Andrew Mouser, director at Baker Tilly, explains the tax impact study on the tax increment financing district expansion to the Warsaw Redevelopment Commission on Monday. Photo by David Slone, Times-Union.

By David Slone
Times-Union

WARSAW — A public hearing and confirmatory resolution approved by the Warsaw Redevelopment Commission on Monday, June 3, were the final steps the commission had to take to expand and consolidate the Northern Economic and the Warsaw Central development areas.

The Warsaw Common Council and Warsaw Plan Commission previously approved resolutions related to the expansion and consolidation of the tax increment financing districts.

Warsaw Community and Economic Development Director Jeremy Skinner explained to the commission, “So the two areas that were expanded into, one was bringing in what was left of the McElroy Business Park, which was to bring in property that Danco (Medical) has purchased and is expanding on. And the second part of the expansion was the connection between along (SR) 15 of the Northern TIF District and the Central TIF District, that section in between, to allow us to create that economic development area, which will allow the city council to expand the riverfront district, if they so choose to do so in the near future, and allow those individuals in that area to apply for a riverfront liquor license.”

Because there was a TIF expansion, an impact study had to be done. Andrew Mouser, director at Baker Tilly, reviewed that study for the commission.

Mouser said the tax impact study went out to all taxing units that overlap any of the allocation areas that are being amended, which included Plain and Wayne townships, Kosciusko County, Warsaw Community Schools, Warsaw Community Public Library, Kosciusko County Solid Waste Management District, Warsaw-Wayne Fire Territory and the city itself. He said the study reiterates the findings the commission made in its previously approved declaratory resolution.

He said they do include estimates for the new TIF allocation areas.

“So for the Danco allocation area, which will be located in Warsaw Plain Township, we do include an increase in assessed value of about $550,000, which would generate about $13,000 in TIF, and that’s based on the TIF estimate we had done with Jeremy a few months ago for the renovation of that existing building,” Mouser said. “And then we also do include just an illustrative $1 million increase in the consolidated connector piece, so that could potentially generate another $20,000 in additional TIF for future development that would occur there.”

WCS would see a positive tax impact, he said, because WCS “does benefit from any new assessed value even when that new assessed value is within the TIF areas. The school referendum rates can not be captured by the TIF, so their referendum rate of about $0.07, all that new assessed value that would be generated from these TIF areas, and then from your existing TIF areas as well, will continue to benefit the schools. And they currently benefit from about $300 million within the TIF areas, so pretty substantial impacts to the schools through your referendum rates.”

Skinner said there are about five to six years left of all of the Northern TIF District. The new area added to the consolidated district will have its own 25 years, but the bulk of the Northern TIF will expire in about 2030, including the area of Walmart, Lowe’s, Kohl’s and a portion of the Warsaw Tech Park. The Warsaw Central TIF will expire in about 2040.

When the TIFs expire, those funds generated by the districts will go to the city and other taxing units.
A public hearing was held on the confirmatory resolution for the expansion and consolidation of the development areas, but no one from the public was there to speak. The commission then unanimously approved that resolution.

Next, the commission had a public hearing on and approved a confirmatory resolution amending the redevelopment plan for the Winona Interurban Redevelopment Area. The Warsaw Common Council and Plan Commission previously approved related resolutions.

Skinner said the resolution just adds the Warsaw Chemical property to their acquisition list. “Our intent is to acquire, obviously, that’s why we’re adding it. The intent of this resolution is not to acquire any property. There will be other approvals that will have to come before you and the council before that would happen,” he said.

No one from the public was present to speak on the resolution, and the commission unanimously approved it.

The next two resolutions presented to the commission were to acquire the Danco Medical property for $500,000 and then dispose of it back to Danco for $1.

On the resolution to acquire the property, Skinner said, “This is for the Danco project, and acquiring that property … is based on the conditions of their investment in the new building and for the 20 new jobs and so forth. So we would be acquiring that property to (help with) the impact to them.”

He reminded the commission that Danco spent about $800,000 in a gas line extension, which was expanded to Polk Drive and the access to the Warsaw Tech Park. The pipe size was increased from 4 inches to 8 inches “so it will be a value to us at our Tech Park as well,” he said.

Joe Thallemer asked, “Was this an economic incentive based on their investment and their jobs? And does it also help to defray the cost of the gas line, or is that separate?”

Skinner replied, “Yeah, so that was the point. In meeting with them, obviously, they had their own cost in the project expansion, but they had the unknown cost of the gas main … that cost them $800,000. So between our contribution to that gas line extension, we also did a tax abatement. In the end, they were trying to recoup the cost of that gas main. They didn’t feel like it was just for them. There was other people who benefitted as well, but they were the only ones who had to pay for the extension.”

Thallemer said that’s where the $500,000 came into play then, and Skinner agreed. Skinner estimated Danco invested a total of about $3 million in their expansion project and are creating 20 new jobs.

After the commission approved the resolution to acquire the property, they then unanimously approved the resolution to dispose of it back to Danco.

The final business before the commission was June claims, including: $401.34 to Indiana American Water for the Marsh building; $16,360.50 to Barnes & Thornburg LLP for work on the TIFs; $120 to Skinner for his cell phone stipend; $1,100 to Radon Environmental for The 2525 affordable housing project on Durbin Street; $45,000 to Retail Strategies for this year’s payment on the contract regarding finding a business for the old Marsh building; $42,000 to Westhill Development for the lease of the shell building space that’s not occupied; bond payments of $82,000, $139,147.50, $54,762.50, $23,812.50 and $196,000 to Huntington National Bank; bond payment of $58,968.75 to Regions Corp. Trust; and $300 to Kosciusko Economic Development Corporation for workspace leasing for PeekMed.