Monday, September 23, 2013

Fort Wayne Plans To Provide Nearly $20 Million Subsidy To New Downtown Development

The message should go out across these United States of America. We have elected officials here in Indiana who have bags full of money to throw at you if you make your investments in their community. Fort Wayne Mayor Tom Henry announced today that the city will provide nearly a $20 million subsidy to entice an existing local business, Ash Brokerage Corporation, to relocate its headquarters from West Jefferson Boulevard into a new $71 million mixed use development planned for the city's downtown. Ash Brokerage will invest $19.6 million into the project and relocate its existing 200 employees to the new downtown location, with plans to hire add another 115 jobs by 2017. Separately, Hanning & Bean Enterprises plans to invest $32 million into an adjacent development with a mix of apartments, townhouses and condominiums, along with a parking garage. The $51.6 million in private investment will be matched with a $19.5 million public investment by the city, which represents 27% of the investment.

Like Indianapolis, this area of downtown Fort Wayne at the corner of Harrison and Barry is located within a TIF district, which means that property taxes levied on this new development will be paid into the TIF district for the next 30 years in all likelihood, providing little in the way of new tax revenues to other taxing districts that are dependent on property taxes for their funding. The early reports indicate no ownership interest or return on investment the taxpayers of Fort Wayne can expect from their investment in this private development project. Earlier this year, the Fort Wayne city council approved a 35% increase in the local option income tax from l% to l.35%, part of which went to reduce the impact of the tax increase through the form of property tax relief and the balance of which is being used to pay for more spending on public safety, streets and parks. The city's budget is expected to grow 8% next year thanks to the tax increase from $136 million to $147 million.

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