Chesterton Tribune

Burns Harbor moves to capture taxes from ArcelorMittal plant

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By PAULENE POPARAD

Voting 4-0 Tuesday, the Burns Harbor Redevelopment Commission authorized its attorney to begin the legal steps necessary to designate much if not all of the ArcelorMittal steelmaking facility as an economic development zone where future property taxes on new Mittal construction and improvements would be captured by the RDC for the towns use.

Better known as tax-increment financing or TIF, attorney Charles Parkinson said many steps will be involved over several months and a public hearing will be held prior to the new TIF being approved. The town has one designated TIF district currently.

John Marshall, a non-voting RDC member and a member of the Duneland School Board, said he was withholding his support Tuesday because Duneland officials have had only very preliminary discussions regarding a Mittal TIF and the School Board probably wont address the matter for 30 to 60 days.

Future property taxes collected by Duneland Schools, Westchester Public Library, Westchester Township and Porter County all could be impacted if the Mittal plant is placed in a TIF district.

Parkinson said Burns Harbor needs to establish an exact legal description of the new TIF area and to adopt a capital improvement plan with projects that justify the need to capture future taxes there. The towns sewage treatment plant is located on the Mittal property north of U.S. 12.

The Town Council is hosting a public meeting tonight at 7 p.m. at the Burns Harbor town hall seeking input on needed capital improvements for the whole town. Hesham Khalil of town engineer Global Engineering and Land Surveying said so far $12 million in requests have been proposed and the council will need to review and prioritize the list in the coming weeks.

The RDC has been working with Stu Summers, a TIF consultant, on how to generate usable revenue for the town. Last night he suggested refinancing the 2005 sewer bonds over 15 years in a general-obligation sale to free up cash; the RDC asked the Town Council --- whose members are the same on both boards --- to consider the proposal. The council next meets Aug. 11.

The 2005 bonds financed installation of sanitary sewers and lift stations throughout town and the bond agreement pledges that all TIF revenue, about $300,000 a year, will go toward their debt service. Summers said its been determined that TIF revenue tied to a new bond issue would not automatically carry the same restriction.

Summers said if the town bonded for $4.9 million and paid off the outstanding $3.5 million sewer-bond balance, there would be $1.4 million left over for other uses.

Also, instead of each year needing both the $300,000 annual TIF revenue and about $475,000 from the general fund in additional property taxes to pay for the 2005 bonds now, explained Summers, under one option only $350,000 would be needed in property taxes annually to retire the refinanced bonds leaving $125,000 in the general fund and $300,000 in TIF revenue for other projects.

RDC member Mike Perrine said if it wouldn't increase the town tax rate, refinancing would solve a lot of problems and sounds like a win/win situation.

Summers said its easier to sell general-obligation bonds pledging unrestricted property taxes than it is to sell bonds backed by TIF revenues alone. He also cautioned that the state Department of Local Government Finance might not let the town keep in its general fund the $125,000 it annually would save on refinanced bonds.

Parkinson said to get maximum benefit from the new TIF it should be in place by March 1, 2011. Summers said property along Indiana 149 south of Mittal is not in an existing TIF area and could be included in the new Mittal TIF if desired; that option also gives more flexibility to the types of capital improvement projects proposed for the TIF zone. The Town of Porter uses a portion of its TIF money to pay for future hike/bike trails.

In other business, the RDC voted to approve up to an additional $500 payment for Weaver-Boos as part of a $2,500 Phase 1 environmental study of the site of the abandoned former Standard Plaza truck stop demolished by the town several months ago. The contract increase is to do a chain-of-title search listing property owners and uses for the last 80 years.

Vote was 3-0 with RDC member Louis Bain absent and member Cliff Fleming, an attorney and developer, recusing himself from voting because he is involved in a potential contract in a different community with Weaver-Boos.

Resident and business owner Jeff Freeze gave a status report on a 2020 committee formed in partnership with the Chesterton/Duneland Chamber of Commerce to foster communication between and support for Burns Harbor and its business community. Freeze said next month the group hopes to develop a sharper focus; it was formed to help implement recommendations in the new Burns Harbor comprehensive plan adopted last year.

Freeze is president of the town Advisory Plan Commission and invited 2020 shareholders to join the 2020 effort. Fleming said having the chamber involved provides a structure to promote progress.

 

Posted 7/21/2010