TIF keeps Grissom Aeroplex running in Miami County

The three TIF districts – which divert property tax revenue for development – that MCEDA is responsible for, the Grissom Aeroplex, U.S. 24 and U.S. 31 Corridor and Peru’s West End, had a total combined ending balance of $190,312.01 at the end of 2013. The balance at the start of 2013 was $125,535.39. The total revenue received was $200,654.50, and the total disbursements were $135,877.88.

2013 figures for the fourth TIF district in Miami County, located in Converse and handled by the Converse Economic Development Corp., weren’t available, but Converse Redevelopment Commission President Steve Reiff said the ending balance in July 2014 was $689,734.

MCEDA Executive Director Jim Tidd called TIF districts “one of the primary tools we have for economic development.”

“The goal is to further development,” he said. “It allows communities to put in infrastructure and help with site work to get facilities built and investments made.”

Grissom Aeroplex

The Grissom Aeroplex was the major moneymaker of the TIF districts, accounting for virtually the entire revenue received and the sole recipient of disbursements.

In 2013, the Aeroplex received $182,352,65 in revenue and disbursed $135,877.88. Their balance rose from $125,535.39 to $172.010.16.

Tidd said the TIF was in its 20th year of existence, having been established in 1994 when Grissom Air Force Base was inactivated. He said the captured taxes came from “real property taxes paid by private companies on the aeroplex or users of the aeroplex.”

“Out of that comes cutting grass, grounds maintenance, building maintenance,” Tidd said of the disbursements. “We own 28 buildings and have to be somewhat maintained and repaired. This covers utilities, streetlights, and some of the operational expenses of MCEDA for the redevelopment of Grissom.”

Tidd also said MCEDA didn’t pay property taxes on them because it “would be paying itself.”

However, those 28 buildings aren’t attracting many developers.

“Some of these TIF dollars could go towards building new facilities, hopefully before too long, to get into development out of,” he said. “One of the things we’re looking at is possibility of a shell building. Because the buildings we currently have to compete with on projects do not meet what manufactures are looking for.”

He said they were “mostly older buildings that don’t have ceiling height that manufacturers are asking for.”

“We can’t really effectively compete for projects and some of this money may be used to help leverage in partnering with a developer in building a shell building,” Tidd said. “It’s a shell of a building, but a lot of the finishes are not complete until you get a prospect. You put up the walls and ceiling and truck dock cutouts, but you don’t finish until have a prospect.”

He said that process “gains you about six to eight months in the building process.”

“Once we enter into a partnership or relationship with the developer, and we’re talking with a couple right now,” Tidd said. “As soon as we do reach an agreement, we can go into a lot more detail. Those types of things would be things we would be looking at for future TIF funding down the road.”

He said Dean Baldwin Painting would have had a minor impact on 2013’s finances, but said it that it would “grow as the property grows” and that 2014 would “be the first year that the prop taxes they pay on the hangar will go into the hangar.”

In fact, Tidd said he expected the revenue to increase in next year’s report.

“As we continue to transfer prop out of MCEDA’s hands, that will continue to increase as more tax dollars are generated,” Tidd said of the revenue generated in the district.

However, he said there was a downside to that.

“In the past, one of the benefits to the community in keeping the overall operational expenses down has been because we’ve had a significant amount of lease income coming in,” Tidd said. “As we lease, the lease income goes into helping pay operational expenses and economic development.”

He said as property is sold, lease income decreased but TIF income increased. Due to that, Tidd said they “rely on the rest of TIF income to for continued development.”

U.S. 24 and U.S. 31 Corridor

Tidd said the U.S. 24 and U.S. 31 Corridor was “established a couple years ago” and that 2013 was the “actual first year that we really got any TIF revenue.”

The TIF had no previous balance and generated $18,301.85 in revenue. It ended the year with that same amount generated. Nothing was disbursed.

“We’re going to be looking at ways to leverage that to do things in that area and other things we’re considering,” Tidd said.

He said the TIF was the “first phase” of Broadway Landing, which was unveiled in early July.

A brochure of the area includes several currently-existing elements including businesses north of Washington Street like the Roxy and residences south but also details where future hotel and athletic field development could be located.

Mayor Jim Walker previously said at “full development” the area could create 1,600 jobs “over the course of many years.”

Tidd said Friday he has been “speaking with potential developers.”

“We’re talking with two potential retail developers now,” he said. “We’re also talking with some other private investors now on a facility out there.”

Walker said funds could be used within the TIF district as it currently stood, but that if it were expanded, it could be used in those areas as well “as long as it’s contiguous.”

Although, he said there was no plans to do that as of now.

He said the revenue and ending balance “doesn’t really do much” in the realm of economic development, but that it could be a sizeable sum in years to come.

“As years go by, if we’re getting $18,000 a year, we can really do some things,” he said. “Just because it’s there doesn’t mean you have to spend it. Someday you may have a project; someone says it’s going to cost $180,000 and it’s a deal breaker if they don’t get. Maybe we saved up $180,000 to get it done. When you’re talking economic development, you’re not talking $18,000.”

West End

The city’s west end TIF district was established in October and neither received nor disbursed any funds.

“It was set up specifically for a retail prospect that was looking to go in that area, in anticipation of 40,000 square foot retail facility, a kind of a department store,” Tidd said. “The company came under new management and had a new focus. Although they’re still considering it, they’re not moving forward on any construction.”

He said it had “lost a little momentum” and they’d not been pitching the area to other developers. Though he said the company didn’t “pull out,” he did say it was no longer a priority.

“We are trying to focus more on the downtown as well as for Broadway Landing,” Tidd said. “It was the company that came to us with the idea of putting that store in the west end. Where they wanted it , we didn’t think it was the best location for that type of store. They had researched it and thought that’s where they wanted to go.”

Walker said he doesn’t “discount” West End, saying they “made it a TIF area for a reason.”

“When people ask me, I always tell them what’s available, including the West End,” Walker said. “I hope in time we do get something on the West End.”

However, he said the TIF district for U.S. 24 and 31 was the “most viable option” because it generates more interest.

“But if someone comes in and asked for TIF districts or asks about properties and advantages, we’re mentioning West End,” he said.

Currently, Walker said there were no developers looking at West End.

“It could be removed, but the other thing that TIF also includes manufacturing opportunities with American Stationary and Western Reman, if they ever needed to expand, that TIF would be there to possibly help with that,” he said. “It’s not a detriment to the taxpayers currently paying taxes. Just having a TIF sit there – the only thing we’re losing is time. They have a closeout date, which is 20 years down the road.”

Converse

Reiff said the town’s TIF district had been in existence since 2000 and included the town’s commercial district – Jefferson and First Streets. He said it brought it roughly $60,000 a year.

“Right now, we have never issued any bonds for any projects,” Reiff said.

He said the town’s TIF helped expand First Farmers Bank and Trust, build the Big Dipper and bring in a Dollar General. He also said the funds had been used to improve existing businesses and not just attract new ones.

In 2008, he said the TIF district was able to fund lightning on Jefferson Street that saw 28 new poles put in. He also said it’s helped with loose bricks and maintain buildings, saying owners “just aren’t putting money aside to take care of building repair… in this economy.”

“The main concern we’ve helped on is areas where drainage has been a problem,” Reiff said. “It impacts maybe a TIF area, but it always encompasses a neighborhood around it, not just Jefferson and First.”

He also said that without the town’s TIF district, First Farmer’s Bank and Trust may not be in Converse.

“That is critical to Converse,” Reiff said of the bank. “I think we give First Farmers a perspective of a small town service integrated in a big farmer’s world.”

He said the town would have been “hard pressed” to help the bank expand when it last did in 2010 without an established TIF. Reiff also said he’d been talking with a “couple of entrepreneurs” who were considering coming to the town and was competing with Wisconsin in that effort.

As a result, Reiff said of the TIF district that “it behooves us to make sure that’s used for what it’s supposed to be used.”