New Castle council backs filing for state infrastructure loan to support 27-acre subdivision

The New Castle City Council on Monday voted to support a city application to the Indiana Finance Authority's Residential Infrastructure Fund (RIF) that, if awarded, would provide roughly $1,600,000 in low-interest financing for public infrastructure tied to a proposed 27-acre residential development.

Corey Murphy, who the council invited to present, told the council the proposal anticipates Phase 1 would include about 50 to 60 single-family homes and that two additional phases could add roughly 70 to 80 more homes. Murphy said the RIF loan would pay for public infrastructure only — roads, water, sewer and stormwater — and not for the homes themselves. He said the total anticipated cost for that public infrastructure is about $2.4 million.

"The RIF application would fund approximately $1,600,000 in public infrastructure," Murphy said, describing the program as a low-interest loan program administered by the Indiana Finance Authority. He told council members the state, through the IFA, would serve as the lender and usually offers a lower interest rate than private institutions.

Murphy said the project team plans to use tax-increment financing (TIF) and issue a bond backed primarily by the incremental tax receipts captured by the New Castle Redevelopment Commission; he said the developer would guarantee any shortfall if TIF revenues proved insufficient. "If that TIF is insufficient, the developer makes up the difference," he said.

Council members asked about timing and potential funding gaps. Murphy estimated infrastructure work could begin late this year or in the spring and said the IFA's formula could leave a funding gap that would be addressed through a cost share between the redevelopment commission and the developer. He also noted that an eventual rezoning and a plan-commission review would be required before construction of homes could proceed.

The council took a roll-call vote to register formal support for filing the RIF application so the city could tell the IFA it endorses the submission. The motion passed unanimously on the recorded vote.

Murphy cited high public interest in a similar nearby development, saying the builder's marketing had received strong web traffic. He said the application deadline for the RIF program is Aug. 3 and asked the council to authorize staff to submit the application.

Next steps noted by Murphy and council members include filing the RIF application by the deadline, the plan commission's review of any rezoning, and a future council decision if bonds or other formal approvals are required.