Attorney at Law
Pandemic Pitfalls for Redevelopment Commissions (September 2020)
Since the recession of 2008 that prompted municipalities to assess their need to redevelop urban areas, there has been a corresponding increase in reliance on redevelopment commissions (“RDCs”) and Tax Increment Financing (“TIF”) districts in Indiana. There are many advantages to using RDCs and public-private partnerships (“PPPs”) to cultivate long-term growth of the commercial tax base. At the same time, there are significant challenges. In the wake of the financial crisis caused by the current pandemic, cities should be prepared for new opportunities and risks. Because RDCs operate with a great deal of autonomy, one of the primary tools to facilitate growth is to contract with private enterprises in ways that foster mutual advantages. The city can dedicate certain resources to mitigate expenses for the PPPs, such that the businesses are more likely to succeed. That success then allows the city to attract residents, visitors, and other businesses. Effective use of RDCs necessarily involves working closely with the city’s planning and zoning. In fact, mayors across Indiana expect their staff and the RDCs to share a vision for what the city will accomplish with the TIF district businesses. This alignment of interests poses potential problems. One problem that can develop relates to communication. Recently in Ft. Wayne, the city’s redevelopment commission voted to cancel a $440M development contract. A majority of city council members are reported to have been “blindsided” by that action. There is little doubt that RDCs have the authority to enter, and terminate, contracts. The policy question then arises, though, about the extent to which other local elected officials are to be consulted. Those elected to the legislative and fiscal branch may have a particularly compelling interest in the redevelopment projects that involve their constituents. A legal professional with experience in redevelopment issues, business operations and transactions is best suited to provide counsel to city leaders concerned about the operation of RDCs.