South Shore Commuters

A westbound South Shore Line train prepares to depart the East Chicago train station recently.

Kale Wilk, The Times

MERRILLVILLE — Monday's inaugural meeting of a steering committee that will "provide information and guidance" regarding development around commuter railroad stations helped illustrate the opportunities and challenges facing communities along the South Shore Line and its planned West Lake Corridor.

The committee, with a representative from each of the nine municipalities home to a current or proposed station, was established this year by state legislation that allows creation of transit development districts, or TDDs, around the stations.

The TDDs would glean incremental growth in local property and income taxes, in a process similar to tax increment financing. Money collected in them would flow into accounts maintained by the Northwest Indiana Regional Development Authority in Lake and Porter counties, and by the municipal redevelopment commissions in Michigan City and South Bend.

The funds are intended to help spur growth that the Northwest Indiana Regional Development Authority projects could top $2.5 million over two decades.

"The train itself and the station itself is the anchor for the development," RDA President and CEO Bill Hanna told committee members. "That's really the basis of this concept."

The TDD funds can be used to back bonds for projects within the district they're collected. Infrastructure and aesthetic improvements, as well as direct assistance to developers can serve as "risk abatement" for them, Hanna said.

And, for the communities, "it gives you better leverage with the developer. You have the ability to bargain for better products."

A TDD can be one-half square mile on creation, and be expanded to one square mile.

State statute requires the RDA — which has the authority to create the TDDs — to work with the communities on their size and shape. The TDDs' impact on existing TIF districts, general funds and other commitments all must be balanced in "pretty detailed negotiations," RDA consultant Bill Sheldrake of Policy Analytics said.

He said the state law took into account the financial landscape the TDDs will be established in. "The law's pretty clear we want to protect those existing obligations," he said.

The steering committee, which must meet at least quarterly, will be part of the interplay among developers, the RDA, and the municipalities themselves, Hanna said. He suggested areas along the current line could see development interest first, since they already have train service.

"I think it's going to be interesting to see how these look different in different areas," he said of the districts.

The South Shore's projects — the $665 million West Lake extension to Dyer and the $312 million Double Track improvements from Gary to Michigan City — are currently under federal review for advancement in the design and funding processes.

If they progress as planned, construction would begin in 2019, with Double Track completion in 2020 and West Lake in 2022.

State statute allows TDDs to last until 2047.

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Transportation reporter

Andrew covers transportation, real estate, casinos and other topics for The Times business section. A Crown Point native, he joined The Times in 2014, and has more than 15 years experience as a reporter and editor at Region newspapers.