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Warsaw Redevelopment Commission took the first step of many Monday toward the creation of an Innovation Development District (IDD) with the unanimous approval of a resolution.
In presenting the resolution, Warsaw Community and Economic Development Director Jeremy Skinner said by approving the resolution they were basically “approving the request of funds that were set aside as part of OIRI (Orthopedic Industry Retention Initiative) that have to do with an Innovation Development District (IDD). Part of the OIRI agreement with the state included $350,000 set aside for this development of a (IDD). And the triggering mechanism to get that $350,000 from the state is a resolution from the Warsaw Redevelopment Commission proving that we’re moving forward with that development.”
The next step is to submit the resolution to the state. Assuming the state approves the resolution, the state would send the $350,000 that was set aside as part of the OIRI agreement to OrthoWorx. The city’s and county’s redevelopment commissions would then work with OrthoWorx to create a group that would move forward with the development of the IDD.
Commission member Joe Thallemer asked Skinner to explain exactly what an IDD is and if it was a state designation.
“Yes. So, as you know, the state created the IDD four, five years ago, maybe longer than that. Or, they created the opportunities for IDD. They’ve only done one, to my knowledge ... but think of it like a big TIF (tax increment finance). The state creates a TIF district. They consume most of the assessed valuation within that TIF district, but there is a percentage that goes back to the local communities, but the bulk of that would be by them. But on the flip side, they’re the ones that do most of the funding as well, so they would be setting aside the funds to develop that IDD,” Skinner responded.
Thallemer asked if the IDD would exist on the current footprint of the Warsaw Technology Park, or if it would go well beyond that.
“It would go,” Skinner said. “The IDD I think, I can’t remember exactly but I think it was like 400 to 1,000 acres, the size it had to be, or even larger than that. So it’s a lot of land. I don’t know that we know the exact location, but the target area would be south of the Technology Park. It may include some portions north of, but mainly south of the Tech Park all the way to Slate (Auto) would be kind of the target area.”
He said the intent would be to target for med tech and ag tech. The state would take 80% of the increment, with 20% collected by the locality.
“So the opportunity here is to have a very large parcel available for development?” Thallemer asked.
Skinner said yes and that will be one of the challenges to develop the IDD.
“The intent is to bring state funding in to invest in infrastructure in that area that will drive job growth,” he said.
Thallemer asked if the county’s redevelopment commission would get involved. Skinner said OIRI only requires a resolution from the Warsaw Redevelopment Commission, but the intent is to get the county involved. Thallemer pointed out that most of that property is not within the city.
“So this is basically redevelopment money to really dive into this to see if there’s opportunity,” Thallemer said.
Skinner said there’s $350,000 in OIRI funds specifically to get work started on the IDD plan.
“I know there’s many, many, many other issues - zoning, the whole works, we won’t get into that now,” Thallemer said.
“Yeah, a lot of work that has to be done. ... I see this as kind of the beginning of the work to create a plan that can be presented not only to the county and the city, the community, the state - to try to get that collaboration long-term. This is not something that’s going to happen in one year, two years,” Skinner stated.
He said it’s a very large, grand picture of what the future will hold in terms of job growth in Kosciusko County and Warsaw. He mentioned part of the big picture includes an interchange on U.S. 30 at some point down the road.
Later, Thallemer said, “I know there’s always been an interchange contemplated in that area on 30 ... as somewhere out there and that would potentially spark a little bit of business.”
Skinner stated, “I would actually see this plan as almost better reviewing and determining where the county and city feel like where the best location of that is, and how it connects into Warsaw.”
He said there’s been a lot of conversations on that and they’ve thrown a couple things on the map, but they’ve never sat down and determined substantially where the best route was.
“So, I think part of this plan would be also developing the better idea of what that interchange looks like and where it’s at,” Skinner continued.
“At the end of the day, it doesn’t cost us anything but our time and collaboration at this point,” he said.
Thallemer stated, “This is step one of many.”
“Our very first step,” agreed Skinner.
Thallemer made the motion to approve the resolution, Council President Jack Wilhite seconded the motion and it passed 5-0.
Skinner then presented all of the proposed 2027 budgets for the Redevelopment Commission to review. They will be asked to approve them at their July 6 meeting.
Specifically on the Northern TIF District budget, he said it’ll stay pretty much the same.
“We still have a number of projects out there that we’re targeting, whether it’s 2026 or 2027. We’re still targeting the roundabout project. We have the VA project. We are in conversations with Thompson & Thrift about buying the remainder of the property north of Kohl’s. So that’s on the project list,” he said. “Either of those or all of those can happen, depending, on 2026 or 2027. So those are kind of the targets.”
Thallemer asked when the Northern TIF District expires. Skinner said portions of it expire in 2030, while other portions expire as far as 2040 or sooner.
“But the bulk, the big original Northern TIF expires in 2030, so there will be a substantial drop in revenue in 2030 on our end,” Skinner said. “Obviously, there will be a substantial bump in AV (assessed valuation) on the general end, which will impact all the tax agencies. ... You’re talking close to somewhere in the $200-$250 million AV that will be dumped into the general, that everybody can have access to in four years. So it’ll be a substantial impact of the tax rates for all taxing agencies.”
In four years, the bulk of the bonds in the Northern TIF will be paid off, including the three Winona PVD bonds, the Thompson-Thrift bond and the sewage bond pledge will be gone. They total about a million dollars annually and will be paid off. The only two bonds that will be left will be the airport industrial park bond and the Buffalo Street bond, which will continue on to about 2040-41.
“So we will see a drop in revenue in that Northern TIF area. Obviously, as we continue to invest these funds, i.e. roundabout out there, next to the airport industrial park, Anchorage to the east of that, all those things will still be active and try to continue generate future revenue,” Skinner said.
“But if you would look at how TIFs work, this is a very good example of what the impact would be. I think it will be interesting to see in four years because when we started this TIF district, the AV was $6 million and something in change. Now it’s $250 million. So we’ve taken an underserved, unperforming $6 million in AV and turned it into $250 million in AV. That’s going to have a profound impact on the taxing agencies in four years. And that’s the intent of TIFs - the intent of TIFs is to take land that is underperforming and create opportunity that increases the economic value to all. It takes time to get there,” Skinner stated.
