More than $5 million in road projects, including a roundabout at the intersection of Smith Valley Road and Madison Avenue, are getting started in Greenwood this year with the help of tax dollars collected on the east side of the city.
City officials want the projects done now to help promote more development in the area, and plan to use a loan that would be repaid with funds collected by a tax increment financing, or TIF, district to get some of those projects done sooner than they would otherwise have been able to afford them.
The money for the projects will come from a $5.8 million loan from the city’s Eastside Tax Increment Financing, or TIF, District, an option the city has used before. Officials want to borrow the money now, well before the TIF district that sets aside property taxes for infrastructure and economic development projects, expires in 2029. The loan would be paid back shortly before the TIF ends.
Story continues below gallery
That way, the improvements made can help attract more development to the area, which includes a large amount of undeveloped land along Emerson Avenue, bringing in more tax dollars for future projects, Greenwood Mayor Mark Myers said.
The money would pay for the construction of a quarter-mile connector road from Market Plaza to Surina Way, which would replace Machledt Drive that the city plans to remove and replace with a trail for pedestrians and bicyclists, a proposed roundabout at Smith Valley Road and Madison Avenue and a reconstruction and redesign of Emerson Avenue between Main Street and County Line Road. The loan won’t cover the full cost of the projects, which also are being paid for with city funds and federal grants.
“There are projects coming up that we want to do now, that we cannot wait 10 years to do,” Myers said.
All three projects are planned to be done this year. Designs for the new roundabout are nearing completion, and the redevelopment commission also has hired consultants to create plans for the connector road and Emerson Avenue work.
By borrowing money from the TIF district, the city is able to do projects now, rather than waiting for the money to be collected in future years, Myers said. The loan was unanimously approved by the Greenwood Redevelopment Commission. The Greenwood City Council voted 6-2 to give the loan initial approval.
The Eastside TIF District, created in 1997, covers properties on the east side of the city, primarily along U.S. 31 and Main Street. In 2015, the TIF district collected about $6.6 million in property taxes, money that the city sets aside for infrastructure projects or to help attract businesses to the city. In the past, the city has used money collected in its six TIF districts to fund everything from new roads to a water park.
Under state law, the Eastside TIF District is set to expire in 2029, meaning the property taxes collected there will go to all taxing districts, including the schools and library, which have not been collecting taxes from new development in that area for the last 20 years.
Before then, city officials want to be able to collect as much money as possible for future projects, and their hope is that by doing these road projects, more businesses will develop in the area and more tax dollars will be collected by the TIF district for other projects, Myers said.
The improvements to Emerson Avenue are especially time-sensitive, Myers said. With property around the road still undeveloped, improving both the quality and look of the stretch of Emerson Avenue from Main Street to County Line Road will help attract more businesses there, Myers said.
A loan can be used to extend the life of the TIF district, which Franklin did in 2015, but the city is not considering that for its Eastside TIF District, Myers said.
State law requires TIF districts to remain open long enough to pay off any active debts. So the city could borrow money and keep the TIF district in place until the loan was paid off. In 2015, Franklin extended three of its TIF districts-with a 15-year loan that will be paid back after the districts were supposed to expire.
But this loan from the Eastside TIF District will be paid back by 2029, before the district is set to expire, city officials said.
Another option would be to let the TIF district expire and then replace it with a new one. But Myers said that is unlikely since the vast majority of the properties inside the Eastside TIF District will be developed in the next decade, meaning a new TIF district wouldn’t have many potential properties to draw revenue from.
Here’s a look at the three projects that would be partially funded by a $5.8 million loan Greenwood is close to approving:
- A roundabout at the intersection of Madison Avenue and Smith Valley Road
- A connector road between Market Plaza and Surina Way
- The reconstruction and redesign of Emerson Avenue, from Main Street to County Line Road