While Mayor Wayne Seybold has declined to comment on incentives that city officials have offered or might offer to a developer interested in more than 100 acres next to Interstate 69, he said development virtually requires incentives.
“Projects pretty much never happen anymore unless there are incentives involved, fortunately or unfortunately,” he said, later adding, “I can tell you unequivocally — no political spin or anything — 99 percent of the projects we’ve done, had there not been incentives, they would have gone to a different city.”
“Projects pretty much never happen anymore unless there are incentives involved, fortunately or unfortunately,” he said, later adding, “I can tell you unequivocally — no political spin or anything — 99 percent of the projects we’ve done, had there not been incentives, they would have gone to a different city.”
Marion Redevelopment Commission members recently adopted a resolution authorizing the city to move forward with purchasing about 12 acres that, based on maps provided to members during the meeting, would be part of a proposed 164-acre mixed-use development on the northwest block of Interstate 69 and Ind. 18. One map indicates that the proposed plans include “housing,” “retail” and recreational spaces that include an “arena.”
Any incentives the city might offer for the project would be limited to new property tax revenue generated by that development, though, Seybold said, referring to a type of special property known as tax increment financing (TIF) revenue.
“There’s no free money out there. The way we’ve done incentives it’s all based on how much you’re going to create,” he said.
With the redevelopment commission resolution adopted last month, the city’s next move will follow closely, then-city development director Lisa Dominisse told commission members during the Dec. 23 meeting.
“We’ll immediately go out and seek appraisals,” she said. “It’ll have to be back before the Jan. 20 (city) council meeting because their intention is to be at that council meeting, so we’ll have to push the appraisers to get their work done, probably.”
The dozen acres the city is seeking to purchase are currently owned by MutualBank, according to online county property records. The bank bought the 12 acres — and other land within the northwest block of I-69 and Ind. 18 — after filing a foreclosure lawsuit against the former owner, Marion Land Development. The for-profit company had sought to develop the same block for a large housing and retail complex.
Marion Land Development’s project failed to reach the construction phase before the company lost the property, however. State business records show Marion Land Development was dissolved in July.
The prior owner of the 12 acres is the same entity seeking to purchase it now — the city.
Based on the project maps, the 12 acres the city wants to buy also border a different 12 acres currently owned by Marion Sports Authority, a private nonprofit created for public benefit. The nonprofit, which shares an address with city hall in state business records, sought to develop a sports and entertainment complex centered on an ice arena on Marion Land Development’s property — where the latest I-69 developer plans to build an “arena,” a project map shows.
Marion Sports Authority has been largely inactive for at least the past year or two. When the full board of directors last met, in June, they voted unanimously to start the process of dissolution and agreed to meet again in August. That meeting was postponed at Seybold’s request and the full MSA board has not publicly met since then.
MSA President Jim Brunner could not be reached for comment last week.
Seybold said he declined to name the latest I-69 developer because media and community members “beat (him) up” over past developers’ plans falling through.
That was the case for Marion Land Development and Marion Sports Authority, both of which benefited from public dollars in the form of tax increment financing (TIF) revenue.
Marion, like other cities, including neighboring Gas City, has used its TIF revenue to back a type of loan technically called conduit bonds or conduit financing. The city then gives these loan proceeds to third-party developers, which are ultimately expected to repay the debts if TIF revenue is insufficient.
“In a conduit financing, the conduit (third-party) borrower is liable for making debt service payments on bonds,” according to the website of the Municipal Securities Rulemaking Board, a body created by U.S. Congress to help oversee the municipal bond market.
Marion officials, however, have later refinanced some TIF-backed loans under different terms, which released the third parties of their financial obligation and shifted it to the city, loan documents show. So because of the new terms of such refinanced loans, public money will ultimately repay the remaining refinanced loans.
Seybold differed on the city’s liability to its refinanced debts, however.
“We’ll agree to disagree,” he said.
Redevelopment commission president Madonna French said she wouldn’t hold Marion’s past against its future.
“I definitely want to see more detail, and I think we need to know more than we knew for the last project; however, I am not going to base my opinion of this project based on the last one,” the city council member and former city development director said. “I don’t think that’s fair to any new prospect coming into town.”
As was the case for past proposed developers, it’s possible for the latest potential I-69 developer to receive certain property taxes that might be generated by the latest proposed complex because that land lies in one of Marion’s TIF districts.
TIF districts are an economic development tool that allows local governments like cities and towns to redirect certain property taxes generated in the districts. Instead of being distributed among all local governments that serve a TIF district area — like schools, townships and the county — newer property taxes generated in TIF districts are earmarked. State law allows such taxes to go to the local government that created the TIF district and to be used for certain redevelopment and infrastructure projects that officials believe will benefit the public.
“What we gain is kind of almost like a long-term investment,” Seybold said.