Compromise reached on Landing
In a unanimous vote Tuesday, the Fort Wayne City Council approved a compromise by which Mayor Tom Henry’s administration will reimburse the county economic development income tax fund for the cost of a streetscape project on The Landing.
A contract with Strebig Construction for streetscape improvements along Columbia Street was tabled Oct. 9 after concerns were raised that the $1.4 million contract could trigger a “claw-back” clause included in the Legacy Fund loan agreement with The Model Group, the firm developing The Landing.
Under the terms of that clause, City Council had the power to rescind the $2.4 million Legacy Fund commitment if city officials came to the table asking for further public funds to support the development.
Councilmen Russ Jehl, R-2nd, and Councilman Paul Ensley, R-1st, raised concerns last year over how streetscape improvements at The Landing would be funded. Jehl authored the “claw-back” amendment to the Legacy Fund agreement that allowed the council to revisit the loan agreement should the city return to the table for any additional funds.
The council approved the $1.4 million contract with Strebig Construction in a separate 7-2 vote.
As part of a compromise worked out between Jehl and the mayor’s office, the city will pay back 93 percent : or about $1.3 million : of the total project cost. In return, the City Council will waives its right to rescind the Legacy Fund money.
The city will use tax increment financing revenue generated by the development to pay back the CEDIT fund, Jehl said.
Funds generated in a tax increment financing district can be used to pay for improvements within that district.
“I think this is a really good opportunity to set a precedence that if TIF-eligible projects ask for CEDIT or ask for general revenue funds, to have a payback or loan agreement structure has a lot of potential for future projects,” Jehl said.