Columbia City redevelopment commission postpones TIF declaratory resolution; counsel outlines process and risks

The Columbia City Redevelopment Commission postponed action on a declaratory resolution to create two tax-increment financing (TIF) areas and a related economic development target area (EDTA) after outside counsel said the materials needed for the county auditor and other reviewers were not ready.

Lisa Lee, an attorney with the law firm Ice Miller, told the commission during the April 8 meeting that staff and the developer still needed to provide parcel lists and maps that must accompany a declaratory resolution before it can be presented to the county auditor and other agencies. "We will have to be able to provide that to the county auditor, in order for the county auditor to make sure we're capturing the correct parcels," Lee said.

The commission delayed adoption with the intent to revisit the item in May. Lee said the declaratory resolution would include two separate project TIF areas — one labeled for single-family housing and the other for commercial/multifamily — and would set a base assessment date, statutory findings, a housing program and an economic development plan for the commercial portion.

Why it matters: adopting a declaratory resolution sets the base assessed value for parcels (Lee said, in this case, Jan. 1, 2025) and begins the statutory process that allows the city to capture incremental property-tax revenues generated by future development. Those incremental revenues are typically pledged to pay bonds or reimburse developer costs for roads and infrastructure.

Key points from counsel's outline - Maps and a parcel list must be finalized and provided to the county auditor so the auditor can confirm which parcels are included. Lee said that work is ongoing and cited coordination between city staff (Chip Hill) and the developer. - The planning commission's role is limited to determining whether the proposed area and plans conform to the city's plan of development. If the planning commission finds nonconformity, it must specify how it fails to conform so the commission can amend the documents. - If adopted, the base assessment date for the areas would be Jan. 1, 2025. Incremental assessed-value increases after that date generate TIF revenue. - A single-family housing TIF area carries a 20-year statutory expiration; the commercial TIF area carries a 25-year expiration. That timing affects bond structure and repayment schedules. - Townhomes can fall into a statutory gap between single-family and commercial treatment; Lee said the legislature has required jurisdictions to create an economic development target area (EDTA) to capture tax increment generated by certain townhome products. - Financing options described included selling bonds to third parties (which prompts purchaser due diligence) or having the developer purchase bonds as a reimbursement mechanism. Lee also described taxpayer agreements (a contract recorded as a property-tax lien) that can require developers to make minimum payments to cover potential TIF shortfalls.

What the commission decided The commission did not adopt the declaratory resolution at the April meeting. Members directed staff and counsel to continue preparing maps, parcel lists and a revised procedural timetable; counsel said she would add EDTA preparation and the creation of an economic development commission to the timetable so townhome product types could be captured if needed.

Next steps Counsel and staff will complete the parcel list and maps and produce a revised timetable for review. The declaratory resolution and associated exhibits (housing program, economic development plan) will return to the commission for consideration, then to the plan commission and common council as required by statute and local procedures.

Attribution and sources The procedural and statutory details summarized above were presented by Lisa Lee of Ice Miller during the April 8 meeting; Chip Hill and city staff were identified in the meeting as the staff contacts working with the developer on parcel and map preparation.

Ending Counsel said she expects the commission to consider the declaratory resolution again in May after staff and the developer provide the outstanding materials and the timetable is updated.