Several Hamilton County cities enjoy top-rank placement as the best cities to live in the entire U.S. In fact, numerous publications, including Money.com and Wall Street Journal, repeatedly include our cities in their annual lists. Of course, you could argue that Carmel using tax incremental financing (TIF funds) to drive successful growth contributes to its ranking. Moreover, Carmel provides a successful model for other cities in the county, state, and country. In this post, Edgewater CPA Group reviews how TIF funds boost private investing in Hamilton County suburban cities.
What Are TIF Funds?
Local governments and municipalities leverage TIF funds to encourage redevelopment in neglected areas. New developments in green spaces often require new infrastructure, including underground pipes and wiring, new roads, police and fire support, and more. On the other hand, redevelopment makes use of those existing resources and reinvests in the area. With TIF, public officials designate a redevelopment area and determine the base tax year. For up to 25 years after, taxes in excess of the base tax year go into a redevelopment fund. In turn, the fund pays for bond issues used to redevelop. Ideally, this creates additional value and promotes growth.
In Carmel’s case, the mayor envisioned a specific area in downtown Carmel that would provide densely populated, walkable, sustainable living. The area, known as the Carmel Arts District, would include apartments, condos, townhomes, restaurants, theaters, and more. At the same time, the dense population and mixed-use facilities would create a larger tax base to keep taxes low. Further, it would attract entrepreneurs and private investors to risk investing in Hamilton County suburban cities, which it did.
What Is the Impact of Carmel’s Redevelopment Efforts?
From 1998-2011, Carmel granted $156.7 million in TIF financing for facilities in the redevelopment zone. The investment resulted in another $110.2 million in additional economic activity. Moreover, the higher-earning jobs in the zone were higher than that of Carmel or Hamilton County. Further, the percentage increase of employed people living in the project zone (43.8%) far surpassed that of Carmel (8.7%) and Hamilton County (16.2%), largely due to the density of the population.
What Does This Mean for Local Businesses?
Locating your business in a high-density area with high employment and high earners provides you with a solid customer base. Carmel may have to lead the way, but public investing in Hamilton County suburban cities in the surrounding area continued in other areas. Fishers and Westfield also make lists for the best places to live, and the designation appeals to families and businesses.
Edgewater provides bookkeeping, financial planning, business tax strategy, and other services for local businesses in Hamilton County. We’ve helped hundreds of Carmel, Westfield, Fishers, and other city business owners. We know the area, we know the tax benefits, and we know how to make professional accounting services work for you. If you’re looking to start a business in one of these great cities, or have an existing company that needs accounting support, call (317) 207-9269. Schedule your consultation today.