Redevelopment commission creates TIF allocation area for solar project, pledges revenues to bonds

The Michigan City Redevelopment Commission voted unanimously Sept. 8 to create a new TIF allocation area for a proposed solar project and to pledge the TIF revenues to two series of bonds the city plans to issue. The actions were taken after a brief public hearing and presentations from bond counsel and project representatives.

The confirmatory action finalizes an allocation area the commission first declared in July; the follow-up resolution pledges the area's tax-increment revenues for up to 25 years to pay TIF bonds and economic improvement district (EID) bonds the city will issue to finance part of the solar project. Bond counsel said the commission's action is a typical step under the redevelopment statute following a public hearing and supporting approvals by the planning commission and common council.

Tom Everett of Barnes & Thornburg, bond counsel to the city and the redevelopment commission, outlined the process and timeline: the declaratory resolution had already been approved by the planning commission and common council and a notice of tonight's public hearing had been published. Everett told the commission the confirmatory resolution would "take final action to create this new TIF allocation area for the solar project." After the public hearing produced no public comments, the commission approved the confirmatory resolution (Resolution 8-25) and then approved a related resolution (Resolution 9-25) that pledges the TIF revenue to the city's planned bonds.

A representative from the project team updated the commission on project financing and related development work. He said franchise paperwork for a new Renaissance hotel has been executed and that management agreements and financing placement are progressing. "We are officially Marriott franchisees now," he said, adding the team hopes to finalize management agreements and commitments so bond sales can proceed by late fall.

Commissioners voted to approve both resolutions by voice vote; the clerk recorded no nays. The commission discussed that the city council previously adopted two bond ordinances on Aug. 4 that authorize issuance of the TIF and EID bonds; the pledge resolution is intended to support those planned issues. Bond counsel said a pledge agreement and any required closing documents would be executed at the time of bond closing.

The actions do not themselves issue bonds or obligate the city beyond the stated pledge and will be followed by underwriting, final bond documents and closing steps. Commission members and the project representatives said they expect further financing milestones in October and November and asked staff to continue coordination with underwriters and counsel.

A short public hearing for the allocation-area designation drew no speakers. The commission's approvals tonight clear two major local procedural steps needed for the city to offer pledged TIF revenue as security when the city sells the planned bond series.

Next steps include finalizing underwriting documents, executing the pledge agreement at closing and returning to the commission if any pledge or closing terms require additional local approvals.