GARRETT — Pending repair or replacement of Garrett’s historic City Hall could now be partially financed through tax increment funding following action by the Garrett Redevelopment Commission during a special session Wednesday.
The commission unanimously voted to expand its economic development area originally established in 1995 to include the core downtown area along Randolph St. to Houston St., portions of West Quincy Street surrounding the police and fire station and an area along the southwest corner of S.R. 8 at C.R. 19 not previously included.
Recent legislation in the Indiana State Senate changes the way redevelopment commissions can create economic development areas and use tax increment financing to fund various economic development projects, according to Garrett Redevelopment Commission attorney Doug Johnston.
Under the measure, redevelopment commissions no longer have the power of eminent domain to acquire real estate. It also provides that if a redevelopment commission has an economic development area and is currently capturing tax increment financing revenue, that area will automatically end in year 2025.
As a result of the sunset provisions of tax increment funding, Johnston said a narrow window of opportunity exists through July 1, 2015 to identify worthy projects, and if those projects require extensive funding, put in a bond issue to generate funds to complete the project.
By encompassing these areas, Garrett will be able to capture tax increment financing revenues to help fund capital improvements to real estate and structures already owned by the municipality.
The Garrett Redevelopment Commission prioritized either demolishing and rebuilding City Hall, or upgrading it in place at an estimated $3.8 million, plus funding capital improvements to the street barn including power, insulation, replacing and rebuilding a salt barn, lighting and adding a concrete apron, estimated at $100,000.
Under the new rules, redevelopment commissions will not be allowed to stockpile any funds over and above 200 percent of those necessary to carry out specifically identified projects and expenditures, plus debt service of any bonds.
If a redevelopment commission does not have sufficient plans or does not need those excess revenues, they will default back to the city, Johnston said.
Garrett currently has $2.3 million in its tax increment financing funds, officials said. Tentative plans are to earmark $750,000 for the City Hall project and to sell bonds for the remaining costs.
Earlier in January, the Garrett Development Commission voted in favor of establishing a local redevelopment authority that allows a greater bonding capacity, according the Johnston. That body can acquire a piece of real estate or structure, fund any necessary construction or improvement, then lease it back to the redevelopment commission to be used for its intended purpose.
The redevelopment commission could then lease the property to generate funds to repay the bond, and or use tax increment financing revenues to pay the lease payment for the redevelopment authority to retire the bonds.