News From Terre Haute, Indiana

March 5, 2014

Clock ticking on downtown TIF district

Bill passed Monday by Indiana House would end district in 2015; Officials still hoping to fund new police station

Howard Greninger
The Tribune-Star

TERRE HAUTE — The sun is setting on Terre Haute’s downtown tax increment finance district, which city economic development officials say has been crucial to downtown revitalization, following action this week from the Indiana General Assembly.

Now, Terre Haute officials may have a little over a year to bond financing for a new police/public safety building in the downtown district.

“The bill as it stands would allow the city of Terre Haute to enter into additional debt … with one year in which to incur that debt from July 1, 2014, when the bill becomes law, to July 1, 2015,” said Cliff Lambert, executive director of the Terre Haute Department of Redevelopment.

The Indiana House of Representatives on Monday passed Senate Bill 118 with a 71-27 vote, advancing the bill to a conference committee of House and Senate members before the end of the session on March 14. The bill then goes to the governor to sign and become state law.

Wabash Valley Reps. Bob Heaton, R-Terre Haute; Clyde Kersey, D-Terre Haute; Alan Morrison, R-Terre Haute; and Kreg Battles, D-Vincennes, each opposed the passage of the bill.

“I voted against the Senate bill because the TIF has been used so many times and has changed the downtown area in Terre Haute and the area along Indiana 46 will be using a TIF,” Kersey said. “In our case, TIFs have worked very well. It had bipartisan opposition to it, especially from our legislative area,” Kersey said.

The city’s downtown district, established Nov. 14, 1985, was a legacy or unlimited time district. Senate Bill 118 requires any TIF district established before 1995 to be dissolved by 2025. All TIF districts established after 1995 cannot exceed 25 years.

In addition, under the Senate bill, redevelopment commissions cannot issue public debt greater than $5 million without approval from a town or city council. All of Terre Haute’s TIF approvals have gone before both the city’s Redevelopment Commission and City Council for approval, Lambert said.

Kersey said the bill was sparked from concerns with the Carmel Redevelopment Commission. That commission issued millions in public debt without Carmel City Council oversight, until 2012. However, that council had to help refinance $184 million of debt pledging the city’s property tax base.

TIF districts are geographic areas created to either eliminate blight or encourage economic development through employment or attracting a new business or expanding an existing business.

Indiana requires a tax impact statement disclosing estimated economic benefits and costs. A TIF captures all new assessed value and taxes from new construction in the district. Those tax dollars are then put back into the district to pay off bonds or use for sidewalk, curb or other improvements.

Opponents of TIF districts contend that leaves less revenue to be distributed to other local government units, such as schools and libraries, especially since the implementation of property tax caps.

Lambert said once the final draft of the bill leaves the conference committee, the city “will have [finance bond counsel] Ice Miller and HJ Umbaugh [an Indianapolis accounting firm] do an analysis for their interpretation of what can or can’t be done,” Lambert said as far as funding for a new city police/public safety station.

Terre Haute Mayor Duke Bennett said the city has already done “preliminary work on that bond, so some of that work is already behind us. Absolutely, we want to take advantage of the TIF district.”

“I would not want to miss an opportunity to borrow money to pay for [a new police station] because [the downtown TIF] will be a crucial piece of that funding,” the mayor said.

Some work still to be done includes obtaining an additional piece of property for the police building. “Our goal was already to soon begin the design work on it. We will then identify any other pieces that will have to be completed before that [2015] date,” the mayor said.

“I would like to get the building next spring, so this can all fit” into the year time frame into 2015, Bennett said.

Reporter Howard Greninger can be reached at 812-231-4204 or