Clarksville redevelopment staff outline TIF mechanics and move to pledge South Clarksville TIF for Maine and Clark project

Sam Schroeder, a consultant from Baker Tilly, gave the Redevelopment Commission an annual briefing on tax-increment financing and the revenue capacity of Clarksville’s allocation areas. Schroeder explained that the redevelopment district and allocation areas are separate: allocation areas generate incremental assessed value while the broader redevelopment district designates where TIF dollars may be spent. He said that for Clarksville the legacy commercial allocation area has captured about $354,000,000 in assessed value and that 2026 TIF collections are conservatively estimated near $9.6 million, with 2025 collections reported at roughly $9.5 million.

Schroeder described how only growth above a base assessed value is captured as incremental assessed value and that, when a TIF expires, incremental assessed value returns to overlapping taxing units. He noted state law changes (referenced by staff as SEA-125) will reduce some property tax revenue over the next five years and shift some capacity into local income tax receipts, which the town controls. He also said the legacy area currently shows about a 140% net service coverage on outstanding obligations and that the redevelopment commission has used legacy TIF to fund multiple public improvements, trails and infrastructure projects.

On project-specific capacity, Schroeder reviewed several allocation areas. For the South Clarksville Allocation Area 2 (the George project) he estimated eventual net tax income near $740,000 at full build-out and compared that with annual payments of roughly $325,000 on related bonds; he also said a minimum taxpayer agreement of roughly $576,000 supports the financing structure. For a Central Park School allocation area established during a 2022 developer deal, he estimated about $830,000 in revenue for 2026 and noted the commission had pledged 80% of annual TIF from that project, leaving 20% and a $600,000 minimum payment as additional coverage.

Turning to a new candidate project, Sam explained financing options for the Maine And Clark mixed-use proposal (described in the packet as a $21 million market‑rate mixed-use building with about 85,000 square feet, 69 residential units and 11 commercial suites). He said the developer’s financing request is $3.8 million net proceeds; accounting for debt‑service reserve and issuance costs would increase the bond size to about $4.34 million. Under current assumptions Schroeder estimated a 25‑year bond life with an illustrative annual debt service near $345,000, while noting interest rates and market placement could change that figure.

Schroeder recommended using South Clarksville Allocation Area 1 as the primary pledge for the project because it offers sufficient coverage and leaves revenue available for other local projects. He warned that pledging only the Main and Clark allocation would likely produce about $300,000 annually—short of the illustrative debt service—and would require either additional revenue sources, developer minimum payments or capitalizing early interest to cover the first few years. Commissioners asked whether a minimum taxpayer amount or an annual escalator would be required; Schroeder said those terms are negotiable and likely to be part of the project agreement and financing negotiations.

After discussion, the commission moved to advance the project: staff will continue negotiating project and financing agreements, and the commission approved a letter of intent acknowledging the Maine And Clark proposal and directed staff to proceed with the necessary project agreements and finance-stage reviews. No final bond issuance or legally binding financing commitment was made at the meeting; members emphasized that further approvals would follow review by the economic development commission and town council before any bonds are sold.

The meeting packet and presentation cited Indiana Code 36‑7‑14‑39 as the statutory authority for establishing allocation areas and described the multi-step approval pathway for pledging and financing. Schroeder closed by reiterating the assumptions used in the forecasts (including a projected 67 new housing units in the development footprint and an assumed average household income figure used to estimate local income tax revenue) and offered to return with additional modeling as negotiations progress. The commission also approved related project‑stage motions on project acknowledgement and directed staff to prepare financing agreements as the next procedural steps.