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HomeMy WebLinkAbout07-12-11 TIF used to redevelop Scottsdale Mall will release value 04 SOU T11 � x U d W PE�AACCE;� '� a 1865 Office of the Mayor NEWS RELEASE July 12,2011 5 p.m. TIF used to redevelop Scottsdale Mall will release value Contact: For media contacts this evening, contact Don Inks, Director of Economic Development at(574) 485-3054 Mikki Dobski, Director of Communications&Special Projects, (574) 876-1564 The Erskine Village tax increment financing area, created in 2004 to fund demolition and redevelopment of the former Scottsdale Mall site, has reached its intended goals, enabling the potential release of tax revenue in 2012 and possibly beyond. The South Bend Redevelopment Commission today (July 12, 2011) approved release of the full increment of assessed value for one year for taxes scheduled to be paid in 2012. The Erskine Village TIF area, also known as South Side Development Allocation Area No. 3, has one outstanding bond, but city officials anticipate by the end of 2011 there may be sufficient resources in hand to cover the long-term costs of annual bond payments until the February 2017 early payoff date. The normal termination date for the Erskine Village TIE area is 2034. This is the second south-side TIE area that has completed its planned improvements ahead of schedule. In 2010,the Redevelopment Commission terminated the South Side Development Allocation Area No. 2, the Tax Increment Financing allocation area created in December 2002 to develop Erskine Commons. Together, these TIF areas will make available $5.3 million for use by other units of local government in 2012. "The City of South Bend used these TIE proceeds to demolish a failing mall and fund infrastructure improvements that made it possible for developers to create Erskine Village, retaining existing businesses like Target and Hacienda while bringing in new retailers, such as Kohl's, Bed Bath &Beyond and several restaurants," said Mayor Stephen J. Luecke. "In just seven years, economic growth in this area has raised sufficient revenue that we anticipate already having the resources to pay off our bonds 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." 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. So,this action by the Redevelopment Commission will release the TIF increment from the Erskine Village area for 2012. This increased tax value will benefit 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. If tax receipts by year's end aren't sufficient to cover the remaining bond,then the Redevelopment Commission would need to collect at least part of the increment for taxes payable in 2013. But if outstanding obligations are covered,the Commission can consider whether to terminate the Erskine Village TIF (as it did in 2010 with Erskine Commons) or to release the tax increment back to the larger, 1,100-acre South Side Development Area. Covering 65 acres,the Erskine Village area has seen the creation of more than 510,000 square feet of new commercial space since its opening in 2005 with private investment exceeding $75 million. The Commission's action today was scheduled ahead of the July 15 statewide deadline for Redevelopment Commissions to notify county fiscal officials whether there is excess assessed value related to plans for any TIF area. "This is another great success story for TIF and our redevelopment strategy as overseen by the South Bend Redevelopment Commission," Luecke said. "Not only did the private sector meet its targets, but we are generating more tax revenue than was originally projected."