The laws governing how municipalities can use money garnered from tax increment financing (TIF) districts will change on July 1 -- so Greencastle city officials are hustling to expand the city's TIF district, which presently includes only about two blocks.
"This all came about largely because of a conflict between a municipality and the state," Greencastle City Attorney Laura Hardwick told the Putnam County Council Tuesday night.
Hardwick updated the council on the city's plan to extend its TIF district to include all of downtown.
A TIF district is an area in which tax funds from any construction projects
Previously, money from projects in TIF districts could be used for practically any purpose anywhere in the city. House Bill 1001, which was passed during Indiana's last legislative session, will alter TIF laws so that funds resulting from projects in the TIF district can only be used in the actual designated area or areas adjacent to it.
Without the expansion, a wrench would be thrown into the city's plans for various downtown improvement projects. The current district includes Walden Inn, Marvin's restaurant and Ashley Cinema. The expanded area would encompass all of downtown from the Putnam County Courthouse Annex south to Walden Inn and east to Greencastle City Hall.
"People really want to see the downtown improvements happen," Hardwick said. "We've heard a lot of complaints about that area."
Councilman Larry Parker wanted to make sure no one's taxes would be hiked as a result of the expansion.
"Absolutely not," Hardwick said.
Commissioner Joseph Fogle asked why the city didn't want to expand the TIF district further east of downtown and north to the viaducts.
Hardwick explained that many buildings outside the proposed district were in disrepair, and that the demolition of buildings within a TIF district could be financially detrimental.
"We decided to play it safe," she said.
The measure to expand the district will go before the city's Redevelopment Commission next month for final approval.