NEW ALBANY — The New Albany City Council approved a resolution to create two residential TIF districts.
The council voted 7-2 at Thursday’s meeting in favor of new economic development areas for housing developments, including the Greenway Commons project near the riverfront and a project at Payne Koehler Road.
Council members Stefanie Griffith and Scott Blair voted against the resolution.
The residential TIF districts have been approved by the New Albany Redevelopment Commission and the New Albany Plan Commission.
The redevelopment commission is expected to consider final approval of the TIF districts in August.
The Greenway Commons housing development will be located at the former Moser Tannery site, and the Payne Koehler development will be across from Julian Drive.
Tax-increment financing allows governing bodies to capture increases in property tax value for uses such as infrastructure.
New Albany Economic Development Director Claire Johnson said the TIF ties into the city’s GROWTH initiative and its “aggressive goal” of increasing homeownership and availability of single-family homes.
“Both of these developments help us to incrementally get closer to that goal,” she said.
She said the TIF districts will allow for infrastructure upgrades and allow the developer s to keep the prices of the homes more affordable for residents. “The goal is, by providing assistance to offset some of those costs, the project then becomes feasible as well as helping to cut down on the ultimate selling costs of those homes...,” Johnson said.
These types of single-family developments have not been prevalent in New Albany in the past 20 years, she said.
“There has been a stall in that type of development, and there is a reason for that, and it’s our role as government to step in,” Johnson said.
Decisions about creating a residential TIF “depend on the development, our analysis and feasibility moving forward,” Johnson said.
“It’s based upon a developer coming to the City of New Albany and letting us know, they’re thinking about this development, however, there are certain obstacles in place that are not allowing for it to happen,” Johnson said.
Last year, the state legislature removed barriers that made it more difficult to establish residential TIFs, she said.
The ordinance would remove the Greenway Commons site from the existing Loop Island commercial TIF and the Payne Koehler site from the Charlestown Road commercial TIF.
Griffith voiced concerns with the addition of the residential TIFs.
“I just feel like we have too many TIF areas,” she said. “I feel like we’re borrowing from our future.”
Some of the concerns raised included the effects of TIF districts on public schools. Griffith noted that housing growth could lead to more students in New Albany-Floyd County Schools.
“If we are putting TIFs on them where that’s not going to the schools and we’re going to have all these extra kiddos, I just want to make sure we’re not setting up ourselves for failure,” she said.
After a TIF district is created, the property tax allotment is frozen at the existing level for other taxing units.
New Albany City Council President Adam Dickey emphasized that a large portion of the school funding formula is based on the student population.
“So that [is] another piece of that if there are kids moved into new-developed houses that would apply,” he said. “And at some point when the sunset clause hits, the assessed valuation would go back into the general AV and be assessed by all the taxing units.”
“So you’re only talking about that surplus amount for the period of the TIF,” Dickey said. “In consideration for other things like [private school] vouchers in Indiana, I think that’s a much bigger threat, quite frankly, to public education than what would be lost [from] the AV to the schools.”
Blair said he sees the benefits of increased housing in the community, but his criticism of TIF is that it “siphons money or doesn’t contribute toward other budgets.”
“It doesn’t contribute to the school system, it doesn’t contribute to the operating budget of the city,” he said. “And that’s just the nature of TIFs.”
Dickey said Blair was “casting a very negative light on TIFs when they are one of the few tools that cities have in order to make improvements and developments in that city.”
“If you look at our TIF districts as an example, many of the positive projects that have come to this city that we all tout and have touted for a number of years, including things like our parks improvements — including the development of River Run, including road and sidewalk projects — all those have been incentivized by a carefully managed and financially responsible program that has worked to bring those developments here and improve the quality of life for our citizens,” he said.
He also referenced contributions the New Albany Redevelopment Commission has made to NAFCS through TIF, including improvements at New Albany High School.
“So we have benefitted the school corp by alleviating other costs and providing those through TIF funds in some cases,” Dickey said.
New Albany City Councilman Greg Phipps said these TIF districts stand out for their role in helping to create new homes.
“And homeownership is the bedrock and the foundation and the stability of the community, and we desperately need that here,” he said.
New Albany City Councilwoman Elaine Murphy said she supports helping kids “have a stable environment to grow up in and be part of our school corporation.”
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