Franklin and Greenwood officials presented a study showing how a TIF district proposed by the county could impact growth east of the highway.
The Interstate 65 Corridor TIF district, proposed by the Johnson County Redevelopment Commission, would include more than 3,000 parcels in Clark, Pleasant and Needham townships. The proposed tax-increment financing district includes all of Clark Township, areas of Pleasant Township around Tracy Road, Emerson Avenue and Combs Road, and unincorporated areas east and south of Franklin city limits.
At the same time, the county’s redevelopment commission proposed another TIF district along the future Interstate 69 corridor, which local municipalities support. If approved, the districts together would be unprecedented in scope and size.
TIF districts are economic development tools used in areas that are unlikely to grow on their own, creating a new source of revenue to drive future growth. Local governments collect new tax dollars that are created by growth within a TIF district, then use those new tax dollars to help fund further growth and infrastructure improvements within that particular area.
The rift over a TIF
The size of the county’s proposed I-65 TIF district shocked city leaders, who say their approach with the economic development tool has been concentrated to specific areas that are primed for growth in the immediate future.
Though the TIF area is expansive, county redevelopment commission members argue the parcels included meet the “but for” criteria, because the roads within the area are not fit for development they would like to see, and because there are no sewer services in the area.
Franklin, Greenwood and Whiteland officials spoke out in March against the proposal after the county’s redevelopment commission passed resolutions establishing the two TIF districts in late February. It is now up to the Johnson County Board of Commissioners how and whether to proceed.
The three-member board of commissioners, who also make up a majority of the voting members on the redevelopment commission, put both TIF districts on pause to allow more time to talk with city and town officials after being made aware of the opposition at their first March meeting.
They met again Monday to discuss the proposed TIF districts.
During the meeting, Adam Stone, of Stone Municipal Group, presented to the county a study on the impact an I-65 TIF district could have on Franklin. Greenwood Mayor Mark Myers submitted a letter from Ginovus, a Fishers-based corporate site selection firm, about the viability of growth in the area.
The study includes a blind survey conducted with developers who are looking at projects in the I-65 corridor in Johnson County, or who have an ongoing project there. The survey found the developers care less about whether the site is within the city or the county, and more about whether utility connections and a good transportation system are readily available.
The study also outlined ways the county could still benefit if the proposal is taken off the table and cities are allowed to develop the areas as they see fit.
Infrastructure impasse
Because neither a utility connection nor access to a major thoroughfare exist right now in a large part of the proposed I-65 TIF district, the cities believe growth would be stunted by a county TIF district.
Both Franklin and Greenwood have seen some of their development prospects already in process within the district’s proposed boundaries stall while awaiting a resolution, city leaders said this week.
Utilities are the major reason why the cities say they could make development come faster by annexing parcels and extending infrastructure at the pace the market requires.
As it is now, the county does not have a sewer utility, money allocated to create one or a contract with a third party to provide services, and neither city intends to provide those services to the county.
The county says intended uses for income from the proposed TIF district are sewer projects as well as new thoroughfares through Clark Township. However, money for those projects would be collected over time following development within the district.
TIF monies may be used to fund public projects, such as roads, bridges, utilities, buildings or parks, but revenue produced within a TIF district may only be used in that TIF district, according to state law.
Ron West, a redevelopment commission member and county commissioner, alluded that the county would pay to extend the services but didn’t elaborate on how. He called on Franklin and Greenwood to extend their services to help the county develop the area.
Franklin Mayor Steve Barnett said it does not make financial sense to expand the city’s sewer system because the utility is for Franklin residents only. Even if the county covered some of the cost, it wouldn’t be enough to cover the investment, he said.
With every new development, the city gets closer to capacity and a need to expand, which could put city residents in a position where rates have to increase, Barnett said.
Greenwood has no plans to extend sewer services east of the city either, because Clark Township is unlikely to have further commercial or industrial development east of Franklin Road, Myers said. Extending the sewer that far east of the city at that elevation would require an additional lift station, which the city is not willing to build, he said.
Redevelopment commission member R. Lee Money challenged officials to see the conversation as a partnership rather than an adversarial stand-off.
“I fail to see any reason why the cities and the county can’t offset and match those costs. Assuming it is going to be an us versus them conversation at every point sells everyone a little short,” Money said.
The give and take between the cities and county is lopsided, West said. Cities should be willing to extend their utilities to help the county grow, he said.
“So far what I’ve heard is: ‘The cities aren’t going to work with the counties. You can just write that off right now …’” West said. “Yet I’ve heard the cities say to the county, ‘We want you to work with us where you can.’”
Rather than being adversarial, the goal of the presentation was to share data to back up both cities’ positions and share data, Stone said. The hope is for both the cities and county to grow and remain partners, he said.
“The worst thing for all of us — the county and the municipalities — is a no-growth scenario. That hurts all of us and probably more than any of us the landowners who own the land in this area,” Stone said. “It benefits everyone to have a growing tax base.”
Clark Township debate
Because the township lies between I-65 and Interstate 74 in Marion and Shelby counties, Money thinks the area could develop with more commercial and industrial properties. He said the county needs this tool to accommodate that growth, by continuing the Worthsville Road extension and extending County Line Road from Five Points Road to the Shelby County line.
“To invest in that area is critical, not this year, maybe not next year, maybe not 10 years from now. But certainly within the time limit of the TIF district, there will be development proposals,” Money said. “The RDC and the TIF area is the only viable vehicle to address that.”
In the redevelopment commission’s opinion, establishing the I-65 TIF district is the only way to facilitate that growth.
“Without the TIF district encompassing Clark Township there is no vehicle to address development in that area,” Money said.
Rob Henderson, a redevelopment commission member who also sits on the Johnson County Council, agreed TIF is the best way to fund future projects, and said a tax increase would be the only other solution.
“Absent this process and what we are going through our level to pull, so to speak, is a really hefty economic development income tax,” Henderson said. “Our folks are taking the right steps to consider the steps that are best for our constituents.”
On the other hand, Myers does not envision any development besides housing in Clark Township, east of Greenwood. Since housing is the dominant development in southeastern Marion County, Clark Township will likely see more of the same, he said.
“If you look north, it is all residential. It does make sense there could be some commercial on Worthsville Road … But when you look past Franklin Road, it is all farm fields and residential. I don’t see that ever becoming commercial,” Myers said.
If most of Clark Township does indeed develop into homes, that wouldn’t bring in TIF dollars, as housing developments are typically eligible for TIF under state law.
Barnett questioned the county’s use of TIF, and said it is a more proper use of TIF to create small districts that are centered on an intentional effort to develop an area.
Stone offered some advice during Monday’s meeting, suggesting the redevelopment commission consider making the area smaller. He warned that a district this size could draw criticism from state legislators.
“It is my opinion that the boundaries as proposed are unique in their scale. My first thought is to make sure that there is a targeted plan and that that economic development plan makes sense for that many parcels,” Stone said.
He suggested the county consider other options, such as grants, a road impact fee, or an income or wheel tax increase to pay for new roads.
The path forward
Money and West were ready to go with the proposed I-65 TIF district as is. Henderson and Kevin Walls, a redevelopment commission member and county commissioner, asked to keep the I-65 district on pause, but agreed that the I-69 TIF district is ready to go, as there was no opposition for that proposal.
Redevelopment commission member and county commissioner Brian Baird did not weigh in on the issue at the meeting.
The board of commissioners will reconsider the proposed I-69 TIF district at an upcoming meeting, while members of the redevelopment commission meet with city and Whiteland officials to potentially reach a compromise on the proposed I-65 TIF district.
A resolution on the I-65 district could still be months away, officials said.
