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Mount Vernon residents, council members question loan structure for Liberty Crossing TIF
Summary
MOUNT VERNON — A city resident told Mount Vernon City Council members on Monday that Tax Increment Financing (TIF) money should not be used to pay for turn lanes and road work at the Liberty Crossing development, saying the developer had originally agreed to pay those costs.
MOUNT VERNON — A city resident told Mount Vernon City Council members on Monday that Tax Increment Financing (TIF) money should not be used to pay for turn lanes and road work at the Liberty Crossing development, saying the original public record showed the developer would fund those improvements.
The comment came during public comment, when Mike Hillier, who said he lives at 215 East Sugar Street, said he participated in early planning for the project and that “the realtor, Highland Real Estate, would pay for it.” Hillier said he had emailed council asking for clarification and that a staff member named Brian had emailed back; Hillier said Brian’s email stated, in part, “the city is not taking out a loan of sorts is being taken out against the future revenue that the new TIFs and NCA will collect from this site.”
The issue went beyond the public comment period into the council’s legislative discussion. A council member explained that the city will not issue general-obligation debt for the project and that the financing framework allows bonds to be issued that are secured by the property and future TIF revenue, not by the city’s general fund. “We are creating a framework with the development tools that ADF has brought to us so a loan can be taken out against the real property and the future TIF revenue,” the council member said. “The city is not on the hook for anything.”
Why it matters: Liberty Crossing is being set up as an incentive district under ordinances before council, and TIF agreements can shift the timing of tax revenues for a parcel’s improvements. Hillier said the council was told previously the developer would pay for turn lanes and that switching to a loan that is repaid from TIF revenue changes that expectation.
Details from the meeting: - Council considered two ordinances creating TIF districts for parts of Liberty Crossing; both had second readings during the meeting. Council scheduled a public hearing on the TIF for June 23 at 7 p.m. - A council member said there are two separate TIFs for the project—a residential TIF and a nonresidential TIF—and that tax increment will not flow until parcels are built and producing taxable value. “You’re not gonna get Liberty Crossing paid on any TIF until, a, they’re built, b, they’re rented, c, time to turn the tax,” the council member said. - The council member said the municipal conduit (referred to in the meeting as the NCA) will issue bonds tied to the development and that once those bonds are paid off — a period the member suggested could be 15 years — incremental revenues could be used for city infrastructure like wastewater and police facilities. - Hillier raised a scenario in which a developer stops work after partial completion; council discussion emphasized that the loan would be secured by the land and improvements, and that future developers who acquire the property would inherit the obligation to repay the financing.
What the council did: The meeting advanced TIF ordinances (they received second readings) and set a public hearing for June 23. Council also adopted an unrelated annual ordinance to update the codified ordinances. Toward the end of the meeting council approved an executive session to discuss hiring personnel; the presiding official stated no action would follow that session.
Context and limitations: Statements in the meeting described the financing mechanism in general terms; the council member repeatedly emphasized that the city itself is not issuing general-obligation debt and that the financing is structured to be repaid from the property/TIF. The meeting transcript and public comment included claims about earlier public discussions and commitments by the developer; the council directed that those questions be addressed in the public hearing and in follow-up communications with staff.
Next steps: Council will hold a public hearing on the Liberty Crossing TIF at 7 p.m. on June 23, when residents can ask questions and the city will provide more detailed information about the planned TIF agreement and associated financing.
