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City Council approves TIF bond

BY Carolyn Muyskens - cmuyskens@chronicle-tribune.com

A $3.65 million tax increment revenue (TIF) bond for Central Indiana Ethanol was approved by the Marion City Council Wednesday night.

The council held a public meeting on the bond after council members reported public pressure to do so, but only a handful of community members spoke on the issue Wednesday evening at City Hall.

Several local business leaders turned out in support of the TIF, including Scott Miller, president of Bowman Construction, Bill Gartland, president of Atlas Foundry and David Cain, vice president of distribution and sales at McClure Oil.

“We, the city and county, are in competition with other cities and counties to create new business and help out when we can for existing businesses to succeed and hopefully grow,” David Cain said.

“Do not, and I’m going to say do not, use past failures from past administrations to condemn the use of this tool. This is a good use of a TIF district that doesn’t cost the taxpayers any dollars,” Cain added.

The TIF bond is a first in the city’s history in that as part of the deal CIE is guaranteeing the city the first cut of the TIF revenue, providing $500,000 in revenue to the city in the first years of the bond, later increasing to $1 million and eventually $1.5 million. The bond’s life is 12 years but the TIF district will continue funneling revenue to the Marion Redevelopment Commission for the life of the TIF district, which is substantially longer.

“I think it’s a good working bond and it’s probably one of a kind,” said City Council member Lynn Johnson.

Johnson suggested the city should pursue similar TIF deals in the future.

“If there’s a possibility that we can continue to work towards producing solid TIF bonds so that they return money into the city so that it satisfies the needs of our schools and actually puts some money back into the city then I think this is an encouraging thing for the city of Marion,” Johnson added.

James Sutter spoke in opposition of the TIF during the hearing, citing some of the social issues the city is facing including drug abuse, gun violence and childhood poverty and the need for funding for things like new police vehicles.

“Break the mold. In 20 years you’ve never turned one of these down, never. Tonight, break that mold. Say no and say yes to the kids and people of Grant County,” Sutter said.

Comments were limited to four minutes. Another man asked to yield his time to Sutter, but Council President Alan Miller did not allow it.

The council voted 7-1 to pass the bond financing deal. Council member Steve Henderson cast the sole no vote. Council member Jim Brunner was absent.

Henderson said he had not received a financial statement from CIE or an impact statement for the TIF.

“As a member of the Redevelopment Commission and also of the city council, it’s very hard to make a decision on things when you don’t have financial papers in front of you. Not a bank in this country would loan this money without being seen a financial statement,” Henderson said.

Buddy Downs of Ice Miller told the council that Baker Tilly, formerly Umbaugh and Associates, did prepare an impact statement for the Redevelopment Commission. Henderson claims he asked for one and never received one.

The $3.65 million will help finance a $25 million expansion project on CIE’s property on Ind. 18.

Because part of the project is on a CIE-acquired piece of land outside the City of Marion, CIE and the city initially went to the Grant County Council for permission to spend the bond proceeds on county property but the council failed to garner enough votes to pass it.

The city then revised the bond documents to say the money will only be spent inside city limits to get around the need for county approval. 

Ryan Drook, CEO and president of CIE, said Wednesday phases two and three of the project, grain storage expansion and distillation facilities, are taking place on CIE’s city property.

Drook said he was “humbled” by the city’s support through the process.

“We hope to lead the way and be an example of the ways (TIF) can work,” Drook said.