During the past week, there has been a lot of discussion surrounding tax increment financing (TIF) districts and the value of using TIFs as a viable economic development strategy. As president of Greenwood’s Redevelopment Commission, I can say definitively that when properly executed and managed, TIF districts provide a significant advantage to local communities.
TIF districts have and will continue to be a major driver of Greenwood’s economic development and future growth. Due to the creation of TIFs, our city’s assessed property values have increased by more than $300 million. Unfortunately, not many people truly understand how TIF districts work.
First, let’s address how TIF districts are established and funded. Local governments create TIF districts to facilitate growth in a specific area. Once established, funding for the TIFs comes from the difference in property tax dollars generated by increased economic activity.
Put simply, TIFs capture tax revenues generated by increased commercial assessed values and reinvests that additional revenue to create and facilitate more development.
Any property tax revenue collected prior to a TIF designation continues to pass through underlying tax entities. The increase in commercial assessed values, created by economic development activity, is what funds a TIF.
In Greenwood, there are currently six TIF districts — Fry Road, State Road 135, Cabela’s, Airport Boulevard, eastside and downtown — with a seventh planned for Worthsville Road. I cannot begin to express the crucial role TIF funding plays in the development of these areas.
For instance, the eastside TIF alone has already funded the construction of critical infrastructure, facilitating significant development, including the Greenwood Springs commercial subdivision, Emerson Pointe, ULTA, OrthoIndy South, the Precedent Business Park and several professional office buildings.
Without the Fry Road TIF, Greenwood would have almost no funding to make infrastructure improvements next to our largest taxpayer — Simon Property Group. The Fry Road TIF covers the area around Greenwood Park Mall and is actively investing to ensure that the mall and other retailers are provided with quality infrastructure that will promote further reinvestment.
The State Road 135 TIF will convert an agricultural area to a high-end commercial and residential center. This takes both time and capital. Honey Creek Road, Stones Crossing Road, Cutsinger Road and Smokey Row Road are just some of the many roadways that need to be rebuilt in order for growth to flourish.
And the new downtown TIF will provide capital to upgrade infrastructure, sidewalks and public spaces that downtowns need to thrive.
None of this would be possible without TIF districts and funds.
Attracting private investment to our area depends on a number of factors, including available workforce, shovel-ready land and a readiness to respond to opportunities. However, none of these factors matter if existing infrastructure is not suitable to accommodate such investment.
For Greenwood and other cities across the state, TIFs are an investment in the future. Results demonstrate the many returns we are seeing on that investment, and we will continue to pursue what is clearly an effective strategy for economic development.