For years, the site of the former Seyfert potato chip plant sat vacant, with only the faintest hint of development from pilings for a hotel project that had started construction in the 1980s but lost funding.
Stormwater problems caused flooding and other issues at that location and the Interstate Business Park next door.
But now the site is home to a Costco, Kelley Chevrolet and a LongHorn Steakhouse. The development would not have been possible without the use of a tax-increment financing district, said Justin Brugger, Fort Wayne’s redevelopment director.
TIF districts are a form of economic development incentive, used to entice businesses to move to an area. Property tax revenues generated within a TIF district can be captured and used for improvements within that district. In Indiana, TIF districts can be formed by a county or municipal government through a redevelopment commission.
There are 20 such districts in Allen County, including Fort Wayne.
While city and county officials across Indiana often refer to TIF districts as necessary economic development tools, one study from Ball State University’s Center for Business and Economic Research says otherwise.
Some examples of projects fueled by Fort Wayne’s TIF districts include BAE Systems at 2000 Taylor St., Centennial Industrial Park at 3619 Centennial Drive, and the Summit industrial parks in northwest Fort Wayne. The ongoing Ash Skyline Plaza and planned Cityscape Flats development are also examples of TIF projects. The Jefferson Pointe TIF district was extended downtown in 2007 to cover Harrison Square.
A Ball State study evaluated Indiana TIF districts from 2003 to 2012, and it found that statewide, property owners who don’t reside within a TIF district may pay slightly higher property taxes to make up for taxes captured by the district. TIFs may have a negative effect on employment and business in a county, and the size of a TIF district could also slightly increase the net amount of property tax revenue a municipality or county collects.
However, the study points out only the possibility of the effect TIF districts may have on tax rates, property and sales tax revenues, and businesses; there isn’t enough evidence to make conclusions. Regardless, the study recommends that the General Assembly review TIFs, and it recommends limits and changes to who can use them.
Michael Hicks, co-author of the study and director of Ball State’s Center for Business and Economic research, said Fort Wayne is one example of a city that has “great examples of the use of TIFs.”
“If I were to pick four places statewide where I could say there have been good use of TIFs, I would say Indianapolis, Fort Wayne, the Toyota plant in Princeton and the Honda plant in Greensburg,” Hicks said, citing Parkview Field and ongoing downtown improvement projects as examples.