As development and redevelopment projects continue to take shape downtown, the Kokomo Redevelopment Commission approved a new Tax Increment Financing District on Wednesday that could allow the city to capitalize on the growth.
Wednesday’s final approval of the TIF resolution was made with a couple of amendments to the original proposal, adding Kokomo Recycling, which is located in the TIF district on Market Avenue, as a designated taxpayer.
The commission also modified the base assessment date the revenue will begin being collected from March 1, 2013, to March 1. That means the city will begin to capture the taxes by March 2015. The TIF area is located downtown near North Main Street, extending south from Jefferson Street to Apperson Way.
A TIF is a tax capture area, where incremental increases in tax revenues are directed to the city or to a five-member Redevelopment Commission. The mayor appoints three of the RDC members and the Kokomo Common Council appoints the remaining two members. TIF districts are typically established just ahead of new development in order to capture the maximum amount of new revenue.
City attorney Lawrence McCormack explained that the date was modified because Patriot Porcelain, the city’s main target of the TIF, is in the process of appealing its assessment. The company has plans to expand its operations and add some new equipment this year, which could lead to a higher assessed value.
Patriot Porcelain, which will open new operations on North Main Street, will be investing approximately $11 million in taxable business personal property, while Kokomo Recycling will invest approximately $2.8 million. That would result in a $194,796 net tax increase generated by the TIF.
“The purpose is to make sure the Redevelopment Commission set the base assessed valuation at the lowest point,” McCormack said of Patriot Porcelain’s appeal. “Patriot Porcelain is currently appealing its 2013 assessment based on the purchase price they paid for the property. That appeal will probably lower their assessed valuation for 2013.