A new supermarket and shopping center at a growing Center Grove area intersection could bring in $100,000 or more per year in property taxes.
But under a proposal that got initial approval from Greenwood, the city would collect almost all of that money for future infrastructure and economic development projects, and Center Grove schools and other local governments would get very little.
That new Kroger and strip mall at Smokey Row Road and State Road 135 is one of the first planned developments in what officials have long seen as a future growth area.
Now, Greenwood wants to create a tax-increment financing, or TIF, district along State Road 135, which would stretch from Stones Crossing Road to Whiteland Road. That would mean that property taxes from new development that comes to the land along State Road 135, including new office buildings, retail stores or restaurants, would be collected almost entirely by the city for projects.
And that is a concern for Center Grove school officials, who fear the school district would not be able to fund projects needed to keep up with growth, including a new elementary school they expect will be needed in the future.
At issue is more than 4,000 acres of mostly undeveloped land along State Road 135, which has continued to get busier with more traffic as more development has been built in the Center Grove area.
City officials want to include that land in a new TIF district so they can spend tax dollars from new development on infrastructure improvements, such as sewers and roads, to prepare for and keep up with the growth.
But the school district wants to do the same, and that section of State Road 135 is one of few areas in the school district available for commercial growth.
Schools officials hope that Greenwood will consider allowing the school district to keep at least some tax dollars from new development. They have asked the city to consider allowing them to collect property taxes from apartments or condominiums developed in the area, which could send students to Center Grove schools. Other communities, including Avon, Brownsburg and Zionsville, do something similar, Center Grove superintendent Rich Arkanoff said.
“If apartments and condos are allowed to be developed in the new TIF, we want those tax dollars to come to the school district,” Arkanoff said. “Apartments, condos, those are really important. That tax money impacts the ability to maintain the buildings that we have and build a new elementary school.”
Apartments and condos could bring hundreds more children to the school district, Arkanoff said. So, if apartments are built in the future TIF area, then the school district should be allowed to collect the tax dollars from those to pay for upkeep, renovations or improvements to schools.
City officials agreed to look into the request but also want to know how much money that could add up to.
“We’re going to look into it,” council member David Hopper said.
If tax revenue from apartments appears to be too great of a loss for the city, then the council wouldn’t allow the school district to collect the taxes on apartments and condos, he said. But Hopper questioned how many apartment complexes or condominiums would be developed along State Road 135.
“I don’t think there are a lot of places for apartment complexes to be built. What I envisioned going in there was retail and office buildings,” he said.
The city council would need to give a second approval to the new TIF district, and it plans to review the school district’s request before that meeting later this month. Council members Bruce Armstrong and Ron Bates voted against the initial approval because they don’t agree with the city taking all of the tax money collected there.
“Schools deserve their own cut of the money,” Armstrong said. “Instead of using it all for ourselves, we need to be good community citizens and give back to schools and other branches of government.”
Supporters of the new TIF district say it is needed because the money collected can fund future traffic projects, such as improvements to the intersection at State Road 135 and Smith Valley Road.
The city has listed more than $75 million in future projects where that money could be spent, including a $4 million fire station on the city’s southwest side, more than $4 million in improvements to Freedom Park and Freedom Springs Greenwood Aquatics Park and more than $40 million in other various road improvements along Curry, Honey Creek, Demaree and Worthsville roads on the city’s southwest side, according to city documents.
Arkanoff said school officials understand why the city wants the TIF district. Both sides need money for future plans. Greenwood officials don’t want to lose out on a lot of tax dollars any more than Center Grove officials do. It’s a conundrum, he said.
But he wanted to explain how the school district would be impacted. He used a Kroger on U.S. 31 inside a current TIF district as an example of the impact because that store is similar in size to the one being built in the Center Grove area.
Last year, that Kroger paid about $130,000 in property taxes, with the money going to the Greenwood redevelopment commission and not Clark-Pleasant schools, Arkanoff said.
Based on those amounts, Center Grove schools could collect about 40 percent, or $78,000, in property taxes from a Kroger of the same size. But if the store were included in a TIF district, Center Grove would get less than $400, he said.
If the city gives final approval to the new TIF district, the school district also has the option of requesting funding for school projects or renovations from the city redevelopment commission, as Clark-Pleasant and the Greenwood library have done with the city’s other TIF districts. But the school district doesn’t want to have to request grants to maintain its buildings or to build new facilities, Arkanoff said.