Commission hears overview of residential TIF; members weigh school and infrastructure impacts

The Owen County Redevelopment Commission received an educational briefing on residential tax-increment financing (TIF) on Tuesday and spent an extended discussion weighing how a residential TIF might be used to fund sewer and roadwork linked to housing development — and how those choices could affect school funding and county services.

Ronald Reynolds of LWG CPAs and Advisors explained the process for creating a residential TIF, the public-notice and hearing requirements, and the types of projects the statute allows. "The process currently in statute is very similar [to a traditional TIF]," Reynolds said, noting that a public hearing for impacted neighborhoods is required at least 30 days before adopting a declaratory resolution and that, under current statute, the school sign-off and the so-called 1% test are suspended until June 30, 2027.

Reynolds said residential TIF proceeds can be used for public infrastructure and local improvements related to housing, acquisition and rehabilitation of property within the TIF, and site preparation; bonds can be issued to pay for those items. He described developer-purchase bonds — largely a paper transaction where the developer receives debt service tied to projected TIF revenues — as a common way to provide capital to developers while structuring repayment from future assessed-value increases.

Commissioners raised several policy questions. Some expressed concern that capturing future property-tax growth in a TIF district diverts increases in assessed value away from taxing units such as school corporations. "You bring 200 new kids — we've got to build onto that school — and that money is going to develop more property, not to pay those bills," said one commissioner, urging caution about potential impacts to school capacity and county services. Reynolds and several commissioners noted options exist to structure TIFs with pass-throughs or safeguards and that redevelopment commissions and school corporations can negotiate protections during the planning process.

Members also discussed whether a residential TIF could overlap parcels in an existing commercial TIF. Reynolds said he was not aware of a statute expressly forbidding overlap but recommended legal review and consultation with outside counsel (Barnes & Thornburg was mentioned) before attempting overlapping districts. Commissioners suggested that, if part of a commercial TIF were to be converted to residential, the county would need to dissolve or amend that portion of the existing TIF.

Developers Chris Paul and John Livingston, whose property on U.S. 43 was discussed as a potential target area for residential TIF, attended the meeting but made no formal proposal. Commissioners requested an executive-style summary of the residential TIF rules and asked staff to circulate guidance from legal counsel (Barnes & Thornburg) and to invite affected taxing units — particularly the school corporation — to participate in future discussions.

The commission took no final action to create a TIF district. Members characterized the briefing as an educational step and emphasized that any decision would require coordinated input from the redevelopment commission, the county council, the county commissioners and affected taxing units before proceeding.