There’s a lot of excitement in Elkhart over a proposed new apartment complex at the former Elkhart Foundry site. What there won’t be a lot of is property tax revenue.
That’s according to a review of the financing plans released by the city. The city of Elkhart could chip in $4.6 million in funds to help pay for the $28 million complex, according to our reporting partners at the Elkhart Truth.
How would that $4.6 million be paid back? Property taxes from a Tax Increment Financing, or TIF, District that would just cover the apartment complex. TIF Districts are special districts where property taxes are pumped back into the district for redevelopment.
Indianapolis developer Flaherty & Collins will also be given the 6.8 acre land, worth about $1 million, and providing remedial cleanup at a cost of around $500,000.
Flaherty is also guaranteeing $400,000 in property tax revenues every year to cover the loan and bonds for the city’s portion of the project. This despite projections that show annual property tax revenues at around $300,000 a year. The $3.1 million in bonds would be paid back in 18 years, the remaining $1.5 million loan would be paid after the bonds from years 18 through 25.
The Elkhart Redevelopment Commission will discuss the proposed TIF area at their Sept. 13 meeting.