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Henry County pursues ReadyOne funds and developer contributions to close $537,000 gap for Ashbury Fields housing project after state tax change
Summary
County staff told the Henry County Board of Commissioners on May 14 that a recent state tax change reduced the bond available to pay public infrastructure for a planned housing subdivision, creating a $537,000 funding gap.
County staff told the Henry County Board of Commissioners on May 14 that a recent state tax change reduced the bond available to pay public infrastructure for a planned housing subdivision, creating a $537,000 funding gap. Cory Murphy, a county staff member, said the county is proposing to use $190,000 in ReadyOne funds, a $285,373 developer contribution and a $61,627 redevelopment commission contribution to close the shortfall.
The project, located at the southeast quadrant of 200 North and State Road 3 and previously called Sam Hall Estates, has been renamed Ashbury Fields. Murphy said the debt to pay for roads, water, sewer and drainage for the development was originally sized at $1,557,000; after the change in property-tax treatment tied to the state law referenced in the meeting, that amount dropped to about $1,020,000, leaving an approximate $537,000 gap.
"Essentially the taxes generated aren't sufficient to pay for the public infrastructure necessary to support those houses," Murphy said. He told commissioners the county applied to the Indiana Finance Authority Residential Infrastructure Fund (IFA RIF) and was selected; the IFA financing carries a 3.15% interest rate that is attractive to the developer in the current market.
Murphy said the county applied for IFA RIF funding in December 2024 and was one of 12 projects selected from more than 100 applications. He described ReadyOne funds as a potential 35% contribution toward the identified gap and said the developer and the redevelopment commission were being asked to make up the remainder. "If the developer were to have to pay for the public infrastructure, this project would not happen because the price point would be well above what they're advertising," Murphy said.
Murphy also warned commissioners that the developer bears ongoing risk: if bond payments are not met, the Indiana Finance Authority can require the developer to make payments. He said that payment could be about $85,000 a year for roughly 20 years if the developer is called on to cover the debt.
A commissioner, speaking without name identification in the transcript, told Murphy the board shared his displeasure with the cited change in state law. No formal vote on moving ReadyOne funds to the project occurred at the meeting; Murphy said he would ask the redevelopment commission to approve an additional contribution the next day and that further approvals remain necessary.
Background: Murphy said the county used a tax-increment finance (TIF) area and a bond payable primarily from taxes generated by new home construction, with the developer as a secondary payer. He noted state-level programs and legislative changes affected the project's financing and that the IFA RIF program was created with state funding intended to support residential infrastructure statewide.
