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Staff Report to Redevelopment Commission
Erskine Village Excess Increment for Taxes Payable in 2012
Prepared 7/6/11
Our review of the Erskine Village TIF has been completed, and the recommendation is to
release the full increment of assessed value for one year for taxes to be paid in 2012.
These taxes would be released to the other taxing jurisdictions which would collect them
if the TIF were not in place.
This TIF was originally established to facilitate the demolition and reuse of the former
Scottsdale Mall site. All of the improvements planned for this TIF have been completed.
The only remaining obligation of the TIF is the pledge of TIF to repayment of an EDC
bond. We currently have cash on hand of $5,364,446 and annual bond payments of about
$500,000. At the end of the year we expect to receive additional tax receipts of about
$1,285,000. If this amount is received, then we will have sufficient funds to defease the
bonds. Attached is a schedule showing the cash balance, bond payments and year end tax
receipts. The first opportunity to pay off the bonds is not until February 2017, so the
amount to defease the bonds will need to include the interest payments through that date,
again these are shown on the attached schedule.
If the tax receipts at the end of the year are not sufficient to defease the bonds, then the
Redevelopment Commission will likely need to collect at least part of the increment for
taxes payable in 2013.
Once the bonds are defeased, then the Commission can consider whether the Erskine
Village TIF should be undeclared and the increment released back to the main South Side
Development Area, or released in perpetuity to the other taxing jurisdictions as was the
Erskine Commons TIF.
CITY OF SOUTH BEND, INDIANA
Department of Community & Economic Development
Review of TIF Need for South Side #3 (Erskine Village)
June 2011
Balance
Cash on hand:
4,079,061
Anticipated tax distribution - June 2011
1,285,385
5,364,446
Debt service payment Erskine Village Bond - August 2011
(155,540)
5,208,906
Anticipated tax distribution - December 2011
1,285,385
6,494,292
Debt service payment Erskine Village Bond - February 2012
(340,540)
6,153,752
Debt service payment Erskine Village Bond - August 2012
(149,898)
6,003,854
Debt service payment Erskine Village Bond - February 2013
(344,898)
5,658,957
Debt service payment Erskine Village Bond - August 2013
(143,950)
5,515,007
Debt service payment Erskine Village Bond - February 2014
(353,950)
5,161,057
Debt service payment Erskine Village Bond - August 2014
(137,545)
5,023,512
Debt service payment Erskine Village Bond - February 2015
(357,545)
4,665,967
Debt service payment Erskine Village Bond - August 2015
(130,835)
4,535,132
Debt service payment Erskine Village Bond - February 2016
(365,835)
4,169,297
Debt service payment Erskine Village Bond - August 2016
(123,668)
4,045,629
Debt service payment Erskine Village Bond - February 2017
(373,668)
3,671,962
Final Payoff of Remaining Bonds w/ 1 % premium - February 2017
(3,585,500)
86,462
(Outstanding principal = $3,550,000 + $35,500 premium)
RESOLUTION NO. 2921
RESOLUTION OF THE SOUTH BEND REDEVELOPMENT COMMISSION
DETERMINING THAT THE TAX INCREMENT FOR ERSKINE VILLAGE TO BE
COLLECTED IN THE YEAR 2012 MAY BE ALLOCATED TO THE RESPECTIVE
TAXING UNITS AND OTHER RELATED MATTERS
WHEREAS, the South Bend Redevelopment Commission (the "Commission "), the
governing body of the South Bend, Indiana, Department of Redevelopment (the "Department ")
and of the Redevelopment District of the City of South Bend, Indiana (the "Redevelopment
District "), exists and operates under the provisions of IC 36 -7 -14, as amended from time to time
(the "Act "); and
WHEREAS, the Commission has previously adopted resolutions, which have been
amended from time to time, declaring the South Side Development Area to be a redevelopment
area within the meaning of the Act (the "Area ") and designated territory within such Area as
Allocation Area No. 3 (the "Allocation Area ") under Section 39 of the Act; and
WHEREAS, the Commission, in accordance with the Act, has previously established an
allocation fund for the Allocation Area (the "Allocation Fund "); and
WHEREAS, 50 IAC 8 contains rules adopted by the Indiana State Board of Tax
Commissioners concerning tax increment finance (the "Regulations "); and
WHEREAS, Section 39 of the Act and 50 IAC 8 -2 -4 require the Commission to
determine before July 15 of each year, whether the sum of the balance in the Allocation Fund
plus estimated future investment earnings on that balance is sufficient to satisfy obligations of
the Commission over the terms of those obligations, and whether the capture of less than all of
the Potential Captured Assessment (as defined in the Regulations) will result in a balance in the
Allocation Fund in the following year that, when combined with future investment earnings on
that balance and the resultant tax increment to be collected in the following year, will be
sufficient to satisfy the obligations of the Commission over the term of those obligations; and
WHEREAS, Section 39 of the Act requires the Commission to provide to the St. Joseph
County Auditor, the Common Council, and the fiscal officers for each taxing unit located wholly
or partly within the respective Allocation Areas before July 15 of each year written notice of the
following: (i) the amount, if any, of excess assessed value that the Commission has determined
may be allocated to the respective taxing units, or (ii) state that the Commission has determined
that there is no excess assessed value that may be allocated to the respective taxing units in the
manner prescribed in Section 39 of the Act;
NOW, THEREFORE, BE IT RESOLVED by the South Bend Redevelopment
Commission as follows:
1. The Commission hereby determines that for tax year payable 2012, all of the
assessed value in the Allocation Area is excess assessed value and may be allocated to the
respective taxing units in the manner prescribed in Section 39 of the Act because the
Commission hereby finds that the sum of the balances in the Allocation Fund, when combined
with future investment earnings on such balances will be sufficient to satisfy the obligations of
the Commission over the year 2012, and that therefore the Potential Captured Assessment for the
Allocation Area in tax year payable 2012 shall not be treated as Captured Assessment (as defined
in the Regulations). In making this determination, the Commission has considered the effect that
such determination will have on the property tax rate in the Redevelopment District.
2. This determination for 2012 shall not be construed to affect any future
determination of the Commission with respect to the capture of Potential Captured Assessment
in the years following 2012.
3. The President or Vice President of the Commission is hereby authorized and
directed to immediately notify or cause to be notified the St. Joseph County Auditor, the
Common Council and the officers who are authorized to fix budgets, tax rates, and tax levies
under Indiana Code 6- 1.1 -17 -5 for each of the other taxing units wholly or partly located within
the Allocation Area of the determinations made herein by the Commission, through the use of a
letter in such form as may be recommended by legal counsel, such approval to be conclusively
evidenced by the execution of said letter.
ADOPTED AND APPROVED at a meeting of the South Bend Redevelopment
Commission held on the day of July, 2011.
SOUTH BEND
REDEVELOPMENT COMMISSION
Marcia Jones, President
ATTEST:
Nancy King, Secretary
EXHIBIT A
(Form of Letter)
Date
Mr./Ms. [Name]
Taxing Unit
Address
Subject: Request Regarding Capture of Incremental Assessed Value for the City of South Bend
Dear Mr./Ms. [Name]:
In accordance with the provisions of IC 36- 7- 14 -39, the Redevelopment Commission of the City
of South Bend, Indiana, has determined that for the tax year payable 2012 the excess assessed
value in Allocation Area No. 3 (Erskine Village) of the South Side Development Area may be
allocated to the respective taxing units in the manner prescribed in subdivision (1) of IC 36 -7 -14-
39.
Very truly yours,
Marcia Jones
President
South Bend Redevelopment Commission