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Merrillville RDC pledges future TIF revenue to back proposed $20 million developer bond for Liberty Estates West
Summary
The Redevelopment Commission approved a resolution pledging tax increment revenues to a developer-backed $20 million economic development revenue bond for infrastructure in Liberty Estates West, with bond counsel saying payments would be contingent on generated increment and would not put the town's credit at risk.
The Town of Merrillville Redevelopment Commission on Jan. 28 approved Resolution 25-05, pledging certain future tax increment revenues to the payment of an economic development revenue bond of up to $20,000,000 tied to infrastructure in the Liberty Estates West development.
Tom Pittman, bond counsel with Barnes & Thornburg, told the commission the proposal is in name a bond but "what it really is is an agreement with the developer" under which the developer would receive an agreed portion of any TIF increment generated by the project. Pittman said the instrument "doesn't constitute a default by the town or the redevelopment commission" if insufficient increment exists and that the town's credit is not at risk: "if you produce it, you'll get a share, and if you don't, you won't."
Commissioners were told the request from developer Randy Hall seeks a $20,000,000 bond to cover infrastructure improvements west of Whitcomb Street in Liberty Estates West. Pittman and staff said the pledge resolution sets the framework for a later pledge agreement with more specific mechanics and that the bond structure will require additional actions, including formal town council approval and a public hearing on the bond issue.
Commissioner Leona Uzelak moved to approve Resolution 25-05; Keisha Hardaway seconded the motion. A roll-call vote approved the resolution 4-0. The resolution authorizes the redevelopment commission to pledge future increment to the payment stream subject to the terms of a subsequent pledge agreement and to any conditions required by state law.
Pittman and staff noted prior, similar transactions had been used with other developers and that any payments to the developer would be tied to actual assessed-value growth and measured periodically. The commission recorded no formal dissent at the meeting. Staff indicated that further details, including any required county processes or a fixed-share formula, would be set out in the pledge agreement and in subsequent council-level proceedings.
Because the pledge is conditional on future increment, commissioners were told the town would not be obligated to make payments from general-fund revenue if the project does not generate sufficient TIF. The resolution authorizes further steps toward a developer-backed bond but does not itself issue debt.
