Kettle Park West developers returned to the city last week to request more tax increment financing (TIF) funding.
Forward Development Group has requested $3 million for on-site infrastructure, to be paid in a “pay-as-you-go” plan.
According to its application, that amount is $4.4 million less than the company had previously discussed with city officials, resulting from changes both on the site and off.
TIF is a financial tool used by municipalities to incentivize economic development by pooling increased taxes on that development among the overlying taxing jurisdictions. A pay-as-you-go bond pays that obligation only if and when its development produces those tax payments. By doing so, it eliminates the city’s risk of a default by the developer.
The Finance committee was the first stop in FDG’s request for more funding.
The presentation on Tuesday, July 10, lasted the full hour of the committee meeting, leaving no time for committee conversation, finance director Jamin Friedl told the Hub. He said the committee plans to discuss the application in more detail during its next meeting, scheduled for July 23.
KPW Phase II includes 195 new housing units, continued development of the commercial center, a public park and conservancy areas. Plans for that portion of the development were approved last month, and the request for TIF funding was submitted June 21.
The second phase of development includes new stormwater facilities, a water main and sanitary sewer extension. The city has also required the construction of highway and intersection upgrades at Roby Road and Hwy. 51, and extending Oak Opening Drive to Hwy. 138. The TIF application states the cost for these improvements is estimated at nearly $13 million.
“Without the availability of TIF to recover a portion ($3.0M) of these infrastructure costs, KPW LLC will be unable to develop the second phase,” the application states.
According to the application, redesigning the site plan allowed it to sell more on a larger area, reducing its need for on-site funding by $2.4 million. Allowing the Roby Road intersection with U.S. Hwy. 51 to wait for the state Department of Transportation to fund an upgrade and charging future improvements to the TIF district in the future reduced the costs the developer identified by $2 million, the application states.