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Council hears redevelopment commission report and warned Senate Bill 1 shrank housing infrastructure financing
Summary
County economic development staff reviewed the redevelopment commission's 2024 annual report, outlined a $2.1 million infrastructure package for a 65-home development and said recent state legislative changes reduced the amount the county can borrow to pay infrastructure by about $500,000.
Corey Murphy, who said he prepares the Henry County Redevelopment Commission's annual report, presented the commission's 2024 consolidated financials and a near-term housing project that will need additional local gap funding.
Murphy told the Henry County Council that a bond issued to pay public infrastructure for a planned 65-home development carries an annual debt service of about $86,000 and that changes from ``Senate Bill 1'' (also referred to in the meeting as Senate Enrolled Act 1) have lowered the amount the county can support with tax increment financing from about $1,500,000 to roughly $1,000,000, creating roughly a $500,000 shortfall for the public infrastructure package.
The shortfall matters because the infrastructure financing is structured so the bond is payable only from two sources: the tax increment captured from the new homes and, if that is insufficient, the developer, Murphy said. He gave the overall public infrastructure budget for the project as about $2,100,000 and said the planned funding breakdown included $1,000,000 from bond proceeds (about 50%), $190,000 from a ReadyOne regional allocation, roughly $500,000 in developer contributions (about 24%), and $300,000 previously approved through an IFA award (about 14%). Murphy said he planned to ask the redevelopment commission at its next meeting to approve an additional $61,627 to close the remaining gap.
The ReadyOne funds affect two projects, Murphy said. The region withdrew a $190,000 ReadyOne allocation originally set for a YMCA after construction-timing concerns; regional partners have discussed directing those dollars instead to the County Road 200 North/State Road 3 housing infrastructure project.
Murphy framed the housing example as a real-world impact of the state law changes: "This bond is payable from 2 sources and 2 sources only. The increment generated off the homes, if that is insufficient, then the developer is on the hook. There is no other public pledge." He added that the IFA Residential Infrastructure Fund (RIF) award gave the county access to a below-market interest rate (3.15%) by having IFA buy the bonds.
Council members and staff discussed next steps, including a planned motion to have Murphy review the redevelopment commission annual report with the council on 2025-05-14; that motion passed unanimously. Council members also reported contacting state legislators about concerns with the new law and noted broader county revenue impacts expected over the next three years.
Why this matters: the redevelopment report tied local bond capacity to state policy changes, showed a concrete funding gap for a specific housing project, and outlined how a mix of IFA support, regional ReadyOne funds and developer contributions must be combined to move the project forward. The council did not adopt new policy at this meeting but voted to receive and review the redevelopment report and to ask the redevelopment commission to consider an additional allocation at its upcoming meeting.
Context and next steps: Murphy said bonds must close before July 1 for the project schedule to proceed and that construction of the public infrastructure would follow. The council and staff flagged the impact of the state law on residential tax increment financing and said they will continue to seek regional and state options to preserve planned projects.
