The Redevelopment Department is dedicated to urban renewal and economic growth, using acquisition, clearance, disposition of land, and public improvements to reclaim blighted land for new development. The work of the department focuses on corridors and neighborhoods that are underused and in need of reinvestment using funding from special benefit taxes provided by state law known as tax incremental financing or "TIF", which encourage redevelopment and benefit all taxable property within the boundaries of the city. Design review and community input sets and maintains our City's high development standards for all of the projects on the reclaimed land.
The Redevelopment Commission and Department:
- support development and redevelopment of architecturally significant structures that attract good employers and increase the City’s value;
- focuses attention on improving older established areas of the city where it costs less to build;
- brings vibrancy and pride back to neighborhoods that may have felt forgotten or neglected;
- works to make Michigan City a thriving community, able to compete globally for commerce and quality of life.
What is a TIF?
Tax incremental financing or TIF is a special benefit tax tool provided by state law that encourages redevelopment and economic growth in an established area of the community. To establish a TIF, a specific economic redevelopment area and a base tax year are established. Then, for a period of up to 25 years, all increases in business property taxes, not single family house taxes, in excess of the amount received in the base year go into a fund for redevelopment. That redevelopment fund is then used to pay interest and principal on loans to redevelop the area. The proceeds of the bonds are then used to facilitate the redevelopment of the project.
Redeveloping may seem expensive but it is not nearly as expensive as the long term costs of
green field development, where the true costs tend to be hidden and not always readily
identified up front when a zoning change is made. If a city allows for too much sprawl, it can become too expensive to maintain basic services and severely limits their ability to provide the funds needed for good schools and basic maintenance of streets and parks. A TIF is a very important tool to help redevelop our city's older areas where we already have multimillion dollar roads, police and fire protection, and underground utilities in place.
The TIF bonds are carefully timed to be paid in full when the TIF districts expire. The taxes that
were going toward TIF bond payments then are invested directly back into the community in the form of city, county, township, library, and school tax incomes.