Duneland Village in Gary

Affordable housing pays big dividends to Gary school district

Contributed By: The 411 News

Payments in lieu of taxes contribute $586,000 in unexpected revenues

“A $504,000 check from the city of Gary came out of the blue,” Gary schools Emergency Manager Mike Raisor told the Distressed Unit Appeal Board in March. “And then, a couple days later, we got another check from the city for $82,000.”

Raisor explained that unexpected windfall of $586,000 came from funds received by the city as payments in lieu of taxes (PILOT). Those revenues were contributing to the school corporation’s rosy financial picture, he said. The district also saw a jump in enrollment, increasing revenues by $853,000.

Payments in lieu of taxes is a tax policy to produce a public good. Instead of paying the local property tax rate each year, the PILOT agreement allows project developers to pay a percentage of their investment.

Celita Green, Gary’s comptroller added more details about the payments.

“In Gary’s case, it was used to support 3 affordable housing projects – HOPE VI Duneland Village (350 Fayette Street), HOPE VI Horace Mann Apartments (660 Washington Street) and Parkshore Commons (810 N. Wells Street).

“The Hope VI agreement calls for annual payments with no end date. The original HOPE VI agreement was signed in 2005 and amended in 2008. The Parkshore Commons agreement is a 20-year agreement, ending in 2032.

“The properties connected to these agreements are affordable housing units primarily housing persons with incomes of 60% of AMI (Area Medium Income) or less.

“The agreements were provided as inducements to either newly construct (as in the case of HOPE VI) or substantially rehabilitate (as in the case of Parkshore Commons) housing units to increase available housing stock for this low to moderate-income population.

“On a yearly basis, the payments are made to the city and then, per a formula contained in each of the agreements, distributed on a pro-rata basis to other taxing units in the city.

“The city had not made payments to other entities entitled to funds since 2016.

“This administration was made aware and made said payments, hence the waterfall payment to Gary Community Schools.”

Story Posted:04/17/2024

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