By Travis Gulbrandson
Another step has been taken in the Bliss Pointe development district.
The Vermillion City council approved a project plan for Tax Increment Financing (TIF) District 6 at its regular meeting Monday night.
The decision comes after the council approved the creation of TIF 6 at a meeting last month to assist with infrastructure development on blocks one through six.
In April, the Vermillion Area Chamber & Development Company (VCDC) closed on the purchase of approximately 30 acres of developable farmland as a solution to the shortage of affordable single-family housing in the community.
City Manager John Prescott said Monday that a TIF plan is required to plan how the funding will be utilized.
According to a memo given to council members, the city by resolution will issue a Private Placement Tax Increment Bond, and the city and VCDC have been in discussion with several local entities that will be bond holders.
The bonds will be issued by the city, Prescott said.
“Then, as the VCDC has expenses, that money can then be transferred to the VCDC in the form of what is called grants for the TIF plan,” he said.
The memo also said property taxes generated by the development within the TIF district will be collected and transferred to the city, which will make the payments to the bond holders.
In addition, the TIF plan proposes that during the budget process, the city council consider making advances to the TIF fund for interest only payment to the bond holders until the TIF revenues are sufficient to make the payments.
However, Prescott said the city is not guaranteeing the bonds if the generated tax revenue is insufficient to fully repay the bond holders.
“There’s no guarantee on behalf of the city that we would reimburse these groups and organizations for the funds that they put forth to make it happen,” he said.
As the value of the district increases, the total property taxes paid by the owners of the property also will increase, which is the “increment.”
The memo said the county will collect the property taxes and transfer the proceeds of the increment to the city, which will disburse the funds to the bond holders as interest and principal payments until the bonds are retried, other advances are repaid or 20 years have passed – whichever comes first.
The land in the TIF district is classified as Blocks 1-6 of Bliss Pointe, which extends from the west side of Stanford Street between west Main and west Cherry streets.
Prescott said houses in the $125,000 to $250,000 price range could be built there at the rate of 15 per year.
There also will be some light commercial uses, primarily office, as well as retail and restaurant, he said.
The VCDC closed on the sale of approximately 30 acres of developable farmland in April as a solution to the shortage of affordable single-family housing in the community.
It was announced last month that the VCDC has been in contact with interested developers, who will be able to purchase lots from them. There will be approximately 114 residential lots.
“People aren’t going to be able to come in and buy a bunch of lots, hold them, raise the price, do that sort of thing,” Steve Howe, executive director of the VCDC, said last month. “A developer, if they want to come in and buy 10 lots, same rule. They’ve got to be building on them and doing stuff with them.
“We have been getting quite a bit of interest – not only from the single-family homebuilder – about when lots are going to be available. Whether they actually come through, you never know, but anecdotally, there is a lot of interest,” he said.