GOSHEN — Goshen City Council members Tuesday approved on a 5 to 2 vote a resolution establishing a new tax increment financing district on the city’s southeast side.
Tax increment financing, or TIF, is a tool that allows municipalities to promote economic development by earmarking property tax revenue from increases in assessed values within a designated district.
Creation of the new TIF district, coined the Lippert/Dierdorff Economic Development Area, was proposed in part as a result of the council’s approval in March of an annexation request by Lippert Components Manufacturing Inc. involving three parcels of land totaling approximately 153 acres located east of and adjacent to the existing Goshen corporate boundary on the north and south sides of C.R. 36, just southeast of the Elkhart County 4-H Fairgrounds.
Central to that annexation request is a plan by Lippert to use the property as the location of a new $20 million facility focused on light manufacturing, research and development with the potential for multiple facilities at the site. The company builds components for the recreational vehicle industry.
As part of the approved annexation, the city has agreed to extend water and sewer lines to the C.R. 36 property, which can then be utilized by the proposed Lippert development. The city will also construct new curbs and gutters and a 10-foot-wide sidewalk along C.R. 36 from the railroad tracks to C.R. 31.
For its part, Lippert will be responsible for the initial cost of all necessary right of way acquisition, design, field investigation, geotechnical work, permitting and construction of the proposed infrastructure. The city will then reimburse Lippert for those expenses through the use of revenues generated through the new TIF district.
Tuesday’s meeting marked the third time the request had come before the council in as many months, as some on the council members had requested more time to research the implications of TIF usage and consider all the pros and cons of the proposal before making their final decision.
The new Lippert/Dierdorff Economic Development Area TIF as approved Tuesday includes the following real estate:
• Part of the real estate located east of the railroad tracks, west of C.R. 31, and north of College Avenue/C.R. 36, now referred to as the Lippert parcels
• Four parcels of real estate located north of College Avenue/C.R. 36, including the railroad parcels and two parcels southwest of the railroad tracks and east of the Springbrook Subdivision, now referred to as the Lippert Manufacturing parcels. These four parcels will be carved out of the existing Southeast Economic Development Area and added to the Lippert/Dierdorff Economic Development Area.
• Eight residential parcels of real estate north of College Avenue, west of Horn Ditch including two parcels on either side of the entrance into Springbrook Subdivision, now referred to as the residential parcels.
• Parcels of real estate east of Dierdorff Road, south of College Avenue and north of Eisenhower Drive North, but also including five parcels west and immediately adjacent to Dierdorff Road and two parcels east and immediately adjacent to Dierdorff Road north of College Avenue, now referred to as the Dierdorff Road Parcels.
A total of $15 million in construction and maintenance projects have been identified within the boundaries of the new TIF district and will receive funding support from that TIF district, according to the resolution.
A sampling of those planned projects includes:
• The extension of a water main from College Avenue/ C.R. 36 east under the railroad tracks to C.R. 31, then south along C.R. 31 to a point east of the east/west portion of Century Drive and then west to the existing water main on Century Drive;
• The extension of a sewer main from College Avenue/ C.R. 36 east under the railroad tracks to C.R. 31;
• Construction or improvement of roads within the TIF area, particularly College Avenue/C.R. 36, including adding a third lane to College Avenue from U.S. 33 east to the Goshen corporate boundary; • Construction of pedestrian/ bicycle trails, paths or sidewalks within the TIF area, specifically a bike path on College Avenue/C.R. 36 from U.S. 33 to the railroad; and
• Construction of stormwater retention or detention facilities within the TIF.
One project that was removed from the plan by the council Tuesday was a call for U.S. 33 improvements from College Avenue/C.R. 36 to Eisenhower Drive North that would have included a center turn lane, stormwater retention/ detention, roadways and curbs, pedestrian crossings and sidewalks.
The call to remove the project was made due to some on the council members feeling that it is not the city’s responsibility to pay to improve state roads, even if those improvements would be a benefit to the city and no support from the state appears to be forthcoming.
Among those to speak in favor of the request Tuesday was former Goshen City council member Everett Thomas, who noted that the approved TIF is located within 50 feet of his home in the Keystone Pointe community.
“As you probably know, the years that I was on the council, I voted for every TIF district we have. And given the way the property tax caps have hamstrung us for our dollars, it’s really the last tool in the box that we have,” Thomas said. “When I take a look at the projects that could be done with this money, I get excited, because this is my neighborhood. In fact, if you spend any time between College Avenue and Kercher Road on U.S. 33, you know that it’s becoming kind of a suburb of Goshen, sort of a southwest suburb. When you have all the residents in Springbrook and College Green and Keystone Pointe patronizing those businesses, you really do need to look ahead to the dollars you’re going to need to have to fix up some of these things. I can’t imagine why you would not want to have the money available to keep moving forward with some of the improvements that are needed in that part of town.”
Former Goshen mayor Allan Kauffman offered a similar sentiment.
“I know that in the TIF area that you’re talking about now, there are going to be things that come up in the future, and as Everett said, there is no other money for those things,” Kauffman said. “If these things came up, there would be no money. So I would encourage you to approve the TIF, and not limit it in its scope or its length.”
Among those to speak out against the request Tuesday was council member Mike Orgill, who said while he understands that TIFs can be beneficial, they’re is also the potential for abuse when it comes to their establishment and use.
“As human beings, we’re very apt to look at the positives very strongly. That’s why we always tend to view positive outcomes far greater without considering the negatives. It’s just our nature,” Orgill told the council. “TIF has a lot of good when it comes to funding important programs when you have really good leadership, as we’ve had. And that’s a positive. But there are negatives, very serious ones. While it’s a powerful tool for allowing us to fund projects that we are having trouble funding because of other restrictions upon us, such as the tax caps, it’s also a powerful too for elected officials, and I mean that in the worst possible way. It is the most powerful thing that a local elected official has to dispense. That is why it’s healthy to have dissenting votes and opinions about this. This can be abused.”
Councilman Adam Scharf also express his opposition to the request.
“There is also a natural bias of seen vs. unseen, and when the benefits are seen, and concrete, and real, and we can go look at them in the city, that’s a very easy thing to say, ‘Yes, that’s obviously good.’ I mean, we’re pretty much unanimous that these projects are helpful and important,” Scharf said. “Because of the complexity of our state’s tax system, and TIF, and all these other things, the cost side of the cost/benefit analysis is harder to see. So rather than just pretending that doesn’t existing, I think really in my mind all we’ve been trying to do here is to get a little better handle on what the cost side of the cost/benefit analysis is, so we can be prudent in making the decisions that we need to make. That to me has really been the crux of the discussion.”
In the end, the supporters of the project won out, and a motion to approve the resolution was passed in a vote of five to two in favor. Voting in favor of the resolution’s passage were council members Julia Gautsche, Julia King, Jim McKee, Doug Nisley and Brett Weddell. Orgill and Scharf were the two “No” votes.