Kendallville Expands TIF District
KENDALLVILLE — A new combined tax increment financing district within the city is finally a reality after months of discussion.
The Kendallville Common Council approved the combination of the East TIF district and the Downtown TIF district during Tuesday night’s meeting. The new district also encompasses a new economic development area along the U.S. 6 corridor to the western city limits.
“I think this will benefit the entire city by joining these two TIFs,” said Jim Dazey, councilman. “The redevelopment commission has taken the time to plan areas for growth.”
The main benefit of combining the two separate districts is that it will allow the city wider use of the money that both are capturing. Currently, taxes captured in the Downtown TIF can only be used downtown, while Eastside TIF dollars can only be used out east.
The new district encompasses 25 new properties, which city officials are hoping will be developed in the future providing new revenue. The 25 parcels were hand-selected by the redevelopment commission and are mostly empty lots that could be developed into new commercial buildings. If that happens, the city would get the maximum increment as a piece of blank land with low assessed value would suddenly have new facilities located on them with a much higher tax value.
The creation of the new district will potentially create a revenue source for the city’s TIF fund going forward, as the other two districts have sunset dates approaching.
The Downtown TIF expires in 2025, while the Eastside TIF’s sunset date is later in 2033. When a TIF “expires,” all of the pent-up value is released and the city stops segregating those tax dollars for development. Money then flows to local government units like normal.
Kendallville could always re-establish those TIF districts in the future if it wants, but when that happens, the baseline values are reset at the current level, meaning that it would take new improvement, development or assessed value growth to begin capturing worthwhile tax income again.