Members of the city’s Redevelopment Commission agreed Thursday to take baby steps on the road to figuring out whether or not they can provide financial assistance to a potential major housing development across from Lincoln High School.
But without bigger leaps, it may mean the project doesn’t get off the ground at all.
“Our deadline is approaching quick, so we need to make a decision on whether or not we let the land go or whether this is something we want to continue to pursue,” Butch Niehaus told the RDC.
RDC members during their regular meeting Thursday, held at City Hall, 201 Vigo St., took back up discussions of the possible Lincoln Heights subdivision, a project being proposed by local brothers Butch, Eric and David Niehaus, co-owners of Niehaus Companies.
Dubbed Lincoln Heights, the Niehaus brothers are preparing to purchase multiple lots adjacent to Quail Run Road, specifically behind Herman Family Dentistry; Lincoln High School is located nearby, just across Hart Street.
The plan, they told the RDC last month, is to work with builders to construct as many as 129 homes in that space.
In addition to selling the lots to builders, Niehaus Companies would look to benefit from selling materials to the builders once construction is under way.
But to keep the lots themselves cheap — a critical component to the success of the project — the Niehauses are looking to the RDC to fund infrastructure costs totaling $2.3 million.
The RDC, however, doesn’t have that much to offer.
It takes in about $2 million per year, but with major projects like the second and third phases of a Main Street overhaul and commitments to two other, smaller housing projects, their funds are largely tied up, at least for the foreseeable future.
And a large part of the Tax Increment Finance Zone, the vehicle by which the RDC collects a portion of property tax revenue to reinvest within its boundaries, will fall off in 2026.
That said, they aren’t giving up on Lincoln Heights — or another project like it — entirely.
RDC members Thursday agreed to look more closely at the development of a new residential Tax Increment Finance Zone, a measure only recently allowed by state law.
It’s a move that required the RDC’s signing Thursday of a new letter of engagement — and perhaps more funds spent — with financial advisors Reedy Financial Group in Seymour.
RDC members months ago began discussions with financial consultants from Reedy about the possible establishment of a residential TIF zone, a possible avenue to increasing the city’s housing stock.
Last fall, the RDC heard from Gary Smith, a certified public accountant with Reedy, regarding information on a state law that went into effect more than a year ago allowing for the establishment of a TIF zone made up solely of residential housing.
Previously, TIF zones could only be drawn around commercial districts; any houses that happened to fall within them didn’t generate any revenue for the RDC.
The change allows for the establishment of a residential housing TIF over a period of 20 years.
Once the TIF zone is established, the existing assessed valuation within its boundaries would be the baseline. The RDC would then be able to capture the property tax revenue from any improvements — in this case, new houses — made within it.
So in this case, should the RDC opt to draw a new residential TIF around the proposed Lincoln Heights, they could potentially capture any increase in property tax revenue as a result of construction.
But they question whether the revenue would be near enough to pay for the $2.3 million in infrastructure costs.
Getting the answers to their questions will also take time, perhaps more time than what the Niehauses have.
“It will be hard for us to step in and buy all that land without a commitment from the RDC,” Butch Niehaus said.
RDC president Tim Smith said while conversations with Reedy about the possibility of a residential TIF have been, at best, surface level, he does believe the RDC would have to bond the cost of the Lincoln Heights infrastructure.
Cash-flowing it, given current financial projections, isn’t possible, he said, and the Niehauses have indicated they aren’t willing to take on the housing project in phases.
RDC member and at-large city councilman Marc McNeece said he wanted to see the RDC move forward with learning more about declaring a residential TIF “at least so it gives us the complete picture.”
“It’s going to be difficult to say yes or no to any project without that,” he said. “We have to know what we would be committing the RDC to.”
Smith, too, said it would give the commission “ideas and alternatives.”
“It might also offer future information, so even if this project doesn’t move forward, at least we would know if we are at some point asked about another,” he said.
“At least we would have some idea of what we can afford and what we can’t.”
It was a sentiment shared, too, by RDC member Bob Slatyon.
He called Lincoln Heights a “bold and visionary project,” one greatly needed in a community with not a lot of housing stock.
Yet it also comes with “terrific challenges” financially, he said.
“It would be a steep hill to climb, but I’d hate to see this slip away,” he said, adding that RDC members were finding themselves at the “intersection of what we can do and the (Niehauses) deadline.”
“And that’s a real conundrum,” he said.
But pursuing the establishment of a residential TIF — and the selling of bonds to pay for the infrastructure associated with the Niehaus project — will take months. Such a move, too, would require cooperation and approval from the city council.
“And that might take us out of the game,” Butch Niehaus told the RDC, “if (the purchase agreement) can’t be extended.”
Yet he encouraged the RDC to move forward whether the Niehauses benefit from such efforts or not.
“Because this is a great need Vincennes has right now,” he said, “We’ve got to get more housing.”