ELKHART -- The Elkhart Redevelopment Commission indicated its support Tuesday for creating a self-funding mechanism for improvements in the Pierre Moran Mall area.
The commission took the first formal step to make the area a Tax Incremental Financing district, a designation that funds a plan to improve sewers, sidewalks and other infrastructure in the south-side area.
The area would be bounded by Lusher on the north, Hively Avenue on the south, Prairie Street on the west and Benham Avenue on the east. It includes the mall as well as the neighborhood to the north.
The city has talked about setting up the special tax structure there for months, counting on a proposed new Kroger store and other developments at the mall to generate new taxes in the area. The idea is to use those taxes to improve the area.
New development could generate as much as $2 million for the improvements over the next 10 years, estimated Mark Brinson, the city's planning director.
But the figure could be tempered somewhat by a proposed tax abatement for the Kroger project.
Commission members worried the abatement would deprive the neighborhood of some revenue that could be used for long-needed improvements, particularly to sewer lines.
"We'd like as much as we can get to help this neighborhood," said member Prudy Holzhausen.
The tax abatement is scheduled to be decided Monday by the Elkhart City Council, whose members have been conflicted by the thought of granting an abatement in a special taxing district and giving a tax break to a retailer.
Kroger has asked for a 10-year, $500,000 abatement, though city planning staff has recommended only a five-year, $260,000 deal.
Councilman Jerry Kindig, R-6th, told the commission his mind wasn't made up on the abatement.
"I would like to see the improvements in the neighborhood all happen at a more rapid pace than probably would happen if this abatement were issued," he said. The taxing district "is more valuable to the city and in the long turn, it's going to reward Kroger by improving that neighborhood."
Kroger representatives have given no indication they would pull their $7 million project if the city denies a tax abatement for the company, the nation's second-largest grocery retailer.
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