The future of a tax increment financing (TIF) deal that would have provided $3.65 million in funding to Central Indiana Ethanol and created substantial amounts of TIF revenue that would have been available to the City of Marion’s Redevelopment Commission is in question after it failed to pass the Grant County Council.

The vote was 3 to 2 in favor, but the council needed at least 4 votes in favor to achieve a majority of the seven members present and pass the measure, according to the council’s attorney Phil Stephenson.

Two council members abstained from the vote, Council President Shane Middlesworth and Council member Frank Hix. Both sell grain to Central Indiana Ethanol.

“I’m disappointed but I get it,” said Marion Mayor Jess Alumbaugh after the vote. The mayor said the city’s past with TIF “haunts us” and he understands when elected officials are hesitant to approve such deals.

The County Council had to consent to the city’s bond financing deal for it to move forward because the property in question lies outside Marion city limits, although that won’t be the case for long.

The property which is the former site of Omnisource was approved to be annexed into the city Tuesday night by the Marion City Council. However, the annexation won’t be effective until Jan. 1, 2020, due to a state law barring annexations in the year before a federal census.

“Next year we’ll have more control,” Alumbaugh said.

Come Jan. 1, 2020, when the property becomes part of the city, the city will no longer need county consent to issue the TIF bonds.

But it’s unclear what the next step for CIE will be in the meantime. 

“I think we need to circle up as a team and discuss it,” CEO and President of CIE Ryan Drook said.

The company has said in previous public meetings that without the $3.65 million from the TIF bond, they will not move forward with phase three of their $25 million three-part expansion project, which Drook said Wednesday is “the most critical piece” of the project.

Phase three involves expanding the company’s distillation capability so it can produce export-grade alcohol and break into international markets.

Phases one and two, grain storage and drying facilities and alcohol storage, are in progress.

The company has been on a tight timeline to get the TIF financing approved to be ready for fall harvest, Drook has said. 

Council member Mike Conner was visibly upset at the outcome.

“I’m tired of seeing businesses die when we got a chance to support one that’s growing. I’m ashamed. I’m sorry,” Conner said after the vote. 

Conner and Council members Mark Leming and Jonathan Perez voted yes. Perez said the deal, which guarantees the city’s share of TIF revenue before the share that goes toward bond payments, is ushering in “a new TIF dynamic” for the city.

“We’re having the ability to approve a deal where money is actually coming back and not all of it’s going to have to go to the deal, and we have a local company that’s willing to put it back local … I don’t see the problem with that whatsoever,” Perez said.

Council members Mike Roorbach and Mike Scott voted no.

Roorbach said he was “uncomfortable” with the redevelopment commission’s role in spending the excess funds that would be generated by the TIF.

“They’re not elected. They’re great people on the Marion one, that one works real good because of who Marion is and who those people are, but it’s not an elected body,” Roorbach said. He also said he had doubts that the “but for” requirement for TIF was met, since the project has already begun.

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