Terre Haute Redevelopment Commission puzzled by lack of growth in downtown assessments

An annual report about the city's tax increment financing districts does not show assessed values but does show that growth in property taxes fell short – in some cases far short – of the amount projected.

Taxes on The Deming apartment complex at Sixth and Cherry streets, for instance, increased by about $27,000, compared with an expected increase of more than $100,000.

“How can you spend $6 to $7 million on a building and your assessed value go up by practically zero?” Steve Witt, executive director of redevelopment, asked during Wednesday's Redevelopment Commission meeting.

“In the last reassessment, you guys took a huge hit in your tax base; it went down more than most places in the state,” said Jason Semler of H.J. Umbaugh & Associates certified public accountants, who presented the report.

Assessments throughout Terre Haute and Vigo County declined more than the state average, he added.

“I don't think our buildings are any different than Muncie or Kokomo,” said commissioner Troy Helman, a local Realtor.

“We just don't understand the discrepancy between assessed values in commercial property,” Witt said.

The same disparity does not exist in residential property, Helman said.

Developers of property in tax increment finance districts must make up the difference between expected and actual taxes in order to cover annual payments on revenue bonds used to finance improvements in the district, officials said.

The issue is a concern because a major goal of tax increment financing districts is long-term growth in the community's tax base.

“In some ways, our TIF districts are our loss leaders of our overall development efforts,” Witt said. “If we can stimulate development in the downtown, for example, by utilizing tax increment financing as a tool and demonstrate we have a great quality of life, then maybe manufacturers will want to come in here, folks will want to live here and build houses — and that increases the overall tax base.”

Commercial property assessments are among several areas under review by Terre Haute Competes, a public/private coalition seeking more efficiency in local government. The coalition is expected to report on its findings in July.

Harrison Township Assessor Don Pruitt is responsible for property assessment in most of Terre Haute, including downtown. He could not be reached for comment Wednesday evening.

• Also Wednesday, the Redevelopment Commission got its first look at a resolution to extend an interest-free loan of $5 million in tax increment funds to the city's general fund. A current outstanding loan approved in February by the commission and the City Council must be repaid by Aug. 1.

The August expiration was intended by some council members as an indication the loan amount might be reduced because the city's need for borrowing is not expected to be as great in the second half of the year.

The amount stated in the resolution can be reduced, but it cannot be increased, according to City Attorney Eddie Felling.

The resolution to extend the loan continues provisions for separate bank accounts for redevelopment funds and commission access to information about the accounts, said attorney Lou Britton.

The council is scheduled to discuss the loan extension during its July 5 sunshine meeting and vote on it July 12. Redevelopment action is expected July 19.