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The City Beat

Once More, Into the TIF

Posted 2:12 PM by


The North Midtown Tax Increment Financing District was finally approved on March 6th.  Money will begin to flow into the TIF from new construction within the District in about a year, since what the TIF captures is the tax revenue from new construction after the previous tax assessment date.


Generally, the TIF District had broad support from the major neighborhood associations within the District.  What opposition there was came from the eight person group in Meridian Kessler known as MKNHN, and from Pat Andrews, who is a longtime Board member of McANA.  Since Pat’s position, essentially, is that all TIF’s are bad, a philosophical position that you can accept or reject as it relates to all TIF’s, the main argument against this specific District, made by MKNHN, was that the District should have excluded Broad Ripple, Meridian Kessler and the majority of Butler-Tarkington, and been limited to Mapleton-Fall Creek.


MKNHN’s reasoning, which I think I understand because their testimony before MDC was identical across the five who spoke, is that there is likely to be continued development in the areas they sought to exclude, and conversely not likely to be development in the areas they were willing to include.  While I think that’s perfectly true, I also think it completely misses the point of establishing this TIF District in the first place.


Essentially, a TIF District captures the tax revenue generated by growth due to new development, and uses those funds to create even more growth.  I’ll leave it to Ms. Andrews to present the contrarian argument, but from a philosophical basis, government allows this because it needs growth to increase its tax revenues, and it needs increased revenues to fund local government.  


If, however, you limit a TIF District to an area that is not likely to experience growth in development, little or no money flows into the TIF District, and you never accumulate money with which to fund new growth.  You perpetuate the status quo.


One significant piece of the North Midtown TIF was the creation of the Midtown Economic Council, which consists of representatives of the five major neighborhood associations within the district.  The MEC wasn’t originally intended to be codified into the ordinances creating the TIF District, but the City-County Council so liked the idea, that it was.  The MEC is supposed to act as an advisory group to the Metropolitan Development Committee  (which has final authority on how to spend funds accumulated in the TIF) and to present to the MDC a unified, albeit non-binding view on how those funds ought to be expended.   If successful, I expect this process might be incorporated into future TIF Districts.


Could there be problems?  If the neighborhood representatives disintegrate into a “me first” mentality  -  sure.  If it becomes a rubber stamp for city administration projects  -  sure.  It’s going to be awfully hard to eliminate the base  (apparently Pat’s biggest worry).


The sense I’m getting from what membership of the MEC I’ve met, is a recognition that all of Midtown is in this process together, and, that in the long run, Midtown is only as good as its weakest link.  Right now, the weakest link runs south of 49th St. to the southernmost part of the District in Mapleton-Fall Creek.  That’s not to imply that the rest of the District doesn’t have needs, or that there aren’t potential projects in other areas that would obviously allow additional funds to flow into the TIF, but rather that there exists a potential to develop a severely under performing area of Midtown, and if it’s done, we can increase the tax base across the entire area.  That’s good for Midtown, and good for Indianapolis.  


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