KENDALLVILLE — Just five years ago, Kendallville was setting aside $30,000 per year to help building owners fix up their downtown buildings and wasn’t getting enough interest to use up all that money each year.
Fast forward to now, where the city used up its entire $100,000 budget — in 10 months.
And that’s not even including a second downtown grant fund reserved for bigger renovations, nor the city’s $2 million PreservINg Main Street state grant that will start construction next year.
Most communities in northeast Indiana now offer some type of matching grant program for building owners who want to spruce up their properties in historic areas or in downtowns. But none of them are doing it on the scale that Kendallville has been recently.
From humble beginnings just a few years back, Kendallville has seen its program grow year-over-year as owners have opted to pour hundreds of thousands of dollars of new investment into the three-block Main Street corridor and beyond.
While other communities are still working to kickstart redevelopment and growth, Kendallville is now forced to ask itself, is $100,000 per year even enough any more?
50/50 to $15K
Kendallville’s a conservative city, but it’s facade program is much more liberal than many locally and around the state.
Building owners within the city’s tax increment financing district allocation areas can seek a 50% grant for up to $15,000 annually, provided they are willing and able to put up their 50% match out of their own pocket. That $15,000 cap is per year, but building owners can apply for as many grants as needed until they hit that limit.
That in itself puts Kendallville a step ahead. While Ligonier will also go up to $15,000, Garrett maxes out at $10,000, Angola at $5,000 and Auburn at just $2,500.
Kendallville’s grants can cover any type of facade improvements — brick repair, new windows, new doors and painting — but the city goes a step further in its willingness to fund even more. Kendallville owners can get money for non-permanent improvements like awnings, signage and window clings that programs like the state’s PreservINg Main Street grant won’t allow.
Then, Kendallville also funds something some communities don’t and it’s been a biggie for the city — roofs. Nobody sees a roof, but Kendallville has always justified helping pay for repairs and replacements with the notion that if you can’t keep the elements out, everything inside is at risk.
Roofs are OK in Ligonier and Angola, but not allowed in Auburn or Garrett facade programs.
And, if that wasn’t enough, Kendallville is also willing to fund repairs and improvements on sides and rears of buildings, while many facade programs — including the state’s $2 million program — only will cover improvements to street-facing facades.
Garrett is one locally that doesn’t allow for rear-of-building repairs, but other communities do.
Lastly, the scope of where Kendallville can fund projects is just vastly larger.
While the city program once was only for buildings located in the downtown corridor — like those currently in Auburn, Angola and Garrett — in 2020 the city combined and expanded its TIF allocation areas.
Although Kendallville only captures TIF money from its Downtown TIF, Eastside TIF and new 2020 TIF containing 25 hand-picked parcels primed for development, its allocation area — where it can spend those funds — extends all the way from Drake Road north to U.S. 6 along Main Street as well as the entire U.S. 6 commercial corridor from the west side of the city limits to the east side.
That makes almost every commercial property eligible now, although the brunt of Kendallville’s investment is still happening downtown.
Financial firepower
You’ve got to capture tax dollars to spend tax dollars, and Kendallville is reaping the benefits of decades of investment within its TIF districts.
Right now, Kendallville is capturing about $575,000 annually in its three TIF districts. Most of that money comes from the Eastside TIF, which was created ahead of Walmart being developed and that’s where almost all of that tax dollar capture comes from, to the tune of about $440,000 per year.
The downtown TIF, where most of the work is happening, is much less lucrative, generating only about $120,000 per year, while the new 2020 TIF was only recently formed and, while growing, has a small capture revenue of just about $13,000 per year.
Although the city has been collecting more than a half-million dollars per year recently, it wasn’t always able to utilize that.
Prior to the 2020 TIF combination, those pots of money were segregated, with the lucrative Eastside TIF building a balance that couldn’t be used where it was most needed downtown, since TIF funds could only be spent within the zones where they were being collected.
But when Kendallville created its new TIF, it also linked those once-separate TIF districts and was able to then unlock the funds to be spent anywhere within its joined allocation area.
Five years ago, the city could only budget $30,000 per year for downtown facades because that was all it could afford from it’s annual collections.
Now, that’s no longer an issue, as the city can unleash the full weight of its TIF dollars into projects.
Still growing
Although Kendallville has the money to do projects, setting a budget of $100,000 per year for facades doesn’t mean anything if no one takes the opportunity to use it.
But that hasn’t been an issue, as city leaders have been more aggressive at informing buildings owners that the money is out there and encouraging them to apply for it.
In 2020, the Kendallville Redevelopment Commission paid out $67,708.56 in 50/50 matching grants. Last year, it grew that total to $91,636.81.
This year? The board approved $99,877.51 in projects by October.
All together, that means the city funded nearly $260,000 with matching investment actually higher than that, since some projects more expensive than $30,000 cap out at a $15,000 match.
At its November meeting, Kendallville Redevelopment Commission members were having to turn away applicants seeking money until January, telling them they would have to wait for a budget refill before their requests could be filled.
Redevelopment Commission President Loren Allen said he’s seen the increase come due to building owners now being willing to put down bigger chunks of cash on bigger projects.
“It used to be cosmetics and now it’s a roof. We’re giving $15,000 a whack instead of $4,000 and I think the amount we’re spending per job, per building is quite a bit higher,” Allen said. “A big portion of our cash, that’s where it went to. And that’s great. There’s no better way to preserve Main Street.”
But why now? Why not five years ago? Why not 10 years ago?
It’s the snowball effect, Mayor Suzanne Handshoe said. Investment breeds more investment and downtown renovation and revitalization work has picked up momentum.
That was keyed, in part, by the city finally being able to complete its $1.57 million streetscape project in 2021, investing in new sidewalks and curbs, new decorative streetlights and new trees.
Then the city turned right around and clinched the new PreservINg Main Street pilot program grant, promising another $2 million in state funds for downtown work.
“I think that $2 million facade grant to the city was really a catalyst to what’s going on with the RDC,” Mayor Handshoe said.
The facade programs themselves have been more visible and pushed harder too.
Instead of waiting for building owners to come to them, recent boards have launched more consistent outreach to advertise the facade program. A lot of that came to fruition when the commission added then-Kendallville Area Chamber of Commerce executive director and now-Main Street Manager Kristen Johnson, who worked to market the programs directly to those who could benefit from it.
Likewise, Allen said frequent news stories covering the commission and its facade awards has not just kept it in the consciousness of the building owners but has also let all city residents see how and where the tax dollars are going.
“Nobody used to know when we gave a roof repair. Who knew?” Allen said. “We’re here to preserve Kendallville, to make Kendallville a better place. ... We don’t need to sit on a million dollars.”
Propping up the free market
Detractors to tax-funded grant programs would argue, “Why are we using public money to benefit private owners?”
It’s a question city leaders have grappled with as they set their budgets and pushed hundreds of thousands of tax dollars out the door in recent years.
Free market principles would say government should butt out and let private industry play out.
But that was the attitude for last several decades. And the result was that the free market mostly passed, leading to stagnation and decay that is now being reversed along Main Street.
As Kendallville set its priority to try to revitalize its downtown, to regenerate commercial activity and improve the quality-of-life for residents, it had to become an active player to accomplish that goal.
“You have to give people a reason to want to come to these downtowns and keep them attractive,” Handshoe said. “They were moving out of there to go out on U.S. 6.”
Government officials love the idiom “skin in the game.” When private business comes knocking looking for an incentive, prudent government leaders will want to see them paying their part too.
The same has applied downtown, except that Kendallville government is the one in the driver’s seat wanting to see its corridors improve. In order to do that, it needed to put its own skin in the game to incentivize and nudge the building owners to walk in the direction the city wants.
Now, Kendallville and its building owners are working together to get that revitalized and cleaned up, creating sharper-looking, better commercial space both sides want.
“That’s why we’re here. What can we do to make things better? And it’s just never easy and whatever you do its never right for everybody,” Allen said. “I think we’ve got an excellent group on right now ... as long as we all have the same agenda and that’s ‘make it better,’ I think we’ll be good.”