HomeMy WebLinkAbout03-08-2011 TIF for Erskine Commons, city’s 3rd largest, will end
Office of the Mayor
NEWS RELEASE
March 8, 2011
9:45 a.m.
rd
TIF for Erskine Commons, city’s 3 largest, will end
Contact:
Mikki Dobski, Director of Communications & Special Projects, 235-5855 or 876-1564
or Don Inks, Director of Economic Development, 235-9371
The South Bend Redevelopment Commission on Tuesday will consider the termination
of the South Side Development Allocation Area No. 2, the Tax Increment Financing
allocation area created in December 2002 to develop Erskine Commons.
Beginning in 2012, property taxes that have been generated by private investment in this
area will be distributed to South Bend’s general fund and other units of local government
rather than be retained for public improvement.
This is the first time that South Bend has terminated a Tax Increment Financing area.
“The City of South Bend used the TIF proceeds to assemble property and remediate a
former landfill to make it possible for developers to create Erskine Commons, bringing in
retailers like Wal-Mart, Lowe’s and Gates Toyota. We’ve improved major roadways in
the vicinity and have plans to complete infrastructure improvements with our remaining
resources,” said Mayor Stephen J. Luecke. “Over nine years, economic growth in this
area enabled us to pay off our bonds 15 years ahead of schedule. With today’s action by
the Redevelopment Commission, the increased assessed value of the property and the tax
revenue, which it generates, will be available to support public safety, parks and code
enforcement, as well as other units of local government.”
“This is a great success story for TIF,” Luecke added.
When a TIF area is established, any increase in the assessed value of property that results
from new investment is assigned to that TIF area. The taxes generated by the increased
assessed value, known as the TIF increment, are deposited into a TIF allocation fund,
which is overseen by the Redevelopment Commission and used for public improvements
in the area. Taxes generated from the “base assessed value,” the property values at the
time of the TIF’s establishment, continue to go to local taxing units.
Should the Redevelopment Commission approve the termination, the TIF increment
would be released from the Erskine Commons allocation area. The new investment in this
area will enhance benefits to other units of local government, including the County, the
South Bend Community Schools, the St. Joseph County Public Library and other entities,
including the City of South Bend, where it will support operational expenses in the City’s
general fund and Parks Department.
Back in 2002, the Redevelopment Commission and the Luecke administration envisioned
a development site at the southwest corner of Ireland Road and Michigan Street, featuring
330,000 to 400,000 square feet of retail to anchor the western end of an Erskine Hills
Shopping District (stretching along Ireland Road to Ironwood Drive). The development
by Anchor Acquisitions Ltd. was jump started by public investment from the sale of two
bonds totaling nearly $6 million to be repaid by anticipated increases in property tax
revenue resulting from the growth in the assessed value of that site.
Since the TIF’s establishment, the creation of Erskine Commons has led to the
development of more than 476,000 square feet of new commercial space. More than
$56.5 million in private and public investment has included commercial outlets like Wal-
Mart, Lowe’s and Gates Toyota, and led to the creation of 740 new jobs. Both the total
investment and the number of jobs created surpassed original estimates of what could be
accomplished in 20 years.
In addition, all of the development occurred without tax abatements or direct financial
incentives to developers.
“Erskine Commons has succeeded by every measure at a faster pace than we projected,”
Luecke said. “Not only did the private sector meet its targets, but we are generating more
than four times the tax revenue that originally was projected. That enables us to pay off
these bonds 15 years ahead of schedule.
“This project highlights the success of redevelopment activities overseen by the South
Bend Redevelopment Commission,” Luecke added.
The TIF district for Erskine Commons is generating $3.1 million annually in TIF
revenue, compared with the original projection of $750,000 annually. In terms of
revenue, this TIF area is the city’s third largest, following the Airport Economic
Development Area, which extends from Ignition Park past the airport, and the South
Bend Central Development Area, which serves downtown.
Even after the TIF’s termination, the City will wrap up several improvement projects in
the vicinity using proceeds disbursed before the termination date as well as revenue from
adjacent southside TIFs. Those projects include:
Curb and sidewalk improvements along Ireland Road.
Completion of an expanded drainage reservoir serving Erskine Plaza.
Re-routing South Main Street to connect with South Lafayette Street with an
improved intersection at Ireland Road.
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