Redevelopment Commission Agenda & Packet 01.08.26 - Revised

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CITY OF SOUTH BEND REDEVELOPMENT COMMISSION REGULAR MEETING – December 18, 2025 Page | 4 Today, we are proposing financing in the blue allocation area. The other seven areas will not begin their 25-year clocks until we issue financing in them, giving us some flexibility over the next few years. This step must be completed before the IDD is officially established, which is why it is before you today. If approved, the process would continue with Plan Commission review on January 19, 2026, followed by Common Council consideration on January 26, and final approval by the Redevelopment Commission on February 12. These allocation areas will continue to exist, but we will be resetting the base rate going forward. We estimate that we will forgo approximately $800,000 currently captured in these parcels. We believe this is a worthwhile trade-off given the new investments expected to generate substantial future increment. Commissioner Gooden-Rodgers asked to further explain the impacted tax revenue. Mr. Bauer stated that “Most of the parcels shown here are already within the former River West Development Area. The allocation area that currently includes these parcels is set to expire in 2030—about 12 years from now. Today, these parcels generate roughly $800,000 per year in tax increment under the existing allocation. For context, the entire River West Development Area generates about $20 million annually. So, the portion affected here is less than 10% of the total increment. President Warner stated that by resetting the base rate, we are giving up the $800,000 in increment that would otherwise be collected for the remaining 12 years. However, resetting the base allows us to capture new increment for a full 25-year period rather than just the remaining 12 years. As long as future development generates at least $800,000 in new annual increment, which our projections indicate is likely—we more than make up for that change. Another way to look at it is this: Twelve years ago, a baseline value was set for these parcels, and everything above that baseline has been captured as TIF revenue— about $800,000 annually. When we reset the baseline today, that baseline rises. As a result, the existing $800,000 is no longer TIF revenue; instead, it flows to the general fund, the schools, and the other taxing units. So, although it is a loss to the TIF district, it is not a loss of tax dollars overall. In fact, it results in an increase to the general fund and other taxing jurisdictions, while giving us the ability to capture new growth for a much longer period. Secretary Wax asked to elaborate on how accounting works for these allocation areas—both individually and for River West as a whole. Is all the revenue deposited into a single fund with internal tracking, or are