Kendallville TIF Districts

This map shows the boundaries of Kendallville’s two tax increment financing districts — the Eastside TIF and the smaller Downtown TIF.

KENDALLVILLE — Kendallville may seek to join its two tax-increment finance districts together and may also begin investigating whether to expand further along U.S. 6 to the western city limits.

The main benefit? Doing so could increase the available pool of tax dollars available for downtown projects. And, if the TIF district expands along U.S. 6, more businesses could be eligible for programs like the city’s façade grants.

Although not a main item on the agenda of Nov. 13’s Kendallville Redevelopment Commission meeting, board member Lance Harman broached the topic of whether the board wanted to gather more information about the prospect of combining the city’s two TIF districts.

The two districts include the Eastside TIF, which covers the Walmart property as well as most of the area between U.S. 6 and the railroad tracks from the Noble County Fairgrounds to the east end of the city. The other is the Downtown TIF, which covers the area around Main Street between Sargent and Rush streets.

TIF districts are special taxing districts where assessed values are frozen at the time the district is created. Property taxes on any increase in the property values after that point — the increment — is captured and put into a separate fund in control of the redevelopment commission, to be used for economic development projects or to pay back bonds taken out for improvements.

Over the past year, the commission has been in talks with a consultant about its TIF districts and Harman said he thought the city should continue pursuing the idea to combine its two districts.

“I think it’s really going to be to our advantage to do it,” Harman said.

Since the district must contain contiguous properties, the easiest way to combine the two districts would be to expand along U.S. 6 from the fairgrounds, then turn south down Main Street to connect to the north end of the Downtown TIF.

The immediate benefit of combining the two would be to allow the city to co-mingle funds from the Downtown TIF, which are used for facade grants and is providing the city’s match for the upcoming streetscape project, with the revenue collected in the Eastside TIF, which currently isn’t earmarked for anything.

Clerk-treasurer Sheryl Hanes said the city paid off the last of the TIF bonds in the Eastside TIF in July, money that had been borrowed years ago to prime land for a big-box commercial development, which became Walmart and the commercial businesses in the outlots.

“If you combine the two, you can take some money from the industrial TIF and invest it downtown,” said commission member Kristen Johnson, who is also the executive director of the Kendallville Area Chamber of Commerce. “If you combine the two, you can even make it a little broader than it was.

“If we can build the capacity of our downtown and that’s a vehicle to do it, let’s at least look at it,” Johnson said.

Combining the TIFs would more than double the money available for downtown projects. According the Hanes, the Downtown TIF typically captures around $120,000 in tax revenue per year, while the Eastside TIF is significantly more lucrative, bringing in around $270,000 annually.

One additional detail that was only briefly mentioned was that by combining the TIF districts, the city could potentially expand the life of the districts. TIF districts have a limited lifespan dictated by state law and are supposed to eventually sunset and release all of the captured value and revenue back to the normal taxing units — the county, city, school district, library, township and solid waste district.

Harman mentioned the Downtown TIF is scheduled to expire in the early 2020s, but changing the layout could extend the life of that district.

Before taking the conversation further, the commission invited Mayor Suzanne Handshoe into the meeting to gauge her interest.

After being briefed on the discussion, the mayor indicated that she was open to further exploration of the idea.

One important piece of information the mayor noted, however, was that industrial properties were specifically not included in the Eastside TIF, because the city didn’t want to lose revenue from ongoing expansions in the city budget. Industrial properties are generally the most lucrative in terms of property tax and frequently add new value as they update machinery that can costs millions of dollars.

“I could be supporting of that as long as we understand the industry is carved out,” Handshoe said. “We know U.S. 6 is changing and it’s going to be all developed eventually. That makes sense, you’d be capturing those new commercial funds.”

Harman then added another component, offering his opinion that if the city is going to connect the two TIFs along U.S. 6, he believed the district should extend the entire highway corridor to the western city limits.

“That’s kind of aggressive,” Harman noted after proposing the idea.

The mayor, however, was also warm to that idea. She mentioned that she had previously been approached by the ownership of Don Chico’s Mexican restaurant about the possibility of a facade grant. But since the restaurant isn’t located in a TIF district, the mayor had to tell them there was nothing the city could offer.

If the entire U.S. 6 corridor was in a single, unified TIF, any commercial operation in the boundaries would then become eligible for a program like the facade grants, which offer 50/50 matching grants up to $15,000. City leaders often tout that Kendallville’s facade program is much broader than most communities, which typically only offer up to a few thousand dollars.

Before anything advances, Handshoe suggested that a large group would need to be brought together for an informational session, including representatives from the redevelopment commission, the Kendallville City Council, East Noble School Corp. and U.S. 6 business owners.

Getting the city council information would be imperative, since the five-member board would ultimately have to approve any changes to the city’s TIF layout. She suggested inviting the two members of the council’s finance committee, council president Jim Dazey and member Steve Clouse.

“That’s a discussion I think we need to have a council member or two,” Handshoe said. “We need to have another session like we did for the downtown but involved the businesses on U.S. 6.

“I’d be encouraged by some discussion about that,” Handshoe said.

In other business, the redevelopment commission:

• Approved a facade grant for Kyle Baker of Pizza Forum, 120 S. Main St., for $1,022.50 to make exterior sign repairs. The board also approved a facade grant of $8,000 to Amy Ballard, who owns the former Barker’s Jewelry at 123 S. Main St., for window and rear door repairs.

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