‘Benefit for the town, schools and county’: Public hearing for residential TIF area next week, could be adopted by commission

The final step in creating a residential tax-increment financing (TIF) area for a new neighborhood in Nashville is set for next week.

The Nashville Redevelopment Commission will hold a public hearing to take comment and potentially approve the measure, which would allow the RDC to capture new property tax revenue from the Woods Lane subdivision. The subdivision will be in the area of the Tuck A Way Ridge neighborhood off Old State Road 46.

It’s the final step in the process for the RDC to approve a confirmatory resolution, and the hearing is set for 5:30 p.m. Tuesday, Sept. 27 at Town Hall.

The resolution was adopted 4-1 by the Nashville Town Council on Aug. 18. Council member Anna Hofstetter voted against it.

The RDC approved the resolution on Oct. 5, 2021, and also approved an economic development plan for the area and designated the entire area as an “allocation area” for the purpose of the allocation and distribution of certain property taxes — or “tax increment.”

RDC’s adviser Ed Curtin said in July that the State of Indiana has a new rule stating once the process is started, it must be completed within the year, so the deadline to establish the residential TIF area is Oct. 4.

TIF stands for tax-increment financing. It’s a way that a redevelopment commission can capture property tax money and place it in a fund to help pay for various projects of public benefit.

When a TIF district is created, a base year is set for tax assessment purposes. Any development on the land which occurs after that base year is likely to result in the owner paying higher property taxes. If that land is in a TIF district, the value of those higher taxes — anything over and above the base year assessment — goes into the TIF fund for at least 25 years. The TIF area could last for more than 25 years if no debt has been bonded to be paid off by TIF money.

If the land where development occurs is not in a TIF district, and that development results in higher property taxes, that higher tax amount would automatically flow to government units such as the town, county, schools and township instead of having to wait until the TIF area is dissolved. So, in other communities where TIF has been used as an economic development tool in the past, the public benefit of making a TIF capture versus not using TIF has been debated.

The RDC is responsible for managing the TIF fund and directing how it is used, working from an economic plan document.

At the hearing next week, the commission will receive objections from all interested in or affected by the proposed projects, according to the public notice.

Following the public hearing, the commission will determine the public utility and benefit of the proposed projects and other actions to be taken under the resolution.

According to the RDC’s economic development plan, the Woods Lane subdivision area would be an “appropriate geographic area to be designated as an economic development area.”

The 15 Woods Lane lots are all different sizes, ranging from about a third of an acre to nearly 2 acres, in the first major subdivision to be built in Nashville for more than a decade.

A homeowners’ association will be formed with annual fees of $400 to help pay for road, pond and utility maintenance, landscaping and lighting. The Town of Nashville will maintain the main road, Woods Lane; the HOA will maintain the offshoot roads, Woods Trail and Woods Pond.

Because of the way the land is and the way the developers desire the neighborhood to feel, these likely aren’t going to be entry-level homes. It costs more to build on a rolling-hills piece of land than it does on flat land, developers Scott Mills and Steve Miller explained in 2020.

Miller predicted that to build a good home from scratch with energy efficiencies, an attractive design and quality materials, it’ll run in the $350,000 to $400,000 range. Some homes on the prime lots might end up being closer to $500,000.

Nashville has two existing commercial TIF districts, in the village district and Hawthorne Drive area.

Projects could include pedestrian transportation enhancement, like curbs, gutters, sidewalks, street lighting and signage; “tourism attraction and enhancement projects;” sidewalk and streetscape improvements in the town; a multipurpose trail down Old 46 to Woods Lane; matching funds for a multipurpose trail from Hawthorne Drive to CVS; utility infrastructure projects, including utility relocation, waterlines, water wells and retention ponds; public park improvements and recreational equipment; acquisition or construction of projects to “enhance the cultural attractiveness of the entire” TIF area; and to enhance the public safety of the area, according to the plan.

“In this particular case, I think one of the things we saw was potential benefit of connectivity between school, neighborhood and town,” Curtin said last week.

“This has potential to provide funds to leverage additional state dollars to help with connectivity. That could be sidewalks, trails, from neighborhood down to schools and town. That was one of big issues we saw. It’s a way to accomplish a project we might otherwise not be able to do.”

Bonding against the increased property tax revenue, a redevelopment commission can take out loans for projects that would benefit the TIF area, such as sewers, sidewalks and more.

Maps and plats of the TIF area have been prepared and, together with the resolution and the plan, can be viewed at Town Hall, 200 Commercial St. between 8 a.m. and 4 p.m., Monday through Friday.

Now or never

Town council established the Nashville Economic Development Commission on July 21, a commission that serves to facilitate the creation of residential TIF.

The EDC was formed on July 21, with town council voting 4-1 to approve it. Council member Anna Hofstetter voted against the motion.

Hofstetter said she felt it was important to allow members of the public to apply for the positions before forming the commission.

“I think we need to do our due-diligence and collect applications from those interested,” she said. She suggested a special meeting but the council ultimately voted to appoint members of the RDC to the EDC.

Town council President Nancy Crocker appointed Bob Willsey to the EDC, and council member Tyra Miller appointed Victor Bongard.

Both Willsey and Bongard sit on the RDC and are familiar with the commission and TIF efforts, Curtin said.

Brown County Council also made an appointment to the EDC, nominating and appointing county council member Scott Rudd.

The EDC met on Aug. 18 and adopted the resolution and recommended town council create an economic development target area for the Woods Lane development. Town council approved the resolution at its monthly meeting the same day.

“Really for the purpose ultimately they saw the benefit for the town, schools and county,” Curtin said.

“That’s why they recommended that to town council.”

The final step is to put all materials together and file that with the Brown County auditor’s office, Curtin said in August.

Local resident and business owner Pam Gould spoke at the council meeting and said she strongly encouraged the council to approve the resolution or lose the opportunity completely.

“From what I have gathered, the town will not be losing anything, but possibly the opportunity to be able to fund what’s needed to finance future infrastructure improvements there will be,” she said.

“This is like the first opportunity we’ve had for growth in the sector for decades, unless it would be Pine Tree Hills. This is an opportunity to be able to leverage any residential increase. You can’t lose something you don’t have to begin with. It’s just a matter of clarification. The town has nothing to lose; it has everything to gain. This pocket could be leverage to take out loans or any other financial measures for infrastructure improvement. It’s vital we proceed.”

Hofstetter voted against adopting the resolution, saying there was not enough evidence supporting the measure.

“I’m not saying it’s a bad idea, but we need proof it’s a good idea before we promise our future town’s income to a commission that barely exists,” she said.

“We need facts, not speculation.”

Steps so far

The Brown County School Board of Trustees approved the resolution on Jan. 6 this year. The school district is one of the entities in the county that receives a portion of property taxes.

The RDC said that there may be a small impact on Brown County schools, but it depends on the levy they have. If it interferes or makes a substantial impact on the schools, the commission said that it will re-evaluate the area.

Curtin said last week that every year the commission is required to determine what, if any, increment is released back to taxing agencies, with the ability to release increments each year.

Curtin attended a December school board meeting to ask for the approval of the resolution, but it was tabled after some questions were raised about the price of the homes in the subdivision and if those homes would be appealing to young families to move into and send their children to school here.

School board approval is required when a community creates a residential TIF district, but it is not required when creating commercial TIF districts.

School board members supported the residential TIF concept for Woods Lane in part because they wanted a way to increase connectivity between the schools campus and that end of town. One thing TIF could do is help build a sidewalk along Old State Road 46 up to the homes in the Coffey Hill/Tuck A Way/Woods Lane neighborhoods, Curtin said. Now, students and adults who walk it have to hug the side of the winding, hilly town road with a blind curve.

The resolution was approved unanimously by the school board on Jan. 6. No additional discussion was had before, or after, the vote.

The Brown County Area Plan Commission approved the measure unanimously on July 26.