has put an offer on the land, but the redevelopment commission designated Jon-Myckle Price to negotiate a backup price in case the deal doesn’t go through.
Price is a banker at Security Federal.
Redevelopment Commission member Matt Lewellan had concerns about the commission overstepping its duties for rehabilitating property by starting with vacant property, and commission member Bob Dunderman had concerns about what would happen if the commission bought it and nothing would happen.
Dunderman wanted to know if the City Council would back them up financially.
City Council President Dave Morris, D-Ward 1, spoke in favor of the city acquiring land for housing and said the council would likely help where needed to get more land.
“The biggest problem is we don’t have room to grow,” Morris said. “For the City of Logansport, it’s an opportunity we’ll only get once.”
Others spoke about the problem annexing land in after houses are already developed on it and trying to get all residents of that subdivision to agree to become part of the city.
“It’s a high price tag and it’s kind of a longshot, but I think it’s worth it,” Morris said.