RDC advances downtown theater purchase, reaffirms TIF revenue commitments

Martinsville City Redevelopment Commission members on May 14, 2025 voted to adopt two resolutions tied to a proposed financing package for the purchase and rehabilitation of a downtown theater and discussed keeping Tax Increment Financing (TIF) revenues committed to existing obligations rather than returning assessed value to the general tax base.

The action followed a presentation on the commission’s 2024–25 TIF finances. Jeff (staff member) told the commission it began 2025 with roughly $2,789,000 in cash and was expecting about $2,100,000 in revenue for the year. He said the commission currently has an $805,000 commitment for debt service on 2021 bonds and that, under the projects the commission has already committed to, the authority faces about an $18,000,000 shortfall by the end of 2026 unless revenues grow or obligations change. “We have collected annually or are scheduled to about $2,000,000 a year,” Jeff said.

Commission discussion focused on how the theater purchase would be financed and how that interacts with existing TIF commitments. Jeff said the theater acquisition would be structured as a 20-year lease-rental bond issued through the redevelopment authority and repaid with property taxes. “It is a lease rental, so it will be through the redevelopment authority, but it will be repaid with property taxes,” Jeff said. Commissioners discussed an estimated total project cost of about $3.9 million, including soft costs; one speaker said the bond issue would likely be about $3.4 million and the remainder funded from TIF funds.

Jeff reviewed the TIF district’s assessed value and modeling the commission staff prepared: returning the district’s assessed increment (about $73 million in 2024 assessed value, as presented) to the tax base would reduce the district levy and shift tax collections back to the county, city and schools. The presentation showed an approximate annual distribution change of roughly $74,000 to all taxing units combined if the full increment were released. Jeff cautioned that releasing assessed value could also raise local tax rates and increase circuit-breaker losses, reducing net property tax collections for operating units.

During a public hearing on the theater purchase, a downtown resident and volunteer organizer urged the commission to approve the project and described plans for regular programming and volunteer support. “Our goal on this time next year is to have an event at the theater every week. It’s bringing 300 people into the downtown area,” the commenter said. Speakers from the commission and city staff described plans for volunteers, building cleanup and leveraging downtown restaurants with pre- and post-event specials.

The commission approved two resolutions listed in the meeting packet as 2025-0709 and 2025-0710. The second resolution was adopted after a voice vote in which one member opposed; the minutes record that the “ayes have it” and one opposed vote was noted. Following the vote commissioners discussed obtaining two commercial appraisals on the theater building before closing: staff said they would ask one appraiser identified by city staff and have the seller or another party provide a second appraisal so the commission would have two independent valuations and a final inspection after improvements.

Commissioners and staff said next steps include completing the appraisals, finalizing bond sizing and rate estimates with underwriters (Jeff said worst-case interest-rate estimates discussed were in the 5–5.5% range), and returning to the commission for any final approvals required by procurement or bond closing timelines.

The meeting record shows motions and seconds for the key resolutions and multiple public comments in support of revitalizing downtown through the theater project. No formal change to the commission’s overall TIF spending plan was recorded other than the motion(s) and the adoption of the listed resolutions; staff advised the commission that continuing to commit TIF revenues is an option to honor existing debt and project commitments.