Elkhart Redevelopment Commission adopts Boulder Run TIF area, advances revised development agreement

The Elkhart Redevelopment Commission on April 8 adopted a declaratory resolution creating the Boulder Run Economic Development Area and advanced a revised development agreement for a proposed 86-lot single-family housing subdivision in the Jean Wood Drive/Henke Drive area.

The action starts the process to establish a residential tax increment financing (TIF) allocation area to support infrastructure for the project. "We would pledge 80% of the revenues of the TIF to help support installation of the infrastructure," said Mike Huber, development services director for the city of Elkhart.

The commission adopted the resolution to designate and declare the new economic development area and to create a residential housing development program and allocation areas for tax increment financing. The measure passed on a voice vote after a motion and second; no recorded roll-call votes were provided in the meeting transcript.

Why it matters: Commissioners and staff said the development would add 86 new single-family lots and that the city and developer are relying on a mix of TIF, bonds and other funding to pay for sewer, water and roads. Huber and staff described an identified project funding gap of about $10,000,000 and estimated the infrastructure investment at roughly $7,000,000. Based on the city's projections, at full build-out 80% of the TIF increment would generate about $3 million to $3.3 million to help cover those costs.

In the same agenda sequence the commission reviewed an amended and revised development agreement with the developer team (referred to in the packet as the Garrison Frasier group). Staff said the agreement has been revised through multiple drafts and remains subject to final comments from the developer's funding partners and counsel. The commission approved the agreement in concept and authorized the redevelopment commission president to execute the document, subject to ministerial changes. The commission also approved a motion to sell the real estate described in the agreement at a "not to exceed" price shown in the packet; the transcript records that amount as "$750" as presented to the commission.

Staff warned the final schedule depends on external funding and bond planning. Huber said the administration is waiting for additional clarity from the Indiana Economic Development Corporation on the amount and timing of a LEI award needed for the financing plan. He said the lack of final IEDC information affects the timing and bonding strategy and that staff expects to have final feedback from funding partners within about a week. Staff said final project approvals are expected to be wrapped up by September, and the parties are aiming for a late-fall construction groundbreaking.

Huber noted the developer may begin incurring design costs before all approvals are finalized; the agreement as presented would allow the city to reimburse the developer for real design costs if the project cannot secure the necessary approvals.

The commission also discussed returning for a special meeting if substantive changes are submitted by the developer's funding partners. Staff estimated scheduling a special meeting would likely require about a week’s notice to ensure availability.

Ending: The commission closed the public hearing on the housing program with no public speakers. Staff will await final comments from the developer’s funding partners and the IEDC before returning with final documents or, if needed, a special meeting for formal execution of the development agreement.